Let me begin by saying that Foodcare is not socialized food. Foodcare is a state-financed food insurance plan that ensures the accessibility and universality of food supply. This point needs clarification because so often people assume that Foodcare is some form of socialism. It isn’t—socialism doesn’t work, Foodcare does.

Foodcare is the most popular and important social program in our country’s history. Foodcare recognizes that food is a need, not a commodity. After all, you don’t choose to get hungry. And when you are hungry, there’s no way for you to make rational choices—a hungry man would pay almost anything to get a meal; which is why sociologists say food is too important to be sold on the open market.

Admittedly, there are some problems with Foodcare. The system is not perfect. Some of our best and brightest grocers have left to practice their trade south of the border. Indeed, the brain drain is worrisome.

But look at the good side. All that nasty confusion with all those brand names has been eliminated. Why should the Ministry of Food pay for brand names when generics are so much cheaper?

There have been complaints that certain foods are no longer available. At first, beluga caviar, pâté fois gras, roquefort cheese and other gourmet foods disappeared from store shelves. Now so many common foods are also unavailable—avocados, New York steak, and flavoured coffee to name only a few.

These growing pains are not surprising. Since food became free, people no longer think about cost. Abuse is common—some shoppers fill their carts with food they will never eat. Waiting lists have developed. You can’t just walk into a grocery store and expect to pick up hand made linguini. No, you need to see a licensed dietitian and, if he or she feels you need the pasta, then you go on a waiting list. It’s the only way to control costs, and it’s worth it when you consider the benefits.

We have heard others whining that not everyone has equal access to food. The reality is that the availability of food and the waiting periods differ from region to region. Clearly, Ottawa must set stronger national standards. And don’t believe the stories about politicians, university presidents and others jumping the queue. They are patriotic Canadians too. They wait in line with everyone else. Waiting in lines does take its toll on some people—malnourishment forces some Canadians to miss work, but ignore the alarmists who say some of them actually die waiting.

Politicians, food economists, and grocers have debated the future of Foodcare. Some believe that the way to address the waiting list problem is to allow a two-tiered food system. Under this arrangement, people could opt out of the public system and buy food privately. Advocates argue that this would help reduce waiting lists since the public system would serve fewer people and would, therefore, have more resources.

I remain unconvinced about this scheme. The beauty of Foodcare is that everyone is treated equally. Would it be fair to allow wealthy people to get better food? This is un-Canadian. I also worry that two-tiered Foodcare would lead to an Americanization of our food system. Can you imagine the quality of our food if it were driven by the American corporate bottom-line approach?

The issue of Foodcare reform is a serious one. With an aging population and thus growing specialty food needs, governments must seek out new efficiencies in the system. Provincial governments are solving this problem with grocery store closures, empowered regional food boards, reduced grocers’ college admissions, de-insurance of certain food types, and stronger central control over what’s left. They have proven that we can do more with less. Indeed, federal politicians have suggested that many of the problems could be solved by expanding Foodcare—they propose coverage of vitamin supplements for those people who need them (Vitacare), and of catering services for those people who can’t cook (Catercare).

Foodcare faces many challenges in the years to come. As wonderful as the program is, some quietly wonder: "will it be there for me when I’m really hungry?" In my heart, I know it will.

Every day we hear horror stories about the various health care delivery systems in Canada. People are unable to get the medical care they need when they need it, even if they can afford to pay to get it right away. Now more then ever, those who can afford it are fleeing the various provincial systems for the more expensive yet more accessible health care available in the United States and other countries. Millions of dollars are being drained from the Canadian economy by these medical expatriates.

Despite the very obvious development of a two-tiered medical system in Canada, our governments do virtually nothing. This is not for a lack of interest on the part of some provincial governments. Rather, provincial ministries find their finances bound by the federal govern-ment’s Canada Health Act (CHA), even though health is a provincial responsibility. The federal government can withhold transfer payments from the provinces if they do not adhere to the CHA principles, namely, universality, portability, comprehensiveness, public administration and accessibility. So what can be done to improve the situation?

Last November I received a Fraser Institute student bursary to attend a one day Fraser Institute conference entitled "Putting Patients First" in Toronto. At the conference, eminent speakers from around the world attempted to look at the Canadian health care system from a global perspective and provide some suggested new directions for reforming our ailing system.

