Thursday, 31 December 2015

Driving a Taxi is Not a Human Right (or, Don't Take Away my Uber)


Where's Justin Timberlake to sing "Cry me a river" when you need him?
Image: Chris Helgren, Reuters


Among many things notable things in 2015, one thing that stood out is a "debate"that boiled over which I have followed for a long time, the ongoing "taxis vs uber" controversy.  But really, the only people for whom I believe this is a "debate" or a "controversy" is taxi drivers.  The debate has been falsely framed as an either/or proposition (people used to take taxis, now they take Uber) when it is anything but. Individuals make transportation choices based on cost, convenience, and speed, and when we examine the success of Uber and the inability of the taxi industry to do anything in response to it other than promote its own vested interests, it is a societal debate worth diving into in greater detail, because it is one in which information and context matters a great deal.


The reason information and context matter so much is that the issue is somewhat complex.  But the service at the heart of it is not.  A person does not debate the merits of regulated taxis vs. the sharing economy when they are trying to get from point A to point B.  A person weighs all of their options and chooses the most logical option. And taking a taxi is not just a luxury, it is literally highway robbery.  If you have ever sat in a cab on the highway while the meter is climbing so fast that you are nervously watching the exits fly past with trepidation, figuring out how many you have to go while this is costing you several dollars per minute, you know what I am talking about.  A short distance of a few kilometres will cost upwards of $15-20; anything over 10 km involving highway driving can easily set you back $50-$60, and that's not factoring for traffic, which we know is horrible in Canada's three biggest cities.  Couple that with long and uncertain waits for rides, mostly crappy service (more on that in a minute), the awkward exchange of money/refusal of credit cards/expectation of tip, the $4-5 just to sit down, and you can understand why, even before uber, taking a taxi was something I avoided doing at all costs.  Maybe once or twice a year if I absolutely had to.


In fact, the last time I took a taxi was a few nights ago.  In the midst of a holiday travel, delayed plane snafu dignified of comparison to Home Alone, I had to take a taxi from the Calgary airport to a nearby hotel where I was put up for all of three hours to sleep.  It was after midnight, -19 C, and the shuttle had stopped running.  I sat in the back of a heavily used car with no functioning seat-belts in the back seat (I had my 4 year old son with me), and paid $16 to be driven, by my estimate, about 4 km in 5 minutes.  And despite being exhausted, frustrated, and barley coherent, am I really going to not tip this guy on Christmas?


Uber, on the other hand?  Let's count the steps I go through as a passenger, which have been 100% consistent in my experience on multiple rides in 3 different cities 1) Push a button on my phone 2) Person shows up in immaculate new or nearly new car in less than 5 minutes 3) I know their name, what they look like, and what they're driving in advance of their arrival 4) Drive to destination, having a pleasant conversation about life and where we are on the way. 5) Get out at destination without exchanging money, costing almost always under $15.  In fact, to illustrate the difference in cost between taxis and Uber, consider the example of one night when I went to visit a friend in a far flung suburb about 30 km from my house, had a bit too much to drink, and the highway was closed for construction overnight.  I sat in an Uber for over an hour to get home.  In a taxi this idling over that distance would run up well over $80-$100.  The uber was $31.


These two paragraphs explain why there is no "debate" for people like me and millions of others who are looking for efficient and convenient ways to get from point A to point B.  This is where meddlesome municipal politicians really need to listen up.  We don't take Uber because the service is better; we do not care about "customer service".  We do not want you to regulate the taxi industry even more, compelling drivers to follow a dress code and accept credit card payments.  We don't care if taxi companies have apps.  These developments are the result of trying to solve problems with a typical bureaucratic mentality which is "Oh, interest group feels threatened by x, and x is doing y. Therefore interest group needs to start doing y too, so we can legislate x out of existence."  But the "y" is not the issue.   Uber is not competing with the taxi industry, because, as I have just shown, I never took taxis to begin with.  That is a choice I make as a consumer in a free market; if everyone was like me, the taxi industry could not survive due to lack of demand.  If, on the other hand, Driver A wants to drive his car around and Passenger B needs a ride and Driver A is willing to take him, why do these six figure earning bureaucrats at City Hall think they are on some do-gooding crusade trying to stifle this legitimate transaction between two willing parties?


Some of issues with Uber that the taxi industry often cites can be hammered out relatively simply because they are, in fact, issues between individual drivers and their governments/insurance companies.  One major argument is that Uber is illegal because its drivers don't carry commercial insurance.  Well, if you are putting 100,000 km on your car a year driving Uber, you might want to make sure you are covered, but again, this is a discussion a private individual needs to have with their insurer.  Same thing for uninformed people that claim they are paying no taxes; since Uber does not involve cash, all transactions are on record at Canadian financial institutions, and good luck arguing with Revenue Canada that the $40,000 you earned driving Uber should be tax-free.  Other writers have brought up important points.  Jon Kay's long form piece on Uber basically concludes that it is way better and the taxi industry's days are numbered, but because he trained to do both as research for the piece he made the important (and mostly overlooked) observation that taxis provide an important service to people with limited mobility and there is no compelling reason for Uber to do this.  Other people have taken the social justice angle, wondering what kind of job security and retirement Uber driving can provide.  Unfortunately this lament is related to the omnipresent one about increasing precariousness in the job market, inequality, and the ultimately unproductive discussion about the "good ol' days" when Ward Cleaver supported his family of four's comfortable upper middle-class lifestyle on his middle manager salary.  Sad? A bit, but that ship has sailed and there's no going back, so why don't we focus on all the ways the world is better compared to the 1950s?

There is a profound lack of knowledge around the way taxi ownership works and how drivers are compensated which makes this simplistic debate wholly unproductive.  The taxi industry has an interest in making you think that taxi drivers are legitimate hardworking business owners providing a vital and irreplaceable service and Uber are just a bunch law-breaking cowboys from the Wild West aiming to take that away from them.  In fact, the taxi industry is home to a little-known extremely privileged group of rentiers who are able to exploit a vast pool of cheap labour year round, regardless of economic or market conditions.  It is necessary to explain the concept of yield to illustrate just how disingenuous it is for these people to try and make you think that Uber are the bad guys for encroaching on their monopoly.

