Jan 082011

With the birth on December 29th, 2010 of Savannah Phillips, the first great-grandchild of Queen Elizabeth II, daughter to Peter Phillips and Autumn Kelly of Montreal, 12th in line to the throne and Canadian by descent, I thought it appropriate to resurrect the text (slightly edited) from “Just Right” show #127 of November 5, 2009.

Is there a role for the Monarchy in Canada today?

From The Globe and Mail of Tuesday, November 3rd, 2009, Tony Matthews of Kingston, Nova Scotia wrote:

You can grow up to become anything that you want in Canada, except its head of state.  Another reason to get rid of the monarchy.  It is an institution that perpetually keeps Canada’s head of state foreign, white and Protestant, a discriminatory policy that is definitely anti-Canadian.

(post script: The birth of Savannah Phillips demonstrates that one can be Canadian and become head of state, although you or one of your parents has to marry a royal to gain such a privilege.)

The Prince and Princess of Wales are touring our country this week and next and it seems that every time a Royal drops in to say hello, the same question arises…  Does the Canada of today really need the monarchy?

To answer that question I have to ask myself what is their role…their function in our society and in our government?  The answer I come up with is, on the face of it, not much.  But as it turns out that little bit of a role that they do play has an enormous effect on our society and how we define ourselves as a nation.

The actual power of our Sovereign the Queen is simply to appoint (on the advice of our Prime Minister) a Governor General.  Beyond that it’s all pomp and circumstance, accepting flowers from smiling children and laying wreaths on war memorials.

But let’s consider their Royal Highnesses the Prince and Princess of Wales, Charles and Camilla, our future King and Queen.  Some of you may find it odd that Camilla, styled as the Duchess of Cornwall, is also called the Princess of Wales, a title inextricably linked with the late Princess Diana but Camilla’s title in full is Her Royal Highness The Princess Charles Philip Arthur George, Princess of Wales and Countess of Chester, Duchess of Cornwall, Duchess of Rothesay, Countess of Carrick, Baroness of Renfrew, Lady of the Isles, Princess of Scotland.

When Prince Charles becomes King it is thought that Camilla will style herself as the Princess Consort rather than Queen.  In fact, of course, she will be Queen, the Queen of Canada, and Charles will become the King of Canada.

But do we need a King and Queen once Elizabeth the 2nd s reign has ended?  Would her passing be a good time to take stock of who we are as Canadians and decide if we want to continue with things the way they are?  Why fix something if it isn’t broken?

If you ask a Quebecer, only 11% want to keep the monarchy.  While the rest of Canada don’t necessarily feel that way the numbers aren’t looking too good for keeping a Brit as our Sovereign.  According to a Leger Marketing poll for Sun Media 45% of Canadians would like to see the end of the monarchy in Canada.  That’s an amazingly high number and as Canada continues to grow with immigrants from non commonwealth countries that number will continue to rise until one day, perhaps soon, a clear majority of Canadians may well be asking for a major change in how this country’s government is formed.

Consider these statistics:

According to the same poll only 2% of Canadians think Charles and Camilla would make strong monarchs.

Only 37.5% of Canadians list their ethnicity as being British. (English, Scottish, and Welsh)

32.2% of Canadians list their ethnicity as Canadian.

While the Queen is the “Defender of the Faith” being the governor of the Church of England only 8% of Canadians are Anglican.

20% of Canadians are foreign born with the majority of these coming from China and India.

The demography of Canada today is nothing like the Canada of 1867.  In fact it is nothing like the Canada I was born into.

So, with the obvious disconnect many Canadians feel with Great Britain, Prince Charles and Duchess Camilla, will this inevitably force us to reexamine our British Monarchy tradition?

Let’s now focus on the role of the Queen’s representative in Canada, the Governor General, a position currently held by Michaëlle Jean (David Johnston as of October 1st, 2010).

The Governor General has been in the news on a couple of occasions recently.  There was a slight rising of some eyebrows when her web-site claimed she was the “Head of State.” Some said that the Queen is the Head of State.

