Politics and policy-making can yield strange bedfellows. During the Strategic Program Review from 2015-16, a plan was sought to balance the budget. Every program of government was studied, as were many opportunities to increase revenues. In the end, a plan was put forward through a mixture of about 50/50 of revenue increases and expenditure reductions to put the province on track for a balanced budget. It worked and it worked better than expected, thanks to strong economic growth the third and fourth budget years of the Liberal government of the day ended in surplus despite expectations. But I digress.
One of the revenue measures was an increase to tobacco taxes. For governments, these taxes serve two goods: they raise revenues and they discourage an unhealthy habit that costs the healthcare system dearly. Here come the strange bedfellows.
Big tobacco doesn't like higher tobacco taxes, presumably because it decreases sales. There is however an area for alignment: higher tobacco taxes can lead to increased sale of illegal contraband, something that hits revenues steams of both government and big tobacco companies.
So the tobacco lobby proposed to the government that if they were going to raise tobacco taxes, they should also invest in combating the import and sale of contraband. Public servants studied the proposal and said it was a good one. The contraband enforcement unit was born and they were a big success. They weren't chasing people with a carton of illegal smokes, they were chasing organized criminals who were bringing it in by the truckload and shutting them down. And in the process they were levying fines and mitigating the decrease to tobacco tax revenue.
The public service is wonderful organization with many hardworking people doing great work in thankless jobs. Structurally, however, it is far from a perfect entity. One of its greatest failings is "silo" thinking. Each department operates like an independent entity; that is how their budgets are allocated and how deputy ministers' performance is measured. The political arm of government is also imperfect; directives can be given with good intent that are ill-considered.
Of note: all government revenue goes to a central pot of money called the consolidated revenue fund. Departments do not see the revenue they raise and are their performance is not measured against revenue. In part this is because it is impractical to do so; most revenue is collected by the federal government on the province’s behalf and paid in bulk by a formula. It is not siloed, but as a result it is often overlooked in siloed decision-making.
One of the worst and most common ill-considered directives from politicians are across-the-board budget cuts. These have been a hallmark in New Brunswick under PC governments. Operating from the notion that there is lots of waste and fat to be found everywhere, the edict goes out at budget time that X% must be cut. And departments are measured on whether or not they hit that target.
I do not know what occurred here but I've been around government long enough to make a good guess: in the 2019 budget process, departments were given a cut target. Every department must cut the same percentage from its budget irrespective of the import of its work, previous cuts it has faced, how much of its funding is flow-through from the federal government, how much of its work it is required to do by law, etc. The department of public safety would look at a program like the contraband enforcement unit and see it as "nice to have" but much easier to cut than building inspectors or highway safety officers. Because they never see the money it brings in and are not graded for that revenue the contraband enforcement unit was of no "benefit" to them, at least in the way that the current government measures results: only numbers count, societal benefit does not. The fact that overall the government makes money off of this unit is not something that is relevant to a departmental silo. They offer the unit up and it is cut.
So is there more illegal tobacco in New Brunswick now? Probably. Is there less revenue related to tobacco taxes and fines from tobacco enforcement? Definitely.
But that isn't even the whole measure. Organized crime creates many societal problems. One of the best public policy arguments for cannabis legalization was to reduce a revenue stream for these cruel criminals. If we dry up all of their sources of revenue they will shrink or hopefully die.
Fast forward to this week. Our premier promises that if re-elected he will invest more than he cut from fighting these criminals in new policing to target drug users.
Drug users are mostly victims. Victims of a system that provides insufficient mental health supports, victims of a system that fails to break the cycle of poverty, likely victims of many other things. The solution to their problem is not enforcement. And if you fine them, the likelihood they will have the ability to pay is low so instead they will serve time, costing taxpayers even more in the short-term, and more still in the long-term as incarceration creates even more problems for the individual that may lead to yet more drug use. Drug use may be increasing, but it is a symptom of other societal problems; we need to focus on curing the disease, not the sneeze. Forward-looking cross-party consensus supported by law enforcement in British Columbia has figured this out. We should too.
Setting aside that this program made money, how is that we can't afford $900,000 per year to fight criminals when we can suddenly afford twice that much to fight victims?
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