Free room service from the tobacco industry

If you can admire nothing else about the tobacco industry, you can admire its hutzpah.

Casa Cubana calls itself Canada's fastest growing importer and distributor of quality cigars, tobacco accessories and convenience products. It has forwarded itself to lobby for the repeal of a law to ban candy-flavoured cigars — in a province that is suing the entire tobacco industry for $10 billion.

And this, just days after the whole world was reminded of the health effects of smoking with the death of Eric Lawson. He was the famous Marlboro Man, who succumbed at 72 to chronic obstructive pulmonary disease (COPD), a common cause of death among smokers.

Back in the days when I was riding my bike to work in the wee morning hours, my previous former boss would call this kind of news story a “room service bounce.” It's a story so self-evidently calling for comment, you just can't resist.

The Tobacco Reduction (Flavoured Tobacco Products) Amendment Act has made it through all the legislative stages of becoming law. It only remains to receive royal proclamation, which health minister Fred Horne says will happen sometime this year.

When that happens, big strapping Marlboro Men will no longer be able to pick up a couple of bubble-gum smokes at the checkout counter, while filling their pickups for another day working the range.

Nor will the teenagers from the middle schools and high schools just down the street.

Luc Martial is the guy taking media calls for tobacco on this one.

He said “legitimate industry stakeholders” (I hope that excludes all the illegitimate ones) are seeking a repeal of the ban. They say the government is making a mistake in forgoing $11 million a year in tax revenues from the sale of Casa Cuban cigars.

The company recently sent a letter to premier Alison Redford and a number of cabinet ministers on the matter. It says the government was “unfortunately duped” into thinking that little cigars containing the one of the world's most addictive and health-destroying substances, which are available one at a time for pocket change, and which are soaked in fruit-flavoured chemicals, was a “relevant youth health priority.”

Hmmm. Imagine that.

In the same (long) sentence, the letter says Alberta is one the verge of “unjustifiably and without warrant undermining the rights of hundreds of thousands of voters in the province and throwing (away) millions of dollars in tax revenues.”

Well, the government forgoes a lot more than $11 million a year in revenue for a lot of public policy reasons, not just the threat to health and the cost of health care for the customers of Casa Cubana.

And as far as undermining the rights of hundreds of thousands of voters, we'll not mention the government's unilateral action on pay and pensions of its civil servants, nurses and teachers. Suffice to say that acting counter to the interests of specific voter groups is something governments sometimes do.

Two years ago, when the province announced it was joining B.C., Ontario, New Brunswick, Prince Edward Island and Quebec (headquarters of Casa Cubana) in their massive class action suit against the tobacco industry, it was reported that 13 per cent of Alberta youth aged 12-19 were smokers. Among adults, it's 20 per cent (and falling).

The best hope for a lifetime addiction to tobacco is to hook customers when they are young. Luc Martial and his employers may deny it all they want, but small, cheap, single-issue, candy-flavoured cigars are a quintessential gateway product.

They may be obtained illegally by underage customers — just as youth illegally access alcohol and other drugs. But that is not an argument against this ban.

Casa Cubana's own web site says a federal law regulating the sale of these little cigars “is about morality, not health.”

How's that for hutzpah? A tobacco firm claiming the moral high ground.

Unfortunately for them, our “duped” governments sometimes act in “immoral” ways, too.

My grandchildren will be well into voting age before the provincial lawsuits attempting to recover the health costs of caring for the tobacco industry's victims is settled. A whole lot more than $11 million will be spent on legal fees to do it.

In the meantime, I expect my government to consider my grandchildren and bounce Casa Cubana's plea from the room, and their products off the shelves.

Minimum wage, maximum benefits

For as many well-intentioned people who argue for living wage laws, and/or guaranteed minimum income laws, there are as many others (hopefully also well-intentioned) who will call such efforts a menace.

Recently, the Advocate ran a column from a commentator at the Fraser Institute, looking at a statistical analysis citing why a minimum wage that matches a minimally-acceptable standard of living is a bad idea.

The upshot is that when employers are required to pay substantially more than the current minimum wage, jobs disappear for untrained workers. Worse (if you can call earning more money worse), the people who benefit most from a proposed minimum wage of around $20 an hour are not the people on the absolute bottom of the income ladder, but those on the rungs just above the bottom.

Neither argument really works against such a proposal, but the Fraser Institute study was about statistics, not solutions.

If there was to be a job loss of 12 to 17 per cent of the lowest-paid positions in the workforce (as cited by the article), then who's doing all that work? Management, I guess. Would you like fries with that?

The Fraser Institute could also look at any number of studies showing how an improvement in the incomes of people on the second-bottom rung of the ladder improves productivity and outcomes for the economy as a whole.