Cynthia Ramsay, Health Economist at the Institute, presented considerable evidence supporting the many shortcomings of the Canada Health Act. In fact, with even a cursory glance, it becomes obvious that of the five primary tenets of the Act, only that of public administration is being enforced by the federal government. For example, the federal government has not fined provinces for deinsuring medical services or for insuring different medical procedures than other provinces—the comprehensiveness principle is not being upheld, yet there are no repercussions.

Funding of the current health system was intended to be split equally between the federal and provincial levels of government. As of 1990, this was only nominally the case in PEI, which was paying 56 percent of its costs. The Ontario government was paying 83 percent of total costs, Alberta was paying 82 percent and BC 81 percent. Yet despite the relatively small proportion of funding the federal government chips in for these provinces, there is considerable control at the federal level through the CHA. When Alberta wanted to allow private clinics to operate, they were fined by the federal government. In the end, Alberta gave in. Yet another confrontation between these two governments is inevitable. Soon Alberta will be paying close to 90 percent of its own health care bill, and the federal government’s power will diminish.

In the meantime, however, we wait. For most major radiotherapy treatments, the Canadian waiting period from referral to treatment is usually many days longer than the medically acceptable wait in Canada, and at least double the medically acceptable wait in the United States. For example, for breast cancer, the acceptable wait for treatment in the US is 17 days, and the acceptable wait in Canada is 28 days, but the actual wait in Canada is 44 days. Waiting lists are also increasing for treatment referrals. For example, in 1993, patients waited an average of 13.2 weeks from referral to treatment for elective heart surgery. In 1996, this increased to 19.7 weeks. This is not accessible care. This is a level of care which could endanger our lives.

Without a doubt, our quag-mired system needs drastic reform as soon as possible, since the situation in Canadian hospitals is moving from bad to worse. Unfortunately, the mandated rationing of health care is affecting those with the most to lose to the greatest extent: the elderly, the less educated and the poor. As Dr. Brian Day of the Cambie Surgery Centre in Vancouver readily pointed out, if one is a public personality, a professional, or a union member, they don’t have the same problems receiving adequate and accessible care as everyone else.

Another problem with a solely public system is that patients don’t feel responsible for their own health, and there is no incentive for them to find the most cost-effective treatment available. This is partially due to the lack of information consumers and providers have regarding health care expenses. It is also attributable to the oft expressed sentiment that "it’s free anyway, so who really cares?" As anyone who has taken Economics 101 knows, nothing is free, it’s all just a matter of who pays and when. The less visible the cost at the point of service, the more likely people are to use the service.

All too often, the precious, taxpayer-funded time of health care professionals is spent dealing with situations that might have been prevented with a little patient education, or a more appropriate care setting. Such a paradigm shift will only be possible if consumers are given more control over their health care spending. As well, the very role of physicians, nurses, and other care givers must be redefined. Legislation must be changed to allow for greater overlap in the types of services that various health providers can offer patients.

One free market application to health care is to entrust patients’ health care monies to their own discretion via medical savings accounts (MSAs), as is done in Singapore. Linda Low of the National University of Singapore pointed out the benefits and challenges of this system in her "Putting Patients First" conference paper. She notes that the advantages to this system are that health care expenditures have been kept low, and that MSAs promote self-reliance in the health care system. She also notes, however, that the Singapore government has not been willing to give people much freedom of choice in health care. It has used restrictive measures to curb what it feels to be over-use of medical services.

Those in the health field with the foresight to see beyond simplistic claims that an evil private sector health empire will develop if some people are allowed to pay for their own care must stress the positive impact that increased competition in health care will have on the public purse and on the quality of care in the whole system. Greater accessibility would result from a formalized two-tier system since those who wish to opt out of the waiting lists could do so with relative ease, and thus the waiting lists would decrease considerably for those who choose not to leave. Also, important health care dollars would be kept in Canada, and this, too, would help fund the system and keep medical specialists in the country.

If governments give consumers some degree of control over their health care dollars, or, at the very least, the opportunity to pay for faster care, the benefits will be universal. In all, a truly accessible system would come into being.

