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Eric Lombardi: Canadians are witnessing the slow and relentless erosion of our economic freedoms

Commentary

“It is because every individual knows little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it.” – Friedrich Hayek

Canadians are watching as their skylines rise ever higher, while the low-rise, single-family neighbourhoods that once symbolized middle-class life become unattainable for the next generation. Amidst superficial signs of economic prosperity, life for the average citizen has deteriorated as our economy, having not grown on a per-capita basis for 10 years over Canada’s “lost decade”, becomes increasingly zero-sum. This has hit our young the hardest, with Canadians under 30 reporting they are far less happy than their parents.

Frustration is boiling over as the public demands action rather than talk from governments. Meanwhile, politicians make shallow promises to alleviate the cost-of-living crisis. This anger has been channeled in the growing protest against Loblaws, the largest business in Canada’s “Big Three” grocery oligopoly over perceived price-gouging. Pretending that they’re taking food inflation seriously, the Trudeau government loudly announced plans to attract an international grocery chain to enter the Canadian market, suggesting that one new entrant to the market could create enough competition to solve a much deeper problem. 

Canada’s lost economic values

All this reflects a consistent pattern: governments fail to understand the systems driving market outcomes, attempt to pick new corporate winners with subsidies that align with their political agenda, and are then baffled when the consumer benefits don’t materialize. Rarely do governments allow themselves—or the public—to ask the deeper questions underlying Canada’s economic stagnation.

Why are there not more small and medium-sized grocers? Why haven’t international grocers invested here without coercion? Why have so many sectors of Canada’s economy become dominated by oligopolies established a half-century ago or more? Why have basic necessities like food, housing, healthcare, and transportation become so much more expensive? How has it become so hard and costly to build anything physical in this country? Why do Canadians, who once had an abundance of choices, increasingly have fewer real options in their economic lives? 

Canada’s economy is experiencing the culmination of a long-term decline in real economic freedoms, which is increasingly evident in everyday life. You are not free if soaring rents prevent you from moving to a better job in a different place, or if owning property is only possible through inheritance. Freedom is stifled when moving incurs exorbitant taxes and fees, or when you’re told you must wait on endless lists to address health issues with no alternatives. It’s compromised when the costs of having children or starting a simple business are an unrealistic dream. It’s curtailed when changing careers demands costly re-education, or taking time off work risks basic sustenance. Ultimately, you are not free if your future is chained to debt, paying endlessly for shelter inferior to what previous generations enjoyed. True economic freedom demands real, attainable choices in every aspect of life.

Economic freedom is built on fundamental principles essential to a thriving and just society. These principles include open and competitive markets, regulatory efficiency, the rule of law, ease of starting and scaling businesses, labour freedom, freedom from corruption, and, importantly, secure property rights. Market openness fosters competition and innovation, while regulatory efficiency ensures rules facilitate rather than hinder economic activities. The rule of law guarantees fairness and predictability, and labour freedom ensures individuals can work in environments that respect their rights and potential. In too many examples to count, contemporary public policy has discarded grounding in these important values. The outcome has been a decline in all of them.

From telecom to banking to airlines, governments have erected formidable barriers to entering the Canadian market through onerous regulatory regimes and restrictive foreign ownership policies. In Ontario and Quebec, the inability to crack down on auto-theft rings has sent our cars abroad and insurance rates skyrocketing. Interprovincial trade barriers act as an invisible tax representing up to 7 percent of the cost of goods. Credential inflation, coupled with rigid credentialing authorities, has extended the time it takes to enter the workforce, made career transitions difficult, and stymied the potential of highly educated immigrants. High housing costs, exploding rents, and high taxes on moving have trapped Canadians in place and hindered productive labour mobility in our biggest cities. Infrastructure costs, like those for the Ontario Line subway, have ballooned to be multiple times higher than in comparable developed countries, revealing the unspoken soft corruption ingrained in public procurement we pay for via higher taxes. The ArriveCan scandal is already fading from public memory; we’ve become desensitized to what we should find alarming.

Canadians have given up their property rights

The most critical pillar of economic freedom—property rights—has suffered the greatest erosion, largely at the behest of provincial and municipal governments. Once a cornerstone of individual autonomy, economic prosperity, and the fight against feudalism, property rights have been systematically undermined by intrusive government policies. As property rights deteriorate, the ability of individuals to invest, innovate, and plan for the future diminishes, leading to a stifled economy and diminished personal freedoms.

