Duke University
Jennifer L. Merolla and Laura B. Stephenson
January 1, 2004
This paper investigates strategic voting in Canada. We test the standard expected utility model, as developed by McKelvey and Ordeshook (1972), across four federal elections.
Jennifer L. Merolla and Laura B. Stephenson
January 1, 2004
Duke University
This paper investigates strategic voting in Canada. We test the standard expected utility model, as developed by McKelvey and Ordeshook (1972), across four federal elections.
Lawrence Solomon
National Post
December 27, 2003
Paul Martin bills himself as a Prime Minister for the 21st century. His first Cabinet better suits the 19th century.
Take the inner circle of his Cabinet, the Priorities and Planning Committee. Among the ministers overseeing the high-level portfolios mandatory in any Cabinet’s inner circle – inherently powerful departments such as Finance, Justice, Health and Foreign Affairs – is a minister for the Department of Fisheries and Oceans. A century and more ago, Canada’s fisheries, like our trapping and hunting industry, were all-important to our economy. Then came the great economic growth that accompanied the industrialization and the urbanization of our economy, which made the fisheries small in comparison, followed by government mismanagement of our cod and other fisheries, which made the fisheries much smaller again. Canada’s fisheries now represent less than one-tenth of 1% of Canada’s GDP and sinking. There is no economic merit in favouring this industry by awarding it a minister in the Cabinet of a modern economy. Even if the fisheries industry were privatized in the hands of individual fishermen, and grew ten-fold because it was now allowed to thrive, it would remain less than 1% of Canada’s economy. But if it were privatized, as it should be, it would have even less claim to ministerial representation.
Or take another inner circle Cabinet position, the Minister of Indian Affairs and Northern Development. It will emphasize two forms of welfare: handouts to aboriginals, to meet Mr. Martin’s desire to ease aboriginal poverty, and handouts to northern industries, to meet his desire to develop the hinterlands. As the government press release announcing the Cabinet appointees stated, this ministry will place “special emphasis on Northern Economic Development.”
The Cabinet rank given to the ministers charged with overseeing Canada’s rural reaches has nothing to do with creating a 21st century economy and everything to do with old-fashioned electoral pork: Though these rural areas don’t amount to much economically – in fact, their small amount of economic activity occurs at a net loss – they represent a hefty number of ridings. Even better, the cost of pork per rural riding is relatively low, because so few Canadians inhabit them. Buying them off becomes a prudent political investment for financial stewards.
Hence the parade of other ministers serving the unpopulated parts of Canada. There’s a minister for the economic development of northern Ontario, a minister in charge of the Atlantic Canada Opportunities Agency, and a minister in charge of Western Economic Diversification, all charged with delivering political pork. Plus a minister for agriculture to complement the minister for the fisheries, and a minister for the mining and forestry industries in the form of a Minister of Natural Resources. All natural resources combined, including the energy sector, Canada’s one profitable resource sector, account for less than 5.5% of Canada’s GDP.
As for the populated parts of Canada, Mr. Martin has appointed no minister for either city or suburb. No urban industry, except for the financial sector, rates a Cabinet member.
The Martin Cabinet has nothing to do with boldly reinventing the Canadian economy for the 21st century. It is, however, a bold and audacious Pre-Election Cabinet. With Urban Canada unlikely to leave the Liberals for the new Conservative Party of Canada, so leery of immigrants and otherwise socially conservative, Mr. Martin is plotting a historic sweep of the rest of the country. The sweep starts at the Atlantic, where the new Minister of Fisheries and Oceans is charged with netting all the ridings now held by the Tories. It rolls through Quebec, where the Bloc Quebecois is in disarray. It picks up Ontario, which is solid Liberal country. And with a Cabinet now weighted to the West, it goes for the gold and a crushing majority.
The 21st century begins for Mr. Martin after the spring election. He will then be at liberty to select a Cabinet that reflects his true disposition. Canadians will then discover whether Martin the Prime Minister craves something more than merely acquiring power, and whether the next century will look any different to him than the last.
Lawrence Solomon is executive director of Urban Renaissance Institute and Consumer Policy Institutes, divisions of Energy Probe Research Foundation. E-mail: LawrenceSolomon@nextcity.com.
