Cannabis Consultations: Answering questions with more questions

 

The only thing clear about the legalization of cannabis is – there are more questions than answers. Since the Trudeau Liberals foisted responsibility of delivering the stash, provincial governments have been hunting for a flashlight to see through the policy smoke.

In Nova Scotia, Justice, Finance and Health and Wellness are co-leads on the file, but there are lots of other folks who have a stake in this including Business, Community Services and Education. The conflicting priorities and broad implication of this massive policy piece were clearly on display at the consultation session I attended this week.

From the medical community, there is deep concern about the accelerating proliferation of cannabis use among youth. For good reason. More and more evidence is piling up around the impact more potent forms of cannabis have on adolescents’ brains undergoing rapid and extensive development. Instances of schizophrenia among younger and younger cohorts have been growing significantly in the last 20 years, coincidentally tracking with the increase of both the use and the potency of the product.

The number of youth (22%) and young adults (26%) who used cannabis in 2013 was more than two and a half times that of adults 25 and older. But, let’s put that in context – 60% of Canadian youth between 15 and 19 drink alcohol. There was lots of discussion about how legalization, taxation, and control must put the binders on youth access to cannabis, but if our experience with alcohol is any indication, we should keep those expectations in check. I will admit however, that train has left the station.

It’s now up to the provinces to figure how to implement this policy pronouncement from on high and the public consultation has begun. MQO Research in doing a handful of facilitated roundtables and there’s an opportunity for online input at http://novascotia.ca/cannabis.

The questions posed in the online survey and at our roundtable session deal with the following; Age restrictions, where folks can or should be able to smoke it, how we deal with impaired drivers and what the delivery model should look like (who should sell it and how).

On the question of age, the medical community says the age for legal use should be around 25. While those arguments are science-based and clearly well-intentioned, I’ll refer back to the usage rates of alcohol with an existing restriction of 18 or 19. Once cannabis is a legal product, the likelihood that usage among youth will decrease, is a pipedream. In my opinion, and this is my opinion, societal acceptance of cannabis as a legal product will not discourage access and use among youth any more than it has discouraged access to alcohol or porn. Setting the legal age at 25 would be seen as laughable given current usage statistics. Restricting or reducing usage will depend exclusively on vigorous education campaigns and severe restrictions on marketing to kids and product oversight.

On the topic of where folks can smoke it, there is some consensus the province should stick with its smoke-free places legislation, but other questions emerge. There are those who feel users of medical cannabis should be able to smoke it at home. If that’s the case, how do differentiate between medical and recreational cannabis use and how do you balance the rights of those who own or coexist in apartment complexes and don’t want their properties to smell like a Negril nightclub. You get the sense there will be lots of work for lawyers in days ahead.

As for the impaired driving question, apparently, there is no answer. Strangely, the question posed was about the severity of penalties for driving while under the influence of cannabis. Police still don’t have a chemically based way of estimating what the drug is doing in the brain. A blood test exists that can detect some cannabis components, but there is no widely accepted, standardized amount in the breath or blood that gives police or courts or anyone else a good sense of who is impaired. So in light of no available tests reliable enough to determine the level of impairment among cannabis users, why are we talking about penalties? I’m sure Crown lawyers are really looking forward to this busy work. There is consensus, however, that getting drunk, getting high and then driving is a very poor idea indeed.

The fourth subject area dealt with how cannabis should it be sold in Nova Scotia? CFIB members in the province are evenly split on this issue. When asked in 2016; should government agencies (e.g. liquor commissions) be exclusively responsible for the retail sale of marijuana? 41% said YES, 41% said NO and 14% were UNSURE.

There are arguments for a public sector monopoly, except none of them are particularly compelling and not surprisingly, all center on command and control. A public sector monopoly, such as the model in Ontario and the recently announced direction in New Brunswick, seems simply to be the path of least resistance for politicians and bureaucrats. Why they believe the public sector delivery model of anything is the gold standard remains perplexing.

