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
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
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