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Lawrence Solomon
National Post
December 11, 2003
Canada’s conservatives have voted overwhelmingly to create a new Conservative Party of Canada. They now need to decide on a leader but even more, they need to decide whether to contest Canada’s urbanized ridings, home to an overwhelming number of voters.
To many conservatives, contesting the cities seems suicidal: The Liberals have sure appeal on gun control, gay rights, immigration and other social issues that sway urban voters. Yet abandoning the cities is a sure formula for replaying the last century of dominant Liberal rule. Eighty per cent of Canadians live in our cities and suburbs, a proportion that has been steadily growing. Each new census adds urban ridings and reduces the number of rural ones, shifting the political calculus ever away from our rural past. The conservatives’ traditional strategy of contesting the rural areas, and capitalizing on regional discontent here and there to cobble together a victory, becomes less credible with each passing year. Worse, this strategy relegates the party to incoherence and opportunism – hardly the invigorated and unambiguous platform that a new party needs to inspire the next generation of Canadians.
Conservatives can take heart. Canada’s cities are winnable. The Liberals have been coupling their overt pro-urban social policies with covert anti-urban economic policies – in effect, the Liberals have been overtaxing urbanites to subsidize small town and rural residents. By attacking the Liberals’ anti-urban economic policies, Conservatives can remake themselves as protectors of the urban economy, and of urbanites’ pocketbooks. By also attacking the harm that the Liberals’ anti-urban policies do to the environment – urbanites are unwittingly forced to subsidize the exploitation of our natural resources for the benefit of American consumers – Conservatives can split the vote of urban Canadians who vote Liberal on social grounds. If Liberals lose their social sheen, and must campaign chiefly on economic grounds, Urban Canada is in play.
Taxes on urbanites tend to be hidden, providing shock value when urban Canadians learn of them. For example, the federal CRTC, which regulates phone companies, forces urbanites to pay a hidden surtax on their phone services – in recent years, it has reached $1-billion a year – to reduce the long-distance charges of rural Canadians. Similarly, urban consumers are kept in the dark over the discriminatory costs they bear in air travel, mail service, banking and other federally regulated goods and services. Statistics Canada provides another measure of how urbanites get shortchanged through our political process: The average rural resident receives 50% more in welfare, employment insurance, old age security and other government transfers than he pays in taxes, it reports. The gap between taxes paid and cash transfers grows for the average resident of small towns – those with populations less than 30,000. Most of the cost of carrying our unsustainable rural and small-town economy is borne by the residents of the large urban and suburban centres, whose sizeable middle-class and affluent populations, with their correspondingly high tax brackets, pay a whopping two-and-a-half times as much in taxes as they receive in transfers.
Urban residents aren’t alone in bearing an unfair share of the costs of carrying the country. Urban businesses also bear discriminatory charges, undermining their competitiveness and their ability to create jobs. Canada’s income tax rate for large corporations, and capital taxes that are widely considered to be among the most destructive taxes that we levy, are specifically designed to hit urban businesses. Rural businesses, meanwhile, particularly the extractive industries that inflict most of the environmental damage, get tax credits and direct government handouts.
An urban platform for the Conservative Party of Canada would signal that it sees itself as a party of the future, one that stands for a level playing field for all Canadian industries and equal rights for all Canadian citizens. An urban platform welcoming of an advanced, information-based society would also allow it to champion the free market values it espouses with integrity, and without needing to defend a host of regional development grants and other decidedly un-free market subsidies to inefficient resource industries. Not that this platform wouldn’t have risks – subsidy-dependent rural ridings that traditionally vote conservative may well switch to another party. But as the Ontario Tories learned to their dismay in their recent election, playing to a rural vote can be a quick route to political ruin. The status quo, in reality, represents much greater risks. And much smaller rewards.
Lawrence Solomon is executive director of Urban Renaissance Institute and Consumer Policy Institutes, divisions of Energy Probe Research Foundation. E-mail: LawrenceSolomon@nextcity.com.
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National Post
National Post
December 6, 2003
For four decades, in three provinces, under Liberal, Conservative and NDP governments alike, nuclear power has brought Canadians nothing but grief.
