Wildrose AGM review Part 4 - Alberta Constitution, financial regulation, gun rights

One of the first policy planks to come up for a vote called for an Alberta Constitution. A lawyer (or law student?) helpfully pointed out this could well end up playing a similar role to that of the Charter of Rights and Freedoms. As such, it would serve to limit the discretion of the elected legislature. The membership ended up voting for this measure, but later on voted for a philosophically opposite measure by deleting a clause that called for a referendum before invoking section 33 of the Charter (the Notwithstanding Clause), thereby handing discretion for whether to "opt out" of applying a provision of the Charter within Alberta back to the legislature. A sponsor of the measure to delete the requirement for a referendum when using s. 33 claimed that there would otherwise have to be a referendum every 5 years, but in fact that is only true under an unreasonable interpretation of the Wildrose policy clause. There is nothing in Canadian law which would preclude a provincial legislature from holding a referendum once, and the legislature interpreting that as supporting, say, a 50 year mandate instead of 5, and accordingly renewing sans referendum the use of s. 33 ten times over that 50 year period (every 5 years as is required by Canadian law).

I supported the use of section 33 without holding a referendum and voted against bringing in an Alberta Constitution primarily because I am a conservative as opposed to a libertarian. At the heart of our current problems is not too little reference to rights but too little reference to responsibilities. An Alberta Constitution, like all forms of legislation that are intended to be superior to the legislation produced by a legislature, would restrict the power of the majority (presumably) in the name of protecting the minority. The net result of this is provide a means of legal redress against the coercive power of norms. If the norm is to not engage in a certain behaviour, by enshrining a constitutional right to engage in the behaviour, deviants can sue to preserve their right to deviate. That's all well and good in theory, but in practice norms are what hold society together and minimize the development of anomie. The Charter of Rights and Freedoms only works in a liberal / libertarian direction opposed to conservatism because of its fundamental nature: it is not a "Charter of Responsibilities". While I grant that an Alberta Constitution could include rights that conservatives would normally support as part of an alliance with libertarians, like property rights, having experienced life in 80-odd countries and studied law and society for several years I am convinced that what ultimately protects a "right" is a society's norms, not what is written in its law books. Whatever a country's constitution might say, it is going to be interpreted in a way that is consistent with the prevailing culture of that country and the mentality of its people. North Korea is formally known as the Democratic People's Republic of Korea but in reality it is one of the least democratic jurisdictions in the world. An Alberta Constitution could ultimately make it more difficult to take necessary collective actions like creating budget surpluses, since it could create negative rights to not be taxed, positive rights to government services, or both. You might believe that the less collective action the better, but note that collective action is not necessarily government action. Whatever one's opinion on gay rights, for example, it is difficult to deny that the primary objective for those who used the Charter to advance gay rights was the erosion of the social norm than found same sex relations deviant. Government's role was really just incidental, since there was nothing stopping same sex couples from solemnizing their relationships before friends, family, and/or clergy. "Official" government recognition was important not for the piece of paper it involved but the message that was sent to the general public. Acceptance by society, as opposed to some formal government institution, was the most important goal.

Now it is true that an Alberta Constitution could enshrine things like "a marriage consists of one husband and one wife" but enshrining norms in legislation that is superior to elected legislatures is an abuse of power. Enshrining (true) rights at least has a rationale revolving around limiting majoritarianism. Enshrining whatever happens to be supported by the majority at a particular point in time (as reflected by the opinion of an elected legislature) as unchangeable for future majorities is to engage in unjustified exceptionalism. What is so special about today's norms that some of them should receive constitutional status? There has to be some sort of timelessness argument, and it is because I believe very very little is truly timeless than I oppose charters and lengthy, wide-ranging constitutions. Actually, I should correct that saying that I believe there are a number of timeless transcendent values but I am not inclined to force others to accept them by accepting my view of a constitution over theirs. Leave it to democracy. Choose conservative humility about what constitutes social justice over liberal arrogance. Constitutions and Charters take power away from democracies and hand that power to the framers of constitutions and charters. If an Alberta Constitution took power away from the federal government, I would interested in supporting it but, of course, an Alberta Constitution could control only the Alberta Legislature, not the Canadian Parliament.

