Thursday, June 25, 2009

Government Monopoly

Turmoil this week in Ontario and especially in Toronto. Yet another garbage strike in the city; piles of rotting garbage in parks midsummer. Children playing amidst the stench and the vermin just when the children are out of school. Not a pretty picture. The disagreement is between the Canadian Union of Public Employees Local 416 (CUPE) and the City of Toronto on the issue of bankable sick days; the workers want it, the city can't afford it especially in the midst of the Great Recession.

For me the most interesting development in this story was the rise of private garbage removal entrepreneurs immediately after the strike was announced. These new businesses will remove trash usually based on volume of trash and happily do it for a profit. Removing trash based on volume, encourages homeowners to reduce their trash production to save money - its win-win. The current system encourages homeowners to recycle but removes the real incentive to reduce trash - namely a separate bill for the cost of removal. When faced with real costs people become much more environmentally aware. The private trash collectors would compete with one another lowering price and improving service and the chance of a another city-wide garbage strike is almost zero. The removal of garbage is a service just like lawn mowing and haircutting. What are the chances of a city wide barbers strike or a lawn mowing strike? Just go to a different barber or select a different lawn mowing service or do it yourself. Garbage collection and removal requires no special skill and can be done by oneself exactly as it is in cottage country north of Toronto. I know we're talking about a major city and the cottage analogy doesn't apply, but why is it necessary to have a government monopoly on waste removal? Yes the issue is much greater than that. Where would the trash go, Michigan, like it does now? Trucks full of trash travelling down the 401 from Toronto to Michigan - imagine, only a government would come up with such a creative solution, ridiculous. Its time to think differently about the entire issue.

While I'm looking at government monopoly Ontarians were rattled recently by the possibility of an LCBO (Liquor Control Board of Ontario) strike. The threat caused near panic buying across the province. The LCBO is one of the last vestiges of Ontario's puritan past. As a result of federal and provincial laws in Ontario the control of the so-called vices by the religious majority made it impossible to shop on Sunday, sell liquor, beer or wine without special government permission and on and on. The Charter of Rights (1982) began to slowly loosen the grip of Church and government on Canadians. In Ontario however, liquor sales and distribution is still regulated by the Province. The LCBO has a monopoly on the sale of liquor in Ontario that each of us pays extra for. Does anyone seriously think that the LCBO somehow benefits consumers in Ontario? Imagine if there was a monopoly on the sale of soft drinks, would there be price competition as there is now? Would there be more or less brand selection than there is now? Exactly what are the benefits of monopoly to the consumer? There are none. Its way past time to end the LCBO , ASAP!

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