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One of the main sticking points in the ongoing NAFTA re-negotiation is Canada’s regulated dairy industry vs. America’s market-driven dairy industry. And it shouldn’t be.
The dairy industry in Canada uses a system called ‘Supply Management’ to produce only as much milk as is required (with no waste) for the Canadian market, and unlike the American dairy industry it isn’t an export-driven model.
Yet, it’s the United States under President Donald Trump that is pressing Canada to accept American milk into the Canadian market. That same United States subsidized its dairy industry to the tune of $22.2 billion (2015) a number that increases every year. In fact, without massive subsidies American dairy producers would go bankrupt in a year.
U.S. dairy subsidies equal 73% of producer returns, says new report
“Based solely on the USDA’s national average farm-gate price and national average costs of production, Clark says American dairy farmers lost money every year from 2005 to 2016. The report figures support granted to U.S. dairy farmers in 2015 represented approximately $0.35 per litre — almost three-quarters of producers’ revenue.” — RealAgriculture.com
Why President Trump or anyone in America’s dairy industry would want to subsidize Canadian consumers by $1 per gallon is a complete mystery.
American Milk Has High Levels of Growth Hormone and Antibiotics that are Illegal in Canadian Milk
Not one gallon of U.S. dairy product is allowed to be sold in Canada for this reason, although some Canadians do cross the U.S. border and are allowed by the Canada Border Services Agency to return with small amounts of American dairy products for their own consumption (but not for resale).
There are up to 20 chemicals, hormones and antibiotics in milk and Monsanto’s glyphosate is toxic to dairy cows
“According to the Daily Mail, a study published in the Journal of Agricultural and Food Chemistry released information that cow’s milk contains traces of anti-inflammatory drugs such as niflumic acid, mefenamic acid, ketoprofen, diclofenac, phenylbutazone, naproxen, flunixin, diclofena. The researchers also discovered hormones (both natural oestrogen and 7-beta-estradiol), antibiotics, anti-fungal drugs, steroids and Anti-malaria drugs (pyrimethamine) in milk and dairy products.” — excerpt courtesy of SeattleOrganicRestaurants.com
Will Canadians want to purchase dairy products sourced in the United States where such growth hormones, chemicals and antibiotics are on the ingredient list? Likely not.
However, those living in poverty might. Prison administrators in Canada who feed thousands of people every day might enjoy saving $1.00 per gallon of milk and save even more by purchasing American cheese and other dairy products — those savings courtesy of the American taxpayer.
Canadian Cows are Happy Cows!
(Because they don’t have to take bovine growth hormone or other nasty medicines or chemicals)
But it’s not all cowbells and sunny meadows for the Canadian dairy industry. Canada employs the Supply Management system which plots exactly how much milk will be required annually and the country’s milk producers must comply.
Canada’s dairy industry regulates the supply to ensure the optimum amount of milk for the Canadian market without the oversupply spikes or undersupply crashes that other countries experience due to market forces.
It means that every year some amount of Canadian dairy product is poured back onto the fields so that prices will stay high enough for Canada’s milk producers to stay in business. While pouring milk on fields re-adds vital nutrients to the soil it’s an expensive way for farmers to condition their soil. Consequently, it doesn’t happen very often.
Canada’s dairy industry is sized to fit the Canadian market and very little of the country’s milk is exported, therefore, American milk producers rarely compete with Canadian milk producers anywhere on the planet.
Canada’s dairy industry contributes about $20 billion CAD to Canada’s GDP, which is smaller than the $21 billion USD that the California dairy industry sells to Californians — but California also exports an additional $44 billion USD worth of dairy products to other U.S. states — and good for California! Both the Golden Bear state and other U.S. states benefit from the excellent growing and production conditions in California.
The Canadian industry threatens no other country’s dairy industry as it’s sized for Canadian needs alone — therefore, one wonders why President Trump wants to flood the Canadian market with subsidized American milk and other dairy products.
