for economic freedom
Updates from the Prairie Centre/Centre for Prairie Agriculture in Regina, Saskatchewan.
Hot off the press! Don Baron's Jailhouse Justice
web posted February 18, 2002
Alberta is unique
By Kevin Avram
Alberta is unique. It's more pro-American than any other province, yet is distinctly Canadian. And unlike other provinces, it is able to embrace certain aspects of US thinking without fear of losing its identity. It's a self-assured, can-do, damn-the-torpedoes kind of place. It's an example of what the rest of Canada could be like.
Consider the Prairie Provinces:
In the early part of the 20th century, Winnipeg was the biggest cash wheat market in the world -- bigger than Liverpool and even Chicago. Grain buyers and investors from all over the world were drawn to Winnipeg. After the Canadian Wheat Board monopoly was established, buying, selling, and the unapproved processing of wheat products was illegal. The buyers and investors took their money, talent, and innovative ideas elsewhere.
In the US, risk taking and innovative ideas in the ag sector paid big dividends, creating a pool of capital that gave rise to other industries. Huge private corporations that would very likely have located their head offices in Winnipeg, were it not for the CWB monopoly, today employ tens of thousands of people. Only a small fraction of these employees are in Manitoba. As silly as it sounds, successive Manitoba governments cheered the policy that made it happen. At the same time, Manitobans have elected several big labour anti-business governments, which explains why Manitoba has exported an average of 5,500 people per year for the past 40 years. If it had retained them, Winnipeg would be the size of Calgary.
Saskatchewan is a more tragic story. In the 1930s, it had a population that was almost equal to what it is today. Many national and multinational companies had located their head offices in Regina. They did so because Regina is the true geographic hub of the west, not Winnipeg, not Calgary.
With the creation of the CWB monopoly and the election of a socialist premier, the province's economic future was in trouble. Prior to the CWB monopoly, the rural skyline had been dotted with flourmills. The CWB monopoly made it illegal for a farmer, investor, or group of farmers to grow wheat, turn it into flour, and sell it.
Even today, there is far more money to be made processing wheat than selling raw kernels, yet the roadblock of the CWB stands. There are Saskatchewan farmers and investors at this very moment who want to build pasta plants, add value to their grain, and sell it. They can't. It's illegal now and has been for 60 years. Tragically, Saskatchewan governments have cheered the policy and still do. While doing so, they moan about an undeveloped rural economy and insist that Ottawa hike transfer payments.
Saskatchewan is a have-not province because successive governments planned for it to be that way. It didn't just happen. After getting elected, the socialist government of Tommy Douglas literally picked a fight with private business and the many oil companies that were located in Regina.
The result was that businesses left Saskatchewan in convoys, moving west to Alberta. The province's economic future was mapped out when Douglas and his colleagues began borrowing money to set up the many Crown corporations that they said would go hand in hand with the CWB monopoly to form the foundation of Saskatchewan's economy.
Today, Saskatchewan is bleeding people. It gets by on welfare. The welfare cheques are delivered in the form of transfer payments that come from Ottawa. Ottawa gets the money by taxing Albertans who are able to generate it because many decades ago Alberta rejected the very policies that turned Saskatchewan and Manitoba into have-not provinces.
Kevin Avram sits on the Prairie Centre's Board of Trustees.
web posted February 11, 2002
Devaluing the assets of retiring farmers
By Craig Docksteader
When the issue of Saskatchewan's farmland ownership law comes up in the legislature this spring, it will not just be Saskatchewan people who are watching. The issue has attracted interest from all three prairie provinces.
With the most restrictive farmland ownership legislation on the prairies, any changes made to Saskatchewan's law will determine whether Manitoba or Alberta residents are able to purchase Saskatchewan farmland without moving here. Currently, Saskatchewan is the only prairie province that prohibits other Canadians from buying farmland if they don't live in the province. Alberta's law never did shut out Canadians and Manitoba removed the restrictions on Canadian citizens a few years ago. While all three provinces restrict foreign ownership, only Saskatchewan restricts ownership by fellow Canadians.
On-going surveys by the Prairie Centre Policy Institute reveal that the Saskatchewan farm community is split over the issue. Some prefer to see the law stay as it is and others want to see it opened up. The arguments are often emotional and infused with deeply-rooted fears about absentee landlords, corporate farming, or large tracts of idle land.
