Quotulatiousness

April 17, 2021

“Today’s Liberal government is […] the most anti-Internet government in Canadian history”

Filed under: Cancon, Government, Media, Technology — Tags: , , , , — Nicholas @ 05:00

Michael Geist gives both barrels to Justin Trudeau’s government, then reloads and fires again:

Canadian Heritage Minister Steven Guilbeault, 3 February 2020.
Screencapture from CPAC video.

As I watched Canadian Heritage Minister Steven Guilbeault yesterday close the Action Summit to Combat Online Hate, I was left with whiplash as I thought back to those early days. Today’s Liberal government is unrecognizable by comparison as it today stands the most anti-Internet government in Canadian history:

  • As it moves to create the Great Canadian Internet Firewall, net neutrality is out and mandated Internet blocking is in.
  • Freedom of expression and due process is out, quick takedowns without independent review and increased liability are in.
  • Innovation and new business models are out, CRTC regulation is in.
  • Privacy reform is out, Internet taxation is in.
  • Prioritizing consumer Internet access and affordability is out, reduced competition through mergers are in.
  • And perhaps most troublingly, consultation and transparency are out, secrecy is in.

This is not hyperbole. The Action Summit is a case in point. I was part of the planning committee and I am proud that the event produced two days of thoughtful discussion and debate, where the both the importance and complexity of addressing online hate brought a myriad of perspectives, including from the major Internet platforms. There was none of that nuance in Guilbeault’s words, who spoke the evil associated with the “web behemoths” and promised that his legislation would target content and Internet sites and services anywhere in the world provided it was accessible to Canadians. The obvious implications – much discussed in Internet circles in Ottawa – is that the government plans to introduce mandated content blocking to keep such content out of Canada as a so-called “last resort”. When combined with a copyright “consultation” launched this week that also raises Internet blocking, Guilbeault’s vision is to require Internet providers to install blocking capabilities, create new regulators and content adjudicators to issue blocking orders, dispense with net neutrality, and build a Canadian Internet firewall.

If that wasn’t enough, his forthcoming bill will also mandate content removals within 24 hours with significant penalties for failure to do so. The approach trades due process for speed, effectively reducing independent oversight and incentivizing content removal by Internet platforms. Just about everyone thinks this is a bad idea, but Guilbeault insists that “it is in the mandate letter.” In other words, consultations don’t matter, expertise doesn’t matter, the experience elsewhere doesn’t matter. Instead, a mandate letter trumps all. If this occurred under Stephen Harper’s watch, the criticism would be unrelenting.

In fact, one of the reasons that the government finds itself committed to dangerous policy is that it did not conduct a public consultation on its forthcoming online harms bill. Guilbeault was forced yesterday to admit that the public has not been consulted, which he tried to justify by claiming that it could participate in the committee review or in the development of implementation guidelines once the bill becomes law. This alone should be disqualifying as no government should introduce censorship legislation that mandates website blocking, eradicates net neutrality, harms freedom of expression, and dispenses with due process without having ever consulted Canadians on the issue.

March 28, 2021

TARIFFS and TAXES: The REAL Cause of the CIVIL WAR?!

Filed under: History, Humour, Military, USA — Tags: , , , , — Nicholas @ 02:00

Atun-Shei Films
Published 16 Jan 2020

Checkmate, Lincolnites! Debunking the Lost Cause myth that the American Civil War was fought over taxes and protectionist tariffs. Was the South subjected to disproportionate taxation? Did the Morrill Tariff cause secession? Watch and find out, you no-account, yellow-bellied sesech!

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March 8, 2021

Despite the rhetoric, judging by their actions the Democrats really hate the “gig economy”

Filed under: Business, Government, Politics, USA — Tags: , , , , — Nicholas @ 03:00

Along with all the giveaways to favoured groups in the US government’s huge “relief” bill, there was a late change that will take the gig economy into a back alley and rough it up to the tune of about $1 billion in new taxes:

UBER 4U by afagen is licensed under CC BY-NC-SA 2.0

When the economy is struggling to recover from a pandemic and crushing government lockdowns, that’s probably the worst time to impose $1 billion in new annual taxes on the working class. But that’s exactly what a new provision quietly slipped into the Democrats’ sweeping $1.9 trillion COVID legislation would do.

“A last-minute insert by Democrats looking to offset the cost of their coronavirus aid package would send tax collectors into the gig economy, eventually costing Uber and DoorDash drivers, Airbnb hosts and others about $1 billion annually,” Roll Call reports.

Under current tax law, earnings data for gig economy workers only needs to be reported to the IRS once it reaches $20,000. This means that small earners pursuing gig work to supplement their income aren’t hit by crushing federal taxes. However, the Democrats’ provision would nearly eliminate this benchmark, and instead require all income above $600 to be reported to the IRS.

“The stiffer tax burden would be imposed while 10 million Americans are unemployed and more and more have turned to freelance and gig economy work to make ends meet,” Roll Call notes.

Indeed it would, and this would be disastrous for both workers and the economy.

This tax hike “adds a significant burden to gig economy and small business workers at the worst possible time,” according to TechNet spokesman Steve Kidera. One tax expert warned Roll Call that many struggling gig economy workers won’t be able to pay the higher taxes, and that IRS penalties “can destroy a person’s life.”