And the reason Trump wants to export U.S. dairy products is because there’s a huge supply glut in the United States which means that dairy producers there must either downsize or find new markets.
If President Trump wants to export American milk, here’s some food for thought; The total annual demand for milk in China is more than the United States could produce in 10-years — and 1.35 billion Chinese citizens pay an average of $7.00 USD per gallon of milk while 327 million Americans pay an average of $2.39 USD per gallon.
American milk producers could charge Chinese consumers $5.50 USD a gallon (and not require U.S. subsidies due to the higher retail price in China) and still sell every gallon they could ever hope to produce!
America’s leaders must stop focusing on microscopic markets like Canada where the market is already saturated with established Canadian producers and concentrate their efforts on the huge unfilled demand economies like China where they pay so much for milk that American subsidies could be discarded entirely and U.S. dairy products would still be cheaper than what Chinese consumers pay now.
How could a Guaranteed Basic Income solve four problems in Canada, and what four problems might they be?
It’s a good question which can only be answered in the context of how these four things are being handled/not handled now.
So let’s see how a Guaranteed Basic Income could help Canada to care for people (including seniors, economic migrants to Canada, and refugees living in Canada) more efficiently than the present multilayered system.
Before we go any further, every group or individual who supports a Guaranteed Basic Income (GBI) may have a different idea of what constitutes a Guaranteed Basic Income. So to keep things simple for the purposes of this discussion, let’s agree for the rest of this post that a Canadian GBI would offer the following benefits to recipients:
- $1088. per month (a standard anti-poverty metric)
- Free provincial healthcare with no deductible
- Free provincial dental care with no deductible
- Free prescriptions with a $50 annual deductible
- Low entry bar to access: Must be a Canadian citizen or legally landed immigrant
- Over the age of majority in the province in which they reside
- A person earning less than the official poverty line amount in the province in which they reside
- Not a person serving time in prison
- Not a person serving in Canada’s military
- Not a person under 24/7/365 medical care (like a person in a long-term coma)
With that said, let’s see what a GBI can do for all Canadians — and not just the actual recipients of those benefits.
GBI Benefit Number One for Canada and its Provinces:
Saving Provinces and Taxpayers Money
Kick every welfare recipient in Canada off of provincial welfare and provincial disability programmes the moment the GBI comes into effect.
Yes, end provincial welfare and provincial disability programmes completely!
It sounds traumatic, but every province in Canada spends multi-millions (and depending on the size/population of the province) billions on the administrative support (administration buildings, office staff, other personnel, IT costs, security costs, land costs, property management costs, management training/seminars, etc) to pay provincial welfare and provincial disability recipients. This is known as the ‘overhead’ cost of running these programmes, and the gross annual totality of those administrative costs can be more than all of the welfare cheques combined.
For each welfare recipient who gets a $700 monthly welfare cheque, there is obviously a per capita cost for every person receiving a monthly welfare cheque; There is a person being paid $50,000/yr (or more) to administer a certain number of recipients, there is a building (or buildings) dedicated to that city, town, or region of the province, and there are other costs associated with running provincial social assistance programmes.
Every province has its own welfare and disability administration. That’s overlapping and duplication of services tenfold (10 provinces) and three territories, plus the federal government.
By paying poverty-stricken people via the federal CPP payments system only, the provinces would no longer be obligated to pay provincial welfare or provincial disability payments. At all. Ever.
After the transition period to a pan-Canadian GBI each province could lower the taxes it charges to its residents by a corresponding amount. Some provinces might be able to drop their provincial sales tax in half or better! Other provinces might be able to abolish provincial income tax altogether.
This is especially true if provinces decide to sell-off all the infrastructure associated with welfare and disability payments. Which (land and buildings especially) could net them many billions of dollars.
‘Yi-Haw!’ — said every Canadian premier.