This is from the Governor General’s web site:

The responsibilities of the Governor General have evolved over time, along with the evolution of Canada as a sovereign and independent nation. In 1947, letters patent signed by King George VI redefine the powers of the Governor General. These letters patent “authorize and empower Our Governor General, with the advice of Our Privy Council for Canada or any members thereof or individually, as the case requires, to exercise all powers and authorities lawfully belonging to Us in respect of Canada”. Since then, the Governor General has daily and fully exercised the duties of the Head of State, not only in Canada, but also abroad. As per the letters patent, the Governor General is also the commander-in-chief of Canada.

The Governor General represents Canada during State visits abroad and receives Royal visitors, heads of State and foreign ambassadors at Rideau Hall and at the Citadelle of Québec.

The Governor General presents honours and awards to recognize excellence, valour, bravery and exceptional achievements. The Governor General is also the head of the Canadian Heraldic Authority.

As it turns out that the Governor General has a considerable amount of power in our country and it is only by tradition that most of her reserve powers as they are called are not used.

It is the Governor General who summons, prorogues and dissolves Parliament, delivers the speech from the throne, and gives royal assent to acts of Parliament.  She can also

  • dismiss a Prime Minister;
  • refuse to dissolve Parliament;
  • refuse or delay the Royal Assent to legislation. To withhold the Royal Assent amounts to a veto of a Bill. To reserve the Royal Assent in effect amounts to a decision neither to grant or refuse assent, but to delay taking a decision for an undetermined period of time.

The reserve power of dismissal has never been used in Canada, although other reserve powers have been used to force the Prime Minister to resign on two occasions: The first took place in 1896, when Prime Minister Charles Tupper refused to resign after losing the 1896 election, leading Governor General The Earl of Aberdeen to no longer recognize Tupper as his prime minister, disapproving of several appointments Tupper had recommended. On the second occasion, known as the King-Byng Affair, in 1925 The Viscount Byng of Vimy refused to dissolve the new Parliament after his Prime Minister, William Lyon Mackenzie King, looking to avoid an upcoming non-confidence motion, had advised. In fall of 2008, Governor General Michaëlle Jean used her reserve power to prorogue Parliament instead of dissolving it to avoid another election 2 months after one had already been held. No modern Governor General has disallowed a bill, although provincial Lieutenant Governors have. [wikipedia]

You have to scrutinize the histories of the commonwealth countries over hundreds of years to come up with a “constitutional crisis” involving the monarch or a Governor General.

One of the most notable comes from a country which weathered the controversy quite well and is still a very stable and prosperous democracy….Australia.  “The Dismissal”, as it known in Australia, is worth studying.

So, with that bit of background to our Governor General I’d like to bring up a proposal by Jeffrey Simpson of the Globe and Mail.  Mr. Simpson wrote on Saturday, October 31st, 2009, that “Canada should cut its ties to the British Monarchy.” His reason is simple.  “They are British, and we are Canadian.”  He proposes that Canada should “make the Office of the Governor General the office of the head of state, period.  No constitutional debates about whether the Queen or Governor General is head of state, de jure or de facto.”

Personally I could accept that but I could equally accept leaving well enough alone.

Despite the changing demographics, the antics of the Princess of Wales, the personalities of the other Royals, there is no pressing need for change.  The current system has worked for such a long time why mess with it?

Canada is not alone having a Governor General represent the British Royals.  Currently 15 of the 54 Commonwealth nations have Governors General.  All of these countries share, to varying degrees, our system of government and virtually all of these countries are stable secure democracies.  We share something in common with each and every one of them.  Why destroy that?

(Originally aired on Just Right show #127 November 5th, 2009.  To download the show visit //www.justrightmedia.org))

Jan 062011

PennyWe’ve heard the call to get rid of the one-cent coin before and nothing has come from it.  Now we have a report from the Standing Senate Committee on National Finance renewing the call for its demise.

While I can’t say I really care one way or the other whether or not we keep or lose the penny I am curious as to the reason why some are asking for its “calling-in.”  That phrase by-the-way is the legal term used in Canada for when a coin is removed from circulation and is no longer considered legal tender.

The Committee’s report clearly identifies that the need to call-in the penny is the loss of value it has experienced since the coin was first domestically produced in 1908.  In that year one Canadian dollar was worth twenty 2010 Canadian dollars.  Cumulative inflation since 1908 is 1,826 percent.  Or to put it another way the dollar and hence, the penny, has lost 95% of its value since that time.