Let's say that you bought shares of the grocery store chain Metro in 1998.  You paid around $4 per share and the dividend was 1 cent per quarter which is an annual yield of 4 cents or 1% return on your intial investment.  Metro stock has split several times since then and they have raised their dividend on multiple occasions as well.  So today if you buy the shares at $39 today your yield would be around 1.34%, but your yield from when you bought in the late 1990s is now up to 8%, because you got in for cheap at the beginning. That's not even counting the massive capital gain you still have not realized. Ergo, you have been hugely rewarded for your patience because would you sell an investment that consistently and safely yields 8%? (And pay the tax bill)? Probably not. But would you want to tie up a much greater amount of capital today to earn 1.34% from the same investment?  Only if you expect it to keep doing the same thing.

Real estate in expensive cities works the same way.  A triplex at Dufferin and College in Toronto, once a working class neighbourhood, would today fetch upwards of $1.75 million.  The three apartments could be rented for perhaps $1,500-$2,000 each.  But this is scarcely enough to cover the landlords costs even in this era of record low interest rates, PLUS the huge amount of capital he would have to tie up to even buy the property.  If it is a long term landlord however, who has let's say owned the building for 15-20 years, he should be making a tidy return on his initial investment of let's say 375,000-450,000 in the late 1990s.  If there is no mortgage left the income from the apartments is basically enough to live off of.

Thank you for bearing with me.  Now understand that licences to operate taxis (sometimes called "medallions") function much the same way as the investments in the examples I have just described.  People who bought medallions back in the day for let's say $5,000 or $10,000 now have people driving taxi for them, earning perhaps $200 profit every day the taxi is on the road.  Someone who made an initial investment of $60,000 in 1980 owns today $1,200,000 worth of medallions.  That's just on the medallions.  Now the initial owner is not going to drive the taxis and make 300-400$ a day (which would be nearly pure profit), they are going to pay someone to drive who is going to earn $100-150 a day working 14 hours 6 days a week while they (the owner) collect $200-$300 a day pure profit from each taxi for doing nothing.  Now you see how owning a taxi, for a long time, has been a licence to print money, because cities have limited the number of medallions for sale, creating a distorted market.

Now that poor bastard from Pakistan or Morocco or Bangladesh who is the face of taxi driving you see in Canada is working 12-14 hour days, 6 days a week, and can scarcely support himself and his family on the $650-$800 a week salary he is earning in Canada's large urban centres, so what does he think.  He thinks, I'm going to borrow the money to own this taxi so I can be an owner operator rather than an employee.  This way eventually I'll own the taxi and all the driving revenue will flow straight to me.  But here's the rub.  Today a medallion goes for around $200,000.  So, the guy is going to have a mortgage on the taxi medallion plus a bunch of insurance and licensing fees and business licence and inspection and bullshit from city hall to own the taxi outright in 20 years.  And remember the car has to be new-ish and replaced every few years.  So these are the guys protesting and blocking streets in downtown Toronto and assaulting people at the Ottawa airport, and no wonder.  They've been sold a bill of goods, and the medallions they have been working like dogs to payoff have already lost in some cases 30% of their resale value as the dark cloud of Uber hangs over the future demand of the taxi industry like the sword of Damocles.

Taxis are just like Metro shares or Toronto real estate.  In the past, a long term investment would have been extremely lucrative but today, you are going to pay a hefty price for the promise of future earnings.  And even though nothing is guaranteed in the investment world, people buying groceries and living in high-demand, centrally located areas seems like a safe enough bet today to demand a huge premium on those future revenues, even though there is no guarantee that today's investor will enjoy that immense run-up of capital appreciation an investor would have had up to now.  Taxis were in the same boat, until Uber came along.  This is why these Uber and companies like it are sometimes called "disruptors", and deservedly so.

We have, therefore, the vagaries of the free market which have created the predicament taxi owner/operators find themselves in today.  There is yet another wrinkle which is the fact itself that they are owner/operators.  It is never mentioned that at one time, someone could earn a middle-class salary driving cab for a taxi.  In smaller communities, this possibility still exists today.  My friend was earning $1200-$1300 a week driving a taxi in Belleville, Ontario, and he had none of the headaches or BS he would have had to deal with owning the taxi.  In the big cities, however, demand is such that greedy municipal politicians legislated away such arrangements long ago, so that today all taxis on the road must be owner operated though they can then, of course, be driving by a driver other than the owner for a slave's wage.  Bureaucratic overreach and municipal incompetence are of course never protested by cab drivers because monopolies tend to be accepted as unbreakable, but as soon as a new force that they don't understand emerges that people like way better, it is derided as a threat to humanity.

Humans tend to have short memories, especially when it comes to market history and the evolution of supply and demand.  Did the thousands of workers who poured their life savings into Nortel stock in the 1990s block downtown Toronto when it was a penny stock just a few years later? Was there a bailout in the 1920s for people who were deep in the horse and buggy whip business in 1915?  Are we going to setup a federal assistance program now for people who paid $800,000 for trailers in Fort McMurray when oil was $115 a barrel?  It is imperative that politicians understand that taxis' fate must be decided by the market and they are there to defend the public interest, not prop up those of special interest groups which in this case they have done for too long already.  We are not even protecting good middle class jobs by intervening in this industry as was successfully argued during the 2009 bailout of the auto industry; we are merely protecting a class of rentier-elite's ability to squeeze all the more cheap labour out of an all-too-willing, mostly immigrant underclass.

Unfortunately, as with all jobs, no one is entitled to make a living doing them indefinitely.  Driving a taxi is not a human right.  Drivers, you are not going to convince me or anyone else with your protests.  And government, don't you dare take away Uber.

Happy New Year

*This blog will be undergoing a much-needed, long overdue re-think and re-vamp very shortly.  Thank you for reading, and see you in 2016 

Sunday, 13 December 2015

Why I'm Cancelling My Walrus Subscription



It's time for me to say goodbye to one of the long-standing dysfunctional relationships in my life.  So long, Walrus.  Our five year-plus subscriber-magazine LTR (long term relationship) is over.

