proper-liberal

[proper-liberal]

Optimal Housing Tax Policies: Part 1

For years, I have been thinking about how housing tax policies by the multiple levels of government affect house prices across Canada, but specifically on the City of Vancouver (CoV), Metro Vancouver (MVan) and the Province of British Columbia (BC). 

In Part 1, I plan to list out all of the various housing policies that I can think of that are relevant for the housing market in these jurisdictions with an explainer on what the policies are for. Some of the housing policies will be applicable to Toronto (TO), the Greater Toronto Area (GTA) and the Province of Ontario (ON). Part 2 will be about my recommendations for each policy! But to make sense of it, you should read Part 1 first. 

Let’s begin with the easy stuff that seems totally normal because we’ve all grown up with these laws and think they have always been there (but the reality is they were all enacted with some intended purpose, which of course has been long forgotten and is no longer relevant). I will source, what I think are decent, definitions from the interweb (mostly wikipedia!) where necessary with my own modifications.

First up:

1) Property Tax - “A property tax is an ad valorem [based on value] tax on the value of a property, usually levied on real estate. The tax is levied by the governing authority of the jurisdiction in which the property is located.” 

Pretty self-explanatory. Everyone who uses property (aka every human, except the homeless) pays directly or indirectly (renters for example) property tax to the municipal and provincial governments. Property tax rates are broken down into sub-categories that are used for funding specific services. For example, in the City of Vancouver, there “mill rate” (aka the property tax rate per $1,000 of “assessed value”) is made up of the following sub-categories: General Purpose Levy, Provincial School levy, Translink Levy (MVan’s mass transit system), BC Assessment levy, Metro Vancouver levy and Municipal Financing Authority levy. These six levies total up to a mill rate of $2.55489 per $1,000 of assessed value. That means, if you have a $1,000,000 home in the CoV, the property tax will be $2,554.89. (http://vancouver.ca/home-property-development/residential.aspx). 

It’s important to note that different cities and provinces and states fund different services from property taxes, which makes it harder to compare mill rates across different regions. For example, Seattle’s mill rate is about $10.10 per $1,000 in assessed value, or nearly 4x that of the CoV. But Washington State likely has lower State Income Tax than BC does, making them less comparable.

All real property types pay property taxes. However, since owners of, say, office towers don’t vote in local elections, the burden of taxation is heavily weighed upon commercial users of property and away from residential users, who happen to care a lot more about how much they pay in property taxes and will vote in their own self-interest. But too high of property taxes on commercial property, such as retail, office and industrial, can and does lead to higher vacancy rates as businesses close down and find lower cost jurisdictions to establish in. The landlords are still liable for property tax even if they have no tenants to derive income from to pay the tax. 

2) Goods and Services Tax (GST) that are levied on newly completed or significantly refurbished housing units.

Many people find out the hard way that when they buy a residential housing unit, whether a condo or a new house, the Federal government of Canada (GoC) levies a 5% tax on the contracted purchase price between the developer and the buyer. This can often leave the myopic people in a bind as completion approaches if they haven’t saved enough to pay the 5% levy. 

It’s important to note that “substantially refurbished” units technically are liable for GST levies, but there is ambiguity on what the definition of “substantially refurbished” is. The Canada Revenue Agency (CRA) probably prefers to keep it vaguely worded so they can apply the tax at their discretion. 

In BC, there is a 36% GST rebate (36% * 5% = 1.8% off, so a total of 3.2% of purchase price) on housing units below $350,000. The scale slides from 36% to 0% rebate on properties above $450,000. Anything above $450,000 is levied the full 5%. 

In Ontario, the GST was replaced with the Harmonized Sales Tax (HST) and has its own system with rebates that I’m not aware of. 

3) Property Transfer Tax (PTT)

As the name suggests, the PTT is a tax on the value of the property when the title is transferred from the seller to the buyer. The buyer is liable for the PTT. In other jurisdictions, they call it Land Transfer Tax (ON), or Stamp Duty (UK, HK, Singapore, Australia). 

