The Case for Retail Cannabis

By Samuel Kirsh (AIMS on Campus 2nd Place 2017 Essay Contest Winner)

A recent meeting of federal and provincial financial ministers led to an agreement to divide future tax revenue of legal cannabis sales 75%-25%, with the majority going towards provincial coffers. This is primarily because the provinces will be responsible for a substantial proportion of judicial and regulatory costs once recreational cannabis is fully legalized (slated for July 2018). While the initial instinct of many Nova Scotian’s would be to approach regulating cannabis in a similar manner to alcohol, there are several economic and demographic factors that must be considered before arriving at a definite conclusion.

One of the most significant variables is the infrastructural cost of implementing a system that mimics the Nova Scotia Liquor Corporation, a solution that has already been extensively developed by Ontario. While partnering with the provincial liquor board may curb spending in the short term, it requires establishing a parallel governmental system of management. In the current economic environment of the Maritimes, where aging populations are set to put increasing pressure on provincial budgets in the upcoming decades, this would be a frivolous and short-sighted measure that could work counter to its intended purpose. It would be more prudent to invest tax revenue from sales and the savings from law enforcement and judicial costs in public health initiatives than to commit the province to sizeable, indefinite expenditures.

It is also necessary to consider the current and projected price environment for cannabis. The Canadian Department of Public Safety issued a report that put the national average price per gram of high quality cannabis at $7.69, and demonstrated the inelasticity of demand for the product. This is of great significance as at least one government model (the Parliamentary Budget Officer’s) use the base price of $10/gram for cannabis. If $10 were the mandated price set by the government, this would negatively impact the consumer, as well as the government’s mission of addressing the role of organized crime in illicit sales of cannabis. The elimination of the criminal component in cannabis sales will be nearly impossible to achieve without the advent of a transparent market, away from the opacity of the current, criminally controlled one. Even at the comparatively low price of $7.69/gram, there is evidence that it is possible to fall further from increased competition, which will not occur through government mandated price controls.

The last, and perhaps most significant development necessary for the cannabis industry in Canada is that it will be the first nation of the G7 to legalize recreational cannabis. Canadian firms are better positioned than American firms to achieve a substantial first mover advantage in this market if regulatory liberalization continues. A consequence of state-only legalization in Colorado and California is that the dispensaries that operate are not able to fully invest and capitalize on their earnings, because cannabis is still a Schedule I narcotic according to the U.S. Drug Enforcement Agency. Thus, this is an opportune moment for Canadian firms operating in cannabis plant and value added production to cement this advantage. Aurora Cannabis, one of Canada’s biggest cannabis producers, recently signed a deal to begin providing German pharmacies with medical marijuana, the largest of its kind in the world. The natural extension of this trend is sales and growth with Canada’s largest trading partner, where cannabis has proven to be a tremendous growth product.

In conclusion, consider the three key factors discussed above. If allowed to price freely, the burgeoning competitive atmosphere among cannabis firms will lead to cost reduction, which can be passed on to consumers through lower prices of the plant itself and its ancillary products. Next, consider the drastic decrease in law enforcement and judicial expenses devoted to cannabis in its current, criminalized form. And as the Maritimes are projected to face considerable budget deficiencies, consider the economic boon that a recreational substance could provide to the province, if managed properly. At this time next year, there could be pressure from cannabis farmers and retailers to list ounces of cannabis on futures exchanges to help secure long-term pricing for their new cash crop.

 

 

Interested in improving performance in key subjects, preparing K-12 students for future careers, and growing Atlantic Canada’s economy? Start with learning a new language

By Ainslie Pierrynowski (AIMS On Campus Student Fellow)

In recent years, policymakers, educators, and parents in Atlantic Canada have grappled with a pressing question: how can the region’s schools provide students with the knowledge and skills needed to secure livelihoods and revitalize local economies? Moreover, what specific kind of knowledge and skills ought to be taught? Why? How? Much of the discourse surrounding these questions has focused on improving students’ performance in language arts, mathematics, and science—and understandably so. In fact, I pointed out in a previous op-ed that the 2015 results of the OECD’s Programme for International Student Assessment (PISA), which measures student achievement at the national and sub-national level, showed that all four Atlantic provinces ranked below the Canadian average when it came to students’ reading comprehension, mathematics abilities, and understanding of science. While these skills are certainly instrumental to students’ success in further education and in the workplace, one further area of study has become increasingly important to Atlantic Canada’s survival in the larger global economy: learning additional languages.

Although this discipline may, for some, initially appear to be a beneficial (but optional) addition to one’s resume at best and a “bird course” at worst, the acquisition of other languages has a direct bearing the development of students’ human capital. For instance, a growing body of research suggests that individuals who speak multiple languages regularly tend to develop a variety of skills that transfer across several different fields. Multilingual individuals tend to be better able to retain information, multitask, and absorb information from their surroundings than their monolingual peers. In fact, language courses (and these cognitive benefits) need not detract from students’ study of English or French language arts, mathematics, science, and other key subjects. Rather, learning another language may actually improve students’ academic performance in these areas. Research suggests that studying another language tends to bolster students’ scores in mathematics, in part by pushing students to develop strong problem-solving and memorization skills. Further research indicates that learning a new language can push students to develop their grammar, vocabulary, reading, and communication skills, thus improving students’ knowledge of their first language. One study found that students who learn an additional language tend to attain higher grades in mathematics than students who do not, even when learning another language takes time away from studying mathematics. Another study observed that students who spent just one semester learning a language, with one 90 minute class per week, saw substantial improvement in their performance in language arts and mathematics. Therefore, although language learning should not be taken as a substitute for strong language arts and mathematics curricula, it could serve as a valuable complement to these subjects. In addition, multilingualism affords students even more human capital when they finish their studies and enter the workforce. Communicating with prospective clients and companies in their preferred language, for example, can help to forge lasting international business relationships. Health professionals may have more success with diagnosis and treatment if they can speak their patients’ first languages. A multilingual researcher can share their findings with other researchers around the globe more easily than their monolingual counterparts—the list goes on.