This is not, as you might think, due to the embarrassing and maladroit behaviour of some of the higher-ups over there that was recently highlighted on the Canadaland podcast.  Yes, I am a long term supporter of that show and I did, in fact, learn of its existence from an article in the Walrus, but none of that should take away from the fact that the segment gave a peek into what looked like a rather toxic culture. The Canadaland story also brought into focus, crystallized if you will, the unease with which I watched those increasingly desperate unopened renewal notices pile up on the table at my front door, but it is not the reason I'm out.  It gave a conscious validation of my subconscious whispering to me: "I don't want to give these guys any more money." Trust me, I wouldn't just ditch a media outlet over someone criticizing it, since all media outlets are run by humans and therefore fallible. But this struck at something deeper.  I could tell something had been amiss at the Walrus for some time.

And let's get this out of the way: This is not about Jon Kay's editorial bent, or his perceived conservative leanings, either.  On the contrary, I look forward to reading Jon's forceful and incisive op-eds in the Walrus just as I did when he was at the National Post.  Unlike many bien-pensant elite members of your readership who were horrified at his hire, I myself was quite gratified, because I thought he would head up a smashing of the complacency I felt was developing at the publication. John MacFarlane did a good job but the meandering, stodgy Central Canadian paternalism that came through in his op-eds was wearing pretty thin by the end, which may just be more generational than anything else.  I think you have to be John's age to be able to square this progressive, enlightened view of Canada as this great social democratic force for good in the world with a steadfast refusal to pay interns.   Briefly, I was rewarded by this changing of the guard.  Patrick Graham's piece on ISIS was the most jolting and informative article I had ever read in the magazine, topical and relevant and forwarded to countless family, friends, and acquaintances in PDF.  I cannot emphasize how much more entertaining this piece was than a piece about local TV shows in Regina, or a photographic retrospective of curling memorabilia throughout the ages.

Therein lies the tie-in with all the drama surrounding Kyle Carsten Wyatt stealing the idea for his cover essay about plagiarism.  Now bear with me here.  It wasn't a bad article, and it was his original work, even if he stole the idea.  I'm not firing the Walrus because of that.  I'm not firing the Walrus because MacFarlane refused to pay the interns or even comment publicly on that decision.  I'm not firing the magazine because it appears that one of the publisher's first actions on the job was to secure herself a 1%er, multiple six figure salary, or because she may have also overrode journalistic integrity standards at the behest of a highly placed, downtown elite employed at one of Canada's megacorps at least once.  I'm firing you because this is all behaviour that is symptomatic of a toxic and dysfunctional organization.  Now, being toxic and dysfunctional is not a grounds for dismissal in itself (if it was, I would have to exclude 90% of the great music, books, and acting that have occurred in the past half century), but it is when it affects the product (and we've all experienced the moment when our favourite toxic and dysfunctional movie stars, musicians and writers go south and we can no longer take what they are doing seriously).  I'm firing the Walrus because I believe this toxic and dysfunctional nature has caused the publication to fundamentally fail at its mission.  For that, you no longer deserve my $29 a year.

What is that mission again?  It bears repeating here: "Report and encourage debate on matters vital to Canadians."And why has that mission failed? I'll tell you why.  Because all of these lies and machinations and backroom bullshit shenanigans that have been going on over there and have come to light are of interest to no one, and I mean precisely no one, in this country. There are two reasons you have failed in your mission - #1, because I'm probably the only person in Canada who is pathetic enough to remember an approximation of that lame-assed stated mission and #2 because when I read that lofty and ambitious proclamation and then look at what is actually going on at the publication do you know what do you see?  A bunch of scheming, jockeying Downtown Toronto Elites all trying to protect their own status and turf, the boundaries between whom seem to be defined by the clashing of their own massive egos.  Lost in all this is a simple but fundamental question: Who reads the Walrus?

Does my Dad read the Walrus? Does my Mother-In-Law read the Walrus? Does my boss read the Walrus? Does my son's teacher read the Walrus? Does anybody I know read the Walrus? And the answer to all those questions is no, not really.  Is the Walrus a piece of shit? No, I actually enjoy reading it most of the time.  And yet, for the same reason I stopped giving money to another publication I enjoy most of the time, the Globe and Mail, I will stop financially supporting it.  You arrive at a certain point where you just cannot stand the utter arrogance and entitlement with which people in downtown Toronto pretend to address and speak for the whole country anymore.  The reason this is precisely so insufferable is because in reality, they are speaking to an infinitesimally small subset of like minded people just like themselves.  The whole country suffers as a result, when these so-called "national newspapers" and "national magazines" cannot look beyond their own white, middle-aged, moneyed, educated, Torontonian navels with the accompanying interests and perspectives.

And there have been great writers in the Walrus; I guess some are there, and some are not.  But people like John Lorinc, Ivor Tossell, Sasha Chapman, and Rachel Giese, to name a few, were why I loved to read the magazine.  I enjoyed their work very much and mean no disrespect to any of them by writing this kiss-off.  But I think the mismatch between the magazine's stated objective and how reality played out on the ground can be explained by one feature the Walrus aped from another great magazine.

Some years ago, John MacFarlane detailed in an op-ed how the Walrus became financially sustainable: it set itself up as a non-profit charity, following the same structure the New Yorker uses. Great idea - now, as a once-happy New Yorker subscriber who had to stop because once a week is just too much, maybe I can point out two other areas where the Walrus would do well to follow that venerated publication.  First of all, by calling itself the New Yorker, the magazine has no pretension to be based anywhere else, have the perspective of anywhere else, or be primarily grounded in the worldview of anywhere else.  It could never be America's "National Magazine", and it never tried.  This allows the magazine to remain incredibly erudite and highbrow without ever feeling the need to pander or fulfill some indescribable mission (like the Walrus's).  Second, for first rate long-form and fiction, it is simply the best.  And I don't mean stereotypical dense literary fiction or academic compound sentences that are the literary equivalent of BDSM;  just great writing that is like candy to people who enjoy reading great writing.  I mean, I can find a New Yorker lying around in the garbage from 3 months, 1 year, 3 years, 10 years ago, from 1947, it doesn't matter.  They always publish great stuff to read.