In BC, the PTT is a progressive tax that is based on the contract price of the Purchase and Sale Agreement (PSA) between the buyer and seller. First Time Buyers (FTB) who buy housing units below $475,000 are exempt from PTT with a sliding scale to $500,000, above which the full PTT is charged. Newly built homes below $750,000 don’t have PTT because the buyer has to pay GST. There are some other exemptions for newly built homes (https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions/newly-built-home-exemption)

The PTT is calculated with these thresholds:

1% on the portion of the price under $200,000

2% on the portion of the price between $200,000 and $2,000,000

3% on the portion of the price between $2,000,000 and $3,000,000

5% on the portion of the price over $3,000,000

For example, a $799,000 condo would be $13,980 ($2,000 + $599,000 * 2%)

Here’s a calculator: https://www.bcrealestatelawyers.com/ptt-calculator/

The recent BC NDP budget added the 5% band on above $3,000,000 housing units. 

4) Development Cost Charges (DCC) and Community Amenity Contributions (CAC)

These two types of charges are specifically for new developments in MVan municipalities. DCCs are governed by the Metro Vancouver Regional District, the entity that organizes the drainage and sewerage system across the region. The DCCs go towards covering the cost of integrating newly developed housing units into the drainage and sewer systems. DCCs are a fixed cost per unit, which are higher for homes than apartments. Also, the Fraser Valley has much higher DCCs than the Vancouver ones, probably because the density north of the river allows for economy of scale, and the system south of the river requires massive investment. The DCCs will be increasing effective May 1, 2018. http://www.metrovancouver.org/services/liquid-waste/consultations/development-cost-charge-program/Pages/default.aspx

Community Amenity Contributions, on the other hand, are “in-kind or cash contributions provided by property developers when City Council grants development rights through rezoning,” as per the City of Vancouver’s website. The CACs go towards: parks, libraries, childcare facilities, community centres, transportation services, cultural facilities, and neighbourhood houses (social housing). CACs are different in various parts of the city and municipalities, meaning some parts of the city have higher costs to develop than other, holding everything else equal. For example, if a developer wants to rezone for a 6-storey building in the Cambie Corridor, they would have to pay to the CoV $68 psf of “net additional” square feet. This cost gets directly passed onto the future consumer of the properties being developed.

Here is the link: http://vancouver.ca/home-property-development/community-amenity-contributions.aspx

5) Home Ownership Grant (HOG) and Property Tax Deferral Program

The Home Ownership Grant provides a subsidy of $570 off of each property tax bill for people who live in their principal residence. There is an extra $275 grant for seniors (over 65) and other grants for disabled people. To qualify for the HOG, you must be a Canadian citizen, be the registered owner of the home. 

As properties in BC have risen in value over the years, the government of the day continues to raise the threshold on which the housing units no longer qualify for the HOG. For example, in 2015, the threshold was $1.2m, meaning people with their principal residences below the threshold qualified for the HOG. But in 2016, there was an outcry because house prices in MVan rose so much that the threshold was raised by 33% to $1.6m. Yes, in Metro Vancouver, millionaires, whose wealth rose in the year by up to hundreds of thousands of dollars, cried to the government that it was unfair that they should have to pay $570 in property tax. Of course, the renters, lacking in political power and knowledge of what’s happening with the HOG, receive zero benefit but do have to shoulder some of the increased property tax cost, as owners of rental units don’t receive the HOG and thus just recover it from renters through raising rent when possible. Here’s the link: https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/reduce/home-owner-grant/regular

The Property Tax Deferral Program is an old program that was set up in a by-gone era when more than 20% of seniors lived in poverty (today it’s like 6%-8% in BC - and even lower for homeowners). The political compromise was that people over the age of 55 were eligible to defer the property taxes due each year at an interest rate set each year (currently 1.2% plus $60 fee for first year, $10 per annum thereafter). Effectively, the deferral program can be renewed each year until the housing unit is sold or is no longer the principal residence. Taxpayers of BC are protected because a restrictive lien is placed on the title of the land, meaning the housing unit can’t be sold until the debt is paid. Here is the link: https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/defer-taxes/regular-program

6) Foreign Buyers Tax (FBT)

The FBT was brought in abruptly on July 25, 2016, and effective one week later by the BC Liberal government. It applied a 15% (now 20%) ad valorem tax for foreign national, foreign corporation or taxable trustee if the property being acquired was in Metro Vancouver. The BC NDP government expanded the areas to the Capital Regional District (Victoria), Nanaimo Regional District, Fraser Valley Regional District and the Regional District of Central Okanagan. 

