Canada: Norway & Greece in One Country with One Currency

[August1991]

If you don't know Richard Martineau, you should. He's a free-thinker who defends a collective: Quebec culture and the French language.

Here's what he said about Quebec, and Equalization

If you can't read French, you can use Google translate to read his post - and in particular, the comments that follow.

Google Translated Link

If this continues, it is not us who will leave Canada. These are the other provinces that will anoint us out.

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I happen to disagree with Martineau for three reasons.

1. In a civilized society, we are our brother's keeper.

2. IMHO, the economic logic of equalization payments is correct. (Pay other governments so that people stay away.) The German taxpayer bailout of the Greek government is small compared to Canada's annual cross-provincial equalization payments between taxpayers and other provincial governments.)

3. Foreigners buy Albertan oil using Canadian money, but we Canadians have a single currency. WTF?

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I wonder: Was the BNA Act, written in the 1860s on the cusp of the gold/oil age, wrong to give natural resource rents to the provincial governments?

Edited April 17, 2012 by August1991

[August1991]

BTW, Norway is not a member of the European Union and Norwegians pay no taxes/equalization to Brussels. Norway (like Sweden) has its own currency. Yet by geography, Norway/Sweden are part of Europe - just as Alberta is part of Canada, northern North America.

Apparently, "left-wing, socialist" civilized Norwegians/Scandinavians have a different more sophisticated view of "solidarity" than right-wing "libertarian" civilized Albertans.

Or maybe the Norwegians and Swedes are simply practical, like most Lutherans.

Edited April 14, 2012 by August1991

[Vineon]

He's a crass demagogue and moreso in this particular article than in his usual crap.

His analogy is especially painful: Québec's extra social spendings are compared to a man on the party abusing drugs and escorts. Apparently, that is "a bit what is happening". Surpassing himself here in a frankly disgusting way.

It'd be nice if he also stopped comparing receiving equalization payments to receiving a welfare check. Should we also say of working citizens that get tax returns through wealth equalization that they are on welfare?

Dutch disease now? You are completely all over the place. What is the thread even about? Are you suggesting we should have multiple currencies? What does it have to do with Martineau's article?

Edited April 14, 2012 by Vineon

[August1991]

His analogy is especially painful: Québec's extra social spendings are compared to a man on the party abusing drugs and escorts. Apparently, that is "a bit what is happening". Surpassing himself here in a frankly disgusting way.

It'd be nice if he also stopped comparing receiving equalization payments to receiving a welfare check. Should we also say of working citizens that get tax returns through wealth equalization that they are on welfare?

How about chips and cigarettes, and 7$ day care?

On part sur le party et on se paie des programmes quatre étoiles que les autres provinces n’ont pas les moyens de se payer — garderies à 7 $, congés parentaux, frais de scolarité à rabais…

Comment pensez-vous que les habitants des provinces riches réagissent ?

Ils grimpent dans les murs ! Et avec raison…

Ils nous donnent cet argent pour qu’on puisse manger, pas pour qu’on s’achète des chips et des cigarettes !

Vineon, do you understand sarcasm and irony?

BTW, IMHO, the ability to understand sarcasm/irony distinguishes Sophisticated West from Superstitious East.

Edited April 14, 2012 by August1991

[Vineon]

Vineon, do you understand sarcasm and irony?

If you had Martineau's analogy in mind and all you saw was irony and sarcasm and not an attempt to condition imbeciles against any form of extra social spendings, because we receive equalization, using wonderful images such as 'escorts' and 'drugs' to compare them with, I realize you simply do not understand his actual intentions.

The "cigarettes and chips" one I didn't appreciate either but it wasn't as sensational.

Oh the guy can be ironic without launching a few blows at the programs offered by making such crass comparisons. I could rewrite the whole analogy and only change a few disparaging terms meant to symbolize our social programs and keep all the irony... all the sarcasm.

Do you understand this?

Edited April 14, 2012 by Vineon

[August1991]

If you had Martineau's analogy in mind and all you saw was irony and sarcasm and not an attempt to condition imbeciles against any form of extra social spendings, because we receive equalization, using wonderful images such as 'escorts' and 'drugs' to compare them with, I realize you simply do not understand his actual intentions.