So the Walrus is doing something right, and if you keep pieces like Patrick Graham's and John Lorinc's coming, you should achieve long term success.  But please ditch these 3 or 4 pointless, 200 word blurbs every issue about insignificant events happening in nowheresville, Northwest Territories. I don't have a problem with you running stories that happen in godforsaken corners of our country but for the love of god let them be fucking interesting.  It is the worst kind of Central Canadian conceit that we need to "create a culture" by "telling stories about ourselves" and "representing our regions". No.  It's time someone stood up and said that a village in Saskatchewan is not interesting to Canadians, it's not interesting to the world, and it's not interesting to the people who live there.  This is the very reason Canadian cultural elites bemoan the fact that the industry they preside over produces content that the vast majority of Canadians are either ignorant of or absolutely indifferent to.  Like they are with the Walrus.

Walrus, you've come a long way but you've got a long way to go.  At least if you were developing great talent or had an awesome collegial culture I could maintain a soft spot for you.  But you guys need to up the bar 1000% before you give yourselves licence to treat interns like shit again.  You cannot have your cake and eat it to.  These young impressionable people could not possibly know how irrelevant your publication is.

Cutting the cord (*sniff*)
Christopher Lackey

PS...don't think I take myself seriously.  A subscriber threatening to cancel is like an opposition MP asking when the minister will resign - bluster-filled and par for the course.  Nevertheless, we should have good magazines to read that are not owned by rogers...and this is about the principles that could facilitate that more than $29.

Saturday, 14 November 2015

PARIS -Le Lendemain/The Morning After

11/14/2015 >   > D’abord j’aimerais offrir aux Français mes condoléances sincères.  La France est un pays très important pour moi, je n’ai que des bons souvenirs du temps j’y ai vécu, et je continue de cotoyer des Français au quotidien ici à Montréal.  Paris est une ville très spéciale et ça fait mal, tout simplement.  La solidarité est donc de mise à travers le monde, et je pense bien vous allez en voir. >   > First of all let me say that France is a very special country for me.  I have very fond memories of the time that I lived there and continue to interact with French people often here in Montreal.  Paris is a great city and this hurts, condoleances and solidarity are the order of the day. >   > I have something else to say that is burning me up inside.  This is to all the right wing demagogues and ideologues on tv, on the radio, in the press, and especially on twitter, who immediately exploited this tragic event for their own personal ax-grinding, unable to resist that their own cynical impulses to not only kick dirt in the faces of their political opponents, but to suggest that said opponents’ “softness” or “relativism” was somehow responsible for the deaths of ~129 people.  Here’s an example from Stephen Harper inner-circle alumnus Gerry Nicholls. >  
> Let me give you ignoramuses a little history lesson.  Attention spans these days are compressed to micro seconds.  People have short memories.  Everything is “instant reaction! instant reaction! knee-jerk!” .   So you probably forget all the other times this has happened. Let’s look back at terrorist attacks perpetrated against the west by racial islamists in the past 17 years.  US Embassies in Kenya & Tanzania August 7 1998. New York Sept 11 2001. Madrid March 11 2004.  London July 7 2005.  Paris November 13 2015.   Those are just the notable ones that I remember; there are hundreds worldwide every year.  Right wing governments have been in power in Spain, UK, USA, Canada, Germany, Australia and France for many of the years during this period.  This begs the question: what exactly would you have done differently, in the past and today, that makes you feel entitled to fucking moralize against the population at large as if you belong to some enlightened minority who “understand the threat” and the “urgency to act” at a time like this? >   > I’ll give you an example of what your urgency to act has given us.  Two lifelong piece of shit dictators removed by Western military forces in Iraq and Libya, which has created highly destabilized countries where the populations are more vulnerable to sectarian warfare, lawlessness reigns and corruption is rampant.  The kind of place that is a fertile breeding ground for organizations like ISIS. >   > Excuse me if I am skeptical in the face of your tough-guy bullshit that sees the world like a giant playground we just need to walk across and kick some ass in. >   > Refusing to be cowered, suspicious, and afraid is how you defeat brainwashed murderous ideologues like ISIS.  You are letting them win the war by fanning the flames of division and clamouring for a world war.  I live my life with my head held high everyday with no fear of Islamic terrorists.  We live in western countries with world class spy and surveillance apparatuses and police and military personnel.  If some piece of garbage extremist wants to kill innocent people where I live he’s going to have to get past all those hard working people doing their jobs, and THEN he’s going to have to kill himself, because those people won’t let him survive for 2 seconds once it becomes apparent what he’s doing.  If I was at that show yesterday I might not have survived but alas, that could not have been prevented in all these tragic deaths.  SO spare me all your lecturing directed at “bleeding hearts” like you’re somehow the principled and upstanding members of the human race…the fact that you would use this terrible time to plunge us into a maelstrom of vile and incendiary rhetoric says a lot more about your weakness of character then your “resolve”.  I’ll take my chances of surviving every day like every other human on earth does and all of your reckless mouth-frothing will not change that one iota. >   > Even Justin Fuckin Bieber sounded a million times more enlightened than any of you last night.  That says a lot. Get a grip already

Sunday, 2 August 2015

Why I'm Voting For Stephen Harper




My name is J.C. I'm an average Canadian and I voted for Stephen Harper in 2004, 2006, 2008, 2011 and I'm getting ready to do it again in 2015.  Here's why.
 
In terms of being an average Canadian, there is just nobody who represents my interests, my values, and what I believe in more than Stephen Harper.  I believe there is a lot of danger in the world and he is the only one who can keep us safe and protect us.  When he's riding that ATV on the ice off Iqaluit, looking through those binoculars on a Canadian battleship in the Baltic Sea, or looking Vladimir Putin in the eye and telling him to get out of Ukraine, you know one thing for sure.  This is a tough guy.  He is a tough customer.  You don't want to mess with SJH.  Especially when he's got that black HBC 2010 Vancouver Olympics Canada sweater on.  I know that's what I wear whenever I'm not wearing a suit.  I'm on Team Canada!
 