It is a tax on top of the PTT (mentioned above) and GST (mentioned above) for new builds. So, a foreign national buying a new build condo in Downtown Vancouver would have to pay 20% + 5% + 2% = 27% of tax on top of the contract price. This compares to 5% for British Columbians, 7% for British Columbians buying a place valued above $750,000, and 7% for numbered BC companies (holdcos) owned by British Columbians. There are some exemptions for the FBT. Here’s the link: https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/understand/additional-property-transfer-tax

7) City of Vancouver’s Empty Home Tax (EHT)

The City of Vancouver has had an extremely low vacancy rate for many years now, which is a significant contributor to the “Housing Crisis” in the region. The EHT was brought in by City Council in 2016 and is to be paid for the first time in 2018. The idea of this tax is to discourage people who own second homes in the City of Vancouver from holding them empty for more than 6 months of the year, and to encourage them to put their units up for rent. The tax rate is 1% of assessed value. 

The City required every housing unit owner (principal and rentals) to “declare” if the housing unit is their principal residence, or if it is leased to a tenant. The deadline was early February 2018, but was extended to March for people who didn’t realize the deadline was approaching. The administration costs to set up the EHT was $7.5m, and it is estimated that it will cost $2.5m annually to continue the tax. The amount levied in the first year is between $17m and $30m from 1,200 to 2,300 (depending on the result of disputing the tax). The highest amount levied was $250,000 on an empty home. Here’s the link: http://vancouver.ca/home-property-development/empty-homes-tax.aspx

In this post, I’m concentrating on tax policies that affect the housing market while purposely leaving out the controversial so-called “Speculation Tax” because I wrote a whole blog post on it previously. And in Part 2, I will address each of these policies listed above. Nevertheless, the recent BC NDP budget provided a long list of non-tax policies that could and probably should be addressed in another blog post. Here’s the link to the “Homes of BC” document from the Budget: http://bcbudget.gov.bc.ca/2018/homesbc/2018_Homes_For_BC.pdf

Cheers for now.

[proper-liberal]

Political advert from the UK for the Liberal Party (precursor to Liberal-Democrats) in the 1910s. 

[proper-liberal]

BC NDP’s so-called “Speculation Tax” intent explained

In the 2018 Budget for British Columbia, the BC New Democratic Party brought in a number of measures to “cool” the real estate market in the major cities of the province. The Finance Minister, Carole James, labelled their plan “Homes for BC: A 30-point plan for housing affordability in British Columbia”. It can be found here:

http://bcbudget.gov.bc.ca/2018/homesbc/2018_Homes_For_BC.pdf

I will only address the announced “Speculation Tax” in this post. In the budget, the “Speculation Tax” (Spec Tax for short) would apply an extra 2% property tax based on the the assessed value of housing units owned by people who don’t pay income taxes to the British Columbia government, with tax credits and exemptions for British Columbians. The Regional Districts originally slated for this tax are Metro Vancouver, the Capital Regional District (Victoria), Nanaimo Regional District, Fraser Valley Regional District and the Cities of Kelowna and West Kelowna. On March 26, 2018, Carole James announced more details and some changes to the Spec Tax, which I will get into lower down. 

The so-called “Speculation Tax” is by far the most controversial part of the 30-point plan as it was written without much detail on how it would work and thus provided an opportunity for natural opponents (real estate participants who benefit from high house prices and unfettered foreign investment) of this type of policy to spread worst-case scenarios to foment backlash. But in the poll after the budget came out, 81% of British Columbians supported this new tax, including 75% of Liberal voters in the most recent election. (https://biv.com/article/2018/03/most-bc-residents-support-foreign-buyer-tax-increase-and-new-speculation-tax-poll)

Nevertheless, non-real estate vested interests opposition did come from various quarters of the province, most notably by the city councils of Kelowna and West Kelowna and individuals who owned vacation homes on the Gulf Islands between Vancouver Island and the Lower Mainland.

