The Problem With Free Parks

Commentary, Peter Holle, Taxation, Uncategorized

The onset of a global recession has been met by a flourishing of creative politics and policy from the bizarre (a wax museum earmarked 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 of removing user fees from provincial parks would be an example of the latter, but it is also a case study in bad public policy and a broader malaise in Manitoba politics.

Free provincial parks sound like one of the hardest policies in the world to be against. Who could oppose families –children in particular- connecting with nature, without having to travel too far, or dealing with money which many see as the root of all evil? But the case for user fees wherever possible is strong and straightforward enough that many people could and should oppose the free provincial park policy.

For one thing, the parks are only being made 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 and those costs do not disappear. Indeed, there is a famous dictum in the policy world – there “is no such thing as a free lunch.” Governments cannot avoid costs, they can only shift them. While politicians usually prefer to advertise the primary effects of a public policy, like free entry, the secondary effects, higher taxes elsewhere, 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. 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 is all the business owners and their employees who provide a service in competition with the parks, 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. Adding insult to injury, those other providers are now being forced to fund their competition with a proportion of what their own businesses make.

Another such group, which the new policy is supposed to help, is low income earners. Even here the picture is more complex than it seems because park users are not necessarily low income earners. In order to pay your seven dollars at the gate, you must be able to afford to get there first. 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. Like 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.

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

Just like other weird political responses to the global economic situation, the free provincial park policy is a political attempt to be photographed with the primary effects of a policy even though the secondary effects will cancel them out, or worse. More deeply, it is worth Manitobans’ while to ask: Is shifting the cost of Provincial parks 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?