Rural Subsidies

[Renegade]

For years, for several consumer services, urban consumers have subsidized rural consumers. In most cases the cost of these services are cheaper to provide to urban consumers than to rural consumers, however urban consumers have been forced to subsidize the cost of providing those services to rural consumers. Some examples include local telephone services, and Canada Post mail delivery. Increasingly there is discussion of the digital divide and the argument that high-speed internet service should fall into this category.

A couple of points:

1. Rural consumers choose to live or to stay where they do, should their choice not reflect the true cost of providing those services?

2. There is less demand for rural land, and this is reflected in the costs. The cost of living, especially housing is substantially lower in rural areas. This more than offsets the cost of these services. Rural dwellers are not expected to subsidize the housing cost of urban dwellers so why should urban dwellers subsidize the cost of services to rural dwellers?

3. Subsidizing rural consumers provides them unnatural incentive to live where it is least efficient to provide those services. Why ecourage such inefficiency?\\\

Thoughts? Is there some benefit urban consumers get for subsidizing rural consumers that I am not aware of? If not why should we continue these subsidies.

[guyser]

Great post !

A couple of points:

1. Rural consumers choose to live or to stay where they do, should their choice not reflect the true cost of providing those services?

I have no problem with basic services, postal, telephone, ambulance, fire dept. Beyond that....well it gets tricky.

2. There is less demand for rural land, and this is reflected in the costs. The cost of living, especially housing is substantially lower in rural areas. This more than offsets the cost of these services. Rural dwellers are not expected to subsidize the housing cost of urban dwellers so why should urban dwellers subsidize the cost of services to rural dwellers?

Rural dwellers , or small town dwellers have services beyond their capacity.Everything from community social services to arenas to schools.To some degree they can thank the urban dweller and the cottage owner, and frankly the cottage owner the most. The amount of taxes paid, and the resultant exclusion of benefits for taxes paid is criminal. But they pay to hold on to a place they love. (most of the blame can be put on MVA determination of taxes)

But dont get me wrong. Share the wealth is fine by me, and frankly I dont know where to draw the line, although I am fast approaching that line. No one I know wants rural or small towns to disappear . Since the GTA is relatively rich, one should expect some of our cash going to pay for services, or at least help out.

3. Subsidizing rural consumers provides them unnatural incentive to live where it is least efficient to provide those services. Why ecourage such inefficiency?\\\

Thoughts? Is there some benefit urban consumers get for subsidizing rural consumers that I am not aware of? If not why should we continue these subsidies.

Not to be flippant, but they can be a source of cheaper labour, cheaper wood for the heating season, but from my standpoint, they are just fine people to begin with.

Rural people dont get services that we in the city do. They expect that and are fine with it. Cable, cell,internet and natural gas are four that come to mind.

Cable? Meh...satellite is available although not entirely usefull.

Cell? lots of spotty areas.

Internet? ..dial up, the bane of every kid looking for music.....or porn.

Natural Gas? Man, the prices they want, and the way they want you to go about it are bizarre.

Anyhow, thanks, and lots to talk about here. It should be interesting to hear from rural or small town posters.

[blueblood]

I'll Bite.

We don't get much for services.

Trash - we load up the 3/4 ton truck and haul it to the dump ourselves

Electricity - reg. rates plus "convenience"

Natural Gas - I wish

Sewer - Nope, just a septic tank and water from a well. Don't worry still runs

TV - satellite (cheap Canadian garbage, the grey market american stuff) or good old rabbit ears

Postal Service - Drive into town to the post office

Cell phone - piss poor service, if anything I am subsidizing good cell service in cities by paying sky high bills and the phone not working half the time.

Ambulance - ching ching. If I'm conscious I'm driving myself to the hospital

Good Shopping - big day in the city

Plus the taxes paid on every quarter section a person owns plus yard sites...

The school division i was in before we amalgamated with a school division with an urban area was very well financially due to the large amount of farms paying lots of tax for few kids, then the urban area and it's large schools came in and sucked the bank account dry.

