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The problem with 'free' parks

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The onset of a global recession has been met by a flourish of creative politics and policy from the bizarre (a wax museum to be built in California as part of the Obama stimulus package) to the verbose (Australian Prime Minister Kevin Rudd's 7,000-word essay on economics), to the whimsical.

Manitoba's recent initiative to remove user fees from provincial parks would be an example of the latter, but it is also a case study in bad public policy and of a broader malaise in Manitoba politics.

"Free" provincial parks sound like one of the hardest policies to be against. Who could oppose families -- children in particular -- connecting with nature, and not charging money which many see as the root of all evil? But the case for user fees wherever possible is strong, straightforward and Manitobans can and should oppose the free provincial park policy.

First, the parks are only free in the narrowest sense of the word. It may well be that no money changes hands at the park gate, but provincial park maintenance cost a touch under $19 million last year; those costs won't disappear. Indeed, the famous dictum -- there "is no such thing as a free lunch" means governments cannot avoid costs, they can only shift them.

While politicians usually advertise the primary effects of a public policy, such as free entry, the secondary effects -- higher taxes elsewhere or sacrificed services, cannot be ignored.

Consider the most obvious secondary effect of cost shifting onto the general taxpayer; the estimated $2.6 million that won't be collected at the park gate means $2.6 million of either increased taxes or reductions in other services for all Manitobans. (Ask yourself how many doctors $2.6 million could employ every year.) This effect applies to those who use the parks, which might be seen as fair, but also to those who either can't or don't.

One of those groups are business owners and their employees who compete with the parks for patrons, from urban entertainment to private camping grounds. Running a business in these economic times already involves enough uncertainty without a major competitor suddenly announcing that they are dropping their price to zero for the next two years and funding their activities through the taxes of all Manitobans. To add injury to insult, those other providers are forced to fund their competition with a proportion of what their own profits.

Another such group, which the new policy is meant to help, is low-income earners. Even here, the picture is more complex than it appears at first glance. Park users are not necessarily low income earners. In order to pay your $7 at the gate, you must first be able to afford the expense of getting there. Getting to provincial parks may seem a frivolous barrier to middle-income earners, but removing park fees is same in concept as giving all Manitobans taxpayer-funded ice cream in Hawaii. Great if you can get there, but you pay for it even if you can't.

More importantly, Manitoba, and Canada for that matter, already have comprehensive tax and transfer systems aimed at topping up low incomes. Similar to the wasteful policy of keeping electricity prices ludicrously low and benefiting mainly well-to-do folks who can afford to pay higher rates, eliminating user fees for park visitors benefits mostly those who don't need help in the first place.

"Free" parks as with under-priced electricity are unfocused subsidies which benefit those who don't need the subsidy -- the rich. In addition, another group benefits: out-of-province tourists, who otherwise would help out with the cost of maintaining the parks they also use.

These are much more effective ways to help low income people than distorting the outdoor recreation market.

Just as with other weird political responses to the global economic situation, the free provincial park policy is a politically-inspired search for a photo-op, one which highlights only a superficially attractive aspect while in fact cancelling out the assumed benefits, or worse. More deeply, it is worth Manitobans' while to ask: Is shifting the cost from park users to taxpayers really the best that can be expected of the provincial government, or has it just run out of better ideas?

Peter Holle is president of the Frontier Centre for Public Policy, www.fcpp.org

Republished from the Winnipeg Free Press print edition May 29, 2009 A12

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