Canada is a modern country with modern values and that's why we closed our embassy in an  theocracy like Iran.  And now we are bombing the evil islamic terrorists in ISIS that pose an existential threat to…Iran.  So we are against Iran and we are against ISIS.  Iran said Israel needs to be wiped off the map in 2005 and Israel is our friend.  Remember, if you get on Stephen Harper's bad side it's a lifetime grudge that's why we throw anyone who harms a police dog in jail for five years in Canada.  Anyway, there is no other principled nation on earth that defends the rights of radical extremist jewish settlers who carry assault rifles while they push their kids in strollers in the occupied palestinian territories as ardently as Canada.  The palestinian arabs they killed and displaced were all terrorists anyway.  Saudi Arabia is also an islamic theocracy and saudi money has been a big help to terrorist and non-terrorist palestinians.  The Saudi monarchy promotes a very conservative islamic ideology similar to ISIS and has held public beheadings in the country.  We did an arms deal with Saudi Arabia last year but are bombing ISIS. Can you keep it all straight? Stephen Harper is the only Canadian politician who is tough and takes a principled stance in this region -  the other guys just want to coddle and appease the terrorists.
 
I am proud to live in a country blessed with natural resources.  When Stephen Harper said he wanted to make our country as an energy superpower my heart swelled with pride.  Even if the kind of oil we sell, Western Canadian Select (WCS) trades at a discount to conventional North American oil, West Texas Intermediate (WTI), which trades at a discount to the crude price on international markets (Brent), and the price of all of these commodities has fallen 55% in one year, our economist prime minister is clearly an extremely intelligent guy who developed a very innovative and forward thinking economic policy.  I mean, he must be, right? The media always says how smart he is.  Our oil also risks to keep trading a discount because 0 new pipelines have been approved in 4 years of conservative majority rule, but don't worry, change is just around the corner.  It's like Harper said, right? You don't take no for an answer.
 
Canada is a beacon of freedom and democracy to the world.  That's why Stephen Harper is taking such pain to pick up the megaphone and tell the world so.  Our country is literally spending hundreds of dollars of taxpayer money building a huge, 80 foot statue of liberty knockoff in the middle of Cabot Trail National park on cape breton island (Mother Canada), her arms stretched out to the atlantic ocean and her ass facing Nova Scotia.  Or how about an avant garde, multi-edged monstrosity on public land in the middle of downtown Ottawa between our nation's most sacred institutions (parliament, the supreme court)?  That's our national memorial to all of history's victims of communism, who nobody before Canada ever thought to memorialize probably because it is impossible to determine how many people actually died from a political ideology.  But Canada does, that's who we are, and in case you didn't know that, well, just look smack in the middle of our capital.  We don't do subtlety in this country anymore.  We stand firm in our solidarity with millions of dead nationless, faceless, nameless, imaginary victims of communism.  Thank you Stephen Harper, for making your personal ideological score-settling something Canadians will have to explain for generations to come.  We can also count on Harper to stand up and be counted in our country's undying loyalty to the British Monarchy.  If that means spending tens of millions of dollars every year Prince Charles or Prince William decides to show up for "a visit", so be it.  If the other guys want to pick a pointless fight with the monarchist league of canada (14,000 members, median member age 88) let them. 
 
The other guys will bankrupt the country with their wacky policies.  This government has run deficits in 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014 and...wait for it.  This year we have balanced the budget.  And we have passed a law that every Canadian government must balance the budget forever.  We do not listen to those eggheads at the bank of canada and the parliamentary budget office (which Stephen Harper created) who say that there will be a deficit this year because of weak oil prices.  We know we've got our priorities straight.  Anyone who asks you if it was worth it hasn't seen all those new curling rinks on the Saskatchewan prairie paid for from the funds of the "economic action plan"
 
And there's no government that's closer to our men and women in uniform, even though veterans have had to sue for benefits and the government has not managed to build any battleships in Halifax or Levis or order any new fighter jets since 2006.  I guess that must have been the Liberals.  And you can't trust any of the scientists, journalists, premiers, or academics out there.  They purposely distort our democratically-elected government's message.  They're the enemies.

It's been a great ten years and here's to another 3,650 days of Conservative majority rule!

Tuesday, 14 April 2015

Federal Finances – Totally Extreme

Well, despite years of deficits at the federal level, more specifically an over 25% increase in Canada’s national debt since they took over, the Conservatives feel it is time to double the amount Canadians are allowed to put into TFSAs next year.  Hey, no objections here.  If you want to let me shelter $47,500 from tax and potentially make some really lucrative investments, who am I to refuse? The Conservatives will be denounced by the other parties and traditionally “left” participants in the public debate in Canada, saying it only benefits the rich.  While there is some truth to their argument, because not many people necessarily have all the money lying around to max out their TFSAs, including me, it is simply shameless pandering to the large segment of the population whom we should have no sympathy for: those who live beyond their means.
It is not just the “1%” who could have found a few hundred bucks in their jeans every month to invest every month since the TFSA was created in 2009, a time during which we have seen the US market triple and the Canadian market double.  A reasonably thrifty and industrious person earning the median national income or less could have easily done that and be sitting on over 50k today tax-free.  But no, we should penalize this guy because the average Canadian is absolutely clueless, and has no money to invest because of their car payments, $180 cable packages, and maxed out credit cards and lines of credit.  The fact that only a small part of the population seems to have the intellectual wherewithal to take advantage of their right to use this account properly should not incite overzealous populists to alter or cancel the program.

