Published in the Financial Post, April 3, 2003, p. FP-15
Tobacco, and especially the anti-smoking jihad, illustrates a crucial economic fact: regulation is not costless, except for the people on the right side of the government wicket.
How much is spent on tobacco control in Canada is very difficult to evaluate. There is no official figure, and bureaucrats and politicians are not especially keen to reveal the order of magnitude. My own estimates, extrapolated from scanty federal figures, and from access to information requests to provincial and municipal governments, suggest that at least $165 million were spent by all levels of government in 2001 (or during the closest fiscal year). Two thirds of this amount came from the federal government’s coffers, 30% from provincial governments, and the rest from municipalities.
These estimates are based on incomplete figures: much enforcement expenditure could not be captured, and municipal governments have become much more involved. In general, anti-smoking activities have increased much over the past few years. It is reasonable to believe that all levels of government currently spend more than $200 million every year to finance anti-smoking activities, and to enforce anti-smoking regulations.
Two hundred million dollars per year is a small amount in the ocean of public expenditures. It amounts to less than 0.05% of the $500 billion in annual public expenditures from all levels of government. The federal government, which is the most involved in anti-smoking activities, spends on this crusade less than 0.1% of its $175 billion of annual expenditures. Annual expenditures of $200 million correspond to less than $7 per Canadian resident. No individual will spend much protest time to save so little in taxes.
The problem is that the direct beneficiaries of anti-tobacco expenditures will, for their part, lobby hard to keep their jobs and perks. These beneficiaries include public-health bureaucrats and subsidized “non-governmental” organizations. For example, in fiscal year 2000-01, the Canadian Council for Tobacco Control received more than $400,000 from coerced federal taxpayers, and the Non-Smokers’ Rights Association grabbed more than $100,000.
No doubt all these people are well intentioned, and it is only a coincidence that they put their good intentions where their money is. As Public Choice economics shows, the taxpayer loses, special interest groups win.
Yet, even if $200 million per year is not much in the great statist scheme of things, there is an opportunity cost. Something is sacrificed by not allocating these resources to other useful purposes. For example, a memorandum I obtained under the Access to Information Act reveals the Québec government has been diverting money from breast cancer diagnosis to the enforcement of its 1998 Tobacco Act. On December 6, 2000, Health Deputy Minister Pierre Roy approved a request by Assistant Deputy Minister Richard Massé to extend an annual budget of $500,000 which, “[f]or fiscal year 2000-01 … came from the mammogram fund.”
We don’t know, and we have no way of knowing, how much money in total Canadian governments have diverted from other health programs to their crusade against the lifestyles of the 25% of Canadians who smoke. We don’t know, and there is no way of knowing, what taxpayers would do with $200 million left in their own pockets. However, we can easily calculate that $200 million could pay for the operation of 400 CAT scanners.
Collective choices are much more imperfect than individual choices. It is time for the statocrats to leave adults alone, to let them live their lives as they want to.