The "cigarettes and chips" one I didn't appreciate either but it wasn't as sensational.

I gather that you don't understand sarcasm.

Vineon, you are a Calvinist.

[Vineon]

I gather that you don't understand sarcasm.

Vineon, you are a Calvinist.

Say I have a problem with Québec's daycare program being symbolised in an analogy by a man's luxury spendings on drugs and escorts, it is simply that I do not understand sarcasm? You don't understand what is wrong about this, do you? How frankly pitiful. It would never cross your mind that the man could have spent this extra money on something that carries a bit less negative connotation than "escorts and drugs"? That this negative connotation comparison stands a purpose in this text?

Of course not... because you're not even interested in trying.

You might also want to wait until you actually know people before quickly labeling them.

[August1991]

You might also want to wait until you actually know people before quickly labeling them.

You're probably right.

----

In my OP, I meant simply that it would be difficult to put Norway and Greece into a single country, with a single currency - indeed Norwegians don't. And yet, Albertans (we Canadians) manage to do this in a civilized way.

From our banks to our equalization payments, from our federal system to our respect of minority rights, why do we Canadians generally get things right? Why are Canadians so civilized?

Edited April 14, 2012 by August1991

[August1991]

From our banks to our equalization payments, from our federal system to our respect of minority rights, why do we Canadians generally get things right? Why are Canadians so civilized?

This question is bothering me.

People like the Belgian Mark Steyn will say that it is "our" "Anglo-Saxon Common Law inheritance". I disagree.

French Catholics lived under marshal law for the 50 years after the capitulation. Not a single ship from France arrived in Canada between 1763 and 1850. In 1763, there were 60,000 French-speaking Catholics in Canada. The British intended to submerge them. Ships arrived from Ireland, Scotland, Liverpool.

This remarkable place called Canada, a place where individuals of different languages and religions live together in peace, has existed for several centuries.

In theory, India/Pakistan are such places, and Galicia was once such a place.

Edited April 17, 2012 by August1991

[cybercoma]

Can someone translate "capoteraient," Google translate won't do it and the best I could gather from my very limited French is that it would mean something like renege or take back in English.

[cybercoma]

My first reaction to his article is that he doesn't seem to understand equalization payments very well.

I will use his analogy as the example.

So the federal government gives Quebec money to buy clothes because it is unable to actually raise enough money to buy them (this seems to be the important part that he's missing), so it doesn't freeze in the winter. Quebec wastes all its money on hookers and blow.

That's not the rest of Canada's problem. The rest of Canada doesn't then all of a sudden give them more money because they didn't spend it on the "right" things. Le Québécois ought to be pissed that L'Assemblée nationale du Québec is not providing the same standard that the rest of Canada receives (assuming they don't).

Transfer payments are only meant to make up the shortfall in a province's ability to raise funds on its own. It really has nothing to do with what sorts of things the province is putting its money into or how much money its spending on its own projects.

So, they can waste all of their money on that sweet party that they're having, but they're not getting a dime more from the rest of us. Anyone that has a working knowledge of the way the equalization program works couldn't possibly care less what programs Quebec is running or what they do with the money.

[cybercoma]

This page: http://www.fin.gc.ca/fedprov/eqp-eng.asp

The two most important things on that page, as it pertains to this topic.

1) Equalization entitlements are determined by measuring provinces' ability to raise revenues – known as "fiscal capacity".

It has nothing to do with a provincial government's expenditures.

And before someone jumps in and says that Quebec intentionally keeps its income tax low, so that their fiscal capacity looks worse than it is. The federal government uses the average tax rate across the country, so it doesn't matter what a particular province collects.

While I agree that expenditures should not be considered (you don't get more because you want to spend more than everyone else), the downside is that it doesn't take into consideration differences in the cost of delivery across the country. Transportation costs, accessibility, and other things may be a factor that causes programs to be more expensive for some provinces than others. This isn't at all a consideration for equalization payments. To some extent, it probably should be to make things more fair.

2) Equalization payments are unconditional – receiving provinces are free to spend the funds according to their own priorities.

Which means buddy that's part of the commune can spend his money on whatever the hell he wants. It doesn't have to be clothes. That's not the rule.

