There is nothing like a wonderful streak of beautiful fall
weather to mess up your plans to write regular blog entries. And that is exactly what we have had for
several weeks now. Who wants to be stuck
at a computer indoors when you can be out and about doing other things like
moving your outdoor furniture indoors because you know that this cannot last?
As my grandmother used to say when the weather was good, dour old Scot that she
was, “We’ll pay for this.” And so, it
appears, that day is approaching. So now
it is time to get serious once again and write something meaningful (I hope).
So how about a few words on the Throne Speech presented to
you by our friendly government this week.
I think the most positive thing said about it was that the Governor General
read it very nicely. As for the rest,
here are a few thoughts on what was, or was not, presented.
Did you notice there was nothing said about foreign policy
or defence spending?
You know, I used to think the conservatives believed in the
free market for their economic platform, but this no longer seems to be the
case. Witness the following.
The speech said that they were going to bring prices into
line with US prices for goods and services.
I’m no economist, but I only know of two ways to accomplish this. The first is to fix prices based on US
prices. This will, of course, skew the
market significantly, but maybe not before they get themselves through the next
election. The second is to peg the
dollar against the US dollar, which if events in the US get any worse, could be
like handcuffing yourself to the railing of a sinking ship. Both of these measures have been tried in the
past, although admittedly when price controls were brought in during the 1970s
they also included wage controls. In both
cases, the end results weren’t pretty.
And besides, they break every rule of a free market economy.
The speech also talked about forcing telecom companies to
reduce roaming charges, presumably because Bay Street executives don’t like
them when they go to their Muskoka cottages in the summer. This, of course, is a weak response for
people who think we pay too much for cell phone service. These responses have
included attempts to lure other companies into the fray, so far with poor
results. I have tried one of the “new
kids on the block”. The service was
spotty at best. The reception was such
that the phone was constantly seeking alternate sources which kept resulting in
roaming charges right around our own home.
But when they started charging an extra two dollars when you paid your
bill at one of their outlets, we had enough and left them.
People think our costs for cell phone and wireless service
should be the same as the US. But Canada
is not the same as the US market. The
biggest difference is in population density.
We have more land area and only ten percent of the US population. If you examine the big US carriers, you will
find that they do not, in general, serve low density areas of their
country. It probably cost about the same
in infrastructure costs to serve a high density area like New York or Los
Angeles, as a low density area like eastern Ontario. But those similar costs are paid for by tens
of millions of people in those areas of the US compared to less than a couple
of million people in eastern Ontario.
And when you also have to serve places like the Maritime Provinces and
the prairies, of course the costs in Canada are going to be higher. We have competition in Canada among three
players which is perhaps the most that can adequately serve the broad reaches
and low density of the Canadian market.
Any other way of forcing lower costs is just interference in the
(conservative ideal) free market.
And to top it all off, the government promises us a law
requiring balanced budgets. But it will
have loopholes for years that are not good economically . . . bad years being
defined by the government of course. And
by the way, what happened to the balanced, even surplus, budgets that we had by
the government before the Tories?
My impression of this throne speech is that it is a trap for
the party that will replace the Conservatives in 2015. Because the skewed markets promised by this
plan will have to be fixed, with some pain, at a later date.
So there are my thoughts from the throne.