In short, instead of 13 multilayered, overlapping and duplicated provincial and federal income assistance programmes (now that’s approaching communist-era levels of duplication my friend!) there would be one payer of income assistance only — Canada’s federal government — which would be 100% responsible for administrating the GBI programme.
To finance the GBI, the federal government might need to raise the GST rate by 1% (don’t forget that your provincial taxes would be dramatically lowered) or the feds might decide to raise the federal income tax rate by 1% on the richest Canadians instead.
Either way, provincial taxes would fall dramatically, while federal taxes would see a fractional increase.
GBI Benefit Number Two for Canada and its Provinces:
A GBI Would End Homelessness in Canada
Welfare rates in Canada are based on each province’s ability to pay, not on how much it actually costs to feed, clothe, and shelter a human being in that province. Which is why there is homelessness in a rich country like Canada.
The reason there is homelessness in Canada are threefold:
- A person lives in a city where rents are high and therefore can’t afford to pay rent, nor do they have enough money to be able to afford to move to a rural area where rental rates are a fraction of the lowest rents in Canada’s biggest cities.
- A person becomes depressed or violent on account of not being able to afford rent, and ends up committing offenses (like sleeping in someone’s backyard, pickup truck box, or dumpster) or commits property crimes (and gets caught and jailed) and subsequently, no one will rent him or her a place.
- A person is disabled and is unable to afford rent, nor can they move to a cheaper rental market because they need to be close to a hospital, a clinic, or other medical facility. In some cases, it’s that they have enough money for their rent, or their meds, but not both.
A federally funded GBI would pay enough to allow low-income people to pay rent, eat, receive their prescription medications, buy clothing — and yes, unlike provincial welfare schemes — allow them a little extra money so they can purchase work-related clothing, get a haircut and take the bus to work if they land a job.
Not only all that, but many welfare recipients have serious dental problems. If you’re an employer and you have 50 people apply for 1 job opening, are you likely to hire that one guy who is missing his front teeth? Not likely. With a GBI, those people can get their dental work done and appear as presentable as the rest of the job-seekers and have as good a chance to land the job as the other 49 people.
Provincial welfare systems just can’t afford to provide all that, which means that once people get on welfare, they’re often on it for life.
And they can face reductions in their monthly benefit amount if they do earn money. That just doesn’t happen with a GBI.
Indeed, provincial welfare systems can reduce monthly benefits for many reasons, such as more than one person living in a dwelling. In British Columbia for example, the rent portion of the welfare cheque is regulated to $375. per month (not too many places available for rent in BC for $375/month!) but if two people on welfare live together at the same BC address, both will have their monthly welfare cheque reduced. Now you have ‘two upset homeless people’ instead of ‘one homed couple’.
Which directly impacts crime stats. See how that doesn’t work for taxpayers?
Paying people a standardized $1088 per month (no matter how many people live in the same house or apartment as long as all zoning bylaws are met) will allow people to share accommodations — leaving them enough money every month to eat, buy work-related clothing, haircuts, bus passes, etc. and eventually get them back into the workforce.
Hey! Even if they can work part-time that is a benefit to them and to society because it means that eventually they’ll find permanent employment and they won’t need GBI.
That is the ultimate goal of GBI: Temporary assistance to get back to work — instead of welfare for life.
GBI Benefit Number Three for Canada and its Provinces:
Streamlining the Payments System for Canadian Citizens, Refugees and Economic Migrants
Some poverty-stricken refugees and economic migrants to Canada receive higher amounts of assistance from the federal government than poverty-stricken Canadians.
For instance, some Syrian refugees are receiving $2600 per month from the federal government — that’s per family member!
So, a Syrian refugee family of five receives $13,000 per month no matter where they live in Canada, while a poverty-stricken Canadian-born family of five might receive $1600 per month (or less!) depending on the province in which they reside.
Is that right? Is that how generous Canada is to refugees, but not to its own citizens?