Three policy proposals that came up later arose in a sequence and I ended up approaching the microphone to speak to all three. Two concerned labour and one concerned securities regulation. I'll address the labour matters in a subsequent post since otherwise this blogpost will be absurdly long. I spoke out against the proposal titled "Securities Act" because it just added clutter to the policy book. The policy planks should bind elected MLAs (and the party executive / leadership?) and this proposal didn't limit discretion at all. Gut securities regulation? Arguably OK because the proposed clause said the party supports greater protection for sellers of securities (against whom if not the buyers of securities, who would only have a positive action against the sellers if the law gave them one?). Increase the level of securities regulation? Just as defensible because the clause also called for greater protection of buyers of securities. A speaker in favour of adopting the policy plank made reference to the financial crisis, but I would refer readers to what the Economist wrote about the financial crisis just within the last day: "Though the financial crisis was global, it originated in America’s uniquely fragmented financial system, overseen by a patchwork of federal and state regulators." If the USA has a "patchwork of federal and state regulators" what does Canada have? Yet continuing or even increasing the "patchiness" of regulation in Canada seems to be exactly what the Wildrose leadership / caucus has in mind when it so intensely opposes a single national regulator. The Alberta Securities Act and Regulations is something like 3 inches think. It was my fattest statute book when I was in law school. Now times that by 13 for 10 provinces and 3 territories and call me when you are done reading, because only then have you mastered securities regulation throughout Canada, which represents, at most, 3% of global capital markets.

Were the party to adopt a plank like,

The Wildrose Alliance will use Alberta's influence over a national securities regulator to attempt to ensure that only financial derivatives listed on public exchanges may be traded in Canada

one might actually have something that got at what caused the crisis and helped prevent a future one. As that same Economist article notes, "[under the Dodd-Frank Wall Street Reform and Consumer Protection Act] Most derivatives that now trade dealer-to-dealer will be traded on public exchanges. That will lessen the risk that one dealer’s failure brings down others." Why is the risk reduced? For two main reasons. The first and most direct is that exchanged traded products are marked to market, usually daily, such that if one's counterparty defaults, the default is on just one day's worth of margin, whereas if the product were off-exchange, days, months, and perhaps even years' worth of a position going against the counterparty could have built up, leading to a massive credit overhang. The second is more structural, and goes to the transparency of the system. As the Globe and Mail reported on June 30 in a story titled, "Ignorance of derivatives spurred AIG fall",

As markets slid toward chaos, [AIG and Goldman Sachs] quarrelled bitterly over what obscure derivatives were worth, current and former executives testified Wednesday.
Their testimony casts light on what has long been one of the murkiest episodes in the broader meltdown.

Most Wildrosers support free markets primarily because they are free. As an economist, I primarily support free markets because it is generally the case that free markets make fundamental price values more transparent (government bureaucracy obscures the state of true demand and supply). But in the case of derivatives, which, as their name suggests, derive their prices from more fundamental prices, they make the fundamental economic signals more obscure. An off-exchange derivative is especially obscure because it is a tailored, non-standardized product requiring a unique valuation.

At the end of the day, neither of these policy planks, the Alberta Constitution nor this "Securities Act" plank, were especially consequential in and of themselves. With respect to the Constitution, what will matter is what is in it, not whether it exists or not. And the Securities Act plank didn't say anything. One could argue that the proposal to add a clause after "a Wildrose government will entrench individual property rights" stating "ownership of firearms is a form of property rights" would have been consequential (had it passed) but I don't think it would have been of great import in any case aside from optics (meaning voting just on one's view of the optics was entirely appropriate). It really just said what should be obvious: if one owns a gun one owns a gun. Governments violate individual property rights all the time by taxing individuals; it is just a question how much property the individual is left with after the tax man departs. What would matter was how the proposed policy plank was interpreted, and on that count I voted against it because the context seemed to be that of raising the right to own a gun to the level of, say, the right to due process, i.e. beyond mere property right. The debate on the subject helped turn votes against the proposal, I suspect, since the respected Link Byfield spoke out against and speakers in favour used implausible and/or extreme rhetoric, e.g. "a man without a gun is a slave (a man with a gun is a citizen)." As it was, a Firearms section which contained a lot of pro-firearms language was added to the policy book later, and the presumptive reason why that passed and this first proposal didn't was because the later proposal was in a context that was more appropriate to gun rights being on the level of presumptively respected but practically regulated property rights than on the level of inalienable and absolute personal rights.

So what did really matter, in my view? The provisions that were union-related, for reasons I will explain in my my next post.

a missed opportunity for both Canada and South Africa

As an update to yesterday's post, I note that Ottawa has decided to appeal the IRB decision. This effectively says that the Canadian official who made the decision does not speak for Canada.