The BC government continues to lurch from one ill-considered piece of legislation to another. The latest came on June 16, 1997, in the form of Bill 37, the Tobacco Damages Recovery Act. Its purpose is to make tobacco companies pay for the costs incurred by the provincial government in treating smoking-related illnesses.

The Act makes it easier for both the government and individuals to sue tobacco companies by relaxing the rules of evidence, and by allowing plaintiffs to group themselves into massive American-style class actions in order to recover damages. While it gives the government a chance to grandstand against corporate "profiteers," the legislation is doomed to fail.

First, the numbers don’t add up. The government clams that the annual cost to the medical system due to smoking is roughly $500 million. This is the amount they hope to recover in damages from the industry, either through negotiations or litigation. What they don’t mention is that the government already receives nearly $500 million in provincial cigarette taxes each year. To put this high tax burden into perspective, 75 percent of the price of a carton of cigarettes consists of federal and provincial taxes. The real problem is that these taxes are not put directly toward offsetting the health costs of smoking; rather, they almost all go into general revenue. The BC govern-ment’s claim that they don’t have the money to cover their health care costs is simply false. They do—it just needs to be managed better. BC has a spending problem, not a revenue problem.

The legal aspects of the Act provide further grounds for criticism. By pursuing the tobacco companies through the courts, the government has chosen an incredibly costly and inefficient way to raise revenue. The litigation against American tobacco companies has been both lengthy and expensive. What’s more, the companies have won almost all of their cases. Juries, it turns out, are very sympathetic to the companies’ claims that smokers knew the risks before they began smoking. Given this history, there is every chance the BC government will lose its cases, and end up paying the legal costs of the tobacco companies. The only group to benefit from this legislation will be the trial lawyers, who stand to collect large contingency fees on multi-million dollar verdicts. Do British Columbians want to allow such an Americanization of their legal system?

Even the settlement with US tobacco companies doesn’t justify the government’s policy. The terms of the American agreement simply bring their regulations on taxes and advertising up to Canadian standards. Given that Canadian tobacco companies already face stringent bans on advertising, along with high taxes, there is very little that they would be willing to concede to the BC government. Rather than settle, they are likely to take their chances with the courts.

Even if the government is successful in getting a judgement, the tobacco companies will simply pass on this cost along to smokers. Litigation is just tax by another name. And, as the federal government recently learned, if tobacco taxes are too high, smuggling flourishes, and the government receives less revenue, not more. There is very little evidence that the number of smokers will be significantly reduced.

This legislation also strikes at one of the core values of a free society: personal responsibility. Such laws encourage the idea that individuals cannot be held accountable for the consequences of their actions. The simple fact is that people have known the dangers of smoking for a generation, yet continue to choose to smoke. Since 1971 we have had warnings on cigarette packages. Tar and nicotine levels have been displayed since 1975. We should also remember that cigarettes are a legal product. Surely, if consenting adults want to buy them, they should be free to do so, as long as they are willing to accept responsibility for the costs of their actions.

If the government really wants to reduce smoking it should make smokers pay directly for their health costs, possibly through higher medical premiums. Passing the buck to big tobacco companies through the courts will simply further remove from individual smokers the cost of their actions.

I had a nightmare last night. I dreamed that the Canadian federal government decided to double the gas tax in response to its Kyoto commitments. I saw visions of lineups at the gas pumps and people walking the streets unemployed, with no end in sight to either. I awoke with a shudder and decided to see if it would really be as bad as I thought.

In Canada, the price of gas is composed of its unrefined price, a refining and shipping charge, and taxes at various levels of government. I simulated a doubling in the federal gas tax on the University of Toronto’s Quarterly Forecasting and User Simulation Model (FOCUS). The results were not at all surprising to anyone who knows a little bit about economics. They should serve as a warning to a federal government thinking of raising the gas tax either as a revenue measure, or to ease congestion, or to placate the environmental lobby.

Five years after the government doubled the gas tax, GDP growth was $7 billion lower than it would have been with no such change. The unemployment rate was 1.2 percentage points higher. Investment fell, as did exports and imports. The government did not have much to show for all the pain that it had inflicted on Canadians. Admittedly, new car sales fell by $2 billion a year, which would reduce pollution over the long run. But was it worth it?