The concerns coming from the municipal politicians in the Interior were predicated on a number of factors: 1) Albertans are large owners of vacation homes in the cities and are subject to the 2% tax without a corresponding tax credit. 2) If the Albertans pay the tax, they will have less disposable income to spend in the local economy as tourists and just won’t come as often. 3) If the Albertans are forced to pay the tax, they may just sell their properties, and take their money elsewhere, and thus will crash the market by selling too many properties concurrently. As a result, there were rumours that some developers in the region were cancelling or stopping projects, despite the vacancy rate of the City of Kelowna being 0.2%, which is among the lowest in Canada, if not the lowest. These, in my opinion, are all legitimate concerns for municipal politicians to have. 

What is the main intent of this “Speculation Tax” though? It’s to address a “Free Rider Problem” (FRP) that has been taking place in British Columbia for several decades. A FRP is when too many people consume or benefit from “Public” goods or services without paying taxes to share in the cost of producing the public goods or services. The name “Speculation Tax” is a misnomer IMO, as it doesn’t target the people who engage in conventional “speculation”, which is the buying and selling assets in a short period of time for the purpose of capital gains. As a result of this misnomer, the natural opponents of this Spec Tax have used it as a reason to discredit the rationale for creating this tax. However, other points in the 30-point plan do address the conventional speculation issue. 

So what are the examples of the FRP? There are three main categories: 1) Rich foreign investors who purchase expensive homes in Metro Vancouver for investment purposes that are not utilized for making an economic return (i.e. held empty), 2) Rich new immigrants, such as those who used the Immigrant Investor Program to move to Canada between the mid-1980s and 2014 (Quebec’s IIP is still intact), who buy homes in the Metro Vancouver region or elsewhere to live in, but make their income from sources outside of British Columbia and don’t declare worldwide income or, more specifically, don’t follow the tax laws of Canada. The third category are “Satellite” or “Astronaut” families in which the husband (almost exclusively) lives outside of Canada while the wife and children live in BC. In this situation, the husband sends money to the “Satellite” family in BC for living expenses while not paying income taxes to the BC government, and the children are usually enrolled in school in BC for years and the wife is often unemployed. Thus the family doesn’t pay income taxes to the BC or federal governments. They receive benefits (free schooling and healthcare, etc) without contributing to the cost of providing those services. These satellite families are defined by the government as “households with high worldwide income that pay little income tax in BC”.  In addition, these families usually stay long enough to acquire Canadian citizenship, and thus the children are able to attend BC universities at the subsidized local tuition rather than the foreign tuition rate, which is roughly 4x the local tuition rate. Foreign students who purchase housing units are also expected to be captured by the Spec Tax. 

How would the Spec Tax reduce the the Free Rider Problem? Under the new details that were announced on March 26th, the Spec Tax will be applicable to owners of BC properties who are foreign investors (including satellite families); Canadians and Permanent Residents who live outside of BC and British Columbians who own second homes that are held empty for 6 months or more (second homes) in the designated areas. The designated areas also changed slightly, as the Gulf Islands located near the Capital Region District and Nanaimo Regional District were removed, as well as the towns of Hope, Harrison Hot Springs and Kent in the Eastern half of the Fraser Valley Regional District. 

The government dropped the Spec Tax rate for Canadians from outside of BC who own property in the designated areas from 2% to 1% to appease the concerns of areas that are dependent on tourism and retirement demand. The rate for British Columbians with an empty second home was dropped from 2% to 0.5%. 

In addition, more details for the “non-refundable tax credit” for people who pay income tax in BC were announced, they will receive $2,000 in tax credits. This ensures that British Columbians who own a second home don’t pay any Spec Tax on assessed values less than $400,000. If foreign investors (including satellite families) report their worldwide income and pay the relevant income taxes to BC, they will be eligible for the tax credit. 

But the most important clarification, to dispel obfuscation by natural opponents, is that British Columbians’ primary residences and those who multiple properties that are used as long-term rental investments are exempt from any Spec Tax. Hence, it’s the BC NDP made the note that “99% of British Columbians” won’t pay the Spec Tax. 

But for those British Columbians who are captured by this Spec Tax, what does that math actually look like? Let’s take an example: A Vancouverite that lives most of the time at their Sunshine Coast primary residence but has a 1-bedroom condo in Yaletown that is used for one week out of the month (i.e. less than 6 months out of the year) for work reasons. This housing unit in Yaletown is subject to the new Spec Tax. Let’s assume the 1-bedroom is assessed at $600,000. Assuming this individual makes over $46,000 in gross income a year (the amount needed to pay at least $2,000 in income tax to British Columbia), the Spec Tax liability would be:  $600,000 * 0.5% = $3,000 less the non-refundable tax credit of 0.5% on value up to $400,000 = $2,000 means the net Spec Tax liability is $1,000 for the full year (or $83.33 per month). Given the City of Vancouver’s ludicrously low mill rate of 0.255% on residential property, it would raise total property-related taxes to $2,530, or only 0.42% of assessed value. In my opinion, this is very reasonable. 