March 6, 2021

QotD: Why “the rich” benefit more from tax cuts

Filed under: Economics, Government, Quotations — Tags: , , , , — Nicholas @ 01:00

It might be worth our giving a little explanation to The Guardian about how tax systems work. We impose taxes upon certain things. Activities, transactions, even at times unsuccessfully upon mere existence as with the poll tax. These taxes are then paid by those who indulge in such activities, perform such transactions, have the temerity to exist. If we then decide to cut the tax rate or level on an activity, type of transaction or mode of existence then it will be those who formerly paid the tax on such who benefit from the tax cut on such. This shouldn’t be all that difficult for people to understand but we do seem to have an entire newspaper devoted to not grasping the point […]

There is that objectionable idea that not taxing something is a giveaway. The root presumption there is that everything belongs to the State and we’re lucky it allows us to keep anything to deploy as we desire and not as those who stay awake in committee do. This is not an assumption that leads to a free country nor populace, nor a liberal society.

But it’s also to miss that logical point, that if income tax is to be reduced then it must be those currently paying income tax who benefit from not doing so in the future under the new rates. […] The low paid cough up hardly anything in income tax. Therefore the low paid gain hardly anything from income tax being reduced. This should be obvious.

Tim Worstall, “Budget Revelation – Those Who Pay Income Tax Benefit From Income Tax Cuts”, Continental Telegraph, 2018-10-30.

January 7, 2021

Fallen Flag — the New York Central System

Filed under: History, Railways, USA — Tags: , , , , , , , — Nicholas @ 03:00

This month’s Classic Trains fallen flag feature is the first part of the history of the New York Central System by George Drury. The New York Central was one of the biggest and most economically powerful American railways for over a century before the postwar boom turned into the economic disaster of the 1960s and 70s, as passengers switched from rail to road and plane and the decline of northeastern heavy industry and mining hit the established eastern railroads very hard:

The New York Central was a large railroad, and it had several subsidiaries whose identity remained strong, not so much in cars and locomotives carrying the old name but in local loyalties: If you lived in Detroit, you rode to Chicago on the Michigan Central, not the New York Central; through the Conrail era and even now, the line across Massachusetts is still known as “the Boston & Albany.”

The streamlined steam locomotive New York Central Hudson No.5344 “Commodore Vanderbilt”, leaving Chicago’s LaSalle Street station pulling the NYC’s premier passenger traing, the 20th Century Limited, 22 February 1935.
Photo originally copyrighted International News Photos (copyright not renewed) via Wikimedia Commons

The system’s history is easier to digest in small pieces: first New York Central followed by its two major leased lines, Boston & Albany and Toledo & Ohio Central; then Michigan Central and Big Four (Cleveland, Cincinnati, Chicago & St. Louis). By the mid-1960s NYC owned 99.8 percent of the stock of Michigan Central and more than 97 percent of the stock of the Big Four. NYC leased both on Feb. 1, 1930, but they remained separate companies to avoid the complexities of merger.

In broad geographic terms, the NYC proper was everything east of Buffalo plus a line from Buffalo through Cleveland and Toledo to Chicago (the former Lake Shore & Michigan Southern). NYC included the Ohio Central Lines (Toledo through Columbus to and beyond Charleston, W.Va.) and the Boston & Albany (neatly defined by its name). The Michigan Central was a Buffalo–Detroit–Chicago line and everything in Michigan north of that. The Big Four was everything south of NYC’s Cleveland–Toledo–Chicago line other than the Ohio Central.

The New York Central System included several controlled railroads that did not accompany NYC into the Penn Central merger. The most important of these were (with the proportion of NYC ownership in the mid-1960s):

  • Pittsburgh & Lake Erie (80 percent)
  • Indiana Harbor Belt (NYC, 30 percent; Michigan Central, 30 percent; Chicago & North Western, 20 percent; and Milwaukee Road, 20 percent)
  • Toronto, Hamilton & Buffalo (NYC, 37 percent; MC, 22 percent; Canada Southern, 14 percent; and Canadian Pacific, 27 percent).

[…]

The New York & Harlem Railroad was incorporated in 1831 to build a line in Manhattan from 23rd Street north to 129th Street between Third and Eighth avenues (the railroad chose to follow Fourth Avenue). At first the railroad was primarily a horsecar system, but in 1840 the road’s charter was amended to allow it to build north toward Albany. In 1844 the rails reached White Plains and in January 1852 the New York & Harlem made connection with the Western Railroad (later Boston & Albany) at Chatham, N.Y., creating a New York–Albany rail route.

The towns along the Hudson River felt no need of a railroad, except during the winter when ice prevented navigation. Poughkeepsie interests organized the Hudson River Railroad in 1847. The railroad opened from a terminal on Manhattan’s west side all the way to East Albany. By then the road had leased the Troy & Greenbush, gaining access to a bridge over the Hudson at Troy. (A bridge at Albany was completed in 1866.)

By 1863 Cornelius Vanderbilt controlled the New York & Harlem and had a substantial interest in the Hudson River Railroad. In 1867 he obtained control of the New York Central, consolidating it with the Hudson River in 1869 to form the New York Central & Hudson River Railroad.

Vanderbilt wanted to build a magnificent terminal for the NYC&HR in New York. He chose as its site the corner of 42nd Street and Fourth Avenue on the New York & Harlem, the southerly limit of steam locomotive operation in Manhattan. Construction of Grand Central Depot began in 1869. The new depot was actually three separate stations serving the NYC&HR, the New York & Harlem, and the New Haven. Trains of the Hudson River line reached the New York & Harlem by means of a connecting track completed in 1871 along Spuyten Duyvil Creek and the Harlem River (they have since become a single waterway). That was the first of three Grand Centrals.