The government is supposed to bring in more money when it introduces a tax, so why do the simulation numbers show an increasing deficit? The government had precipitated a huge rise in the employment insurance premiums it paid out due to the increase in the unemployment rate. Although new revenue came in from the gas tax, income tax revenues fell off, as did corporate tax revenues. It was bad for government and it was bad for industry. So why bother?

A self-interested government does not raise taxes when doing so will lower its revenues, just as a self-interested firm does not raise prices when doing so will lower its revenues. But our government does not seem to be behaving in a self-interested way. Several months ago, the government doubled the pension tax (CPP premium). While paying lip service to cutting taxes, the government continued to raise taxes in the last budget by failing to index tax brackets to inflation.

Que les Montréalais se rassurent, nos politiciens veillent au grain et la ville ret-rouvera bientôt le chemin de la prospérité. Le ministre d’État à la métropole, M. Robert Perreault, annonçait ainsi récemment la mise en place d’un organisme pour agir comme levier économique du secteur des affaires du centre-ville. La nouvelle corporation Quartier international de Montréal regroupera des représentants des pouvoirs publics ainsi que les principaux propriétaires riverains du secteur et devrait au cours des prochains mois s’entendre avec la Ville de Montréal sur un nouveau plan d’aménagement.

Le ministre Perreault situait cette démarche dans le contexte du désenclavement du Vieux-Montréal, de l’agrandissement du Palais des congrès, de la construction de passages piétonniers, du réaménagement des places publiques et de l’amélioration des rues et des trottoirs. La nouvelle corporation joindra ainsi l’interminable liste des organismes para-munici-paux, exercices de concertation, plans de développement, projets institutionnels et bureaucraties de toutes sortes financés par les contribuables montréalais.

Le moins qu’on puisse dire de l’initiative du ministre Perreault, c’est que la mentalité des gestionnaires publics québécois et montréalais est aussi immuable que le Stade olympique. Comme le soulignait il y a plusieurs mois le président d’Héritage Montréal et professeur de géographie urbaine à l’Université du Québec à Montréal, M. David Hanna, "les paliers gouvernementaux n’arri-vent pas à concevoir que l’espace urbain puisse être consommé par autre chose que par l’institut-ionnel et le tourisme" (Le Devoir, 5 juin 1997). On continue pendant ce temps de surtaxer les résidants et les entrepreneurs tout en les enfermant dans un carcan réglementaire défiant tout bon sens.

Les expériences urbaines novatrices ne manquent toutefois pas en Amérique du Nord. Il semble cependant que nos décideurs n’ont rien à apprendre des villes américaines qui, rappellons-le, ont toutes connue une meilleure performance économique que la métropole québécoise au cours des dernières décennies. On pourrait citer des dizaines d’exemples, mais nous n’en retiendrons qu’un seul, Indianapolis.

La principale ville de l’Indiana, qui compte près d’un million et demi d’habitants, a en effet été l’un des principaux foyers du remarquable renouveau urbain américain. Elle est ainsi passée du statut de "Indiana-no-place", une ville industrielle typique du Midwest américain dont l’économie était dominée par quelques grandes entreprises (Eli Lilly, Western Electric, RCA, Thomson Electronics) à celui d’une métropole régionale en pleine expansion. Son taux de chômage de 2,6% en 1997 était quatre fois moindre que celui de Montréal.

Indianapolis a évidemment bénéficié des politiques nation-ales américaines (baisse d’impôts, déréglementation de l’industrie aérienne et des télécommuni-cations, absence d’entraves au commerce entre les états américains, réduction drastique des dépenses militaires, etc.) qui ont contribué à l’essor écono-mique des États-Unis.

Ses résidants ont toutefois eu le bon sens supplémentaire d’élire l’un des maires les plus avant-gardistes en Amérique, Stephen Goldsmith. Le maire n’a pas dépensé l’argent des contribuables en études documentant les causes du déclin de sa ville, en opérations de marketing pour en améliorer son image internat-ionale ou en coulage de béton à la gloire de la bureaucratie municipale. Sa philosophie a été très simple: privatiser le plus grand nombre possible de services municipaux, réduire la réglementation à sa plus simple expression et alléger le fardeau des payeurs de taxes. En fait, le maire Goldsmith croit tellement aux vertus de la privatisation qu’il a tout fait pour accélérer la fermeture d’une base militaire dans sa ville, en sachant très bien que l’entreprise privée qui en ferait l’acquisition créerait plus d’emplois et rapporterait plus de taxes à la ville que l’armée américaine.