Less demand for rural land... Hah!!! corner to corner 1/4 sections going for 150 large in the boonies

or rent is approaching 50 bucks an acre. I can't imagine the cost out in Alberta.

It depends on the small town/rural area for tax revenue. Some are more prosperous than others. It's like efficient or not cities, if a small town has lots of skids that don't contribute, then said town is not able to generate tax for services and has to be one that siphons off from cities and it won't get the same services as the next town over that is efficient.

One also has to remember that some of the services were put in place by provincial governments at times when a lot more people lived out in the country and were under immense political pressure to do so.

[Renegade]

I have no problem with basic services, postal, telephone, ambulance, fire dept. Beyond that....well it gets tricky.

You may not, but I do. Why should an urban dweller care if a rural dweller has telephone service as cheap as the city?

Rural dwellers , or small town dwellers have services beyond their capacity.Everything from community social services to arenas to schools.To some degree they can thank the urban dweller and the cottage owner, and frankly the cottage owner the most. The amount of taxes paid, and the resultant exclusion of benefits for taxes paid is criminal. But they pay to hold on to a place they love. (most of the blame can be put on MVA determination of taxes)

You may complain that cottage owners are taxed beyond the services they use, however they must feel strongly enough that their cottage is worth it or else they would not own the cottage. Alternatively they can mobilize and if there are sufficient numbers advocate for a user-pay system.

No one I know wants rural or small towns to disappear .

Why does it matter if they dissappear? What benefit does its existance hold to the urban dweller?

Since the GTA is relatively rich, one should expect some of our cash going to pay for services, or at least help out.

Any urban area is not uniform. There are rich and there are poor. Same with rural areas. You may not be bothered that a rich urbanite subsidizes a poor rural person's phone service, but should what about a poor urbanite subsidizing the telephone services of a rich rural recreation property?

Not to be flippant, but they can be a source of cheaper labour, cheaper wood for the heating season, but from my standpoint, they are just fine people to begin with.

So? Is the service subsidy going to make the cheap labour any cheaper? or the wood any cheaper? What exactly does them being "fine people" have to do with a reason for a subsidy?

[Renegade]

We don't get much for services.

Trash - we load up the 3/4 ton truck and haul it to the dump ourselves

Electricity - reg. rates plus "convenience"

Natural Gas - I wish

Sewer - Nope, just a septic tank and water from a well. Don't worry still runs

TV - satellite (cheap Canadian garbage, the grey market american stuff) or good old rabbit ears

Postal Service - Drive into town to the post office

Cell phone - piss poor service, if anything I am subsidizing good cell service in cities by paying sky high bills and the phone not working half the time.

Ambulance - ching ching. If I'm conscious I'm driving myself to the hospital

Good Shopping - big day in the city

You don't address the issue of why for example if it cost Canada post 25 cents to deliver a letter in the city and 75 cents to deliver it in a rural area, should they charge everyone 52 cents for a stamp?

Less demand for rural land... Hah!!! corner to corner 1/4 sections going for 150 large in the boonies

or rent is approaching 50 bucks an acre.

Compare those prices to GTA or Vancouver or any large city and you will understand that the demand for land is less in rural areas.

[blueblood]

You don't address the issue of why for example if it cost Canada post 25 cents to deliver a letter in the city and 75 cents to deliver it in a rural area, should they charge everyone 52 cents for a stamp?

Compare those prices to GTA or Vancouver or any large city and you will understand that the demand for land is less in rural areas.

I don't know how much it costs for delivering mail precisely. I'd need facts and figures. That 52 cents is not all tied up in travel costs, it also has to pay for staffing, there is much more staffing in urban areas obviously and a lot more mailed is shuffled around there, I'd say its a fair trade. Canada Post is going the way of the Dodo though, e-mail and express mail will kill it.