The Wikipedia page on the New York Central includes a good overview of the decline of the railway:

The New York Central, like many U.S. railroads, declined after the Second World War. Problems resurfaced that had plagued the railroad industry before the war, such as over-regulation by the Interstate Commerce Commission (ICC), which severely regulated the rates charged by the railroad, along with continuing competition from automobiles. These problems were coupled with even more formidable forms of competition, such as airline service in the 1950s that began to deprive NYC of its long-distance passenger trade. The Interstate Highway Act of 1956 helped create a network of efficient roads for motor vehicle travel through the country, enticing more people to travel by car, as well as haul freight by truck. The 1959 opening of the Saint Lawrence Seaway adversely affected NYC freight business. Container shipments could now be directly shipped to ports along the Great Lakes, eliminating the railroads’ freight hauls between the east and the Midwest.

The NYC also carried a substantial tax burden from governments that saw rail infrastructure as a source of property tax revenues – taxes that were not imposed upon interstate highways. To make matters worse, most railroads, including the NYC, were saddled with a World War II-era tax of 15% on passenger fares, which remained until 1962, 17 years after the end of the war.

Robert R. Young: 1954–1958
In June 1954, management of the New York Central System lost a proxy fight in 1954 to Robert Ralph Young and the Alleghany Corporation he led.

Alleghany Corporation was a real estate and railroad empire built by the Van Sweringen brothers of Cleveland in the 1920s that had controlled the Chesapeake and Ohio Railway (C&O) and the Nickel Plate Road. It fell under the control of Young and financier Allan Price Kirby during the Great Depression.

R.R. Young was considered a railroad visionary, but found the New York Central in worse shape than he had imagined. Unable to keep his promises, Young was forced to suspend dividend payments in January 1958. He committed suicide later that month.

Alfred E. Perlman: 1958–1968
After Young’s suicide, his role in NYC management was assumed by Alfred E. Perlman, who had been working with the NYC under Young since 1954. Despite the dismal financial condition of the railroad, Perlman was able to streamline operations and save the company money. Starting in 1959, Perlman was able to reduce operating deficits by $7.7 million, which nominally raised NYC stock to $1.29 per share, producing dividends of an amount not seen since the end of the war. By 1964 he was able to reduce the NYC long-term debt by nearly $100 million, while reducing passenger deficits from $42 to $24.6 million.

Perlman also enacted several modernization projects throughout the railroad. Notable was the use of Centralized Traffic Control (CTC) systems on many of the NYC lines, which reduced the four-track mainline to two tracks. He oversaw construction and/or modernization of many hump or classification yards, notably the $20-million Selkirk Yard which opened outside of Albany in 1966. Perlman also experimented with jet trains, creating a Budd RDC car (the M-497 Black Beetle) powered by two J47 jet engines stripped from a B-36 Peacemaker bomber as a solution to increasing car and airplane competition. The project did not leave the prototype stage.

Perlman’s cuts resulted in the curtailing of many of the railroad’s services; commuter lines around New York were particularly affected. In 1958–1959, service was suspended on the NYC’s Putnam Division in Westchester and Putnam counties, and the NYC abandoned its ferry service across the Hudson to Weehawken Terminal. This negatively impacted the railroad’s West Shore Line, which ran along the west bank of the Hudson River from Jersey City to Albany, which saw long-distance service to Albany discontinued in 1958 and commuter service between Jersey City and West Haverstraw, New York terminated in 1959. Ridding itself of most of its commuter service proved impossible due to the heavy use of these lines around metro New York, which government mandated the railroad still operate.

Many long-distance and regional-haul passenger trains were either discontinued or downgraded in service, with coaches replacing Pullman, parlor, and sleeping cars on routes in Michigan, Illinois, Indiana, and Ohio. The Empire Corridor between Albany and Buffalo saw service greatly reduced with service beyond Buffalo to Niagara Falls discontinued in 1961. On December 3, 1967, most of the great long-distance trains ended, including the famed Twentieth Century Limited. The railroad’s branch line service off the Empire Corridor in upstate New York was also gradually discontinued, the last being its Utica Branch between Utica and Lake Placid, in 1965. Many of the railroad’s great train stations in Rochester, Schenectady, and Albany were demolished or abandoned. Despite the savings these cuts created, it was apparent that if the railroad was to become solvent again, a more permanent solution was needed.

January 5, 2021

QotD: Tax “loopholes”

Filed under: Business, Government, Law, Politics, Quotations, USA — Tags: , — Nicholas @ 01:00

… “loopholes” is a term most often used by people who don’t understand accounting or tax law, to complain about how somebody else used the existing laws created by congress to pay less than what that person thinks is “fair.” Regular people have heard the bullshit term loopholes tossed around so much that they start to believe that it is some magical easy button that rich guys can just push that makes it so they don’t have to pay taxes.

Nope. They’re just laws. These “loopholes” exist because at some point in time congress (both democrat and republican both!) decided that they wanted to promote some type of behavior or discourage some other behavior. So they basically put a reward into the law saying if you do this thing we like, you’ll pay less taxes! Or the opposite, congress wanted to discourage some behavior, so if you do that thing we don’t want, it will cost you more.

Both sides have done this forever, state and federal. We want you to drive electric cars so if you buy an electric car you get a tax break this year. YAY! Uh oh, we want you to stimulate the economy by buying this kind of machinery faster, so you have to depreciate your assets this other way or you’ll pay more! BOO! You get a discount for paying your employees health insurance, YAY! Oh, wait … Not that kind of health insurance. BOO!

So on and so forth, up and down, these perks come and go, all based upon whatever behavior congress is trying to promote at that time (or what favors they are doing for their friends). Why was mortgage interest deductible? Because at one point congress said “we really want people to own houses!” Even regular people have things that are considered “loopholes” to somebody.

