It's an eloquent parable from the nation's capital. For the past five years, a life-size fibreglass cow has stood - on guard, between two Canadian flags - atop the low-rise Cheddar Et Cetera cheese shop in the suburban area of Orleans (population: 100,000). One person complained. As apparently required by policy, City of Ottawa bylaw enforcement officers served notice on the proprietor: The cow had to go. Ottawa's bylaws do not authorize cows on rooftops - either as signs or as urban sculptures.
More than 1,500 residents protested against this exercise in bureaucratic hegemony - signing a petition to save the cow and compelling Ottawa's planning committee to justify its arbitrary decree in public session. Recognizing that the people were standing with the beatific beast, the committee stayed the removal order until the end of the year, directed staff to review the situation and ordered the obligatory "public consultations." It authorized staff to hire a consultant (approved fee: $20,000) to help out.
This is a single vignette from a tragicomic melodrama that's playing - multiple performances daily - from Canadian coast to Canadian coast. The cast expands in number by the hour, the audience dwindles. Question: When will the performers outnumber the paying public? The City of Ottawa, for example, will need to collect millions of dollars more from taxpayers this year simply to increase the salaries of existing staff and to hire more people. The $20,000 needed to engage a fibreglass-cow consultant will be extra - though it would be money well spent if the consultant were to advise the municipal government to get a life.
In February, Statistics Canada reported that public-sector employment increased 0.5 per cent in the final quarter of 2009. This may not seem excessive. But it was enough, year over year, to bump the number of Canadians who work for government to 3,650,000 from 3,350,000 - a public-sector infusion of another 300,000 people.
Canada has a labour force of 16.9 million workers - and a public sector that requires the full-time services of more than one in five of them. At the end of 2008, the public sector needed to employ 19.1 per cent of the work force; at the end of 2009, 21.1 per cent. Local governments were the most aggressive last year - expanding staff by 3.2 per cent. Did anyone in the country detect any improvement in efficiency at City Hall? Did anyone observe any gain either in productivity or in performance?
This measure of public-sector jobs doesn't begin to capture the extent of government intrusion into the economic and social life of the country. To accurately measure it, we would need to know the number of Canadians now substantially dependent on government. Directly and indirectly, this number almost certainly - this is a guess - approaches 50 per cent of the population. Since governments spend roughly 50 per cent of the national income (all taxes, all levels of government), this should be no surprise. Statscan should report this "gross dependency" number, seasonally adjusted of course, on a monthly basis.
Only in a country unconscious of such dependency could Finance Minister Jim Flaherty announce, with a straight face, that the federal government would reduce government regulations - by establishing a new federal red-tape commission to do it. The only effective way to lessen the consequences of government regulations is to lay off the people whose task it is to prosecute plastic cows.
The Canada Revenue Agency (CRA) provides a good example. With thousands of regulations to enforce, among them some of the most complex and incomprehensible regulations in existence, the CRA carries out "verification actions" on 4.5 per cent of tax revenues collected. This percentage, which is entirely discretionary, is one of the highest in OECD countries. In 2007, CRA agents "verified" 14.8 per cent of registered taxpayers. The United States "verifies" only 2.2 per cent.
Yes, you can reduce the deadweight cost of CRA regulations by assigning the task to the bureaucracy - and waiting. But you can do it more quickly by cutting the number of public servants who enforce them. The CRA has 36,000 full-time workers. With 10 times Canada's population, the United States has 92,000.
Canada has thousands of regulations, perhaps tens of thousands - indeed, perhaps, millions. From a certain salvationist perspective, each of them has (or had) a rational purpose. Take the rooftop cow. Ottawa's bylaws prohibit signs on rooftops because they might fall and hurt someone. This is a rational calculation of risk. But the accumulation of regulations requires more and more enforcement officers, more and more lawyers, more and more hours, days and weeks spent in committees, commissions and courts. The regulations that reason devised, one by one, are now, in combination, transforming the country into something inadvertently akin to a police state.
Some regulations are vitally important. Most are not. With a smaller public sector, we could do a better job of telling them apart - without ever convening Mr. Flaherty's new red-tape commission.