The rural demand for land is considerable grain prices are at all time highs, without it you guys simply starve, it is given value based what you can get out of it. And compare the prices I gave you with a plot of land the same size out in Nunavut. A booming rural economy in today's time is raising housing prices in nearby towns and small cities at unprecedented rates. One key item keeping land values at a lower rate is the fact that the provincial governments expropriated mineral rights from land owners, had they not done that, land prices would be ridiculous. I think your beef should be with the communities in the high arctic most aren't even self sufficient.

Western Canada is well on it's way to self sufficiency if we're not already there. It's our vast oil reserves, our hydro, and our now booming grain industry that's keeping Canada afloat. If you guys want to kick us out, we'd gladly go, the days of Western Canada relying on Ontario are long gone. Take your beef with Quebec and the extreme North.

Edited January 9, 2008 by blueblood

[Wilber]

Why does it matter if they dissappear? What benefit does its existance hold to the urban dweller?

Great, lock yourself up in your city and starve. Where do you think your food, fuel, building materials and everything else you need to live comes from. You are aware that milk comes from cows?

[madmax]

I'll Bite.

We don't get much for services.

The end

For taking the bait, you did a great job.

[Renegade]

I don't know how much it costs for delivering mail precisely. I'd need facts and figures. That 52 cents is not all tied up in travel costs, it also has to pay for staffing, there is much more staffing in urban areas obviously and a lot more mailed is shuffled around there, I'd say its a fair trade. Canada Post is going the way of the Dodo though, e-mail and express mail will kill it.

You seem to be making an argument that the cost for providing some services such as mail are the same in rural areas as for urban areas. Would you agree, that IF the cost can be shown to be different and the cost to provide rural service is held artifically low, then such a situation should not be justified?

The rural demand for land is considerable grain prices are at all time highs, without it you guys simply starve, it is given value based what you can get out of it. And compare the prices I gave you with a plot of land the same size out in Nunavut. A booming rural economy in today's time is raising housing prices in nearby towns and small cities at unprecedented rates. One key item keeping land values at a lower rate is the fact that the provincial governments expropriated mineral rights from land owners, had they not done that, land prices would be ridiculous. I think your beef should be with the communities in the high arctic most aren't even self sufficient.

If the cost to produce grain is higher because of rural land prices, why not simply pass on those cost to the consumer? Why does a rural community need subsidized services to produce grain?

Western Canada is well on it's way to self sufficiency if we're not already there. It's our vast oil reserves, our hydro, and our now booming grain industry that's keeping Canada afloat. If you guys want to kick us out, we'd gladly go, the days of Western Canada relying on Ontario are long gone. Take your beef with Quebec and the extreme North.

You are introducing regional issues where there are none. The same rural-urban split applies equally within a province and to all provinces.

[Renegade]

Great, lock yourself up in your city and starve. Where do you think your food, fuel, building materials and everything else you need to live comes from. You are aware that milk comes from cows?

Sure, and I fully expect to pay the producer the cost of providing those products. If it is economical to produce those products in a rural community, someone will. Why does it take a subsidy of services as an enconomic incentive to do so?

[White Doors]

Sure, and I fully expect to pay the producer the cost of providing those products. If it is economical to produce those products in a rural community, someone will. Why does it take a subsidy of services as an enconomic incentive to do so?

If you find it that unfair, you are free to move to the country.

[Renegade]

If you find it that unfair, you are free to move to the country.

Yes, of course I am, just as rural dwellers who find a service expensive are free to move to a city, but that is hardly a justification of an injustice. Maybe you can try and address why that discirmmination should exist.

Edited January 9, 2008 by Renegade

[Wilber]

Sure, and I fully expect to pay the producer the cost of providing those products. If it is economical to produce those products in a rural community, someone will. Why does it take a subsidy of services as an enconomic incentive to do so?

Where do you expect them to be produced, on someones high rise balcony? Rural communities exist because people need them, you included. They aren't some social engineering project. I really don't think you believe milk comes from cows. Tell my why the citizens of rural communities should have any of their income, sales and fuel tax dollars go to build and subsidize transit systems, sports and cultural facilities etc, etc that they will never have.