As I noted yesterday, this is likely the correct move when one limits the issue to the merits of this particular man's claim. But just as some South African commentators have described the incident as "a missed opportunity" for their government to acknowledge the concerns of white South Africans, the Canadian government could have set the stage for a more rational refugee policy going forward by snubbing the charges of Canadian malfeasance levelled by South Africa's ruling African National Congress. Under a sensible refugee policy, we simply would not entertain refugee claims from safe countries like members of the European Union. Because we DO entertain any and all claims with a formal hearing and legal rights to appeal, the Canadian government attempted to deal with a (resultant) surge in claims from Mexico and the Czech Republic that was overloading the bureaucracy by adding to (another area of) the bureaucracy in the form of requiring visas, and the associated processing costs, from all Mexicans and Czechs entering Canada for any reason. This latest episode was unsurprisingly just a repeat of the events back in the 90s that led to visa fees being imposed on Chilean visitors to Canada (and, in Chilean retaliation, on Canadian visitors to Chile). Why doesn't Canada have a "safe country" list? Because countries NOT on the list would complain, and at work here is the indulgent collegiality amongst national governments that is a product of a common enemy called domestic challenges to their moral or legal authority. So it is that they satisfy the demands coming from those of their peers who are unhappy that their subjects are exhibiting public interest in escaping from their regimes. To make a not unrelated observation here, the Obama government is now saying that with respect to Honduras it will further turn the financial screws against Zelaya's enemies (that is to say, Hondurans) and will "not support" "the outcome of scheduled elections in November" regardless of whether such elections were fairly and transparently administered sans Zelaya. If Zelaya could be overthrown and elections held because Zelaya contemptuously swung well left of the mandate that was granted to him by his electorate and that was sanctioned by his country's institutions, perhaps the same thing could happen to other powers that be!

Canada admits too many refugees period (50% of all applicants, the highest rate in the world according to a Forbes writer, while Italy admits 16% and France 13%), but a fair place to start in terms of cutting down on the cost to the taxpayer and the abuse of the system would be by summarily rejecting refugee pleas from citizens of safe countries and ignoring the howls of outrage coming from foreign leaders who insist that they ought to be on the safe country list as well because their benevolent government has precluded the possibility of anyone being persecuted in their jurisdiction. Ottawa, in other words, should generally do the exact opposite of what it did in this particular case which was to essentially apologize for a Canadian bureaucrat making the ANC look like the dodgy government it is. Parliament should then go one better and make the most substantive reform: pass a bill citing the notwithstanding clause to assert its discretionary authority over the unelected judiciary with respect to the Supreme Court's ill-advised 1980s decision to grant full Charter rights to every non-citizen who happened to get a foot inside the border.

the costs of the Charter

In 1985, the Supreme Court of Canada issued a decision (Singh v. Minister of Employment and Immigration) that held that "The term "everyone" in s. 7 [of the Canadian Charter of Rights and Freedoms] includes every person physically present in Canada..."

According to Immigration Watch Canada

In 1981, in the Pre-Singh Decision period, 3450 refugee claims were made in Canada. In 1987, two years after the Singh Decision, over 25,000 refugee claims were made. Also in 1987, a backlog of 85,000 refugee claimants had accumulated and these people were given amnesty.

Today, according to Jeffrey Simpson's must read G&M column:

It's a situation linked to a 20-year-old Supreme Court ruling (the Singh case) that led to amnesties, administrative chaos, bureaucracy, huge financial costs and, eventually, to the existing refugee-determination system.
Under it, Canada has to process anybody and everybody who comes to this country and claims refugee status, bogus or otherwise. To try to stem the flow, we impose visa requirements.

In April of this year, I decided to change my flight to South America from Santiago, Chile to Buenos Aires, Argentina, because otherwise I would have had to pay 132 USD to enter Chile by air (I entered Chile by land about a week later). Why 132 USD? Because Canada requires Chileans to have a visa (and pay an associated visa fee) for entry into Canada. The Chileans call it a "reciprocity fee". And why that visa requirement? As Simpson explains:

In 1996, there was a surge of phony refugee claimants to Canada from the Chilean port of Valparaiso. Word had got around in a poor neighbourhood that Canada was an easy mark. These obviously economic migrants were told: Apply for refugee status in Canada, get into the multilayered refugee-determination system and melt into Canadian society. And the chances of getting caught, or being deported, are next to nil.
Canada responded by slapping visas on all Chileans wanting to come to Canada, even though Chile had thrown off dictatorship and become an admirable country.

Simpson concludes "We incur large costs in money, time and bureaucracy (or what the Supreme Court airily dismissed as matters of “administrative inconvenience”). We get big backlogs in the system." Yet can one really fault the SCC? For once, our Supreme Court actually took the words of the Charter at their plain meaning (it says "everyone", not "Canadians" or "Canadian citizens") as opposed to, say, the 1995 Egan case which managed to find the words "sexual orientation" in the following Charter section:

Every individual is equal before and under the law and has the right to the equal protection of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.

It's thus fair to say that when you hand over your 132 USD at Santiago airport (or pay for a visa to enter many other countries of the world), that fee exists as a direct consequence of the Charter:
the Charter says "everyone"

hence

kicking someone out after arrival is a massive legal process

hence

there has to be some speedbump BEFORE arrival

hence

visa requirement

hence

reciprocal visa requirements for Canadians abroad

132 USD, however, pales in comparison to the tax revenues that support the Canadian refugee review system. Immigration Watch estimates costs to be 2 billion per year, and that was several years ago.