Besides, anyone with knowledge of recent Canadian fiscal history knows to take this carrot and stick vote buying with several grains of salt.  What the government giveth the government taketh away.  Loopholes and opportunities to shelter money are always exploited to the max by rational actors (a group that does not include average Canadians, it would seem) until they are no longer tenable.  In the early 2000s, many companies in Canada figured out that instead of being publicly owned corporations they could turn themselves into something called “income trusts” (and they still exist today: any ticker on the TSX that ends with .UN is an income trust) and thereby avoid paying tax on their profits.  This is because they would distribute much or all of it to shareholders in the form of income which, until 2006, was not taxed in the hands of the shareholders.  Seniors and smart people of all ages could invest their savings in shares which would provide a reliable stream of tax-free revenue, and many did.  It was fun while it lasted.  The conservatives had to break their election promise when it became apparent that Bell, the big banks and pretty much any blue chip crown jewels this economy had were going to join the bonanza and convert to income trusts, pretty much ensuring an avalanche of corporate profits was going to completely escape taxation indefinitely.   The loophole was closed.  Income trust income is taxed today like regular income, whether it be in the form profits flowing from refining zinc (Norando Income Fund, TSX: NIF.UN) or selling slices of pizza (Pizza Pizza, TSX: PZA.UN).

So the odd greedy pissed-off senior would leave a comment on political news articles, and Jim Flaherty said he got earfuls in airports for the rest of his life, but most of the population didn’t give a shit because they weren’t personally affected by the change, and probably didn’t even know or care what it meant.  The same thing is going to happen one day with TFSAs.  Those future trillions can and will be taxed at the stroke of a pen, in the name of “fairness”, and naïve entitled Canadians won’t be able to do a damn thing about it.  Revenue Canada is the nation’s most powerful creditor, and anyone who thinks their RRSPs and TFSAs are bulletproof needs to remember that nothing is guaranteed in this world, not even the solemn word of the Canadian government.  The Income Tax Act has been amended many times and it will be amended again if the nation’s fiscal health is compromised, and demographics pretty much ensure that it will be.
But in the meantime, invest away or “smoke ‘em if you got ‘em”, to use one of my favourite redneck quotes, with your tax-sheltered cash.  Because whether you choose to invest in Bell, Potash, or some junior uranium producer in the third world, you’ll be doing better than this next group of people who are going to be affected by another Conservative government policy.  For all the bitching in the Canadian financial pages about high fees, these people would be in heaven if they could pay 2.5% a year on their money.  They are the people who don’t have any money – the people who are going to be affected by the government’s policy of requiring everyone to sign up for direct deposit by spring 2016.
It’s hard for some people to digest – that the notion of walking into bank branches, standing in line with physical paper cheques, waiting for 5 days for the cheque to clear, etc, etc, is just completely unnecessary in 2015, and has been for a long time.  The real old timers will want to update their bankbook at the end, just to complete this cumbersome and time consuming sequence.  These amounts and who they are destined for is all digital data in the computers now.  If people want to hang onto their “symbols” of how banking used to be, that’s fine, but these things are now purely symbolic, so normally I’d be all for the government doing its part to phase out what costs, after all, real taxpayer dollars.  And these bank artifact antique collectors are not the people I want to talk about. The truth is, there are people in Canada who do not have and cannot get bank accounts.  This is the most vulnerable layer of society who will probably experience more stress and difficulty as a result of this change, and this is what has driven a lot of criticism of this policy.
There are all kinds of people out there – mentally unstable, unable to look after their own affairs, transient – who cannot get bank accounts.  To get a bank account you need two pieces of ID, to get the ID you need to have your original ID and navigate government bureaucracy.  Also, to get ID, you generally need a fixed address. You laugh but there’s people out there who can’t deal.  And these are the people who end up giving a huge chunk of their pathetic amount of government assistance to cheque cashing outlets and other shady payday loan companies because they are literally in hand to mouth survival mode.  If they had bank accounts they could have immediate access to their money when it gets deposited, if they can get their head around obtaining a void cheque and sending it to the government (not likely).  And that is if they can get the bank account.  Someone who smells, is incoherent, scary, or unable to be respectful and polite is not going to get far in a bank.  Or maybe they are banned from certain banks for doing things desperate people do, like writing cheques to themselves and depositing empty envelopes in ATMs. 
For a brief period in my life when I did collections calling the States, I discovered that a shocking number of Americans I talked to had no bank account and functioned only with money orders.  I know there is a similar segment in the Canadian population.  And this policy, if it is applied too severely, will adversely affect that segment of the population.  All to save 19 million bucks.  Whether the government is competent or not, we’re stuck with it, so as far as this being an important cost-cutting measure, all we can say is “If you say so”. 

Now let’s get to work depriving it of untold billions of tax revenue.



Tuesday, 17 March 2015

Zunera Ishaq has made Canada look stupid


After much internal deliberation about all of the symbolic dynamics of this story that make it a controversial and provocative one, I decided that I absolutely do not give a shit if Zunera Ishaq wears her niqab in her citizenship ceremony.  Why? I think the fact that she has managed to make Stephen Harper look stupider than the two opposition leaders makes her deserve to wear it, if nothing else.

Let's start by getting one thing out of the way.  The reason she is allowed to wear it under the law is that she is not harming anybody else by doing so.  Nobody else's rights or freedoms are impinged upon, and no undue burden is placed on the state,  Yes, it does feel at first like you are being played for a fool and how far does tolerance go in the name of political correctness, but if we are afraid of a regressive and oppressive islamic culture permeating the Canadian state, let's talk about matters of substance rather than little pieces of cloth.  There will be no legally recognized sharia court.  And "cultural customs" that cause or could cause harm to free Western citizens - honour killings or genital mutilation or whatever it is, will not and cannot be defended within a Western legal framework.  Niqabs and burqas are not a "gateway drug" that will plant these things at our doorstep.  Just look at the Shafia family in prison.  The system works.

One inconvenient truth of our modern, western, liberal democracy is that we have to tolerate free expression and free speech no matter how offensive they may be.  Whenever some blowhard politician starts talking about "things going too far" and "where do we draw the line", you know that you have to stop taking them seriously.  You cannot open that can of worms saying that you speak for the "majority of reasonable, common sense people" because then you arbitrarily get to decide what is acceptable and what is not.  This is a slippery slope that society cannot be permitted to slide down.