You have a very self centered way of looking at life.

[Renegade]

Where do you expect them to be produced, on someones high rise balcony? Rural communities exist because people need them, you included. They aren't some social engineering project. I really don't think you believe milk comes from cows.

You are simply avoiding the point I am making. I am not saying we don't need rural communities. What I am asking is why those communities need services subsidies in order to produce the things (such as food) which are essential. Why doesn't the incentive to produce those, come simply from the price of those goods?

Tell my why the citizens of rural communities should have any of their income, sales and fuel tax dollars go to build and subsidize transit systems, sports and cultural facilities etc, etc that they will never have.

I agree, they shouldn't.

You have a very self centered way of looking at life.

Thanks.

[White Doors]

Yes, of course I am, just as rural dwellers who find a service expensive are free to move to a city, but that is hardly a justification of an injustice. Maybe you can try and address why that discirmmination should exist.

Why should single people subsidize families in the income tax system?

Why should rich subsidize the poor?

Why should I have to pay for an extension of a subway arm in toronto, something I will never use?

If you think that this is the lone case of 'discrimination' you are sadly mistaken. In fact, it would be near or at the very bottom in terms of offensiveness.

Edited January 9, 2008 by White Doors

[Renegade]

Why should single people subsidize families in the income tax system?

They shouldn't.

Why should rich subsidize the poor?

The only reason I can think of is that it may be more cost effective for them to do so than to spend the money on additional police and security services they would need if they didn't provide such a subsidy.

Why should I have to pay for an extension of a subway arm in toronto, something I will never use?

You shouldn't.

If you think that this is the lone case of 'discrimination' you are sadly mistaken. In fact, it would be near or at the very bottom in terms of offensiveness.

I'm not saying it is the lone case. I'm saying it is ONE case. I AGREE with you that there are other cases. Virually all cases are unjustified. The fact your response seem to agree with me that this subsidization is "offensive", however you seem to justify it only because there is other discrimmination.

[White Doors]

They shouldn't.

The only reason I can think of is that it may be more cost effective for them to do so than to spend the money on additional police and security services they would need if they didn't provide such a subsidy.

You shouldn't.

I'm not saying it is the lone case. I'm saying it is ONE case. I AGREE with you that there are other cases. Virually all cases are unjustified. The fact your response seem to agree with me that this subsidization is "offensive", however you seem to justify it only because there is other discrimmination.

No, I am providing you examples where sometimes the good of society outweighs the 'rights' of individuals.

What you are advocating is extreme libertarianism.

Why have a country at all then?

[Wilber]

You are simply avoiding the point I am making. I am not saying we don't need rural communities. What I am asking is why those communities need services subsidies in order to produce the things (such as food) which are essential. Why doesn't the incentive to produce those, come simply from the price of those goods?

I'm not avoiding anything. You will pay anyway. If you want the rural resident to pay up front for everything it takes to get you the stuff youneed, it will be included in the price. If for instance, you want the farmer to build the road to get his produce to you, he will but he will have to charge you for that road. If you want to go somewhere other than his farm, you will have to build your own damn road. Want to fly to some other city from your nice international airport? Build it yourself.

Tell you what. We will build a wall around whatever center of the universe you live in. Nothing or no one gets in or out except those from other cities which are also walled off. At the same time we will not let anyone or anything in or out of rural communities that doesn't come from another rural community. In six weeks we will see who is still alive. Any bets?

If your city got no money from Federal or Provincial governments other than what was generated by it's own taxpayers, how well do you think you would be doing?

We all pay for the country's infrastructure no matter where we live, because it won't work without it. We get 52 cent stamps, you get multi billion dollar transit systems.

QUOTE(Wilber @ Jan 9 2008, 10:34 AM)

You have a very self centered way of looking at life.

Thanks.

Perhaps that was unfair. Maybe you should just get out of the city more often.

[charter.rights]

Why should single people subsidize families in the income tax system?