So when the blue check mark journalism major (who probably dropped out of PoliSci because “there’s too much math”) declares that it is immoral that some rich dude didn’t pay his fair share because he used loopholes, those are basically a bunch of meaningless buzz words strung together to prey on the feelings of the gullible.

Larry Correia, “No, You Idiots. That’s Not How Taxes Work – An Accountant’s Guide To Why You Are A Gullible Moron”, Monster Hunter Nation, 2020-09-28.

December 15, 2020

Port wine

Filed under: Britain, Europe, History, Wine — Tags: , , — Nicholas @ 03:00

In The Critic, Henry Jeffreys considers how Port became so popular in Britain:

Before there were package holidays, there was port. This was the way British people shivering on their cold wet island could get a bit of sunshine. It’s a miracle drink, preserving the heat of the Douro valley in liquid form for decades ready to be uncorked and spread cheer. And don’t we need cheer more than ever at the moment? According to Adrian Bridge, CEO of Taylor’s, British port sales were booming during lockdown.

Our love affair with port goes back a long way but the funny thing is that when wines from Portugal began to arrive in large quantities in the 17th century, people hated it. Port was a necessity because Bordeaux, the traditional wine of choice, had become expensive due to the high duty put on it from Cromwell’s time onwards. Early port was a rough sort of wine, often transported down to the city of Oporto in pig skins and adulterated with brandy and elderberries. A poem from 1693 by Richard Ames captures the mood of the times: “But fetch us a pint of any sort, Navarre, Galicia, anything but Port.” The Scots in particular were not impressed. After the Act of Union, wine drinking took on political connotations with Jacobites drinking claret and Hanoverians port. This antipathy to port still persists: a few years back, I sat next to a Scottish woman at dinner who complained that the English only drank port to thumb their noses at Napoleon.

It took a long time before port became the sweet smooth consistent wine that we know and love today. In fact, until 1820 it would usually have been dry. The vintage that year was so hot that the grapes contained more sugar than the yeasts could deal with, so brandy was added while the wines were still fermenting. It was such a success in Britain that this became the model for how port was made in future. Not everyone was keen, however. Baron Forrester, the man who first mapped the course of the Douro river, was still complaining about the new-fangled sweet port right into the 1850s. The current winemaker at Taylor’s, David Guimaraens, reckoned this year’s heatwave had more than a little in common with the 1820 vintage.

Port really is perfectly designed to deal with this heat. Even with modern temperature-controlled fermentation it can be difficult making balanced dry wine with such ripe grapes whereas adding brandy during the fermentation preserves the fresh fruit flavour. Furthermore, heavier wines can be blended with lighter vintages to make tawny ports which are aged for years in wood with oxygen contact. Tawnies were traditionally enjoyed more by the Portuguese but they’re becoming increasingly popular over here. They’re mellow, pale and nutty from oxygen contact, quite different to vintage wines. The great thing is they are ready to drink, no ageing or decanting needed, and an open bottle will last for months. In fact, wood-aged ports are practically indestructible, I’ve had examples from 1937 and 1863 that were both fresh and vigorous.

Grapes with the right balance can go into vintage releases, though a declared vintage from 2020 does look unlikely. The discovery of how well port aged in bottles was probably an accident. A well-off individual would buy a pipe of port (around 500 litres) and have it bottled and corked. It was discovered that after years in bottle, something sublime happened to the fiery tannic wine. A vintage from a declared year will need at least 20 years. Happily, for the impatient among us, ready to drink vintage ports aren’t terribly expensive when you compare with the price of say, mature Bordeaux or Burgundy.

November 21, 2020

About that “Canadian content crisis” the feds are trying to “fix” with Bill C-10

Filed under: Cancon, Government, Law, Media — Tags: , , , , , — Nicholas @ 03:00

Michael Geist begins a series of posts on the ongoing blunder that is the federal government’s “get money from the web giants” proposed legislation:

Canadian Heritage Minister Steven Guilbeault, 3 February 2020.
Screencapure from CPAC video.

Canadian Heritage Minister Steven Guilbeault rose in the House of Commons yesterday for the second reading of Bill C-10, his Internet regulation bill that reforms the Broadcasting Act. Guilbeault told the House that the bill would level the playing field, that it would establish a high revenue threshold before applying to Internet streamers, would not impact consumer choice, or raise consumer costs. He argued that even if you don’t believe in cultural sovereignty, you should still support his bill for the economic benefits it will bring, warning that Canadian producers will miss out on a billion dollars by 2023 if the legislation isn’t enacted. He painted a picture of Internet companies (invariably called “web giants”) that have millions of Canadian subscribers but do not contribute to the Canadian economy.

Guilbeault is wrong. He is wrong in his description of the bill (it does not contain thresholds), wrong about its impact on consumers (it is virtually certain to both decrease choice and increase costs), wrong about the contributions of Internet streamers (who have been described as the biggest contributor to Canadian production), wrong about level playing field claims (incumbent broadcasters enjoy a host of regulatory benefits not enjoyed by streamers), wrong about the economic impact of the bill (it is likely to decrease investment in the short term), and wrong about cultural sovereignty (it surrenders cultural sovereignty rather than protect it).

With the bill starting its Parliamentary review, this is the first in a new series of posts on why a careful examination of the data and the bill itself reveals multiple blunders. There are good arguments for addressing the sector, including tax reform, privacy upgrades, and competition law enforcement. There are also benefits to updating the Broadcasting Act, but in an effort to cater to a handful of vocal lobby groups over the interests of the broader Canadian public, Guilbeault’s bill will cause more harm than good. The series will run each weekday for the next month, first addressing the weak policy foundation that underlies Bill C-10, then a series a posts on the uncertainty the bill creates, a review of the trade threats it invites, and an assessment of its likely impact on consumers and the broader public.