There are other questions with a public sector monopoly which need answers. Will public sector salaries/benefits and bricks and mortar costs add to the final cost to the consumer? Add this to the federal and provincial tax, are we leaving the door open for the underground economy to undercut and continue to thrive. What are the implications of being regulator and retailer? The decision has been already made not to co-locate sales with alcohol, so why would we build another bricks and mortar version of the NSLC or LNB? When New Brunswick rolled out their public sector monopoly this week, one staggering question was not even addressed…the cost.

The government should carefully examine the option of private sector retailers rather than simply defaulting to building another bureaucracy. Politicians also need to answer this larger question; should selling recreational cannabis be a core government service and can we afford spending precious tax dollars on building the required infrastructure to do so? Are there better options for generating external private sector investment with appropriate government oversight? My guess is there would be an entrepreneur or two willing to pony up some dough for the opportunity to sell legal pot. Just sayin’.

Then there’s the issue of online sales. This system, by most reports, has been working just fine for medicinal cannabis, however, there is resistance emerging as some folks feel children will now gain access to credit cards and somehow game the system. Note to skeptics, children are already buying weed. Having them input online credit information, wait for days or weeks and sign for packages at the door from bonded delivery agents will not make the process easier for them. (“Hey Mom, did that FedEx package for me arrive?”)

There were also puzzling omissions in the consultation. For example, there is little guidance for employers or employees on implications around occupational health and safety issues or work restrictions. Additionally, there has been no indication of how the provincial governments are creating any alignment of regulation either in the region or nationally. Does this mean we will end up with another massive patchwork of regulatory regimes?

As you can see, legalizing cannabis is creating many more questions than answers, and we haven’t even started with the edibles. Gummy bear anyone?

This is the 15 Dollar Minimum Wage Argument?

Here is the latest argument being made to promote the 15 dollar minimum wage.

Employers should simply pay their employees more. This will help solve our economic problems. With a 15 dollar minimum wage there will more money being spent. People on lower incomes will be spending all this money because they can’t afford to save it. Consequently, people will sell more goods and services and we will all prosper.

In a recent Global News piece, Christine Saulnier from the Canadian Centre of Policy Alternatives said, “If we are putting money into the pocket of those who are the lowest waged workers in our economy, they actually have this pent-up demand, they actually need to spend it. They’re not going to save it and take it out of the economy, they’re going to spend it.”

If this is the only issue, why don’t we raise the minimum wage to $100 per hour? That way, everyone will have enough money for all their needs, small businesses will be rolling in cash from the jump in domestic demand, people will have lots to put in their retirement plans, the real estate market will boom, imagine how quickly our teenagers could save for university…what possibly could be the downside?

Well, the reason this isn’t happening is because businesses operate by creating value through effort. If the cost of creating a product or service is higher than what it can sell for, the business will operate at a loss and it won’t last long. Those employees are subsequently thrown out of work. This is especially true for small businesses.

Advocates suggest however those small businesses should be given a pass and only the Walmart’s and Loblaws of the world forced to pay a 15 dollar minimum wage. This idea was actually in the provincial NDP’s last election platform. The sentiment is a nice one, mom and pop shops aren’t forced to pay unaffordable wages but the problem here is, how will this torque the labour market?

How will the small locally owned gas station or convenience store find workers when Sobey’s owned Needs or Superstore Gas Bar pays 3 dollars more per hour? Or will those larger companies simply automate and eliminate these jobs altogether?

The minimum wage debate is complex and it is an economic balancing act. Understanding the value of labour against demand and impact on costs seems to be totally lost in this discussion.

Another argument being floated is workers will migrate out of Nova Scotia because other provinces have higher minimum wages. Our young people didn’t leave in droves for another 3 dollars per hour, they left because the average income in Fort McMurray was $100,000 dollars.

Sixty percent of minimum wage earners are students, living at home and not a primary income earner in a household. If we want to do something to improve the lives of low-income earners, let’s create a stronger economy with good-paying jobs and help those folks improve their skills so they can participate fully. Forcing businesses to contract or shutter due to arbitrary labour cost increases accomplishes none of that.

Fall Back Up with Jeremy White

Jeremy White and his wife Melanie were looking for a summer retreat in Cape Breton after honeymooning in 2008. What they found were a new way of life and a successful small business.