Edited April 17, 2012 by cybercoma

[August1991]

Can someone translate "capoteraient," Google translate won't do it...

capoteraient = (they would) go nuts

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Mark Steyn knows that Canada is a successful bilingual society, with no official cultural. He lives such a life himself.

Edited April 17, 2012 by August1991

[Evening Star]

This remarkable place called Canada, a place where individuals of different languages and religions live together in peace, has existed for several centuries.

In theory, India/Pakistan are such places, and Galicia was once such a place.

India more than Pakistan, surely. Pakistan has a state religion.

[mentalfloss]

wtf is this thread?

[cybercoma]

This page: http://www.fin.gc.ca/fedprov/eqp-eng.asp

The two most important things on that page, as it pertains to this topic.

1) Equalization entitlements are determined by measuring provinces' ability to raise revenues – known as "fiscal capacity".

It has nothing to do with a provincial government's expenditures.

And before someone jumps in and says that Quebec intentionally keeps its income tax low, so that their fiscal capacity looks worse than it is. The federal government uses the average tax rate across the country, so it doesn't matter what a particular province collects.

While I agree that expenditures should not be considered (you don't get more because you want to spend more than everyone else), the downside is that it doesn't take into consideration differences in the cost of delivery across the country. Transportation costs, accessibility, and other things may be a factor that causes programs to be more expensive for some provinces than others. This isn't at all a consideration for equalization payments. To some extent, it probably should be to make things more fair.

2) Equalization payments are unconditional – receiving provinces are free to spend the funds according to their own priorities.

Which means buddy that's part of the commune can spend his money on whatever the hell he wants. It doesn't have to be clothes. That's not the rule.

Did I lose something in translation here? This was an interesting thread, but a day later there's been no discussion.

[Evening Star]

You didn't lose anything in translation. Imo, the OP is kind of ridiculous and hard to discuss.

[August1991]

So the federal government gives Quebec money to buy clothes because it is unable to actually raise enough money to buy them (this seems to be the important part that he's missing), so it doesn't freeze in the winter. Quebec wastes all its money on hookers and blow.

Taxpayers in the rest of Canada give the Quebec government the money.

That's not the rest of Canada's problem. The rest of Canada doesn't then all of a sudden give them more money because they didn't spend it on the "right" things. Le Québécois ought to be pissed that L'Assemblée nationale du Québec is not providing the same standard that the rest of Canada receives (assuming they don't).

Now, I think you understand Martineau's real point.

Equalization pisses off ROC and pollutes Quebec.

Transfer payments are only meant to make up the shortfall in a province's ability to raise funds on its own. It really has nothing to do with what sorts of things the province is putting its money into or how much money its spending on its own projects.

So, they can waste all of their money on that sweet party that they're having, but they're not getting a dime more from the rest of us. Anyone that has a working knowledge of the way the equalization program works couldn't possibly care less what programs Quebec is running or what they do with the money.

The logic of equalization payments, if I understand Robin Boadway properly, is to prevent inefficient migration of people between provinces.

Cybercoma, you seem to think that provincial governments can waste money/resources/lives just like any dysfunctional family. Moreover, you think that provincial governments can waste the money of taxpayers in other provinces.

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No successful/sustainable society encourages dysfunctional families, or wasteful governments.

[August1991]

wtf is this thread?

It's a riff on a serious world/Canadian issue.

At issue is whether a government should have the power to tax people in another jurisdiction.

Edited April 21, 2012 by August1991

[cybercoma]

Cybercoma, you seem to think that provincial governments can waste money/resources/lives just like any dysfunctional family. Moreover, you think that provincial governments can waste the money of taxpayers in other provinces.

This is wholly a provincial issue. Transfer payments are there so a similar level of services can be provided from province-to-province. It's based on the fiscal capacity of the province and not their expenditures and the provinces are allowed to spend the money however they wish. The purpose for this latter point is that provinces are supposed to be better equipped to handle the things within their power (S. 92 of the Constitution lists the enumerated powers of the provinces). There's a reason the provinces were given control over these things. So, they get the money to make up for the shortfall in their fiscal capacity and they get to spend it on the things that are within their powers as they see fit. Now if Quebec has a problem with how their province is spending the money, that's Quebec's problem. The rest of Canada shouldn't possibly be able to care less about it. Those that complain that "Alberta is giving money to Quebec" simply have no idea how transfer payments work or what the purpose is for them. So if there's a problem with how Quebec is spending their revenues, then the people of Quebec need to take it up with the National Assembly.