The series begins with a post on the fictional Canadian content “crisis.” Canadians can be forgiven for thinking that the shift to digital and Internet streaming services has created a crisis on creating Canadian content. Canadian cultural lobby groups regularly claim that there is one (Artisti, CDCE) and Guilbeault tells the House of Commons that billions of dollars for the sector is at risk. Yet the reality is that spending on film and television production in Canada is at record highs. This includes both certified Canadian content and so-called foreign location and service production in which the production takes place in Canada (thereby facilitating significant economic benefits) but does not meet the narrow criteria to qualify as “Canadian.” I have written before about the need to revisit the Canadian content qualification rules which enable productions with little connection to Canada to receive certification and some that directly meet the goal of “telling Canadian stories” that fail to do so.

November 18, 2020

Trudeau’s internet policy — cash grab or power grab? Embrace the healing power of “and” (TM Instapundit)

Filed under: Business, Cancon, Government, Media, Technology — Tags: , , , , , , — Nicholas @ 03:00

The Canadian government is taking advantage of the ongoing economic and social disruption of the Wuhan Coronavirus to widen their existing regulation of both broadcasting and internet entertainment. It’s not just a bit of maple-flavoured cultural imperialism, but it’s also a blatant cash grab:

Canadian Heritage Minister Steven Guilbeault, 3 February 2020.
Screencapture from CPAC video.

I see, in the Globe and Mail, that Justin Trudeau and Steven Guilbeault want to further regulate the broadcasting services in Canada. Their goals seem to be, in part, a cash grab ~ online streaming services, like Netflix, are offering Canadians, for a price, what they want, while the CBC offers Canadians, thanks to a $1+ Billion annual subsidy from taxpayers like you and me, what we, pretty clearly, do not want to watch and the Liberals want a share of that money ~ and also an appeal to those who play identity politics.

I think we need to look at the “products” of broadcasting ~ information (news and “public affairs” and documentary programmes) and entertainment, including sports, as “consumable products,” rather like food and, say, soft drinks.

We do allow, even demand that governments exercise some important regulatory functions in regard to food and soft drinks: we want to make sure that they are safe to consume and Canadians want to know what is in the food we consume.

The Canadian Radio-television and Telecommunications Commission (CRTC) was, originally, conceived to solve a fairly simple problem: allocating broadcast licences. Government engineers calculated how many radio channels could be used in any given place but they didn’t want to have to decide who should get to use them. Politicians didn’t want to do it, either, because while the successful applicant was (usually) happy the more numerous unsuccessful ones were disappointed and politicians hate to disappoint people. Thus they created an arms length agency to make the tough decisions for them. Licence allocation is still an important job for the CRTC. But the CRTC’s mandate was expanded with the birth of cable TV. Companies, like Rogers, built cable systems ~ and they received both direct and indirect government support to reach more and more Canadians ~ and then “sold” access to consumers. In the normal course of events one might have thought that the government would attach some business conditions to its loans, grants and tax deductions, but there was an ever-growing demand, from the Canadian cultural community ~ based almost entirely in Montreal and Toronto ~ to regulate the fledgling cable and “pay TV” market to ensure that Canadian programmes were not shut out but, in fact, could have privileged positions in the cable lineup, which led to the government, in the 1960s, telling the CRTC to regulate how companies like Famous Players, Maclean Hunter and Rogers configured the private product they sold to individual consumers.

The initial government argument was “we regulate all kinds of things for the common good: that’s why we all drive on the right, for example, and the delivery of broadcasting by cable is like that.” “No it’s not,” the cable operators replied, “you build and maintain the roads, using taxpayers’ dollars, so you’re allowed to regulate how they’re used, plus it’s a safety issue. Cable service and ‘pay TV’ are private, commercial transactions between us, the companies who built and operate the systems, and the individual consumer who wants to subscribe to what we offer. You don’t presume to regulate, beyond the laws against libel and pornography, what people can read in MacLean’s magazine or the Globe and Mail, why is ‘pay TV’ and cable different?” It’s still a good question. But the cable operators surrendered gracefully and the CRTC has been, broadly, for the last half-century, protective of the rights of incumbents in the infotainment markets. In return the cable and internet operators have agreed to “tiers” of programming which means that if you want to watch, say, BBC World Service or Deutsche Welle or Fox News, you must also pay for CBC News Network and CTV News Channel and, no matter who you are and what your individual preferences might be, when you subscribe to a cable/internet service you must also support a number of French stations/channels; it’s the law. And now Minister Guilbault wants to ensure that you pay for the output of indigenous producers, writers, actors and so on, on both indigenous networks ~ to which you must already subscribe if you have a “basic” Canadian cable or satellite TV package ~ and, it appears to me, in programmes produced by Canadians and even by Netflix.

November 14, 2020

People are working from home? Gotta tax that!

Filed under: Business, Government — Tags: , , — Nicholas @ 03:00

I am … unimpressed … with this sudden urge to impose new taxes on people who are currently working from home (I was working from home before it was cool, so I clearly have an interest in this issue). In the Vancouver Sun, Colby Cosh discusses the “wisdom” of this latest proposed tax grab:

One of the joys of working from home – being your own tech support.