The slow usurpation of property rights in Canada can be traced back to the introduction of modern planning and zoning regulations, particularly in cities like Toronto and Vancouver. These measures, originally intended to organize urban growth and ensure livable communities, have become tools of restriction rather than empowerment. Toronto’s stringent zoning laws, initially designed to separate residential, commercial, and industrial activities, have evolved into a complex web of regulations that severely limit property use and development. The recent rejection of a modest three-story, 10-unit building on a dilapidated property in Toronto’s wealthy Seaton Village, located near two subway stations and requiring no new infrastructure, underscores the challenge. This rejection, made by an unelected Committee of Adjustment after the project endured multiple public hearings and extensive letter campaigns, ultimately demonstrates how little property rights matter to Canadians and their local governments.

Canadians have overlooked the risks of ceding their rights to overzealous central planners. For instance, moral panic regarding single women in the early 20th century led to the banning of apartment buildings in neighbourhoods restricting housing options, encouraging expensive suburban sprawl, and perpetuating exclusionary zoning. Coupled with onerous modern approval processes and exorbitant taxes on new development that have exploded in recent years, these restrictions make it increasingly difficult to build housing within the constraints of infrastructure and demand. Canada ranks second to last in the OECD for building approval times as of 2020, a testament to the bureaucratic hurdles that exacerbate the housing crisis.

People walk by bilingual signs for a commercial space for lease in the city of Westmount on the island of Montreal on August 5, 2022. Graham Hughes/The Canadian Press.
Even when starting small is legal, it’s infeasible

Let’s return to some of our initial set of questions: why don’t small and medium-sized grocers capture a larger share of the Canadian market? Let’s consider the challenge of starting a small neighbourhood store, like a bodega. Modern zoning laws have severely restricted housing development in neighbourhoods to densities too low to viably support most local retail businesses. Even where they do, other rules prevent entrepreneurs from renovating the first floor of their home into a small shop, forcing them to instead turn to commercial landlords in strip malls or plazas. These landlords then demand long-term leases on properties that incur costly renovations, resulting in higher startup costs for the entrepreneur. This significant financial burden deters many from pursuing their dreams and represents a loss of economic freedom to the entrepreneur and their customers.

Without opportunities for small businesses to start and thrive, there are fewer chances for them to grow into medium and large enterprises. Our theoretical bodega can’t learn and prove itself by starting small, expanding into a supermarket, and eventually becoming a chain. 

More importantly, if incumbents in a sector don’t fear new competition from these theoretical upstarts, they have little incentive to invest in their own competitiveness. It’s also worth highlighting that the lack of local businesses also means fewer “third places“—essential social spaces outside of home and work—in neighbourhoods, reducing opportunities for community interaction and healthier lifestyles. Restrictive policies not only stifle economic dynamism but also diminish the vibrancy and health of our communities.

Governments need to quiet down and get building

While this may sound like a libertarian argument, economic freedoms are not a challenge of the size of government per se. Instead, calling for an increased focus on our lack of economic freedoms confronts the government’s increasing intrusiveness and its coercive impact on our lives. The issue at hand is not how large the government grows, but how loudly it operates in the private economic lives of its citizens through public policy. That governments have become too big is certainly debatable, but that they’ve become too noisy is undeniable.

Public agencies can and should compete with the private sector, but the government should not impose excessive limitations on private businesses and then blame them for the resulting market failures they create. Instead, governments should build public institutions that deliver services and goods (such as housing) while adhering to similar rules as the private sector, enabling fair competition. This approach broadens options for individuals and businesses alike, ultimately enhancing economic freedom. Take our heated debate on the future of healthcare, one can support funding a robust public health sector that guarantees universality without the need to restrict options for private care. Ultimately, by cultivating strong public institutions that add to rather than obstruct opportunities, the government can empower citizens to pursue their goals in an environment where both public and private entities contribute to a vibrant economy that respects individual choice.