By now, we al realize that the “trickle down” theory of income redistribution so beloved by the conservative right, is a myth. Money in the economy does not trickle down, it flows up. The increasing wealth of the top income percentiles at the expense of the middle and the bottom is proof enough of that.

Rather, I'd like to present examples of how raising the bottom quartile of the income groups is not only ethically sound, but sound economics as well.

The Globe and Mail recently commented on a Swiss proposal for a national referendum on what they are calling a universal basic income (UBI). The article suggests even right-wing think tanks in the U.S. seel merit in ensuring that no adult, employed or not, should live on less than about $3,000 a month.

This would involve more or less scrapping the bureaucrat-heavy welfare system, which is a huge tax saving, and putting the dollars where they do the most good: into the hands of people who bolster basic consumer activity.

A common argument against a UBI (or as it's known in Canada, a Guaranteed Annual Income), is that it rewards indolence. Worse, it enables the bad decisions of people are destined to be poor, simply because they make bad decisions. Beer and cigarettes get mentioned a lot.

Here's a couple of real-world examples to show that the poor are not as stupid or lazy as rich people think.

Let's start with a small experiment, that has been repeated often enough (even in Canada) to be considered reliable.

In 2009, a group selected 13 homeless men in London, some of whom had “slept rough” for 40 years and more. Forget the soup kitchens and temporary shelters that make up the traditional charity solution to homelessness.

Each of these guys was given about $4,500 in cash — no strings attached.

None of the participants blew their unearned cash on booze, drugs, or gambling. One year later 11 of the 13 still had their own roofs over their heads — some after a lifetime of having no real residence at all.

They got education and training, learned how to cook their own meals, got treatment for drug abuse. Some even got a passport.

After decades of well-intentioned charity supports, what got 11 of 13 vagrants off the street was the simple act of giving them cash and the freedom to spend it as they wished.

The cost of the experiment was about $75,000, including the salaries of the people running the program. Reporting on the experiment The Economist opined: "The most efficient way to spend money on the homeless might be to give it to them."

Here's a larger example. Brazil's Bolsa Familia (family allowance) turns 10 this year. It works there much the same way it used to work here when our own family was raising children. Mothers get a monthly cheque, and they spend it.

The program costs about half a per cent of GDP. It is income-tested; only the poor receive it, though many recipients do have those minimum-wage jobs the right-wingers love. And, it comes with strings attached; the mothers must keep their children in schoo, and must prove they provide good nutrition for the children.

The Bolsa Familia is credited with reducing child mortality in Brazil by 73 per cent. What's the savings to the economy in that, I wonder?

I have no credentials as either economist or statistician. But I do see the widening  income gap in Canada as a bad thing. I also believe that the health of the economy as a whole is best ensured when the lowest income brackets have decent and reliable housing, nutrition, health care and education.

If someone says it takes a minimum wage of $20 to get that, or a universal basic income, my start point is to accept the argument.

Sit, stand, live — but walk

When you get a couple minutes of free time — and nobody's looking — try this simple exercise: In socks or bare feet, stand in the middle of a room with your legs crossed. Without using your hands, arms or knees as aids, sit down, then stand up again.

This test only (officially) applies to people aged 51 and up, but if you can do this smoothly and without losing balance, congratulations. Live long and prosper.

Picture taken from Discover's web site. Give yourself 5 points
 if you can sit like the illustration, and 5 more if you can stand
again. Deduct half points for wobbles or loss of balance.
Deduct a full point for each touch of the ground for support.
A score of 8 or less doubles your risk of dying in the next
6 years. A score of 3 or less suggests you are 5 time more likely
 to die in 6 years than people who can do this well.

If you need to touch the ground to sit and/or rise again, you apparently have double the risk of dying within the next six years, compared to your more nimble neighbours. Total failure raises your risk by a factor of five.

Which is to say that, all other factors considered, your risk of imminent death is still slight. But numbers are numbers, especially to people publishing studies in medical journals.

The December issue of Discover magazine, both in print and online got a lot of attention in our attention-deficit age — and a lot of criticism, showing that no matter how connected we are by technology, actual science is still a mystery to many.

Some years ago a Brazilian doctor, Claudio Gil Araujo, was concerned that his aging patients could not comfortably pick something up off the floor, or even had difficulty rising from a chair. It is well documented in medicine: when seniors lose mobility, their downward spiral accelerates.

But how to make this predictable, and how to make it easy to explain to older patients that they must work on flexibility, strength and balance?

The above test became his answer. Dr. Araujo followed 2,000 patients, recorded how they could do the test, and tracked how many of them had died six years later. His results were published in the European Journal of Cardiology. Not quite The Lancet, but the study is out there.

Science writers like those at Discover found the study and made it popular. People like us in the news media made it viral.

And people who don't understand science (including some news types) went off the deep end.

