Archive for December, 2009

Playing the Enemy

December 6, 2009

Book Notes
Playing the enemy: Nelson Mandela and the game that made a nation
By John Carlin

One of the most remarkable events of the postwar WW2 period, along with the demise of communism, is the ending of apartheid in South Africa. This book describes the behind the scenes negotiations which took place between the ANC and the Afrikaner Nationalist Party leading to the end of official apartheid and the election of Nelson Mandela as president. Written by a journalist, the book examines how popular support of rugby by all races was used by Mandela to bring the two sides together climaxing in South Africa winning the World Cup for rugby in 1995. At the time there was only one colored player on the South African team. Rugby was played by colored South Africans in the apartheid years but in separate leagues.
Well written by Carlin, a journalist, the story illustrates how major crises or events often give rise to secret negotiations that only later become known. This was true for the Irish troubles. It may be less true today as modern communications manage to leak stories.
Sport as a political instrument is illustrated by the book, rugby in this instance but cricket in the case of India and Pakistan and the Olympic Games and other international events like the World Cup of Soccer. Another theme shows how business, especially mining interests in South Africa, acted to promote the end of apartheid.
The book club to which I belong rated it highly, one of the very few titles in the last 5 years that has had general support in an informal poll. Our January 2010 read is The Best Laid Plans by Terry Fallis, an Ottawa based writer and winner of the Leacock award for humour.


December 5, 2009

CRTC 2009 Hearings: Broadcasters v. Cable Companies

The battle between Canadian broadcasters and cable companies taking place before the CRTC is a about the past and the disappearing present and not about the future of traditional television and other forms of video. If the protagonists and the CRTC are to consider the public interest as reflected by how consumers spend their money and time, they need to look for ways to profit from what consumers want instead of struggling over what consumers have been forced to take.
Today, consumers use their Kindle and computers to read books and view pictures, use their Iphones and Blackberries for all types of media, and their personal video-recorders to store content to watch at their convenience. The media world is changing from public and private broadcasters delivering a signal including advertising to be watched at the convenience of the broadcaster, to the viewer deciding what and when to watch. The bookstore and library format of personal choice from a large and growing inventory of titles, to be enjoyed at the individual’s convenience, has come to television.
In the future, the television networks will be consigned to a museum of technology to recall what happened in a short period of time (1950s to now) when the broadcasters were in the driver’s seat deciding what and when to produce and distribute, and consumers had to accept these decisions or not turn on the set. The situation is now different. Viewers can choose to watch programs from the remaining traditional broadcasters as well as the increasing amount of content available over the internet. All traditional media, print, video and audio are making their content available online where they are experimenting with ways to make money from new delivery channels while protecting intellectual property rights. Google, a newcomer, has found a way. Currently, it makes more than $23bn a year from online advertising, a sum equal to all advertising in US magazines and two-thirds the advertising in US newspapers, by using its search engine to direct users almost instantaneously to the content they select. There are now over 23bn web pages to search up from 3bn in 2002.
The CRTC hearings are the battleground between the traditional broadcasters such as the CBC, CTV and a financially troubled Canwest and the cable companies such as Rogers, Shaw and Telus. Each makes much of the business failures and commercial decisions of the other side while attesting to a desire to look after the consumer interest. The cable companies threaten to increase fees to subscribers if they are made to pay for signals provided to them by the broadcasters, and the broadcasters threaten to withhold signals from the cable companies unless they receive payment for them. Either choice does not look particularly consumer friendly. The Commission acts as a referee, hopefully with the consumer interest in mind, while taking into account the views contained in several thousand submissions available on the CRTC website with more being posted.
What is the consumer interest and what is it they want? Consumers want access to a wide choice of content that they can select and watch in their own time. They are willing to pay for this but want it supplied and delivered in a competitive not a monopolistic marketplace. Payment has to be made to content producers and to those who deliver the signal to consumers, as occurs in other familiar markets. For example, consumers pay for their utilities delivered to them by wires, pipes and cables that carry the electricity, gas and conversations they want. Consumers buy these services from competing suppliers who may use the same delivery system, similar to the way that buyers select from competing trucking and taxi firms that use public roadways.
At present, broadcasters provide a combination of content and delivery systems but also broadcast the content or productions of others. Cable companies provide the delivery system for content. Some of this comes from broadcasters, payment for which is at the centre of the present CRTC hearings, and some is contracted for directly by the cable companies for specialty channels like HBO and TSN. Consumers receive their television/video signals in a variety of ways, over the air, perhaps with a rooftop antenna, via cable or by the internet which in turn may be provided by wireline, wireless or a combination of the two.
Who pays for this? The broadcasting and cable companies would have us believe that they pay. They do not. Consumers pay in various ways. A glance at the financial statements show that taxpayers and advertisers fund the CBC, taxpayers to the tune of $1.2 billion in 2009 plus receipt of subsidies, and advertising to the tune of $356,000. The private networks receive most of their funding from advertisers.
The claim that consumers get their broadcast signals for free ignores the fact that advertising revenues derive from revenues received from the sales made by firms to consumers of the advertised goods and services. When the consumer buys an advertised item of food, clothing and automobiles, some of these funds are used to buy broadcast or cablecast advertising time. In this sense, individuals as both consumers and taxpayers are paying for programming whether produced in-house by broadcasters or by independent producers.
Consumers also pay a monthly rate to cable companies to receive signals from broadcasters and for other programs for which the cable companies contract directly. These companies provide related services such as high-speed internet, mobile phone service, video-on-demand content and purchase or rental of personal video recorders. The content carried by cable companies are paid for by consumers who are offered various bundles of programs, some required to be carried by the government, and some purchased individually. Consumers thus pay for content and carriage in a variety of ways by purchasing goods and services that are advertised, by taxation (and subsidies) and by paying those who deliver the signals by wireline or wireless.
Leaving aside the treatment of Canadian content, which is an issue in these hearings, the consumer interest is in getting a wide range of diverse and quality content. They want to purchase content (news, sport, entertainment, children’s programs) and carriage in competitive markets. At present there are two carriage mechanisms, wireline via cable and telephone line, and wireless either off-air or via satellite. Off-air signals are received with a rooftop antenna, or picked up off-air by cable and retransmitted to distant viewers. Cable and other companies also use satellites for the delivery of signals but these are usually combined with cable (wireline) service on the ground to pick up and deliver the signals to or receive signals from the satellite.
An alternative and emerging competitor for cable is satellite service that carries signals from content provider to the consumer directly avoiding cable and telephone service, like wireless communication between two ships at sea. If this becomes competitive with cable and there are enough alternative suppliers, then competition will increase and cable rates for internet access will decline. Cable companies and telcos are already in the satellite business in different ways so that consumers will only enjoy declining rates if there are more suppliers or a framework that promotes competition. For example, if cable companies control satellite frequencies this will decrease the opportunities for new competition. Note the downward price effects of competition in the cases of the increasing number of electronic book readers, and the declining prices of flat television screens and computers. As the number of sellers increases, prices fall and choice increases unless either firms or government policy restricts competition.
While the CRTC will need to report on the question posed by the government, it should also show how the consumer interest can best be protected in the future, recognizing that traditional broadcasters will atrophy while new means of delivery will continue to grow. Hopefully this will be done without creating a regulatory structure that stifles competition and the associated consumer benefits. Luckily, for the consumer, technology tends to win anyway despite the public and private obstacles put in its way.