Are economic freedom and political freedom inextricably linked? Isn’t economic freedom the same as political freedom? Can we assume that therefore an unfettered market is necessary to ensure a society that can guarantee the rights of its citizens?
—Mark Lee, Royal Holloway, University of London, Economics

To answer this question fully, one has to start by defining the following terms:

Political Freedom: Political Freedom is comprised of two relevant components. The first is political rights, and the second is civil liberties.

Political Rights: Political rights enable people to participate freely in the political process. By the political process, we mean the system by which the polity chooses the authoritative policy makers and attempts to make binding decisions affecting the national, regional, or local community. In a free society this means the rights of all adults to vote and compete for public office, and for elected representatives to have a decisive vote on public policies. A system is genuinely free or democratic to the extent that the people have a choice in determining the nature of the system and its leaders. (Freedom in the World, Freedom House, 1996)

Civil Liberties: Civil liberties are the freedoms to develop views, institutions, and personal autonomy apart from the state. (Freedom in the World, Freedom House, 1996)

Economic Freedom: The central elements of economic freedom are personal choice, freedom of exchange, and protection of private property. When economic freedom is present, individuals are free to make economic choices such as how to use their time and other resources, what goods to consume, and what business and investment alternatives to pursue. (Economic Freedom of the World Index, 1997 Annual Report, The Fraser Institute, 1997) The central elements of economic freedom focus on four broad issues:

• Money and inflation
• Government operations
• Takings and discriminatory taxation
• International exchange

More economically free economies will rely more on markets and less on government to answer basic economic functions.

Hernando de Soto, The Other Path: The Invisible Revolution in the Third World (Canada: Harper & Row Publishers, 1989) $18.75.

It is not often that we think of rich countries and poor countries as facing the same economic difficulties. Average Canadians might believe that our problems, such as unemployment or merchandise trade deficits with, say, China, are not problems at all in comparison to the grinding poverty that afflicts some other countries. What we consider to be of grave concern sometimes seems trivial compared to the problems faced by other countries. I used to think along these lines too. But after reading a book entitled The Other Path: The Invisible Revolution in the Third World, I’m not so sure that there really is a big difference between some of Canada’s economic difficulties and those of our NAFTA partner, Mexico, and the Third World in general.

The Other Path is an engrossing study of how Peru’s lower classes managed to create their own wealth. It traces how Peru’s poorest citizens built up thriving neighbourhoods, bustling markets, and a highly innovative private transit system—all on their own, and often in the face of determined government opposition. That these entrepreneurs succeeded, with little formal education, and certainly without the benefit of lectures in economics or readings in Adam Smith, is a tribute to the human spirit.

The conclusion of The Other Path is a series of policy recommendations. Obviously, while they are intended to apply to Peru, there can be no mistake that they are also relevant to Canada. I will summarize a few of de Soto’s recommendations and ask you to consider for yourself whether Canadians would not benefit from them also.

Simplification. The government must reduce the amount of paper work it requires that businesses and entrepreneurs fill out. It should also make an effort to include "sunset" clauses in new legislation, which allow for certain laws to lapse if not renewed within a certain period. Above all, legislators and executives must root out any legislation that unnecessarily raises the cost of participating in the market economy.

Decentralization. Wherever possible, local governments should be responsible for issues related to the economy, and not a national body. This allows competition between different jurisdictions, which is vital to ensure that politicians will make the economy their first priority. Decentralization also has the effect of creating many small laboratories where a problem common to several regions can be attacked in different ways and the optimal solution determined based on the results of these different approaches.

The Other Path was written as part of a larger discussion, one that has raged in the Third World for decades. To answer the question, "How do we industrialize?" poorer nations like Peru have experimented with every kind of "-ism" imaginable. Finally, having exhausted all the other possibilities, people in the Third World are firmly embracing the free market. The Other Path comes down firmly on the side of letting private individuals follow their own best self interest, an idea which seems to be uniting people on five continents.