The gold standard we have to settle for is zero tolerance for intolerance.  That is why, despite all of Bernard Drainville's resurgent demagogic drum-banging for his no-religious-symbols-in-public-spaces  crusade in Quebec following the Ottawa and St-Jean-Sur-Richelieu soldier shootings and the Charlie Hebdo massacre in France, the PQ got destroyed in the last Quebec election.  Sure, the emotional appeals get momentum early on (I think "burqas" probably occupy the spot between "root canals" and "Chad Kroeger" on the "Things the general Canadian population loves" list), but the crusading turns into a massive liability as the politicians are forced to twist themselves into pretzels to defend a position that they themselves are making up on the fly ("No, no one will lose their jobs over this.  OK, maybe some people will. But only after a five year easing in period.  But not in this category.  But only for religious symbols with this degree of ostentatiousness").  Now, as Stephen Harper doubles down on his anti-niqab position, he is taking possibly the biggest risk of his political career, as Chantal Hébert and other seasoned veteran political observers have duly noted.

Because make no mistake, this is pure and simple politics.  2015 is shaping up to be a volatile and bumpy year for Canada's economy, and people out there are hurtin' pretty bad.  Layoffs are mounting, real GDP growth is anemic despite a zero interest rate policy and materials, financials, and oil & gas - the cornerstone sectors of the TSX, are all susceptible to intense speculation, downward pressure, and extreme volatilty.  Amidst this backdrop, the country struggles with an unimaginable housing bubble (average Canadian home price: $431,000) the feds did nothing to prevent.  Just bear with me here for a second.  Median house price is $431,000, let's say the average Joe and Jill save 5% down (meaning the mortgage is now insured by the taxpayer), and now owe about $405,000.  Their monthly payment is $1900 for 25 years, but the average family income is only $68,000. That means they only have about $1400-$1700 a month left for property taxes, electricity, cars, gas, phones, groceries, cable, beer, shit I hope they don't have any kids because we just about broke the bank here already.  You see where this is going.  People across Canada are awash in debt.  Cashing out what meagre savings they have in futile attempts to service the mountains of it that they have.  Robbing peter to pay Paul.  I know its happening because I see it myself every single day.

Amidst this backdrop, oil's mini-recovery in February looks to have been a head-fake following the outright crash in the commodity in Nov-Dec-Jan.  Now crude is testing new lows and inventories are sky-high.  So when Joe Oliver said in February that the government was "delaying the budget until April to assess the impact of low oil prices", I'm sure what he meant that he was waiting until March so he could assess when they were lower still.  Every smart finance minister wants less dollars to spend on his budget than before.

As I said in my last column, there is no guarantee that Stephen Harper will lose the next election, due to the ineptitude of the two opposition leaders, but it is pretty clear that there are finally some macroeconomic conditions that make his hokey and worn out "steady hand on the tiller" argument weaker than ever (especially given the amount of public debt his government has rung up).  But maybe his terrorism/fear strategy will pay off.  This is a democratic country and polls say he has the support of the population to pick useless fights with Zunera Ishaq and ram through undemocratic, privacy-violating digital surveillance bills in the wake of the radical Islam fad.  But after nine years of endless tempests in teapots that saw the Conservatives duly sent back to Ottawa despite no end to the righteous indignation they provoked (Who can forget Michael Ignatieff's unbelievably dorky table-pounding: "Mr Speaker, when will the minister do the honourable thing and resign?!"), the economic picture might be shitty enough later this year to finally provoke a sea-change among the non-partisan undecideds.  At the end of the day, jobs and debt will trump niqabs.

And we will all remember, back in march, when modern, liberal, enlightenment democratic ideals prevailed.  We may not like Ms Ishaq's niqab, but we must defend to the death her right to wear it. Just like we must defend equally to the death Chad Kroeger's right to produce his shitty music.  By obsessing over things that offend us we become the parody of ourselves that loses all credibility.  Keep calm and throw on Nickelback's latest album while kicking back with the Sports Illustrated Burqini Edition.  Spring is here, baby


Saturday, 7 March 2015

Choiceless Canada




In Canada, if I want to buy groceries from a supermarket, there is a 97% chance that the store will be owned by Loblaws, Metro, or Empire (the Sobey family).  If I want to go open a bank account, there is a 97% chance it will be with one of the big six banks, since that is the percent of the country's inhabited area that their branches are present in.  Need internet, TV, or cellphone service?  You are almost certain to be dealing with Bell, Rogers, or Telus, or some combination thereof (you could take them up on their offer for one of their enticing "bundles" and thereby only deal with one annoying customer service department, but the real best option is to deal with one of the discount providers they own).  Okay, there is Videotron in Quebec and Shaw out west in this sector, but lets not split hairs.  Gas for your car?  We have it on tap from our national treasure, Petro Canada (Suncor), as well as from Dutch (Shell), American (Esso), and Chinese (Husky) sources.  Need to ship goods by rail? You can use Canadian Pacific or Canadian National. Booking a flight? You have a choice between Air Canada or Westjet.  The Panda bear doesn't do long hauls so I'm leaving him out.

Do you see my point? Most critical sectors of the Canadian economy are dominated by 2-6 players, not more.  I'm not here to attack them or accuse them of choking free enterprise with oligopolistic practices (there are, after all, hundreds of thousands of small and medium sized independent businesses in Canada), just to make the observation that, as a nation our consolidator instincts seem to have gravitated to the sectors which happen to be the most visible, the most used by the most people (like, everyone), and therefore the most profitable.  None of these companies are inherently evil; they all employ tens of thousands of Canadians and their income flows back to Canadians in many forms like through the dividends that flow from their shares on the TSX and in all of the institutional (pension fund and mutual fund) ownership of them.  You could make similar cases for other sectors -  with media (Globe, Torstar, Postmedia, Quebecor, Irvings), fertilizer (Potash and Agrium), auto parts (Linamar, Martinrea,and Magna) and natural gas pipelines and delivery (Enbridge and Transcanada), this country is just not that diversified.  As much as that often repeated and nauseating quote about our stable and heavily regulated banking sector gets held up as to why our nation's economy "weathered the storm" during the 2008-09 financial crisis, it seems pretty clear that stability - in the form of big, boring, profitable, cash machine companies that never have more than a couple of direct competitors - dominates the Canadian economy as a whole.