Illegal Migrants

December 3, 2009

Uninvited Guests – a comparative view

Illegal migrants (illegals) to Canada are uninvited visitors. We don’t know who most of them are, how many there are, what they bring and what to do about them. We do know that many countries have them, and not just developed countries. Estimates for 2006 put the global stock of illegal immigrants at 200 million or 3.3% of the world’s population with an annual flow of 10 to 15 million persons per year. After the USA, South Africa hosts one of the largest populations of illegals as a result of political and economic conditions to its north: Mexico is host to about a million, many of whom are American retirees who have settled there without official permission.

In an attempt to penetrate the fog that surrounds the topic and the related guesstimates, we start with the meaning of terms. Illegal migrants include and are at times referred to as unauthorized or undocumented persons who have managed to enter a country secretly. Others are those who have presented fraudulent documents or have violated their conditions of entry such as the duration or terms of their visas. The last include temporary workers, foreign students and tourists. Still others are failed asylum seekers who have exhausted all possible appeals and reviews but who have still not left the country.

The number of illegals is difficult to estimate as, for obvious reasons, they do not wish to publicise their presence. The difficulty is linked to the absence of reliable data on immigration as a whole. There are two types of statistics to consider, the flow of migrants (legal and otherwise) into a country over the course of a year and the stock of migrants in a country at a point in time. The stock is affected by both inflows and outflows. While some types of inflow are measured, only a few countries, such as Australia attempt to record the outflow.

With these qualifications in mind, we can examine some numbers. The oft-quoted 10 to 12 million illegal immigrants in the US refer to the estimated stock figure. The guesstimate for continental Europe is 7 to 8 million illegals. In Canada, estimates of the stock vary from about 63,000 to several hundred thousand depending on the information source. The lowest and probably one of the more reliable estimates comes from the Auditor General (AG), who for 2007 reported an inventory of 63,000 persons in Canada who should be deported, 22,000 in Citizenship and Immigration’s (CIC’s) working inventory and 41,000 of whom the agency has lost track. Some of the latter may have left, but without exit records the number designated for deportation and remaining in the country is unknown. The AG’s figures refer to persons who have been identified for deportation and who represent only a part of the total illegals.

Estimates for all illegals in Canada range as high as 500,000. The highest figure is reported by a former Minister of Citizenship and Immigration. Official Canadian sources provide little help. A May 2009 personal inquiry to Statistics Canada elicited an e-mail response that the agency does not have data on “undocumented or illegal workers (immigrants)”.
A reasonable conclusion is that no-one knows what the stock and annual flow numbers are, nor is it possible to find out unless all entrants are identified on arrival and departure and are closely monitored until they leave.
Below we summarise how the EU and the Netherlands are addressing these problems and what Canada can learn from their experiences.