People who cannot do the sit-stand test are not under a sentence of death. (Hint: we all are.) This study merely a recorded correlation between flexibility, strength and balance, and longevity.

People who were athletes with injured knees made snarky online comments about supposedly being dead. Same for people with arthritis. Runners, those paragons of health and virtue, apparently also get weak knees in the face of statistics.

People, the test was never meant to predict your death. It was made to urge you to embrace life.

All of us simply spend too much time sitting on our butts. Humans did not evolve to do this successfully. We need to move, to sweat, even to hurt a little, if we wish to have the best chance of reaching the fullness of our years.

If you had trouble with the sit-stand test — or even if it was easy for you — it's important to remind ourselves that we have to move a lot, every day.

For a few years now, the Red Deer Primary Care network has sponsored an activity challenge. Participants went on virtual hikes around Jamaica and Hawaii, and mostly recently, up Mount Everest.

The University of Alberta recently got a provincial grant to sponsor a similar challenge for the entire province, and Red Deer PCN is in the thick of it.

They want a minimum of 1,000 Red Deerians to challenge themselves to record activity online, equal to walking 10,000 steps a day, as a team. The goal is to collectively walk the equivalent of a Canadian border patrol in 28 days, beginning Feb. 1.

People who have done PCN treks in the past probably still have their StepsOut link on their Favourites bar. Click on that, and you'll see the link to www.uwalk.ca.

Newbies can just type in the address, and get registered. I still haven't figured out how to get my registration onto the Red Deer team, but that will come.

I've participated in all the local PCN treks over the years, and I'll miss not having my team trying to outrun those dratted school district teachers teams. (They far too often managed to stay a day ahead of us.)

But it will be cool to see people from Red Deer putting in enough activity that, added together, made up a trip along our national border, coast-to-coast-to-coast.

The older we get, the more important it becomes; we need to stay active in all ways: walking, running, biking, swimming — even using the stairs (10 flights of 10 steps a day, that's your goal).

Do the sit-stand test, it's fun. But more important, clip on a pedometer, and make sure 10,000 steps a day (or equivalent in other activity) is your daily minimum.

That's a far better guarantor of health and well-being.

Suggestion: let's all of us just retire as millionaires

A poll was released by BMO Harris Private Banking last Friday, suggesting people need anywhere up to $2.3 million in investable assets to retire comfortably. The report was repeated by CBC, CTV and Global television networks, each providing additional material from an expert commentator — to be recycled every 20 minutes or so, to make sure their entire audiences could be fully depressed by it.

Not depressed enough, I looked for newspaper confirmation of the poll, and found one reference in the Globe & Mail. Print news came the closest to using accurate language to describe the poll, but did not actually say the words that were needed.

So I will say them here: the poll is bogus.

This is Christmas and Thanksgiving combined for the investment industry, the time of harvest for people helping those who need to rush some savings into their RSPs before the Feb. 28 income tax deadline. (Disclosure: that includes me.)

There's nothing like spreading a little panic and despair to spur sales.

BMO contracted polling firm Pollara to discover numerical evidence that a comfortable retirement is impossible for the 90 per cent of us who will never be millionaires. Pollara accomplished this by polling some millionaires.

Here's what they found. Canadians who happen to already be rich say they expect to require a nest egg worth anywhere up to $2.3 million, to be able to retire in the lifestyle to which they had become accustomed. Fully 95 per cent of respondents thought they would achieve that.

Good for them. As for the rest of us, 69 per cent of “average” Canadians say they expect to reach the $908,000 they'll need for their golden years.

How does that compare to your savings plan? What? You're not “average?”

It turns out that only the top 10 per cent of Canadian income earners can be “average.”

Totally bogus reporting. Pollara contacted all of 305 people to conduct their poll. Their sample size is so small and so unrepresentative of the population that their poll can't even be assigned a margin of error in reporting.

But BMO and by extension the entire industry that sells retirement savings products got millions of dollars worth of TV airtime, aimed at getting you to dig deep, dig till it hurts, to buy what they're selling. Even though for almost all of you, it will be impossible to reach the bar they've set.

Right now, Canadians are saving about four per cent of disposable income into retirement plans like RSPs and Tax Free Savings Accounts. At that rate, investment counsellors are taking fees and commissions on sales totalling more than $34 billion a year, according to Statistics Canada.

Even at that, in 2011, there was something like $684 billion in unused RSP capacity, before people would reach their contribution limits. Aren't we just a nation of slackers.

The truth is, the 90 per cent of us don't need to be millionaires to be happy in retirement. And setting the bar at some mythical million is only a pitch to make us unhappy and desperate.

Google “need a million to retire” and you will get page after page of websites promising that if you buy what they're selling, retiring as a millionaire is easy.