This is the first time I have heard this “obvious” idea in any setting, but maybe that’s me. Telecommuting has experienced rapid growth in the decades I’ve been doing it, but before the pandemic it remained more or less at barely detectable levels. [Deutsche Bank economist Luke] Templeman believes that, “Our economic system is not set up to cope with people who can disconnect themselves from face-to-face society. Those who can WFH receive direct and indirect financial benefits and they should be taxed in order to smooth the transition process for those who have been suddenly displaced.”

As Templeman describes it, you would have to have been a crazy idiot not to work from home all along if it were possible. “WFH offers direct financial savings on expenses such as travel, lunch, clothes and cleaning. … Then there are the intangible benefits of working from home, such as greater job security, convenience and flexibility. There is also the benefit of additional safety.”

This would be my own assessment, except for the gibberish parts (job security?), but you will notice that this is the opposite of [Bank of England chief economist Andy] Haldane’s October argument. Haldane thinks there are negative externalities and even net costs to the individual in working from home. Templeman thinks WFH is an inarguable optimum … and is hot as a $2 pistol to disincentivize it.

Does this make sense? Not economically. Templeman is making more of a moral argument that the great shift to WFH is permanent, for which there is some survey evidence, and that it is proper to tax the resulting windfall to ease the adjustment for affected sectors (businesses designed to cater to office workers, basically). This might persuade you, if like Templeman you mistake an “economic system” for the arrangements produced by that system; but if it does, wait till you see how he proposes to do it:

    The tax will only apply outside the times when the government advises people to work from home (of course, the self-employed and those on low incomes can be excluded). The tax itself will be paid by the employer if it does not provide a worker with a permanent desk. If it does, and the staff member chooses to work from home, the employee will pay the tax out of their salary for each day they work from home. This can be audited by co-ordinating with company travel and technology systems.

There is more gibberish here, and at least one idea of Godzilla-scale terribleness — an incentive for employers to “provide” a desk for the purpose of shifting the WFH tax onto the employee. Undeterred, Templeman proposes for modelling purposes that the tax could be a flat five per cent of salary (which is also ridiculous if there’s a single eligibility threshold).

November 13, 2020

Oddly, the Canadian media evince no interest whatsoever in the Trudeau government’s malign plans for the Internet

Filed under: Business, Cancon, Government, Media — Tags: , , , , , , — Nicholas @ 03:00

In The Line, Peter Menzies shows how little the mainstream media outlets in Canada care about the power grab the feds are attempting with their proposed “get money from web giants” shakedown:

Canadian Heritage Minister Steven Guilbeault, 3 February 2020.
Screencapure from CPAC video.

In order to understand where media and public attention has been the past couple of weeks, all you had to do was listen in on Monday morning’s Ottawa news conference.

Six days after Heritage Minister Steven Guilbeault had introduced ground-breaking legislation to regulate content online, Prime Minister Justin Trudeau announced more cash to bring better Internet to rural and remote communities. There were also some COVID-19 updates and something about help for agriculture.

And, of course, the questions asked by the media were about the U.S. election. What else could possibly be of interest?

Eventually there were a few inquiries about Telesat and low-Earth-orbit satellites, but you get the point: things that matter to people’s daily lives such as cable bills, data plans, Netflix, cellular service, crappy WiFi and slow Internet connections haven’t been of much interest to Canadian media lately.

So there has been a dearth of chatter about Guilbeault’s controversial plan to (my words, not his): restrict consumer choice, tax Netflix to finance certified Canadian content (Cancon) and bring to an end the greatest period of prosperity in the history of the Canadian film and television industry. Did I mention stifling innovation, increasing streaming subscription costs and scaring away investment? No? My bad. Those too.

Guilbeault has decided that the agency dedicated to defining the nation’s TV and radio diet — the Canadian Radio-television and Telecommunications Commission (CRTC) — is now going to be in charge of what you are allowed to dine on online as well. No longer will you be able to manage your preferences. No more popcorn and candy for you. Going forward, Cancon spinach and broccoli will be on your plate every evening. Breathtakingly, Guilbeault has “modernized” communications legislation by giving authority over the Internet to something called a “radio-television” commission by using something still called the “broadcasting” act.

October 22, 2020

Carbon taxes may be the most efficient way to address GHG emissions, but no government has implemented them properly

Filed under: Business, Economics, Environment, Government — Tags: , , , , , , — Nicholas @ 03:00

I was persuaded by the economic arguments in favour of a carbon tax to address the externaly of greenhouse gas emissions, but I’ve long been skeptical that governments would actually implement them in a way to minimize economic distortion. A report from the Fraser Institute this week shows I was right to be doubtful, as none of the 31 OECD countries in the study have managed to introduce some form of carbon pricing without political “tinkering” … rather than replacing inefficient regulations, taxes and mandates with the carbon tax, they’ve generally just added carbon pricing on top of existing rules, making the carbon pricing scheme merely another tax grab that fails to achieve the stated goals:

Most economists consider human-made greenhouse gas (GHG) emissions an unintended negative externality of production and consumption. A negative externality occurs when the effects of producing or consuming goods and services impose costs on a third party which are not reflected in the prices charged for said goods and services. In the context of GHG emissions, this negative externality is calculated using the “social cost of carbon,” which is the future damage to society (adjusted to present value) of one additional tonne of carbon emitted to the atmosphere today.

Governments have a wide variety of policy alternatives to address the negative externality of emissions depending on the degree and depth of the policy intervention. They can either mandate individuals and firms to change their behaviour through com­mand-and-control regulations, grant subsidies and tax credits to foster cleaner energy sources, or use market-based mechanisms to correct the misalignment of incentives. It is widely acknowledged that carbon pricing, one of these market tools, is the most cost-effective policy to reduce emissions, as it relies on price signals and trade to provide flex­ibility to economic agents as to where and how emissions mitigation occurs.