Why should rich subsidize the poor?

Why should I have to pay for an extension of a subway arm in toronto, something I will never use?

If you think that this is the lone case of 'discrimination' you are sadly mistaken. In fact, it would be near or at the very bottom in terms of offensiveness.

Answers:

They don't.

They dont and,

They don't.

There is no discrimination.

Taxes do not belong to us. They belong to the government long before you get your paycheck. You have no control over how much they get, or when you pay (except perhaps if you are self-employed and then there is solid reasoning behind it). The government OWNS the tax for every second that you work and it is payable when it is collected.

What the government does with all the taxes collected is nothing we can argue with, because they are not under our control. They belong to the government, and they alone decide how they should be divided up. There is no discrimination in their application any more than you are discriminating against someone because they choose to use the health care system and you don't. These are the institutions we want our government to support. And if it isn't your personal choice to support a social safety net then you can try to elect MPs that agree with you. Good luck on that because they aren't interested in what you think. They just want the majority of votes in their riding...and the majority says we want all these things.

Kwityerbellyachin'! It is what it is.

[Renegade]

I'm not avoiding anything. You will pay anyway. If you want the rural resident to pay up front for everything it takes to get you the stuff youneed, it will be included in the price. If for instance, you want the farmer to build the road to get his produce to you, he will but he will have to charge you for that road.

]

Of course I and other urban dwellers will pay anyway. If the cost is embedded in the price of the product, the cost is ultimately borne by whomever consumes the product most. Further, the more I consume of the product the more I bear the cost. This is ultimately fairer then a backdoor subsidy based upon the assumption that I might use the product.

If you want to go somewhere other than his farm, you will have to build your own damn road. Want to fly to some other city from your nice international airport? Build it yourself.

Again, I agree. If I want to go somewhere I should have to pay for the cost of the infrastructure. If I don't, I shouldn't.

Tell you what. We will build a wall around whatever center of the universe you live in. Nothing or no one gets in or out except those from other cities which are also walled off. At the same time we will not let anyone or anything in or out of rural communities that doesn't come from another rural community. In six weeks we will see who is still alive. Any bets?

You seem to have missed the part of my response above which acknowledges that we need the products produced by rural communities. Why do you seem to think I want to wall off urban and rural communities? On the contrary, there should be free trade between communities as each will benefit. What I question is why there should be a subsidy instead if it being embedded in the cost of whatever is produced.

If your city got no money from Federal or Provincial governments other than what was generated by it's own taxpayers, how well do you think you would be doing?

IMO pretty well, but I have no proof of that. Do you have proof otherwise?

We all pay for the country's infrastructure no matter where we live, because it won't work without it. We get 52 cent stamps, you get multi billion dollar transit systems.

The infrastucture would be built anyway where it made economic sense to do so. Without subsidies rural communities would be paying higher postage and transit users would be paying higher fares. So what, let them.

Perhaps that was unfair. Maybe you should just get out of the city more often.

Perhaps I will, and of course I should pay for the priviledge to do so.

[Renegade]

No, I am providing you examples where sometimes the good of society outweighs the 'rights' of individuals.

IMV, the rights of the individual should never be oughtweighted except is extreme cases. In any case, you have not shown in any of your examples that what the "good of society" is.

What you are advocating is extreme libertarianism.

Sure. And what of it? Libertarianism only make sense if its principles are followed consistantily. I guess that makes it "extreme", huh?

Why have a country at all then?

Good question. Maybe we shouldn't.

[Renegade]

Answers:

They don't.

They dont and,

They don't.

Wrong, wrong, and wrong again. 3 for 3.

There is no discrimination.

Wrong again.

Taxes do not belong to us. They belong to the government long before you get your paycheck. You have no control over how much they get, or when you pay (except perhaps if you are self-employed and then there is solid reasoning behind it). The government OWNS the tax for every second that you work and it is payable when it is collected.