But, by far, the primary concern at the farm gate is the law's impact on the price of farm land. Although no independent studies have verified that the existing restrictions keep land prices artificially low, farmers generally agree that this is true. Everyone understands that the more buyers you have at an auction, the higher the price will go. It follows quite obviously that broadening the market for agricultural land means more potential buyers and thus the likelihood of higher prices.
For those who are interested in buying more land, or want their children to be able to buy land, the existing law is viewed as a good thing. It helps keep prices down for young or expanding farmers. On the other hand, those who are considering selling their land are opposed to the restrictions. Their land is more difficult to sell and captures a lower price on the market.
At first glance, the situation poses a quandary for Saskatchewan legislators. By changing the law they appear to side with the older, established farmers, and by retaining the existing restrictions they appear to come down on the side of the next generation of farmers. Not wanting to alienate either constituency, the issue develops a political inertia, pitting farmer against farmer in a lose-lose proposition. The easiest thing for a politician to do is tinker with the Act to give the appearance of action, while substantially changing nothing.
But when the issue is examined more closely, it becomes apparent that it's not as complicated as it first appears. Consider this simple fact: If it's in the public interest to keep the price of farmland low for new producers, then the cost of doing so should be publicly funded, not imposed on retiring farmers.
It is fundamentally wrong to devalue the assets of farmers who have worked all their lives to establish an equity position that provides for their retirement and the inheritance of their children, in order to provide a subsidy to an emerging generation of farmers. If the objective is to subsidize the purchase of farm land, then do it openly and make everyone pay for it. Don't send the bill to seniors and pretend this is good public policy.
Craig Docksteader is Coordinator with the Prairie Centre Policy Institute.
web posted February 4, 2002
The benefits of big business
In parts of the prairie region, there is a deep-rooted fear of big business. But while some businesses have earned their poor reputation, it is inaccurate to paint all big business with the same brush. In fact, as Kevin Avram explains, big business has brought many benefits to the prairie region.
The following commentary was initially published by the Prairie Centre a couple of years ago. While it is not our practice to reprint commentaries, this one is worth repeating. Following are some of Avram's comments.
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Individuals who go about bashing big business and moaning about an impending doom that will supposedly be brought about by Canada's corporate giants remind me of Shauna. She's a girl who went to school with our daughter.
After turning 16 and starting to drive, Shauna discovered that she had impaired vision. At night, she can't judge distance. In the daytime, she gets around fine, but whenever she's caught out after dark she has to pull her car over to the side of the road and walk, or find someone else to drive. On smaller highways it's particularly frightening because she thinks every oncoming vehicle is about to crash into her.
That's sort of how the anti-big business crowd sees the world. They fail to appreciate or even understand the benefits of big business and due to their impaired vision, lack the ability to accurately assess whether it actually is a threat. So, like Shauna on that two-lane highway, they falsely conclude that they're about to be in a head on collision with an 18-wheel semi-trailer that has "Big Business" written on the side.
Their fears are groundless. Big business has been a blessing to Canada. In centuries gone by only the wealthiest and most elite of society could afford to hire the craftsman necessary to make the kind of consumer goods and gadgets that we all take for granted. Thanks to big business and mass production, the average Canadian has a standard of living that's better than history's most famous kings.
Ranchers and farmers have access to pickup trucks, tractors, combines, animal medicines, weed control, a workshop full of low cost power tools and hundreds of other desirable items because of big business. Corporate giants like Microsoft and Intel provide the computer technology on which tens of millions of people rely every day. Gas and oil pipelines that transport fuel to heat homes and petroleum to run cars, trucks, and turbines were built by big business.
Aircraft giant Boeing provides millions of people with safe and inexpensive air travel and a retail leviathan like Wal-Mart brings an abundant supply of high quality consumer goods to the masses at very low prices. What's more is that companies like Wal-Mart employ thousands of people to do it -- many of them unskilled.
Big business is one of the reasons food processing is safer than at any time in the history of the world. It provides us with medical technology, pharmaceuticals, telephone systems, mining equipment to dig ore from the earth, factories that churn out furniture, electrical appliances, refrigerators, tires, washing machines, and thousands of other items.
Big business brings wealth into being that never existed before and passes it around to employees, shareholders, suppliers, and even the government. The reason the Canadian government can have a multi-billion dollar budget is because wealth has been and is being created in North America on an unprecedented scale -- much of it by big business.
Corporate monopolies and a lack of competition should be shunned. But that one caveat aside, the notion that big business is ruining our lives or is something to be feared, is absurd.
Kevin Avram sits on the Prairie Centre's Board of Trustees.
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