[…]

This report includes thirty-one high-income OECD countries, where each country has either implemented a carbon tax, an ETS [emissions trading system], or a combination of both pricing mechan­isms. Carbon taxes are being implemented in 14 of them whereas 25 of these countries have their emissions covered by an ETS. Our analysis finds that, on average, 74 percent of carbon tax revenues in high-income OECD countries go directly into their general budget with no earmarking for any specific expenditure, while 12 percent are ring-fenced for environmental spending, and only 14 percent for revenue-recycling measures. This means that most governments are using carbon taxes as a revenue-raising tool rather than a mechanism to internalize the negative externalities of emissions in a cost-effective man­ner. Additionally, the vast majority of ETS revenues are being used to artificially acceler­ate the use of renewable energy sources, infrastructure, and technology.

The study also finds that no high-income OECD country has used carbon pricing to repeal emission-related regulations, but instead have introduced new ones following the adoption of the carbon tax or the ETS. Emissions caps, mandated fuel standards, technology-based standards, and renewable power mandates are just some examples of these regulations that undermine the cost-effectiveness of carbon pricing mechanisms. The majority of high-income OECD countries have a combination of support schemes for renewable energy sources, carbon pricing tools, and command-and-control regulations.

Overall, no high-income OECD country is following the textbook model of an optimal carbon pricing system, undermining their theoretical efficiency by design and implementation.

October 1, 2020

Far from being in trouble, Canadian film and TV investment has nearly doubled in the last 10 years

Filed under: Business, Cancon, Government, Media — Tags: , , , , , , , — Nicholas @ 03:00

The Canadian government — particularly Canadian Heritage minister Steven Guilbeault — is eager to pass legislation to “get money from the web giants” and their primary justification is the claim that Canadian TV and movie funding has been shrinking. As Michael Geist explains, that’s a pants-on-fire lie:

CMPA Profile – Financing, Sources: CMPA Profile 2019, 2016, 2013

Canadian Heritage Minister Steven Guilbeault has said that his top legislative priority is to “get money from web giants.” While much of the attention has focused on his ill-advised plan to require Facebook to obtain licences for linking to news articles, his first legislative step is likely to target Internet streamers such as Netflix, Amazon and Disney with new requirements to fund Canadian content and to increase its “discoverability” by making it more prominent for subscribers. Based on his comments at several town halls, Guilbeault is likely to also create new incentives for supporting indigenous and persons of colour in the sector with a bonus for those investments (potentially treating $1 of investment as $1.50 for the purposes of meeting Cancon spending requirements). Much of the actual implementation will fall to the CRTC, which will be granted significant new regulatory powers and targeted with a policy direction.

Guilbeault’s case for establishing new mandated payments is premised on the claim that support for the film and television sector is declining due to the emergence of Internet streaming services, which have resulted in decreased revenues for the conventional broadcast sector and therefore lower contributions to Cancon creation. In fact, Guilbeault recently told Le Devoir that without taking action there would be a billion dollar deficit in support in the next three years. He says that his objective is to actually generate a few hundred million more per year in local production by the Internet streamers. In other words, he’s expecting roughly $2 billion in new investment over three years in Cancon from U.S. entities due to his planned regulations (moving from a billion dollar deficit to a billion dollars in extra spending).

While Guilbeault frames these regulatory requirements as a matter of fairness and “rebalancing”, industry data over the past decade tell a much different story. Indeed, there has been record setting film and television production in recent years, much of it supported by companies such as Netflix. CRTC chair Ian Scott last year said that Netflix is “probably the biggest single contributor to the [Canadian] production sector today.” While that is not entirely true – the data suggests that Canadian taxpayers are the biggest contributor with federal and provincial tax credits consistently the largest source of financing – the claim that there is a billion dollar deficit coming or that foreign streamers do not contribute to film and television production in Canada without a regulatory requirement is simply false.

September 30, 2020

The feds go trampling all over provincial responsibilities again

Filed under: Cancon, Government, Health, Law — Tags: , , , — Nicholas @ 03:00

Ted Campbell suggests that even a cursory reading of the constitution does not give the federal government the power to trespass (again) in what is clearly, legally, a provincial government area of responsibility:

“The Fathers of Confederation”
The original painting by Robert Harris (1884) was destroyed in the 1916 Parliament Building fire, and this image for the “Gallery of Canadian History” series of lithographs by Confederation Life Insurance Company is based on a photograph by James Ashfield (1885).
Libraries and Archives Canada item ID number 3013194. http://central.bac-lac.gc.ca/.redirect?app=fonandcol&id=3013194&lang=eng

[T]he Parliament of Canada should look to §91. Here is what the Constitution says are the areas of national government’s concern: The Public Debt and Property; The Regulation of Trade and Commerce; Unemployment insurance; The raising of Money by any Mode or System of Taxation; The borrowing of Money on the Public Credit; Postal Service; The Census and Statistics; Militia, Military and Naval Service, and Defence; The fixing of and providing for the Salaries and Allowances of Civil and other Officers of the Government of Canada; Beacons, Buoys, Lighthouses, and Sable Island; Navigation and Shipping; Quarantine and the Establishment and Maintenance of Marine Hospitals; Sea Coast and Inland Fisheries; Ferries between a Province and any British or Foreign Country or between Two Provinces; Currency and Coinage; Banking, Incorporation of Banks, and the Issue of Paper Money; Savings Banks; Weights and Measures; Bills of Exchange and Promissory Notes; Interest; Legal Tender; Bankruptcy and Insolvency; Patents of Invention and Discovery; Copyrights; Indians, and Lands reserved for the Indians; Naturalization and Aliens; Marriage and Divorce; The Criminal Law, except the Constitution of Courts of Criminal Jurisdiction, but including the Procedure in Criminal Matters; The Establishment, Maintenance, and Management of Penitentiaries; and Such Classes of Subjects as are expressly excepted in the Enumeration of the Classes of Subjects by this Act assigned exclusively to the Legislatures of the Provinces.