The erosion of economic freedom in Canada has been led by special interests manipulating their relationships with politicians and government to secure policy victories at the expense of our collective autonomy. Economic freedoms must be the foundation of public policy because these interests inflict countless small, often invisible cuts that cumulatively erode our economic liberties. Public policy tends to evaluate individual ideas in isolation, failing to consider whether these fragmented decisions collectively improve the lives of citizens. To safeguard our economic future, we must ground policy in core values and consistently question whether our actions align with those principles. Only by doing so can we ensure a vibrant, dynamic economy where opportunities for growth and prosperity are accessible to all.

Michael Kempa: What the Freedom Convoy can teach us about the anti-Israel encampments

Commentary

The campus protest movement demanding university divestment from all things Israel and denouncing what they define as Israeli “colonialism” and “genocide” in Gaza is spreading out and digging in in the form of encampments across Canada. 

University administrations and police are demonstrating a great deal of confusion around who these protestors are and ultimately how best to respond, leaving students and surrounding communities in the lurch. They are providing the opportunity for protests to devolve from more peaceful gatherings to hotbeds of antisemitic rage. 

Who are the protestors?

Taking its inspiration from the United States, encampments began at McGill University in Montréal and have since fanned out across the University of Toronto and the University of Ottawa to the University of Calgary and the University of Alberta in Edmonton before boomeranging back to Quebec, most recently to Sherbrooke University. 

The campus protest movement is the reciprocal, mirror image of the Freedom Convoy: a multilayered social movement shaped like an inverted pyramid. At the wide top of this inverted pyramid, you can find participants who are ordinary people there to make controversial and potentially offensive points but are nevertheless entirely legal. 

At the convoy, this included the many thousands of Canadians who lined the country’s major highways to wave their support to passing trucks barrelling down to Ottawa. It also included the many thousands more who came to Ottawa itself on weekends to make a point about the damage done to their businesses and children’s development by what they viewed as draconian pandemic lockdowns. It included some vaccine skeptics who did not accept that the COVID-19 jabs had been scientifically vetted. And many more just came because they were curious or wanted to vent their hatred of Prime Minister Justin Trudeau. These groups annoyed and frightened many Ottawans who saw them as the pox of American-style politics and right-wing extremism infesting their neighbourhoods. However, these people were not breaking the law.

In the context of pro-Palestine, anti-Israel encampments, this wide layer of controversial but ultimately law-abiding protesters includes hundreds of students across the country who are horrified by the civilian deaths in Gaza from the Israel-Hamas war and are generally anti-authoritarian. While many Canadians may regard their positions as uninformed or naïve and extremely offensive, what they have come to express is not illegal.

Last Saturday, I visited the University of Ottawa campus, where I also work as a professor. I witnessed lots of these people filling the lawns in front of Tabaret Hall, hanging signs referencing groups in solidarity with Palestine. 

The extreme Left’s more recent drive to universalize every perceived struggle was on full display. A group advocating for “disability justice” had hung a pamphlet persuading passersby that “Disability oppression is intertwined with Israel’s settler-colonial project in Palestine.” They added that “Israeli officials refuse to distribute COVID-19 vaccines in the West Bank and Gaza Strip.” 

There was also a placard hung by a “Trans Gay Jew against genocide.” Many more signs compared the struggle of Palestinians with Indigenous groups in Canada and around the world: “The ongoing genocide in Palestine mirrors the settler colonial project across Turtle Island [Canada] and the globe.” 

While documenting the signs, I was approached amiably by a bearded man wearing a reflective safety vest who appeared to be in his late 30s and who identified himself as a volunteer. He asked if I had any questions about the protest. After telling him that I was a professor at the university who often writes on protests, he encouraged me to carry on reading the signs. “You’ll see we have a total diversity of the Left represented here,” he boasted, unironically. 

Beyond the now familiar slogan of “From the river to the sea” chalked onto the building steps, one sign I found that many might consider to be speech excluding Jewish students from being welcome on campus was a sign exhorting the reader to “Teach your kids” that “the Zionist entity is an enemy,” such that “resistance is an honour,” and that “there is no country called Israel.” Offensive to many, without a doubt. Yet unlikely to yield any conviction for criminally prohibited speech involving the incitement or promotion of hatred, however, as the message is directed at political entities and movements, rather than “identifiable groups” (i.e., Jews specifically), and resistance does not necessarily mean violence. 