Big Spruce Brewing sprung from a passion for craft beer and a serendipitous real estate buy in Nyanza.

Jeremy’s background was in international engineering and while living in Nicaragua, they stumbled upon an opportunity to relocate to Nova Scotia.

He had been a home brewer for years, and have wanted to scale his production up to a commercial level for a long time.

With favourable condition for growing hops and an industry that has been taking off in the region, they opened up Nova Scotia’s first certified organic on-farm brewery. Big Spruce quickly established itself as a local favourite.

Jeremy has made his views known broadly about the public policy challenges facing the craft beer industry publishing this open letter to the people of Nova Scotia.

In our wide-ranging conversation, we talk about the challenges of starting the brewery, his ongoing frustration with regulatory issues and his views on the future of craft brewing and the Atlantic Canadian economy.

I spoke with him in the brewery in the beautiful setting overlooking the Bras d’Or Lakes.

Click here to listen

Fall Back Up with Saeed El-Darahali

Saeed-El-Darahali-headshot

Saeed El-Darahali is the driving force behind the SimplyCast team, who built the company from the ground up to what is now an industry-leading marketing platform that serves clients in over 175 countries.

He has over 10 years of management experience in the IT industry, with an interest in strategic partnering, corporate financing, strategic growth, operations, and sales and marketing management.

Saeed, as you will hear, is passionate about technology and about helping people reach their goals.

He enjoys sharing his experiences with start-up companies, offering insights into growing a business and becoming successful.

Saeed holds a Masters of Business Administration, a Bachelor of Science in Computer Science, a Certificate of Human Resource Management and Minor in Economics, all from Saint Mary’s University in Halifax, Nova Scotia. Saeed is featured in the Sobey School of Business’s Success on My Own Terms campaign.

I met Saeed in his office in what he has dubbed.. Silicon Dartmouth

Click here to listen to podcast

Fall Back Up with Colin MacDonald

 

Colin MacDonald Clearwater

In the mid 70’s Colin MacDonald and John Risley opened up a small retail lobster shop on what was then, the outskirts of Bedford Nova Scotia. 40 years later Clearwater has grown into one of the world’s leading seafood companies. With a combination of enthusiasm and grit and a little help from their friends, the duo changed the face of seafood exporting in Atlantic Canada.

MacDonald grew up in Fairview, just down the road, in a family familiar with hard work and the rough and tumble of suburban Halifax. In this conversation, he explores his early days, dealing with adversity, the politics of the fishery and how he views both success and failure.

 

 

https://fallbackup.podbean.com/e/fall-back-up-with-jordi-morgan-clearwater-chairman-colin-macdonald/

Province’s tire policy flip-flop is a slap at small business

Tires have historically been environmentally problematic sources of waste. Recently, however, technological advancements have led to much more efficient recycling by manufacturing construction materials, developing tire-derived fuels (TDF) and repurposing.

When the province decided the direction for tire recycling, they chose the manufacture of Tire Derived Aggregate or TDA. It has a number of uses, such as foundation material for highway and railway beds, backfill, and other civil engineering applications. At the time, a tender was issued and a local small business, Halifax C&D Recycling, was given the contract.

They invested in the neighbourhood of $5 million in equipment to properly process used tires and for the last eight years have run a successful program. According to the folks at Halifax C&D, there have been no fires, no stockpiles of tires or TDA and no environmental issues.

To pay for all of this, as a consumer, you pony up a fee of $4.50 per tire at the point of sale. This goes to Divert Nova Scotia who in turn pay $2.00 per tire to Halifax C&D Recycling Ltd. to deal with it at end of life. Ostensibly, the other $2.50 is used for transportation, administration and other costs associated with its disposal or funneled off to pay for recycling of other products.

Ten years ago Rodney MacDonald’s PC government proposed using tire derived fuel. In response, Liberal opposition MLA Keith Colwell brought forward a bill to ban the use of tires as fuel. He was adamant in pointing out potential health risks and outlining what he saw as a sweetheart deal for multi-national concrete manufacturer Lafarge because they would be paid to burn the tires. The idea was shelved.