So what are the “Benefits” of creating a Spec Tax as a local resident? In my opinion, the top one is the reduced attractiveness of foreigners to buy real estate in the urban centres of BC. For decades, foreign capital (which I define as capital accumulated from activities outside of the borders of Canada) has been one of the largest factors in increasing the cost of housing in Metro Vancouver. It has been the main reason why the Price-to-Income (median) ratio has continued to widen beyond other Canadian cities, which are more or less equally affected by monetary policies such as lower interest rates, or macroeconomic forces such as inflation. If this Spec Tax reverses, or even just stops, the growing gap between house prices and local incomes, this will give hope to locals that one day they will have an opportunity to own a home. 

Another benefit is the psychological factor the Spec Tax, along with the Foreign Buyers’ Tax initially implemented in August 2016, rising interest rates and the federal government’s new mortgage rules (B20) to restrict credit growth, will definitely reduce the fear of missing out that was so prevalent over the previous few years as Millennials moved into the family formation and home-ownership years. Another benefit is that developers will be incentivized to produce housing stock needed by locals on local incomes as the demand from foreigners wane. Another benefit may be the reduced attractiveness for foreign students buying BC property for a few years while they attend post-secondary schools in the province, which will reduce the competition for buying opportunities for locals. 

Another benefit is that all the monies raised by the Spec Tax and Foreign Buyers Tax will be used to provide funds for the construction of affordable housing and market rental properties. This province is starved for market rental properties since the last 30 plus years have been marked by high profitability of developers producing condos that are sold off for immediate profit. An era of higher purpose built rentals completions would do a significant amount of good for addressing the stability of the rental stock in the designated regions. For example, Metro Vancouver has had an overall vacancy rate of sub-1% since October 2013 according to the CMHC. Kelowna’s vacancy rate is even tighter. It’s literally physically impossible to produce enough housing stock to keep up with demand. 

And a crucial benefit, IMO, is that the Free Rider Problem has been acknowledged and addressed for the first time in BC’s history. In any society, there will always be some people who take advantage of the generosity of others, but there needs to be limits, particularly when many of those taking advantage are actually wealthier than those paying for the goods and services provided by the government. So if satellite families are forced to pay $20,000 in Spec Tax (assuming assessed value is $1,000,000), then they will be contributing to the cost of running the school that their children attend, and the hospitals and clinics that they can attend, among many other things provided by the government. 

What are the “Costs” of creating a Spec Tax? The economy has been distorted so much by high house prices that roughly 25% of the GDP is related to the housing sector in some way, which is significantly higher than the rest of Canada (20%) and the US at its housing peak (16%) over a decade ago. So there will likely be a slow down in economic growth via less sales and thus eventually less future development. However, the backlog of developments is still very long and this will continue to be true for the next 3-4 years, at least in Metro Vancouver. Nevertheless, I think a restructuring of the economy away from dependence on exporting “condos” (i.e. selling condos to foreigners is technically considered an “export” by economists) is definitely needed. Another cost is that people who bought recently with a lot of mortgage debt will be hurt the most through no fault of their own, except if they grossly overpaid for a subpar house due to FOMO and bitterness of losing consecutive bidding wars. 

Another potential cost is that homeowners looking to fund their retirement by selling their largest asset, their primary residence, may have less liquidity at the price levels they are expecting. However, foreign capital arriving in Vancouver may have distorted their expectations of what their primary residence is intrinsically valued at based on local incomes. 

Given that the benefits and costs of the Spec Tax could be temporary, assuming the market changes significantly in the future, there needs to be a sunset clause on this Spec Tax. I would recommend that the Government of British Columbia withdraw the designated markets from this Spec Tax if the vacancy rate rises above 2.5%, as accounted for by the CMHC surveys. At 2.5%, the available options in the market for renters will be enough to reduce inflationary pressures that has been seen in the last few years as more migrants come to Vancouver to find jobs. 