We could have an economics discussion about whether this composition of the economy makes us better or worse off collectively.  We could have a psychology/social science discussion about whether our national psyche craves stability and predictability.  We could talk about how if we were more entrepreneurial as a nation we would have hordes of young bootstrappers failing fast, failing often, and smashing these oligopolies.  And some grumpy right-wing populists and professional left-wing union type people, the two biggest whiners in the public square who often succeed at poisoning the debate quite successfully, could complain about "price gouging" and "unsatisfied customers" and "protecting Canadian jobs" and "big companies paying their fair share". I am not here to engage in any of that unproductive ax-grinding.  Rather, I want to focus on the area of our society where we suffer from the most abysmal lack of choice, which is our political system. These companies are all governed by laws, regulations, and legal and governmental mechanisms; the fact that we have no choice who governs us in our democracy is the real tragedy, and the lack of choices in this area is the one from which our society will suffer the most in the long run.

The Conservative government in Ottawa is old, spent, totally bereft of ideas and hollowed out of many of the brighter ministers who served in it earlier on.  It has endured a lot of criticism over the years from mainstream media and nobodies like me, 80-90% of which was deserved.  The government turned out to be a lot more moderate over time than I think a lot of people would have predicted, but make no mistake: on drug sentencing, environmental regulation, the legal system, digital surveillance, and taxation they have enacted pernicious and harmful policies that represent long-term detrimental effects to the country.  I have never voted for them and always opposed them, both on principle for these issues and for the authoritarian central control the Prime Minister's office exerts on the government and the secretive and deceptive ways he severely limits access to himself as if he was some third world dictator or billionaire.  This behaviour is unbecoming of what we have a right to, which is a democratically elected Member of Parliament who has the confidence of the House of Commons to lead the government - A person who is a normal citizen like any of us whose duty is to serve Canadians, first among 308 equals.  Not this smirking wannabe pretend oilman/economist who is probably still stimulated imagining his armoured car and security detail and his smirking sidekick retired investment banker finance minister whose job seems to consist of trying to sound smart while deflecting attention from the country's actual finances.  I cannot think of two people less deserving of the public offices they hold.

And yet, who do I have to support to replace them? Who do I go to bat for in 2015 when I'm talking to less politically-attuned friends and family? Nobody.  I can't vote Conservative, and I don't know a single coherent, reasonable, thinking person who has one positive thing to say about either opposition leader.  This NDP official opposition has been nothing short of an unmitigated disaster, the so-called "social justice party" being wholly, entirely, invisible to Canadians.  Rather than hammering the government day in and day out over its one-sided foreign policy, its irresponsible depriving of hundreds of billion dollars to the treasury through needless tax cuts, and its shameless distribution of pork for curling arenas in one-horse prairie towns, we are treated to the Thomas Mulcair show which has about as many Canadian viewers as Australian rules football.  The two episodes that sum up this guys performance to me are the following: In May 2013, following one bitter laid-off middle aged employee's revelation to the CBC that RBC outsourced some IT operations to a California-based, NASDAQ-listed company called iGate with employees in India, Mulcair wasted no time pouncing on what he perceived to be a political opportunity.  He scheduled a press conference on the steps of Place Ville Marie, the tallest building in Montreal which RBC has their logo on the front of and where they lease some space, pounded his fist for the TV cameras for a few minutes and fired off some righteous indignation soundbites.  Him, his cars, the people, and the cameras arrived, unloaded, got the segment done in a flurry activity, and were gone before you knew it.  The whole thing took maximum 20 minutes on a blustery weekday morning.  This guy is supposed to be in Ottawa holding his government's feet to the fire and he is here in Montreal to...to do what, exactly? Bitch about how shitty a big bank is to Canadians?  Complaining about banks.  Why not complain about taxes and the weather and houses prices while you're at it? That makes you look like a real prime minister in waiting.

I didn't notice the NDP again until about a month ago, when CP rail was in a labour dispute with its employees who the Conservative government would have just immediately legislated back to work anyway, as is their custom.  Mulcair convened the media for a press conference at 1:30 P.M.with Alexandre Boulerice, one of the five or so out of 107 NDP MPs who has uttered more than 2 words in public since 2011.  And lo and behold, CP came to an agreement with its employees in the morning before it started.  I can just imagine the soup nazi standing there yelling "NO NEWS CYCLE FOR YOU!"  The NDP has this incredibly self-destructive tendency to see itself as this stern, paternalistic moral compass whose job it is to discipline Canada's large companies, when in fact they have no jurisdiction over said companies and the average Canadians they are supposed to be championing and winning over couldn't give a hoot.

It really is a shame that the NDP is so inept and so pointless as an opposition party, squandering this golden opportunity to really get Canadians' attention and occupy their rightful place in the mainstream.  Because the Liberal Party really committed hari-kiri in selecting Justin Timberlake as their leader.  The cringe-worthy yet truly predictable result of this ill-considered decision cannot be fully assessed here until we see election results, but I will say this.  To consider what a dumb move the Liberals made in selecting Trudeau as their leader, imagine what would happen if the Conservatives selected Ben Mulroney as their leader.  It would never happen, because Ben has the job that is suited to him, which is covering celebrity gossip on TV.  Trudeau would actually do great at something similar, and what's scary is you could apply his "pluses" as easily to Ben. "Really nice guy" "Really good looking" "great at connecting with people" "prime ministerial pedigree" "Dad of young kids" "Bilingual".  Apparently the requirements for being the leader of a Canadian political party now are the same as for being on a reality show, and if anyone wants to explain to me how Justin's tenure as Liberal leader has resembled anything other than a reality show, I eagerly await your conscientious objections.

And I continue to be sad as I pine for the day I will actually have a proper political choice as a voter in Canada, with a candidate worth voting for.