This month, in a stunning reversal, Nova Scotia’s newly minted Environment Minister Iain Rankin gave a green light to a one-year pilot for Lafarge to start burning TDF in its plant in Brookfield. So what changed in nine years? Not much. Lafarge will get $1.05 from Divert Nova Scotia for every tire it burns. It’s a great deal for Lafarge, which is getting a fuel subsidy, and for Divert NS, which gets a lower disposal cost. For Halifax C&D, not so much.

Remember, for eight years, Halifax C&D believed the Nova Scotia government would never permit burning and would focus exclusively on recycling tires. They built their business developing markets based on what they saw as a consistent policy direction of government and a reasonably predictable stream of used tires.

The science of burning TDF, some of which was developed at Dalhousie University, indicates health and environmental risks are almost non-existent. We could argue the relative merits of using TDF versus natural gas in the cement kiln, but it would miss the point. What is more troubling, with this reversal, the government of Nova Scotia has put at risk the future of a local family firm, which has grown and developed in alignment with environmental goals, in favour of mandating citizens to directly subsidize a large multinational’s fuel costs.

Meanwhile, the experience Halifax C&D developed as a tire recycler has allowed them to bid on and win a pilot project in Newfoundland and Labrador. While this is a good new business opportunity to export Nova Scotian knowledge, experience and business to another province, and to create more jobs, it will not replace what C&D are losing here at home.

The government, by reversing direction on tire recycling in favour of burning, has thrown a small business into chaos in favour of subsidizing the fuel costs of a large multi-national. For a government that purports to support small business in Nova Scotia, this is not the way to show it.

Jordi Morgan is Vice President Atlantic of the Canadian Federation of Independent Business.

This commentary originally appear in the Halifax Chronicle Herald, July 26, 2017

Fall Back Up with Don Bureaux

SHOW NOTES:

On this episode I’m delighted to sit down with the President of the Nova Scotia Community College (NSCC), Don Bureaux

As President of NSCC, Don Bureaux serves as the chief executive officer for the operation of 13 campuses, with over 120 programs, and approximately 24,000 students and 2,000 staff.

don convocationDon Bureaux has been president of NSCC since 2011 but his commitment to adult education spans over two decades working with adult learners at colleges and universities as well as professional designation granting organizations across Canada and internationally.

At NSCC, he works to bring the college’s vision – transforming Nova Scotia one learner at a time – to life.

Don holds a certificate in Adult Education and a Bachelor of Business Administration from Acadia University and an MBA from Heriot-Watt University in Scotland. He’s Chartered Professional Accountant, Certified General Accountant and holds an international designation as a Certified Business Counsellor through the Asia Pacific Economic Cooperation (APEC).

He’s been granted his Fellow Chartered Professional Accountant (FCPA) designation by CPA Canada and his Fellow Certified General Accountant (FCGA) designation.

In 2015, 2016, and 2017 Don was named one of the Top 50 CEOs by Atlantic Business Magazine and serves on the boards of many not-for-profit organizations in Nova Scotia.

I dropped into visit Don in his office at the Leeds Street campus of the NSCC in North End Halifax

During our conversation he references a book Road to Character by David Brooks. Click for the link and below, you’ll find a link to a YouTube video of a Ted Talk on one of his principle areas of discussion, the difference between resume virtues and eulogy virtues.

Don and I began by talking about his childhood…

To listen to the podcast click here

To watch the Ted Talk with David Brooks, click here

Let’s Start Clearing the Smoke on Cannabis

In another 12 months, we’ll be dealing with the real world impact of the federal government’s legalization of marijuana. There are still lots of unanswered questions about how this will roll out. These are questions with huge economic and social implications.

While the Canadian Federation of Independent Business (CFIB) has conducted only one survey of its members so far on how recreational marijuana should be sold, comments from our members suggest there are still considerable divisions on whether legalizing marijuana is even a good idea.

While we have limited experience with cannabis per se, CFIB is a respected international leader on regulation, including how to get it right and what not to do. This includes considerable experience with liquor and tobacco regulation. The federal government has handed responsibility over to the provinces who will need to apply a laser focus on these key critical regulatory pieces.