Overall, this Spec Tax, IMO, was long over due. I don’t generally like when the government attempts to intervene in the market, but it is clear that efforts to increase the supply of housing to meet the extreme amount of demand (local and foreign) is and never will be enough due to many supply-side factors: NIMBYism, slow processing at municipalities, high Community Amenity Charges and Development Cost Charges, not enough construction workers, not enough available land for development, high land costs, not enough financing for all of the projects, etc. Demand and Supply solutions are both needed to tackle the housing affordability problem in BC. No country or region is exempt from this issue, as many cities across the world grapple with the same problems. 

All of this externally-driven demand for BC real estate has created an extreme market distortion that has become politically unpalatable anymore. None of these categories of Free Riders are a new phenomena to Vancouver or British Columbia, but its combination with other factors, such as low interest rates for too long, has broken the threshold of tolerance of a large segment of the population.

The BC NDP took a big step in addressing the demand side problem. Now let’s hope other parts of their 30-point plan helps address the supply-side constraints. 

#bcpoli

[proper-liberal]

How to improve the Posters

I doubt many people saw this article on “Privilege” in the National Post (March 8), but it caused a “backlash” per se in certain parts of the media. It’s worth a read before I get into it:

http://nationalpost.com/news/canada/canadian-schools-facing-blowback-for-white-privilege-awareness-campaigns

The story was first broken by the Toronto Sun on March 3rd. I came across the story while scrolling through twitter and saw a tweet from Charles Adler (a talk radio host) from the Corus Network interviewing the journalist from the Toronto Sun. I listened to the whole interview. It was mildly interesting, so I looked up what was actually on the “Privilege Posters”. 

I have seen posters like this before. To the uninitiated on concepts of “Social Justice”, it can be provocative and unfair to make such generalizations. The people who put them up thought they were doing a good deed with good intentions. But the effect was to insult some or many people who don’t consider themselves “privileged”. Due to the backlash, they were taken down. 

So what was missing that created a huge dichotomy between what the message the writers intended and the interpretation by a likely substantial minority of readers of the posters? In a word: nuance. That’s the biggest problem with short messages that include loaded words (see twitter wars). 

So I propose some modifications to the “Privilege Posters” to reduce the amount of communicated message that is “lost in translation” between the writers of the posters and the audience of the posters. 

1) Stop using the word “Privilege” to describe immutable characteristics of human beings. Use the word “Advantage” instead. So the first page of the modified poster would say:

“Become Aware of your ADVANTAGE. It is not a burden or a source of guilt, but rather an opportunity to learn about certain DISADVANTAGES others may face in everyday situations.” Personally, I would leave out the rest of the first page. Not everyone cares about a “Just and Inclusive World”. This part makes it sound preachy and moralistic (religious?).

2) “Check your Privilege” is problematic because it implies anyone that is one or more of the items on the list is “privileged” through no fault of their own. The word “Privilege” is loaded with connotation of wealth and inheritance, or unearned status, all of which are somewhat negative in nature. No one wants to be considered “privileged” despite objectively they may be in some sense, such as a family that is statistically in the upper middle class but still think they are not much better than average. So how to fix this phrase in the poster? Perhaps say “Observe your ADVANTAGE”. 

3) I would delete their description of “Privilege”. Not everything on the list confers “social power”. It’s also contradictory given that the first page suggests it shouldn’t be a burden of guilt, but then suggests the reader with “Privilege” have empathy for those without “social power”. I say empathy rather than sympathy because the former is about understanding the issue of the items on the list while the latter is more transactional in nature. Sympathy can be given to an individual for something, like losing a job, but that dissipates once the person gets a new job. I would replace this definition with a section that says “Over the following People:” leading into the check list below comprised of the new descriptions I propose.

Now for the items on the list: 

4) First up is “Able-bodied physically and mentally”. IMO, saying people who have disabilities are not privileged because of their status is an insult to those who turn their situation into a positive outcome. For example: Paralympians (and Alex Zanardi in particular - google him). These hardworking individuals are definitely the exception, not the rule when it comes to people with disabilities. So, assuming “Observe your ADVANTAGE” is used instead of “Check your privilege”, I would change this item to “With physical disabilities doing everyday actions like climbing stairs.” And “With mental disabilities such as depression or schizophrenia.”