Again, that's assuming there's a problem with how the provincial government of Quebec is spending their revenues. I haven't seen any evidence of that. In fact, it seems to be quite the opposite. Quebec seems to have a far more substantial and effective social safety net than the other provinces. Perhaps it's the other provinces that should be learning from Quebec. Well, except for the corruption charges against Charest.

Edited April 21, 2012 by cybercoma

[Topaz]

Do any of you think down the road that the world will have only ONE legal tender, especially since we have the GLOBAL economy? IF so, what would it be in Euros, US $$ or something new?

[August1991]

This is wholly a provincial issue. Transfer payments are there so a similar level of services can be provided from province-to-province. It's based on the fiscal capacity of the province and not their expenditures and the provinces are allowed to spend the money however they wish. The purpose for this latter point is that provinces are supposed to be better equipped to handle the things within their power (S. 92 of the Constitution lists the enumerated powers of the provinces). There's a reason the provinces were given control over these things. So, they get the money to make up for the shortfall in their fiscal capacity and they get to spend it on the things that are within their powers as they see fit.

Cybercoma, you have stated well the simplistic federal Liberal Party justification of equalization.

There's another logic: provincial governments should be able to offer similar levels of service so that people don't wastefully move around the federation simply shopping for provincial government largesse.

Or how about the Bourassa logic: if we are to have a single currency, we must have a single fiscal policy. (I was always doubtful of this but given the transfers between Germany/Greece, Bourassa seems right. The European bailout of Greece is shocking in Europe but so normal in Canada that no one notices.)

I will stay with my original idea.

For some people, life is all about spending other people's money. (I call such people "moochers".) For example, politicians and government bureaucrats love to spend other people's money. The further away the other people, the easier it is to mooch.

Equalization means that Quebec bureaucrats and politicians can tax people elsewhere in Canada.

It's kind of like the UN.

Edited April 24, 2012 by August1991

[August1991]

Do any of you think down the road that the world will have only ONE legal tender, especially since we have the GLOBAL economy? IF so, what would it be in Euros, US $$ or something new?

Topaz, we have a GLOBAL economy. (You can skype/email anyone. We have posters on MLF from around the world.)

In the future, should we have/will there be a single currency/money? Well, in the future, will the world have a single language? Why do we have money and language?

IMV, we have money/currency for the same reason we have language: to communicate/deal with one another. I suspect that some people will always want to deal in their own way.

Here's my prediction: As soon as there is a "single" world language or "single" world currency, someone will do a deal on the sly, or make a slang joke.

Edited April 24, 2012 by August1991

[dre]

Do any of you think down the road that the world will have only ONE legal tender, especially since we have the GLOBAL economy? IF so, what would it be in Euros, US $$ or something new?

Nope we wont have one legal tender. Thats a terrible model that will never work. Control of money is such a dominant position that people will rebel against the idea their money and their economy would controlled from somewhere else in the world by people they cannot fire. Furthermore its very inneficient to manage things this way and very costly.

We are going to see the exact opposite... the LOCALIZATION of power, and also economic localization.

But we WILL see an international unit of economic account. Probably something very similar to the "bancor" proposed by Keynes after WW2. Youll still have national currencies and a floating exchange, measured against the new international unit of economic account. This will happen within the next 10 or 15 years IMO. Chinas central bank is already pushing to use the IMF to implement such an intrument.

[August1991]

Nope we wont have one legal tender. Thats a terrible model that will never work. Control of money is such a dominant position that people will rebel against the idea their money and their economy would controlled from somewhere else in the world by people they cannot fire. Furthermore its very inneficient to manage things this way and very costly.

And yet ordinary people from St. John's to Victoria go to a Tim Horton's every morning and take the same, simple coloured paper from their wallet and get a coffee in return.

IMHO, there is something civilized in such transactions.

Edited April 24, 2012 by August1991