In that looooong list I can find more than adequate justifications for ministers and government departments that are responsible for: finance and revenue; industry, trade, and commerce; defence; foreign affairs; transport; fisheries and oceans; citizenship and immigration; health; and for independent agencies like the Bank of Canada, Canada Post and Statistics Canada. I cannot find anything that says we need a Minister for Women and Gender Equality, nor one for Diversity, Inclusion and Youth nor, especially, Ministers for Canadian Heritage and Middle Class Prosperity.

A lot of things have changed since 1867; the telegraph was still fairly new and innovative, a practical telephone wouldn’t be invented until ten years after confederation and the first useful long-haul radio transmission and reception, from Britain to Signal Hill in St John’s didn’t come until the dawn of the 20th century, thus ideas like the CBC, the Internet, Netflix, air traffic control and the North Warning System were far beyond the imagination of the men ~ they were pretty much all men, working in government, back in the 1860s, weren’t they? ~ who drafted the Canadian Constitution.

What was clear to them, based on the United States experiences, was that §90 to §95 which spell out “who does what to whom” were important to the functioning of a federal state, especially to one in which traditional provincial rights and diverse cultures were well established. Now, it is important to remember that in Canada’s long and rich history there were instances, especially during great wars, when the provinces agreed to federal intrusions into their areas of responsibility; this is not one long story of federal bullying. But what seems perfectly clear to me ~ and I suspect to e.g. John Horgan, Jason Kenney, Doug Ford, François Legault and the other premiers is that last week’s Throne Speech marks another major and quite unjustified federal assault on their jurisdictions. What’s happened, according to Manitoba Premier Brian Pallister, is that the provinces have all the health care delivery problems but, thanks, in some part, to tax decisions made in 1942, the feds have all the money. The solution is blindingly obvious: transfer tax “points” as some experts call them, to the provinces so that they, not Justin Trudeau, who have the problems of too few physicians, too few nurses and too few hospital beds also have the money to solve them.

September 23, 2020

Federal minister admits the Libranos’ plan is a shakedown to “get money from web giants”

Filed under: Cancon, Government, Media, Politics, Technology — Tags: , , , , — Nicholas @ 03:00

Michael Geist on a rare moment of honesty from Canadian Heritage Minister Steven Guilbeault on the federal government’s atrocity of an internet regulation plan:

Canadian Heritage Minister Steven Guilbeault, 3 February 2020.
Screencapture from CPAC video.

As Canadian Heritage Minister Steven Guilbeault prepares an Internet regulation plan that features the prospect of licences for linking, undermining net neutrality, and trade sanctions, he has typically argued that “it’s about fairness”, suggesting that foreign companies unfairly benefit from the Canadian market at the expense of domestic companies. Yet when Guilbeault appeared at a production sector town hall last week, he was far more candid. Guilbeault told the sector that in a minority government situation, his department had to choose between a massive bill changing “everything under the sun” or to slice it up into smaller pieces. Having chosen the piecemeal approach, Guilbeault pointed to his top priority: get money from the foreign Internet companies (his exact words at 47:58 were “the most pressing thing we needed to do was to get oxygen into the system, which is money. And go and get that money where that money is. Which is web giants.”)

In certain respects, the acknowledgement that this amounts to little more than a shakedown makes sense. CRTC Chair Ian Scott has said that Netflix is now probably the largest contributor to film and television production in Canada and the sector enjoyed record production numbers pre-COVID-19, so the data simply does not support claims that the streamers are hurting the industry. As for the news sector, the Minister has failed to deliver millions in promised tax credits and seemingly now wants an alternative that involves creating a licensing regime for linking to content.

Yet if the goal is simply a matter of wanting more money from Internet companies that can be used to support Canadian cultural policies, it is not clear why this is a matter for the Heritage Minister. Everyone wants more money from the Internet companies and countries around the world have a credible argument that the huge global Internet revenues should be more equitably apportioned among them. In other words, the way to “get money from web giants” is for Finance Minister Chrystia Freeland to tax them on their revenues. Those tax revenues would go into general tax revenues and can be spent in an transparent manner without the need for specialized subsidy programs. This isn’t easy. The U.S. unsurprisingly objects to a potential reduction in its tax revenues, which means that Canada must find allies with other countries in seeking global solutions on tax. Further, Guilbeault candidly recently told a publisher town hall that changes to the tax code is far more difficult than direct program spending.

The problem with Guilbeault’s preference for direct program spending subsidized by Internet companies is that it raises a host of complications and negative effects. For example, mandated Canadian content spending for companies such as Netflix could require the companies to pay into a fund that supports Canadian content production. However, the current rules make it challenging for those same companies to access those funds for their own productions. That leads to either a trade challenge (and the possibility of tariffs against key Canadian sectors such as dairy and steel) for being forced to pay into a system that is inaccessible to foreign providers or a reform to the system that would open things up to foreign providers and in the process undermine the competitiveness of domestic producers and broadcasters who are more reliant on tax credits and funding programs.

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