5) “Access to education”. I’m sceptical that this one needs to be on the list. Pursuing higher education in Canada is almost always a choice. However, there is merit to the argument that higher education is too expensive and it leaves people in too much debt. So I would change it to “Who need to take on significant debt to complete their education.”

6) “Christian”. I don’t think “Christians” are as powerful as the author of this poster thinks. Anything that is remotely conservative Christian, policy-wise, is anathema in Canadian politics. Justin Trudeau purged anyone who was pro-life from the Liberal Party. Most so-called “Christians” are not religious, and more likely to be “agnostic” in practice. So I would delete this one from the list.

7) “Cisgender”. This word is put in to acknowledge “Transgender” people are under-privileged (perhaps 0.1% of the population?). I doubt most people even know this word. I would change this to “Who have Gender Dysphoria (Transgenders)”

8) “Heterosexual”. According to studies, “homosexuals” account for between 1.0%-1.3% of the population. I would change this to “Who are attracted to people of the same sex (Homosexuals).” 

9) “Male”. This is a controversial one, IMO. It implies that men are “Privileged” but women are not. There are many instances in which this is not true and insulting to many relatively powerless males. Further, it is likely insulting to many powerful women who eschew the “victim mentality”. I would change this to something along the lines of “Women who have been sexually harassed at work (43%).”

10) “Native English Speaker”. I find this curious that in an English-speaking country that people should be considered “Privileged” to speak the language. This is, IMO, hard to justify. If people can’t speak English and live in English Canada, or French in Quebec, then the onus is on them to learn it so they can be even participate in Canadian society. This item should be removed. 

11) “Canadian Citizen (at birth)”. I don’t think people should consider this a “Privilege” in Canada. Firstly, it is kind of cocky to think that Canadians are special in some way. IMO, we are not. Perhaps that is because I have travelled extensively and have lived in Europe and Asia (briefly). I am assuming that the author of this poster meant it in the same way being a “Native English Speaker” is some privilege too. Well, many immigrants come to Canada as English speakers. Considering over 1/5th of the population of Canada are immigrants, have a higher work participation rate (i.e. more likely to be employed than someone born in Canada), are more likely to start a company and have even have a higher home ownership rate, I don’t see why immigrants to Canada need to be on this list. Delete it.

12) “White”. Another controversial item. It implies that “White” people are automatically of higher status than non-whites. Like the “Male” item, this is true in some regards but not always. It also depends on what type of non-White person we are talking about. Some groups are very large that they can be self-sustaining without engaging with other racial groups for any reason. Canadians are pretty welcoming, in general, and have done a pretty good job of reducing discrimination via laws and encouragement of integration of new immigrants. That said, I would change it to “Who don’t have many people from their cultural group in their community.” This way it takes away the potential racism, while also including people who come from “substantial minority” groups who can go throughout life without making friends beyond their own ethnicity. 

Overall, I think we need to reduce the amount of messages that promotes a “victim mentality” worldview, which IMO this “Privilege Poster” does. The intention of the author does not matter if the effect, or outcome, is bad. The poster is “bad” because it is inherently negative in mindset. It frames the message in a binary way, assuming someone with one or more of the listed characteristics are superior than someone without the characteristics. Let’s try to modify the message to incorporate more nuance to lessen the uncertainty in the audience’s interpretation and a positive message by framing it without a “victim mentality” worldview. 

[proper-liberal]

Why start this blog?

Many reasons, I guess. The easy answer is I think about scenarios of politics and economics a lot. Too much, really. Perhaps if I make my peace in the written form, I won’t be up late at night thinking about scenarios I have no control over. 

But the catalyst was a recommendation from a friend to blog about my thoughts after we were chatting about the “Black Panther” movie. She hadn’t seen it yet, so asked for my opinion. I said “It’s a great movie, but not for the reason most people will think,” and then I told her my thoughts about the many messages that are expertly embedded in the movie. 

So here I am. I named the blog “Proper Liberal” because I think that too many people mistake “Liberalism” for “Left wing” thinking when it is really about, in my opinion, putting power in the hands of the individual (as opposed to the state) to make decisions for improving their own lives. My thoughts are loosely based on “Classical Liberalism”, but I’m not educated enough on the subject to say it’s really “Classical Liberalism”. Also, I’m not always convinced a reduction in government intervention or regulation is beneficial. It goes without saying, everything I post is my opinion (and shouldn’t be taken too seriously). 