Back to our upside-down pyramid analogy, travelling to its narrow tip is a smaller number of people who begin to cross the line into criminal speech and conduct. 

At the Freedom Convoy protests, this consisted of a smaller number of protesters —perhaps five or six hundred—who bedded down in the streets of Ottawa continuously for over three weeks. They basically rendered downtown unlivable (especially for those with visual impairments and other health issues) by violating court orders to cease endless horn honking and rendering public transit inoperable in the city’s core. This tip of the pyramid also consisted of protestors attempting to block economically critical border crossings into the United States, such as the Ambassador Bridge in Windsor. Counted among them were also those who brought—or were planning to bring—guns to the Coutts, Alberta border blockade.

Inside the university encampments, these are garden-variety antisemites engaging in speech that constitutes the incitement or promotion of hatred or hate-motivated forms of criminal mischief and intimidation. A key example here would be reports of a Jewish professor at the University of Toronto who was prevented by protestors from accessing encampment space based on being a member of an “identifiable group.” It would also include any forms of communication that single out Jewish people as members of any form of mysterious, powerful global cabal deserving of punishment or reprisal. It could also include caricatures of Jews appearing inhuman or animalistic.

At the encampments, it has been alleged by university administrators that this group is mostly made up of non-students who have moved onto campus, spoiling for any fight they can find. At the University of Calgary and the University of Alberta, administrators justified their swift and strict security and policing response based on their claims of growing numbers of outside agitators who posed a risk to the safety of campus communities. 

While these numbers are yet to be confirmed, the major lesson of the Freedom Convoy and other mass protests is that the weight of the layers in a protest pyramid shifts over time: the majority of protestors whose actions are often “awful but lawful” become led by or driven out by a growing violent, law-breaking minority that becomes emboldened, colonizing the crowd. Overall, it is the responsibility of the police and other authorities to stop this process and keep the protests’ legal status for as long as possible.

Protesters make signs at the newly-established pro-Palestinian encampment on the Dalhousie University campus in Halifax on Monday, May 13, 2024. Darren Calabrese/The Canadian Press.
Are universities constrained by the Charter?

As was the case with the Freedom Convoy, our security responses to the campus encampment protests have been wildly different across the country on the basis of legal frameworks that are out-of-date and confusing to all players on the ground. In particular, Charter questions are at the heart of the confusion, allowing protests to become encampments that are exploitable by groups with bad intentions.

As the convoy approached Ottawa in late January 2022, the leadership of the Ottawa police received a legal opinion that the truckers’ Charter rights to peaceful assembly and free expression entitled them to bring their rigs to a halt, stationing them in the streets surrounding the Parliamentary district. But while the courts regard encampment as a form of political expression, the standards of reasonableness attached do not extend to shutting down roadways for extended periods of time with heavy machinery. This stands as a fundamental error that allowed the convoy protest to take root and spiral beyond the control of conventional policing methods.

Similarly but perhaps even more concerning, Canadian courts have left open even greater ambiguity about the rules of protest on university campus property. The Charter places limits on government and its direct agencies, such as the police. The Charter does not, however, constrain private actors or authorities. 

When it comes to freedom of expression, this means you cannot be silenced, criminally prosecuted, or punished by any state agency for anything you say outside of very narrowly defined forms of criminal speech promoting hatred against identifiable groups of people, counselling terrorism, or denying the Holocaust. 

It does not, however, mean that there are no consequences whatsoever for your utterances. If, for example, your speech violates the standards of a club or association you have chosen to join, your employer or professional association, you can be barred from accessing that club or fired/barred from practising in that profession. 

Which, then, is a university: a government agency, or a private actor? Is it free—or required by liability—to set and enforce its own rules governing the standards of student speech, expression, and conduct? Or is a university’s ability to set and enforce such rules limited by the Charter? At this point in time, the courts have come to different answers to this set of questions across the country. 

In Calgary and Edmonton, the universities did not hesitate to call the police to their private property to clear encampments. This was done within 48 hours of their creation. 

This is ironic, given that it was Alberta courts who ruled controversially in 2020 that in the domain of promoting free thought and expression, universities act as government agents in the sense that they are carrying out government policies. As such, the judge ruled the University of Alberta was on the wrong side of the Charter by assigning prohibitive security fees to a pro-life student group wishing to hold an anti-abortion event on campus. 