Too often, governments examine a new area where regulation is needed and quickly expand the mandate to include every moving part. This automatically means proper enforcement is near impossible. We recommend focusing on a few critical regulatory priorities, such as preventing sales to minors, ensuring proper product safety information and rules, and prohibitions at work or while driving. Choose the most important aspects to regulate and then do them well. Leave the rest alone.

We also hope to see the same rules across the country. The provinces should be working together to ensure as much consistency as possible as legalization rolls out across the country.  As the new Canadian Free Trade Agreement works to undo the damage of multiple complicated regulatory schemes, the last thing we need is another patchwork quilt of rules in an emerging industry.

Additionally, while bringing recreational cannabis sales out of the underground economy will no doubt have positive revenue implications for the government (excise, sales, and corporate income taxes), there will be added costs for policing and health care. Government would be wise to resist the temptation to frame this as a giant cash cow.

That means getting the tax mix right. If taxes are excessive, particularly in early days, much of it will remain black market. High tax rates may discourage users, but they’ll also push sales into the underground economy. It is estimated that close to a third of tobacco sales are underground, often with links to organized crime.

Also, provinces would be wise not to let regulation get in the way of innovation. An above-ground private sector can stay much closer to customer preferences, the edibles market is a good example. It’s also a myth that only public sector employees can responsibly handle controlled substances. The private sector has held an important role in tobacco and pharmaceutical sales, as well as alcohol in some provinces.

CFIB is also recommending a central role for smaller, independent businesses within this emerging industry. We are already advocating for access to banking and payments services for smaller, independent businesses involved in legal cannabis retail and distribution as a measure to help achieve the goal of limiting the underground economy.

Even those who are involved in the emerging industry appear to remain unsure of where this is all going. A year out from implementation, we should be seeing some of the smoke begin to clear.

Jordi Morgan is Vice President, Atlantic of the Canadian Federation of Independent Business. CFIB represents the interests of 11,000 small and medium size businesses in Atlantic Canada.

What if the results of the Nova Scotia election were declared unconstitutional?

vote-nova-scotia

This was a question some of us were mulling over on election night.

The ambitious and dedicated folks at community radio station CIOE in Lower Sackville asked me to moderate their coverage on election night with a panel comprised of broadcasting legend Al Hollingsworth, former NDP MLA Michele Raymond and former Nova Scotia finance minister and Senator Bernie Boudreau.

Bernie and I share a common failure. We ran in the 2000 federal election in Dartmouth. We both lost. Actually, former Buchanan era cabinet minister and now Senator, Tom McInnes was in the race too, so I was in pretty good company when we all failed to unseat incumbent NDP MP Wendy Lill. (I should point out, my ill-informed run failed much more miserably than the PC and Liberal candidates, mind you Bernie gave up his Senate seat to run, but I digress)

In advance of the provincial election night program in May, I asked Bernie if he would mind having a quick peek at the Reference of the Nova Scotia Court of Appeal regarding the Final Report of the Electoral Boundaries Commission (EBC). We all felt it was an important issue, but it wasn’t getting much media attention.

The Honourable Justices Fichaud, Saunders, Oland, Bryson and Bourgeois were asked to provide opinion on the following; Does Section 1 of Chapter 61 of the Acts of Nova Scotia 2012, by which provisions the recommendations tendered by the EBC by its Final Report to the House of Assembly were enacted, violate Section 3 of the Canadian Charter of Rights and Freedoms by abolishing the electoral districts of Clare, Argyle, and Richmond?

The Court’s answer in late January? Yes.

Now I’m not a lawyer, but Bernie is and his opinion on this, which he freely shared on the radio, is the province could be in some pretty thick soup. If the EBC violated the Charter, does this mean the electoral boundaries are unconstitutional as the Acadian Federation asserts? How many? If the boundaries were illegal during an election, does this mean the result of the election is illegal? What would that mean?

Earlier in the spring, the Acadian Federation’s executive director Marie-Claude Rioux said, “I don’t think it is in the government’s best interest to call an election before this issue is resolved. It opens a whole Pandora’s box, and I don’t think the government wants to go there.” Well, they did.