Another tidbit about me is that I’m a bit of an iconoclast, as I don’t hold cultural norms or beliefs as sacred. But I don’t think I’m a provocateur because I don’t say things maliciously to incite anger or a response.

But I’m going to lay down some opening guidelines/mantras/philosophies that represent my worldview. They are in a random order, so the numbers don’t align with importance. However, they are important to keep these in mind when reading from my point of view (or anyone else’s to be honest).

#1: “Two things can be correct at the same time. People talk at each other without listening because they think only one thing can be correct and they believe they are correct.”

#2: "Good intentions aren’t good if they lead to bad outcomes. Never judge events by their intentions only. By “good intentions”, I mean intentions that are based on subjective morals of the individual.” 

#3: "Morality is largely subjective. Morality (and emotions) clouds reason and objectivity, and thus should be eschewed while debating policy.”

#4: “Ideologues only look at the benefits of their policy without acknowledging the costs, or vice versa. Don’t be an ideologue: be able to discuss benefits and costs on any policy, regardless of your political persuasion.” 

#5: “Ad hominem attacks reduce credibility.”

#6: “No one is ‘Progressive’ all the time, and no one is ‘Conservative’ all of the time. People can be both at the same time on different policies. And people age, gain experience, gain vested interests.”

#7: “Be a political free agent: don’t take sides based on political parties or join political tribes.”

#8: “Be as objective as humanly possible. This is linked to #7. By picking sides based on political affiliations, you will fail at being objective.”

#9: “Understand that ‘Lies, Damn Lies, and Statistics’ is a well-known phrase for a reason. Be sceptical of statistics when they frame an argument for or against any particular policy.”

#10: “Pay attention to people who break down stereotypes. You will probably learn more from people who break stereotypes than people who spout conventional wisdom.”

#11: “When confronted with new information that contradicts your preconceived beliefs, be prepared to destroy your belief system. At minimum, adapt your belief system to the new information.”

#12: “The only constant is change. The question is how fast or slow.”

#13: “The law of unintended consequences is real. This is linked to #2: Good intentions aren’t good if they lead to bad outcomes.” 

#14: “Don’t take #twitteropinions seriously. People need to be aware that what some random person (myself included) is saying on twitter is not likely what they would say to you in person.”

#15: “Nonverbal communication is roughly 90% of communication conveyed in person, and written word on the internet lacks all nonverbal communication, which significantly increases the probability of the audience will misinterpret the writer’s words.”

#16: “People are inherently good. About 1% of the general population are psychopaths and about 4% are sociopaths. That leaves about 95% of the general population as people who have empathy and feel remorse/guilt.”

#17: “A conservative knows the price of everything, but the value of nothing. A progressive doesn’t care about the price of anything, but overvalues what they know.”

#18: “No person or group has a monopoly on knowledge, good ideas, or morality.”

#19: “The government’s primary job is to referee the market, not intervene in the market. Exceptions to this rule is when the market is affected by external forces that distort prices unfairly, and when private sector demand isn’t great enough to support infant industries develop (including mass transit infrastructure).”

#20: “The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else.” - Frederic Bastiat

#21: “Nothing should be ‘taboo’. So-called controversial topics should be talked about openly and vigorously debated on facts and theory, not emotion and moralism. If it’s not done in the open, it will be done in private, where false information will flourish unchecked.”

#22: “The ‘truth’ hurts. But it heals the fastest. If something that’s upsetting is factually correct, coming to accept it as a ‘truth’ will help people get past the what makes it upsetting faster than trying to ignore it or continually attempting to disprove it.” 

#23: “Humans, mainly, respond to incentives and self-interest more than any altruistic factor. Systems need to be set up in a way so that humans respond to incentives and their self-interest in a productive manner for the benefit of society and limit the damage to society that comes with selfishness and greediness.”

#24: “The person who has a ‘Why’ can bear any ‘How’.” - Friedrich Nietzsche

That’s all I can think of for now. I will add to this list as I come across different situations in which stimulates the review of my worldview.

Hopefully starting this blog was a good idea. (Eternal optimist!)

Cheers!

#liberalism