It’s an honourable thing for Canada to accept refugees from war-torn countries and help them to establish a new life here. But isn’t that a little extravagant?
Shouldn’t refugees and economic migrants to Canada as well as Canadian-born adult citizens who earn less than the poverty line amount and Canada’s senior citizens all receive the same level of benefit?
The GBI would pay the same amount to everyone without any reductions in the monthly benefit amount for those who share accommodations, for those who earn money up to the poverty line amount, nor reductions for any other reason, except to pay fines as adjudicated by the courts like vehicle fines or alimony payments, etc.
In this way, every adult who earns less than the official poverty line amount would receive the same monthly benefit amount instead of wildly different amounts. Doesn’t that seem more fair?
Isn’t that a better way to treat citizens and immigrants than the various overlapping and duplicated payments systems? Of course it is.
GBI Benefit Number Four for Canada and its Provinces:
Treating Canada’s Senior Citizens Better
Under the existing CPP and OAS system, some of Canada’s senior citizens receive small amounts of money to live on.
Let’s look at a comparison of a Canadian-born senior citizen couple vs. a Syrian-born refugee couple, both couples reside in Canada.
a) The Canadian-born senior citizen couple may receive as little as $920 per month, and are allowed to work.
b) The Syrian-born senior citizen refugee couple will receive $2176 per month, and aren’t allowed to work.
It seems unfair in the extreme that the people who built this great country should receive far less reward than recent immigrants, doesn’t it?
Of course, it goes without saying that accepting refugees from war-torn countries is a truly noble thing to do. No true Canadian begrudges law abiding persons a better life here in Canada. The country is practically empty and our cities are just tiny dots in a 9.985 million square kilometre landscape so we’re glad to have them.
And paying them $1088 per month (each adult) along with the other GBI benefits seems reasonable, just like it seems reasonable to pay the same amount to Canadian-born seniors who live under the poverty line.
It’s wrong to pay the people who built this great country into what it is today such pitiful amounts of money (which they paid into the CPP fund their entire working lives) while we pay refugees many times more.
It’s like a scene from The Twilight Zone.
By topping-up the pension amount of Canadian citizens to the $1088/mo GBI amount + the GBI benefits, we can do away with the OAS programme completely, do away with pharmacare for senior citizens, and eliminate other overlapping federal and provincial programmes in place to support seniors.
Getting rid of all these layers of duplication will save various levels of government billions of dollars per year, and put the administration of all citizens who live under the poverty line under one roof, one payments system, and one jurisdiction. And we know that ending government waste, overlapping programmes between the federal and provincial governments, and duplication of services between the provinces will save taxpayers billions of dollars every year!
It’s time to streamline Canada’s income assistance systems, it’s time to top-up the incomes of senior citizens to $1088 per month + benefits, it’s time to pay refugees the same amount as Canadian citizens living under the poverty line would receive, and it’s time to put a stop to the costly multilayered benefit systems in Canada.
A GBI would be less costly for taxpayers, it would reduce homelessness and property crimes, it would streamline the benefits payment system and it would help poverty-stricken senior citizens live healthier lives and reward them in a small way for their contributions to our great land.
Disclaimer: I have my own renewable energy website and I contribute renewable energy blog posts to another website — so I’m obviously a proponent of renewable energy.
However, back in the day I was an entrepreneur who learned about dealing with various levels of government, about operating within regulatory frameworks, and needing to budget carefully for future large scale projects.
With the foregoing in mind, I offer the following comment about the Kinder Morgan pipeline project proposal (the TMX expansion) that is planned to run from Edmonton, Alberta through to the Westridge oil refinery (Chevron) in Burnaby, BC:
- Unfortunately, there are still places where renewable energy won’t work in a cost-effective manner. Eventually, renewable energy technology will develop and become feasible everywhere on the planet. But we still need oil & gas in the meantime.
- The past 5 Canadian Prime Ministers and probably a similar number of British Columbia and Alberta Premiers gave tacit approval to the Kinder Morgan pipeline expansion which led the company to believe the twinning of the pipeline would be approved.