In New Brunswick, nuclear power has all but bankrupted NB Power. The utility now has negative net worth and an insecure supply of power, all because its big gamble in building its one nuclear plant – which accounts for 30% of that small province’s production when operating – didn’t pay off.
In Quebec, nuclear power was less of a disaster, but only because the province recognized its error and pulled the plug early on. One of the two plants built in Quebec was mothballed as soon as it was built; the other produces expensive power. Hydro Quebec remains solvent only because of the huge hydro-electric reserves to which it has access.
In Ontario, nuclear power effectively bankrupted Crown-owned Ontario Hydro in 1997, leading to its breakup and reorganization. Of the 21 nuclear plants built in Ontario, only 14 are operating today. The province’s vast supplies of hydro-electric power from Niagara Falls and other water plants, though they produce inexpensive power, cannot counteract the huge costs the power system must bear from its nuclear system. Even the nuclear plants that do work are financial albatrosses. Darlington, Hydro’s last nuclear plant, came in at $14.4-billion, almost three times its initial estimate and 10 years late. It produces the most expensive power in Canada, raising rates for all and encouraging industries to locate elsewhere. This week’s news, that refurbishing the Pickering reactors is now estimated at $4-billion, or more than five times its initial estimate, is true to form.
Federal taxpayers have likewise been hit: Atomic Energy of Canada Limited, a federal Crown corporation, has bled red ink from the get-go and needs annual transfusions in federal support – the tab to date: more than $20-billion.
Neither are Canadians alone in being disappointed by nuclear power. In the late 1980s, the United Kingdom decided to shut down much of its nuclear fleet, and cancel its nuclear expansion program, when the privatization of its power sector revealed that the country’s Crown-owned utility had been providing parliament with wildly fraudulent financial accounts. The balance of the U.K.’s nuclear fleet, privatized as British Energy in the 1990s, went bankrupt earlier this year, despite generous subsidies designed to keep it afloat.
The story is little different in Germany, Sweden, the United States and every other Western nation, with the possible exception of Finland. Elsewhere, nuclear power remains popular only in nations such as China, Iran, India, Pakistan and North Korea – countries with nuclear weapons programs.
Nuclear power can only survive in a monopoly system, where governments can force society to subsidize its operations. When countries turn to competitive markets to meet their power needs – as has happened in the U.K., New Zealand, and parts of Australia, Canada and the United States – no private sector player has ever built a nuclear power plant.
The U.K. was the first country to turn to competition, at the same time that it privatized its non-nuclear plants in 1989. Almost immediately, the private companies that now had access to the marketplace went on a building spree – the largest the country had ever seen. They soon flooded the U.K. with a vast new supply of inexpensive and clean power, most of it from the modern, high-efficiency natural gas generating plants that the private sector always preferred, but also from some wind power and renewable energy. Rates dropped for residential and small business consumers first, then for big business. The U.K.’s power prices are now a remarkable 30% lower than they were prior to privatization.
In the United States, competition came more slowly, and state by state. Some states, like California, badly botched their attempt at opening up their market, and paid dearly as a result. But most states deregulated sensibly, leading to a flood of inexpensive power in the United States, too. In some U.S. states, power companies have the ability to generate almost twice as much power as they will need on the coldest and hottest days of the year. Since 1999 alone, deregulation has increased the U.S. power supply by 24%, creating an immense surplus. Ontario now depends on this surplus from the United States to get by, and New Brunswick may soon, too.
Ontario, Quebec and New Brunswick are now all reassessing their power systems, wondering whether to pour more good money after bad in an attempt to refurbish their ailing nuclear reactors. If they do, they can count on more of the same – cost overruns, followed by high-priced power if the plants work and no power if the plants don’t.
If they decide to stop their nuclear bailouts, they have a ready alternative in open markets. Small power producers – once they become confident that governments won’t change the rules of the game on them after they had invested millions – will soon flood Canadian power markets with inexpensive and clean power. Power shortages will give way to power surpluses. After four decades of careening from one crisis to another, politicians can move on to other fields.
Lawrence Solomon is executive director of Urban Renaissance Institute and Consumer Policy Institutes, divisions of Energy Probe Research Foundation. E-mail: LawrenceSolomon@nextcity.com.