This reduction in value to the point where it is no longer worthwhile to bend over and pick up a penny you may have dropped is the cause for hoarding.  At the end of the day more and more of us throw our pennies, and sometimes the rest of our devaluing coins, into a container at home and wait until they have accumulate enough to make it worth our while to redeem them at a bank for larger denominations.

Since there still is a need for pennies this hoarding forces the Canadian Mint to continue to produce about 750 million pennies every year at a net loss to the government of about $5M since it costs about 1.3 – 1.5 cents to mint a single 1-cent coin.

The only reason there remains a need for pennies is because we have sales taxes which are calculated as a percentage of a transaction requiring us to make change often involving pennies.  Without sales taxes I’m willing to bet that most sellers would price their products so that change would not require pennies, for example selling something at $19.95 without sales tax would only require a nickel as the lowest denomination of coin used in the transaction.  Nickels, dimes and quarters are more economical to roll and handle than pennies and cost businesses less in handling charges at the bank.

The recommendation to eliminate the penny comes with another recommendation from the Committee; to round all cash transaction either up or down to the nearest nickel.

I have a better idea that would require no rounding at the till.  Redenominate the currency back to its 1908 value and keep the penny which will now be valuable enough that we would no longer need to hoard it.

Redenomination would work like this.  Parliament would pass a law saying that a new printing and minting of a new Canadian dollar would have a value 20 times what the current dollar has.  We would have a year or two to redeem our old dollars for the new dollars at the bank.  You would bring in 20 current loonies for example and get back in return one “New Canadian Dollar” which would now have a purchasing power 20 times what the old dollar had.  Likewise the new pennies, nickels, dimes and quarters would have purchasing power 20 times what the old coins had.  This new currency would have the word “new” stamped or printed on it and would be easily distinguishable from the old currency.

Many countries have had to redenominate their currencies with little or no effect on their economies.  Europe essentially did it when the member states adopted the Euro.  Any adverse economic effects following redenomination should be blamed on the economic policies of the European Central Bank   rather than the act of redenomination and conversion.

Historically, however redenomination has a bad reputation, as well it should, because it is an admission of failed inflation policies.  Weimar Republic Germany had to do it when inflation got so out of control it took one trillion Papiermarks to buy a loaf of bread.  The German government simply redenominated the Papiermark into the new Rentenmark.  Did this get rid of inflation?  Not at all, but you no longer needed a wheelbarrow to carry your money to the grocery store.

The brutal regime of Robert Mugabe’s Zimbabwe has had to redenominated its currency four times since 2006.  The last time was in February 2009 when one trillion third Zimbabwean dollars bought one fourth Zimbabwean dollar.  I realize the Bank of Canada’s inflationary policy is not as bad as Robert Mugabe’s but it is not unheard of that currencies have redenominated with a much smaller factor.  Consider that the German Mark ceased to be legal tender in 1999 when the Euro was introduced and was completely removed from circulation in 2002.  1 Deutsche Mark bought 1.95 Euros at the time.

The human mind has a limit when it comes to intuitively understanding very big or very small numbers.  The fact that an average house in Toronto today can cost half a million dollars is a staggering amount to get your head around.  In 1908 houses sold for about $1,000; a much easier number to understand.  A basket of groceries may have cost $5.  The Toronto Globe cost 3 cents in 1867.  Today a newspaper at the stand can cost 250 cents.

Of course we wouldn’t really be having this debate about the penny if we had real monetary reform which would involve getting the government out of the business of printing money and allow a return to private banks issuing private currency as they did as late as 1944.  A return to a common standard like the gold standard would be nice instead of having faith in the government declaring that valueless pieces of paper have value.  Ultimately Parliament should pass an amendment to the Constitution to restrict Parliament from passing laws respecting the economy, but this is just wishful thinking.

Fiat money is fiat money and whether we pay our debts in pennies or paper notes is academic but at some point in our future the Canadian government will have to redenominate our currency.  I say why not do it now and save the penny in the process?

(Originally aired on Just Right show #182 January 6th, 2011.  To download the show visit //www.justrightmedia.org))