Monopolistic mayor dumping on free enterprise

By BRIAN LEE CROWLEY

SUPPOSE that you were in, say, the grocery business and you built a big supermarket in town. Cost was no object, you said, because you were going to get all those rich urban consumers to pay over the odds for their groceries.

Then imagine shoppers discovered they could drive not too far out of town and buy their groceries from another supermarket. A little less fancy, but quite adequate. If you were the manager of the first supermarket, what would your reaction be? You’d look for ways to cut costs, improve quality and attract those consumers back.

But if your local manager is HRM Mayor Peter Kelly, this sensible reaction would clearly not occur to you. No, you will ask the province to forbid those pesky shoppers to look for a better deal outside your local boundaries.

Of course, Mayor Kelly’s not in the grocery business but the rubbish business. And he’s built a grandiose dump (pardon me, “sanitary landfill”) that all of us poor municipal residential ratepayers are obliged to use and pay for through our taxes.

Business ratepayers, however, are in another category. They get to pay for the municipal dump through their taxes but, unlike in the case of residents, HRM doesn’t pick up the rubbish generated by business. Businesses themselves have to pay private contractors to come and take their garbage away, even though those same HRM businesses pay up to three times as much per $100 of assessed value as residential ratepayers do. So you pay a lot more for a much inferior level of service. Put another way, business subsidizes residential garbage service twice: first by paying a much higher property tax rate, and second by forgoing the service itself.

Businesses long ago made their peace with this kind of unfair exploitation. But wait: The mayor has decided this level of abuse is still not enough.

You see, one of the contractors serving the business community has discovered that the dumps in neighbouring communities are cheaper to use. This is not because they are environmentally inadequate, because all the dumps must meet the province’s standards. There is no exploitation of other communities going on, because they could refuse to take this extra business if they wished. Instead, they see here an opportunity to make themselves better off by generating more revenue from their landfill, and probably keeping costs lower for their own residents by having non-residents contribute.

But Peter Kelly had plans for that money, you see. He expected businesses in HRM would send him all their garbage, and so spent the money before he got it. Now he’s watching those dumping fees roll down the road to places like Windsor and he’s angry. He’s tried a municipal bylaw to prevent the small operator who is going outside HRM now from doing so, but no municipality in Canada has been successful, to my knowledge, in enforcing such a rule. So he wants the province to pass legislation that would prevent trade in garbage across municipal boundaries.

Before you take up the cudgels on behalf of the mayor’s convenient “principle” that every municipality should be forced by law to look after all its “own” garbage, let’s think about that for a moment. If that’s such a good idea, let’s get really serious about it. If garbage shouldn’t leave, why not prevent it from arriving in the first place? Let’s refuse anything not made and packaged in HRM. Let’s refuse all food not grown in our backyards. A pox on those Chinese fabrics and Italian shoes. No more imported cars, iPods and televisions. Let’s outlaw all trade outside our little enclaves.

But then if everybody else adopted these rules, they wouldn’t accept our software and blueberries and paper products and offshore gas. The mayor’s “principle” is crude protectionism and thus no ecological virtue, but a violent attack on our standard of living. And if the secret of our prosperity is our freedom to buy the goods and services we want from those who make them cheaper and more efficiently than the competition, there is no reason not to apply this to garbage services too.

Moreover, even if you believe in the absurdity of making each municipality deal with its own garbage, there’s another problem. Mayor Kelly is just a wee bit of a hypocrite. HRM itself sends garbage to landfills such as Chester’s when it suits them, and a great deal of our hazardous waste is sent outside HRM for treatment.

Mayor Kelly’s real complaint is that he hates people seeing HRM’s dumping fees are too high and being pressured by competition to bring them in line. The mayor says that such competition would have the municipalities “racing to nowhere” — but then monopolists always think competition is “wasteful.” Consumers, on the other hand, know that trade and freedom to choose are good for them and a delightful discipline to inefficient aspiring monopolists like Peter Kelly.

bcrowley@herald.ca

Brian Lee Crowley is president of the Atlantic Institute for Market Studies ( www.aims.ca/acedoc), a public policy think tank in Halifax.