For the federal government or any province to pull the rug out from under a company that has been led along for two decades to believe their project would be approved — and which provides a valuable service for people who drive cars and trucks in British Columbia and Alberta — would be unthinkable and two-faced.
The TMX Expansion should be approved based on those points alone as both Conservative and Liberal federal governments have promised the project would be a ‘Go’ and KM proceeded on that basis.
IMPORTANT TO NOTE IF KINDER MORGAN WAS OPERATING IN A TPP COUNTRY: The various levels of government in Canada could be sued for not following through on their tacit approval in recent years — and Kinder Morgan and possibly Chevron would likely win a court judgement worth billions of dollars which Canadian taxpayers would be forced to pay. Not only that, but a TPP court could still order the pipeline built!
However, there is another option which I will cover below.
About the Westridge Refinery in Burnaby, BC
At present, one tanker per week leaves the Westridge refinery (Chevron) in Burnaby BC, sometimes carrying 50,000 or 100,000 barrels of oil, gasoline, diesel, kerosene, or more exotic hydrocarbons like naptha, xylene, toulolene, and other volatile liquids. But once the 2nd pipeline is built, one tanker per day will leave the Westridge refinery.
All of these are explosive liquids and in an accident where fire occurs could easily destroy (yes, entirely destroy) the 2nd Narrows bridge or the Lions Gate bridge, which is why they run under those bridges at 4:00am to enhance their margin of safety. (Thankfully, there are no terrorists in our region)
Proposal to Enhance Shipping Safety in BC by Relocating the Westridge Refinery to Deltaport
I propose relocating the Westridge refinery in Burnaby BC to Deltaport BC, and that the federal government of Canada and the provinces of British Columbia and Alberta offer significant investment, allowing public safety to be dramatically improved.
NOTE 1: I’ve spoken to Ray Lord who is highly respected within the petrochemicals industry and remains the chief spokesman for Chevron’s Westridge refinery and he seemed interested in my idea to move the refinery to Deltaport.
Instead of a 2nd Pipeline – Move the Oil by Rail to Deltaport
It’s magic that Deltaport is the terminus for CN Rail and by using the rail option to move petroleum it means the proposed 2nd pipeline would never be needed.
Public safety would be dramatically improved, Chevron would have two crude oil transportation modes to keep it running, and in the event of a spill it’s well documented that rail spills are orders of magnitude smaller than pipeline spills.
NOTE 2: Pipeline spill incidents average 1.2 million BARRELS of oil, while rail tanker spill incidents average 220,000 US GALLONS. A huge difference!
This option would allow 3 shifts at the relocated refinery instead of 2 as is the case now, and even allow the refinery to continue operations in the event of a failure along the existing pipeline route.
NOTE 3: KM would lose the ability to build the new pipeline but allow it to neatly step out of a public relations nightmare — and it might choose to become an investor in the new Deltaport facility and not lose a cent of profit in the process.
All for less than the cost of a potential legal action brought by Kinder Morgan and possibly Chevron too.
A Fund to Remediate Pipeline Oil Spills
A 6 cents per barrel of oil tax should be applied to all liquids that move through pipelines in Canada which should be held in a trust fund to deal with future pipeline spills. The fund could be invested and the returns would increase the total value of the fund.
NOTE 4: Railways don’t need such a tax as they can’t continue rail operations along that line until the spill is cleaned up, so they’re already highly motivated to clean up rail spills ASAP.
If Canada, British Columbia and Alberta kicked in funding to relocate the refinery:
- No longer any need for the TMX Expansion
- Thousands of jobs would be created to build the new Deltaport refinery
- Public safety would increase by orders of magnitude in British Columbia
- Chevron, environmental protesters, and Kinder Morgan would be happier
And all that government investment would eventually be recovered through taxes.
Even Chevron liked my idea.