European Union

The EU, like Canada, has two types of borders, the external borders of the Member States and those between these states. Because of NAFTA, the two are comparable in some ways to the Canadian maritime border and the Canada-US border including that with Alaska. Free movement of persons between EU member states is mandated by the Schengen Convention subject to the Single European Act of 1985. The EU has since developed measures to establish a Common European Asylum Area to deal with asylum seekers with the aim of completing this by 2012 (Fitchew 2009).

The Dublin Convention of 1990 and subsequent regulations set out the system for determining which Member State is responsible for deciding on claims for international protection. The regulations are based on the principle that the responsibility for examining a request lies with the Member State that plays the greatest part in the applicant’s entry to the EU. A second objective, set out in separate Directives, is to secure common minimum standards for the treatment accorded asylum seekers with the aim of preventing asylum shopping. The standards lay out the level of support to be given applicants regarding subsistence, health care, education, housing and employment.

Since 1999, the EU has adopted nine pieces of legislation on asylum issues. Regulations subsequent to legislation resulted in the establishment of the EURODAC system requiring member states to record the fingerprints of all asylum seekers and other applicants for international protection and to send these to a central database. Fingerprint data must be destroyed after a maximum of ten years for asylum applicants or as soon as a person has become a citizen of a member state.

Member states can also record and send to EURODAC the fingerprints of any alien found on the territory of a member state who has not applied for asylum. From 2005 to 2008, EURODAC received data on 658,000 applicants for asylum and on 49,000 aliens found in the member countries. One problem has been that there is no system to prevent asylum seekers from disappearing once a decision has been made to transfer them to another member state.

These EU procedures deal with persons claiming asylum in order to become a refugee and obtain the necessary protection. However, other persons illegally in one of the member countries escape this administrative net unless they are somehow apprehended. To do that requires a means of finding and apprehending such persons. Since many will seek work, often in the underground economy, it is possible to locate a number of them, providing there is a will to do so. For this one has to look at measures countries use to check the identity of those in the work force especially in certain occupations where illegals are known to find employment. The Netherlands is one country that uses this approach in part through the use of identity cards.

The Netherlands

The Netherlands has two types of borders, both subject to EU policies, those with other EU countries and the external maritime border that is particular to the country. Entry point for the latter is mainly through the seaport of Rotterdam. Amsterdam Schipol national airport provides another entry point from non-EU countries. Since the 1990s the government has introduced a much stiffer screening process for both legal and illegal immigrants.

The Dutch approach includes measures to prevent entry, and to screen, detain and remove those who manage to enter the country illegally. The process includes a series of fines levied on businesses which employ illegals so that the local business community becomes an instrument to control the flow. While this may sound Draconian in contrast with Canadian approaches, there remain weaknesses that allow illegals to stay in the country. The Dutch policy is a work in progress as the government has in recent years amended its policies including administrative procedures. Details of the evolving procedures are discussed in Doomernik.


There is no simple solution to controlling the entry and removal of illegal migrants especially in a liberal democracy. The approach has to be to lessen if not eliminate the problem. No doubt, authoritarian regimes can take more drastic measures, but there is less likelihood of people fleeing to such regimes in the first place.

Policy can work at two levels, on entry and after entry because illegals do not disappear. Many become workers, albeit in the underground economy, as well as consumers of goods and services including public services such as health and education if a way can be found to access these services without being caught and deported.

Thus there are numerous opportunities to monitor contacts that illegals have once they are in Canada, but there also has to be a will to act. If Canadian employers benefit from paying low wages to illegal workers, they are unlikely to cooperate in enforcing Canadian policies, and if politicians see opportunities for votes among communities where illegals tend to concentrate political pressure for removal will be lessened.

The experience of other jurisdictions such as the EU and the Netherlands is helpful in addressing these issues. Among the measures that are worth exploring are the use of identity cards and the enforcement of penalties on those who hire illegals. Both approaches require evaluation beyond the scope of this article, but note that in the case of identity cards Canadians already have them. They are called passports, health cards, driving licences, bank cards and the many other forms of identification that people carry with them as well as the numerous ways in which individuals provide information about themselves when shopping, telephoning or surfing the net. Privacy concerns undoubtedly need to be considered in arriving at some sort of benefit-cost assessment of the use of identity cards and fines.

In sum, illegals are like persons who take advantage of the benefits of club membership without becoming members, conforming to the rules and taking on the responsibilities. Many societal organizations learn how to monitor and administer such behaviour, although not so in the case of illegals.
(By C.J.Maule, Dec 2009)


A Survey of European Asylum Policy and Legislation
by Geoffrey Fitchew at
(accessed June 10, 2009)

Overview of Dutch asylum and immigration system by J. Doomernik
(accessed June 10, 2009)

Martin Collacott and A. Moens, Immigration Policy and the Terrorist Threat in Canada and the United States, Fraser Institute, Vancouver, 2008.

Demetrious G. Papademetriou, The Global Struggle with Illegal Migration: No End in Sight at
(accessed June 10, 2009)

The US is considering measures entitled e-verify that uses communications technology to verify both the eligibility of a person to work in the US and to authenticate a worker’s identity ( ) accessed August 7, 2009).