The Alberta courts have thereby already ruled that Charter rights apply to expression on campuses. Given that encampment is a form of expression, the Alberta courts will likely consider whether the recent use of tactical police measures to break them up in Calgary and Edmonton is reasonable in the circumstances of the nature, scope, and duration of those encampments. 

The Alberta court decision is not binding outside of that province, but it is very likely to be taken as instructive in sister courts across the country. This likely explains the timidity of the administrations at the universities of Toronto and Ottawa in intervening in their campus encampments. This can also help explain the resistance of Montréal police to respond to McGill University’s requests to enter their campus to clear away encampments. 

Pro-Palestine protesters link arms as police move to clear remaining protesters and their encampment at the University of Calgary campus, in Calgary, Alta., Thursday, May 9, 2024. Noah Korver/The Canadian Press.

Toronto and Ottawa appear to have adopted a “wait-and-see” stance. In the nation’s capital, this may be uncontroversial on the basis that the encampment is relatively small, has been peaceful, and is in front of the university’s key administrative building, distant from any classroom spaces. 

But the University of Toronto, by its own admission, is experiencing larger problems. The administration considers their buildings and grounds “private property” and the encampment as a form of “trespassing.”

“We know that some members of our community feel unwelcome and unsafe on campus due to the encampment,” reads one of the university’s recent updates. Nevertheless, the university continues, “We must reiterate that the University accepts and encourages the widest range of debate, and has a high threshold for expression, including speech and imagery that is uncomfortable and offensive to some.” 

But then, the qualifiers and contradictory caveats begin to pile up: “Discrimination and harassment exceed this threshold,” but, of course, “[We are committed to peaceful protest,” the university concludes. 

We can see in this statement an effort to protect themselves as much as possible from the findings of the Alberta court decision: the university must balance its private responsibility to foster an inclusive and welcoming environment for all students with its Charter responsibility to allow potentially offensive—but ultimately legal—political expression, including encampments, on campus.

While they say they are sharing evidence of “concerning speech” with the police, The University of Toronto is extremely hesitant to call the police on protestors, saying instead they wish to “find a peaceful conclusion…without the risk of violent confrontation.”

The Toronto Police Service also understandably appears confused as to how to respond. In communication with The Hub’s Managing Editor Harrison Lowman, the service made it clear that in their view, the University of Toronto constitutes private property. As such, the police assert the university is “leading the planning for the protest”, taking the lead in maintaining order through protests on its property. The police say they will only intervene if they are formally invited to do so by the university, or if the protest begins to pose a demonstrable threat to public safety, such as if assault, shooting, or serious fire occur. Before they enter the encampment in a major way, they say they would warn the public.

The clear irony here is that at the same time as the courts are beginning to treat university space as a form of public property governed by the Charter for the purposes of assembly and expression, the police and university administrations continue to approach order maintenance as a private responsibility.

What can be done?

Ultimately, the question of whether protest on university property is protected by the Charter will likely wind its way to the Supreme Court in the near future, likely on challenges brought by responses to current university encampments.

Given that the entire reason for the existence of universities is to promote the free exchange of ideas (which is explicitly the mandate handed to them as a matter of policy by most provincial governments, including Ontario), it is likely that the Supreme Court will rule in favour of such Charter protections. Nevertheless, given that universities also have private liability responsibilities to ensure a safe and inclusive environment for all students, it is likely that the Court will recognize the legitimacy of stricter limits on the nature, scope, and duration of such protests on university property, as opposed to fully public spaces. 

What this adds up to is that, while they wait for clarity from the Supreme Court, universities could in the meantime allow encampments of moderate size, composed mainly of members of the university community, who are engaged in controversial but legal expression for reasonable durations of time in locations that do not disrupt classes, student travel, or research. 

Nevertheless, efforts should be made between protestors, administration, and police to identify and remove violent and criminal protesters who are currently engaging in criminal forms of expression and hate-motivated criminal mischief and intimidation. 

As was the case in the Freedom Convoy, this dangerous subgroup cannot be allowed to thrive through inaction caused by legal ambiguity. Left ungoverned, student encampments are ripe targets for exploitation and recruitment by professional agitators with bad intentions.