EXPROPRIATION WITHOUT
COMPENSATION
by Brian Martell
Imagine sitting in your office, being
suddenly distracted by the rumble of bulldozers lining up in your parking lot.
At your office door a government worker tells you that, in order to save three
quarters of a billion dollars, your business property will be part of a new
super highway. You applaud the government for saving all that money for the
taxpayers (as you are one), but note that this will cause a great cost to you
and your neighbours who are in the direct line of the proposed highway.
“Sorry sir, you knew of the government’s
plans for the highway for over a year. It will make travel in your area safer
and you have to keep up with new technology as a normal evolution in your
industry. Further, don’t count on getting any government handouts for taking
your land.”
You point out that no other business outside
of the path of the government highway will be affected and that the cost of
relocation will be borne solely by those who fall into the construction zone.
You also mention that knowing in advance of the government’s plans does not
mean you can avoid paying for the cost of relocation, regardless of how much
notice is given. Alas, your logic is drowned out by the sounds of small
businesses being plowed under by a government juggernaut.
Does this scenario sound like Canada, or
perhaps North Korea? Sadly, this tale involves the Office of the Minister
responsible for the Royal Canadian Mint, the Honourable Alfonso Gagliano. Five
years ago, the government took on the task of changing the metal content of
coinage to reduce costs at the Mint. Changes to date have involved the penny,
one and two dollar denominations and now, in June 2000, nickels, dimes,
quarters and fifty-cent pieces. These changes will, to Ottawa’s credit, save
Canadian taxpayers approximately $784 million dollars over the course of a
coin’s 20-year useful life.
What it also does is force every vending
company in Canada to re-direct funds into new software or hardware to accept
the new coins. The vast majority of these companies are small businesses that
will be going further into their credit lines to finance these mandatory
changes.
The Canadian Automatic Merchandising
Association (CAMA), presented its case for just compensation to the Canadian
government. It noted that the changes proposed by the mint will force all
vending operators to change their coin accepting devices or leave the
industry.
Further, CAMA noted that all other
industries which sell the same products as vending machines will incur no cost
whatsoever. In a letter dated February 11, 2000, Mr. Gagliano stated that
these additional costs are “…a normal evolution in your industry”— in
other words — you are on your own.
You may answer that this is expropriation
without compensation. Quite simply, the government has a legal monopoly on the
production of coinage and therefore controls the electronic signature of each
and every coin (it is this signature which is used to validate coins). While
no one would dispute the logic in saving hundreds of millions of dollars, the
government, in so doing, is expropriating the standard used by the vending
industry.
The industry recognizes that the government
was not out for vending blood when it made this decision. It made good fiscal
sense to go ahead with this program, as it might for the government to go
ahead with a new road through your living room. In both instances, all
rational Canadians would agree that just compensation should be in order for
the affected parties, especially when the compensation is a small fraction of
the economic benefit derived through the project. Indeed, back in 1968 the
then ruling Liberals did see the issue as a cause for just compensation when
the Mint changed the quarter from silver to a nickel alloy. Unfortunately, the
now ruling Liberals do not see this as the case.
One could be cynical and think it might have
something to do with the recently failed NHL package, or perhaps the fact that
the 26,000 Canadians who derive their livelihood directly through the vending
industry don’t even make up one riding. I would like to think, however, that
it has more to do with misguided perception.
Therefore, I invite Mr. Gagliano, and all
other members of parliament, regardless of their party stripes, to rethink
this issue and do the right thing. In the end, compensation for a derivative
of fiscal responsibility is the hallmark of a principled government.
© 2000 Brian Martell