So, the implication of this seems, at least on the surface, pretty serious and requiring some delicate unwinding.

The Liberals essentially said, our lawyers see it differently and the Premier can call an election whenever he wants. However, the loss of former Minister of Acadian Affairs Michel Samson’s seat in Richmond adds another layer of intrigue, as Samson was widely seen as one of Stephen McNeil’s senior lieutenants, and his loss in the election can be attributed, at least in part, to the redrawing of the boundaries.

Cape Breton Richmond

Progressive Conservative Alana Paon beat Samson in Cape Breton-Richmond by just 20 votes. In 2013, Samson got 50 per cent of the vote. Prior to the election, Tory Leader Jamie Baillie said the legitimacy of an election would be in question if the government doesn’t pay attention to the Acadian Federation. They picked up the Richmond seat, so what are they saying now?

The issue is apparently going to be resolved one way or another later this year, but it could make for some very interesting political posturing.

The New Phone Book is Here!

For people of my vintage, Steve Martin turned comedy on its ear. I was reminded this week of one of Martin’s best film moments from The Jerk when the new phone book arrives.

Earlier this week the new Halifax Index was released from the Halifax Partnership. Yay. For most, it might seem a little dry, but for people in the public policy world, it’s darn near exciting. Even for those not wonky enough to be enraptured with economic and demographic data, it tells a compelling story.

While there’s much to be pleased about living here in Nova Scotia (especially during warm, sunny weeks like this one past), there are also some sobering numbers provided in this year’s Index. The document is basically a diagnosis of our social and economic health. HP’s Chief Economist, Ian Munro does his best to avoid painting too gloomy a picture, but when you dig into the numbers, neither real growth nor public perceptions are anything to pop champagne corks about. Essentially, he says, we’ve got some good news and we’ve got some…well, work to do.

MQO2On the good news front, the population is increasing and apparently business optimism is up in spite of the fact underlying decision making around investment and innovation would suggest otherwise. The number of jobs inched up and the commercial property tax base has grown, City Hall’s fiscal picture shows very modest spending increases and the municipal debt is being slowly, but steadily chipped away.

There are, however, many challenges. While the population is growing, a considerable portion of that is the result of rural Nova Scotia shrinking and an increase in international students. While this growth is a good sign, longer term trends are not yet established and historically our retention rates are dreadful. It should be noted there is some cause for optimism with the establishment of the Atlantic Immigration Pilot Project, which sets aggressive goals for attracting and retaining new Canadian to the region, but it has only just started and we need to be careful not to prematurely declare victory and set unrealistic forecasts based on very short term results.

MQO’s City Matters survey, released as part of the Halifax Index, did not paint a very pretty picture either. The survey asked people to rate Halifax as a desirable place to live. While it was characterized as mostly flat-lining, the numbers were either unchanged or showed declining opinions on a variety of metrics including; being a good place to raise a family, indoor and outdoor recreation, housing affordability, arts and culture, ease of getting around, and other quality of life indicators.

Construction activity and other major projects including Irving’s ship building and the re-decking of the Macdonald Bridge bumped to GDP growth to 2.2 percent which may explain the sense of optimism, but Halifax continues to dwell in the bottom tier of benchmark Canadian cities, and GDP only hit 0.3 percent per capita.

There’s a great deal more useful analysis in the Index and Ian Munro and his team at the Partnership deserve credit for providing a very useful document to spur discussion around the challenges facing economic growth and social satisfaction measures. While the partnership also sets targets for improvement, it’s up to the business community to put forward clear policy recommendations to assist decision makers.

The Halifax Index 2017 is a very useful tool as it serves as a warning that we cannot be complacent about advancing ideas around economic growth. We have a huge job ahead of us to make Nova Scotia a more business-friendly, competitive environment. Our tax and regulatory burden remain foundation problems and with the demographic trends outlined by this index and many other studies, policymakers need to get serious about establishing long-term forecasting mechanisms to get a clearer picture of the heap of trouble awaiting us 20 years down the road. While I was excited to see its release, given the results in the Halifax Index, I think I may have been a little happier getting the phone book.