But it's not. In fact, if you're an ordinary working Canadian, it's practically impossible.

You've seen the charts. Start investing $2,000 a year from age 25, and your savings plan will have all of $301,478 in it 40 years later. Assuming Stats Canada's annual growth rates and inflation.

They don't factor in that in the last 40 years, we've had at least three major economic crashes that wiped out the value of those accounts three times over — each requiring a decade or so to get back to where they were before each crash.

Even so, in 2010, the average family with one income earner over age 65 had a total of $63,000 in income — from retirement funds, pension plans, part-time employment, you name it. Plenty enough for a comfortable life.

A huge block of Canadians in that demographic make substantially less — and most manage quite well, thank you.

If you can't learn to live and be content on your income by the time you're 65, then I suppose you need to be a millionaire. Check out the get-rich websites, and good luck to you.

Only about a quarter of Canadian tax filers use savings plans like RSPs every year. It should be much more of us. We do need to save, and we do need the expertise of financial advisors.

What we don't need is billionaire bankers setting hopeless standards, to scare us into believing the future will be impossibly bleak unless we give them our money.

Too much government is better than too little

Just like your home, countries can be expensive. If you want a good one in a good neighbourhood, you need to invest a lot into it. And just as happens with family homes, trying too hard to keep up appearances can get you in trouble, while too much frugality can seriously crimp your lifestyle.

The trick is to find the right balance between your expectations of security and comfort, versus the cost of upkeep.

A Nepalese police officer stands guard in front 

of the parliament building in Kathmandu, Nov. 18, 2013.  

(AFP/Prakash Mathema)

The Fraser Institute says that the right balance occurs when government spending takes up a third of a nation's GDP. That just happens to be the global average. Finding how they arrived at that figure is a rather dismal business, so let's just assume they know what they're talking about.

I've just returned from a business trip to Kathmandu. There. I never thought I'd ever be able to say something like that, but not working full-time at a newspaper does have its benefits.

If you want an extreme example of how tax rates and a stable government presence in the economy affects the quality of life, visit Nepal.

By the numbers, Nepal ought to have more government than anyone. For a country of 27 million people (half of them younger than 22 years of age), Nepal's parliament needs to cram 601 elected representatives into a rather small national assembly.

When you look past the armed guard at their parliament building, one has to wonder how that many MPs, plus the aids and infrastructure for 30 political parties could all possibly get inside.

But you needn't worry. The democratically-elected government there has never met. And for the equivalent of about $5, the guard will hand you his gun so you can take a photo of yourself standing in his spot.

The interim government that was to shepherd the country from being a hereditary monarchy into a modern democracy has been slow to release power. Elections were held last September, and all the newspapers report the eagerness of all officials to call members together — next week.

Nepal is a peaceful, hardworking, law-abiding country (that's if you discount the behaviour of traffic). Corruption and bribery are definitely present there, but in the absence of a working government, that's how people need to get by.

The tax rate there is 10 per cent, plus the sales tax that only tourists pay at the better restaurants. Government spending — including bringing electricity to its mountain regions — is reported at just under 20 per cent of GDP.

In Canada, government spending accounted for just under 40 per cent of GDP in 2011, compared with 39 per cent in the United States.

According to the Fraser Institute's figures and analysis, we Canadians are way over-governed and overtaxed.

By the same logic, Nepal is in a position of opportunity, because any increases in taxation and public spending will result in significant gains for the well-being of the country.

Except it's hard to say how much in real money Nepal can tax, when per capita income is something like $1,500 a year.

At the same time, it's too simple to judge that Canada is vastly inefficient, without a judgement of how well we get value for the money taxed and spent by our governments.

All things considered, I'd rather pay my taxes and live in Canada.

So would a whole lot of Nepalese people. My short visit to Kathmandu was to help with basic English testing for skilled tradespeople who desperately want to work in Alberta.

Without any advertising at all, highly-qualified welders, pipe fitters and mechanics showed up at our hotel conference room for a recruiting session, some coming from secure (and locally, well-paid) positions at embassies. Some even took a sudden overnight flight in from the oil and gas fields of the Arabian Gulf to show us some rather impressive resumes.

I got a whole lot more “thank you, sir” and “may I sit here, sir” in one day there than I got in 40 years in the newspaper business in Alberta.

We were propositioned (if that's the right word) for a chance to come to Alberta, from a young man whose job it was to recruit women for a nearby “dance club.” He had a degree in the hospitality industry, if I recall correctly.

Even the owner of the high-end hotel gift shop was hoping we could get him into Canada, so he could become overtaxed, just like us.

I don't profess to know the optimum level of taxation and government spending that buys us the civil society we have here in Canada. But this short experience showed me that “too much” government is vastly preferable to too little.

It's good to be home.