What the government does with all the taxes collected is nothing we can argue with, because they are not under our control. They belong to the government, and they alone decide how they should be divided up. There is no discrimination in their application any more than you are discriminating against someone because they choose to use the health care system and you don't. These are the institutions we want our government to support. And if it isn't your personal choice to support a social safety net then you can try to elect MPs that agree with you. Good luck on that because they aren't interested in what you think. They just want the majority of votes in their riding...and the majority says we want all these things.

Kwityerbellyachin'! It is what it is.

You can apply that logic to pretty much any fiscal issue whatsoever. In that case, why discuss any fiscal matters at all? Remind me again, why you bother to post in the Federal Politics section at all.

[Wilber]

You seem to have missed the part of my response above which acknowledges that we need the products produced by rural communities. Why do you seem to think I want to wall off urban and rural communities? On the contrary, there should be free trade between communities as each will benefit. What I question is why there should be a subsidy instead if it being embedded in the cost of whatever is produced.

My point was that you need rural communities to survive more than they need you.

IMO pretty well, but I have no proof of that. Do you have proof otherwise?

\\

No I don't and neither do you so why do you assume that you are subsidizing rural communities?

The infrastucture would be built anyway where it made economic sense to do so. Without subsidies rural communities would be paying higher postage and transit users would be paying higher fares. So what, let them.

Why do you assume they would be built? Built by who? You have already said that you don't want to pay for anything for which you have no personal use. Without funding from sources outside your city you wouldn't have a transit system to subsidize. Massive amounts of public money went into the transcontinental railway. The country as we know it wouldn't exist without it. How much better off do you think it would be without Alberta's energy resources or access to the Pacific Ocean?

Good question. Maybe we shouldn't.

Don't think you will get much support on that one. Civilization only began when people learned to work together and pool resources.

[Michael Hardner]

Why should city folks have to pay for miles of roads in the country that they never use ?

Why should country folks have to pay for cultural festivals that happen only in the city ?

etc. etc.

To disentangle these costs and put them on the proper tax base would cost us more than we'd save, so everybody should shut up and move on...

Me included.

[Renegade]

My point was that you need rural communities to survive more than they need you.

I don't think I ever disputed that we need the products rural communities produced. That need should be reflected in the cost of the product. That way the production cost is fairly allocated to the consumers of the product. If I consume more eggs, I should pay more toward the cost of the rural community which produces eggs. Subsidizing their telephone services makes no sense.

No I don't and neither do you so why do you assume that you are subsidizing rural communities?

I make no such asumption. My remarks was directed as the kinds of specific services such as telephone and mail. I'm sure there are others such as rail service. The evidence that these services are subsidized is that the government must regulate the prices and service levels for those services and so they are set at an artificial level. This is evidence that those services are subsidized.

Why do you assume they would be built? Built by who?

Hmm, cell phone and internet infrastructure seem to have been built based upon consumer need. Funny that.

You have already said that you don't want to pay for anything for which you have no personal use. Without funding from sources outside your city you wouldn't have a transit system to subsidize.

You seem to conclude that I want a subsidized transit system. I do not. Let us assume for a minute that you are right that a transit system would not get built if it were not for government intervention. Why not recover the cost of that building from user fees of that transit system? If the users aren't willing to pay for it, why should anyone else be expected to? Many toll bridges are funded in this manner.

Massive amounts of public money went into the transcontinental railway. The country as we know it wouldn't exist without it. How much better off do you think it would be without Alberta's energy resources or access to the Pacific Ocean?

I have no idea how much better or worse the country is because of massive government investments in infrastructure. (BTW, isn't it that same government who invested in airport infrastructure in Montreal named Mirabel?). In any case, if Alberta's energy resources, and Sask wheat farmers are better off because of the railway, they should bear those costs.

Don't think you will get much support on that one. Civilization only began when people learned to work together and pool resources.

Doesn't really matter to me how much support I get. I didn't indicate I was on one side of the issue or the other. Simply that it was a good question worthy of further examination and I didn't presume an answer.

Edited January 9, 2008 by Renegade