The time is ripe for Atlantic Canada’s K-12 education systems to become leaders in language education. After all, the small and medium-sized enterprises which predominate the area’s economy sorely need to find new international exports markets. Moreover, the shrinking region must improve its relatively low immigrant retention rates and draw more newcomers to the area. And with Canada becoming increasingly multilingual and ever-more enmeshed in the global economy, Atlantic Canada cannot afford to be left behind. K-12 education is the optimal starting point for such a renewed focus on language-learning. That is, children tend to be more receptive to language-learning than adults. A strong K-12 language-learning program also enables us to invest in the region’s future labour force and Atlantic Canada’s long-term economic success.

Implementing such an initiative, however, constitutes a formidable challenge. Despite the aforementioned academic, social, and economic benefits of learning multiple languages, course offerings at smaller and more isolated schools are frequently limited. Specialized language teachers can be scarce in many communities and may entail a prohibitive cost to cash-strapped school systems. Even existing language programs have no guarantee of fluency among their graduates. Or, as in the case of some French immersion programs, language-learning initiatives might be perceived as little more than a way to covertly filter out low-performing students and provide a hidden stream for high-achievers.

To confront these challenges, schools can take several steps. First of all, online teaching tools, like this language-learning app for young people designed by 13-year-old Hillary Yip, offer unprecedented access to conversations with native speakers, educational games, lesson plans, texts, audio recordings, videos, and many more curriculum resources. Schools can also tap into external learning opportunities, by say offering to host a local cultural organization’s language classes in the school building. E-learning, which is beginning to gain some traction in Atlantic Canada, can also enable educators in disparate locations to pool their resources and knowledge together. For older students, guidance offices can promote funded exchange programs—of which few Canadian students take advantage—especially those involving a language immersion component. Financial savings elsewhere, whether in the form of more efficient transportation or the sale of disused school buildings, could be allocated toward curriculum development, ongoing teacher training, or the hiring of staff. Regular monitoring of students’ language fluency, using an agreed-upon rubric similar to the Common European Framework of Reference for Languages, could help to identify potential areas for improvement and ensure that students are progressing in their studies. Overall, Atlantic Canada’s K-12 school systems cannot afford to think of language courses as mere “add-ons,” but must instead treat language learning as a crucial investment for the region’s future.

 

Finding a pathway to economic diversification

By Ainslie Pierrynowski (AIMS on Campus Student Fellow)

Nearly twenty years ago, a community organization in Bridgewater, Nova Scotia embarked on a mission to transform the town’s economic landscape. Between 2000 and 2017, the Bridgewater Development Association (BDA) spearheaded a number of local initiatives, including the establishment of the Bridgewater Area Family Health Centre, the construction of the Bridgewater Marina, and the extension of Glen Allan Drive. These projects—as different as they might seem from each other at first glance—were all informed by the Association’s overarching goal: diversifying Bridgewater’s economy.

In this context, economic diversification refers to expanding the number of strong, productive sectors and livelihoods. Essentially, in a community reliant on one predominant industry, the entire local economy can suffer when said industry experiences a downturn. Conversely, an area which is home to multiple well-performing economic sectors is less vulnerable when one (or more) local industries encounter difficulties. Given the economic stagnation wrought, in part, by the decline of key industries like coal and steel production—not to mention many communities’ current reliance on tourism and other seasonal sectors—Atlantic Canada has good reason to pursue greater economic diversification. In the words of Bridgewater Mayor David Mitchell, “We want to make sure that Bridgewater is not a one-industry town because we’ve seen what happens to communities when they rely on one industry.” Economic diversification, however, is no easy task. It may require developing new training and continued education programs, devising a strategy to attract investment to the area, gaining access to markets beyond the local community, and creating the infrastructure necessary to support new, burgeoning economic sectors. How, then, should communities in Atlantic Canada go about diversifying their economies?

First, effective local organizations like the BDA can be instrumental to economic diversification. They can identify community needs, act as intermediaries between investors, local businesses, and other stakeholders, and enhance accountability. Garrett County, Maryland (US) provides one such success story. When the focal point of its local economy—a glasses factory—closed its doors, Garrett County lost a substantial number of jobs, including indirect jobs supported by the county’s economic base. To boot, the displaced workers often lacked transferable skills. Amid the economic uncertainty, local leaders met to assess the situation and formulate a response to the crisis. These discussions produced a short, concise economic growth strategy aimed at utilizing existing local assets and enhancing the area’s economic infrastructure. This initial step was soon followed by an ongoing planning process where five key local economic development organizations and several different industry sectors provided input on the county’s future direction. Overall, Garrett County’s economic diversification strategy proved successful. The county is among the most economically diverse municipalities in the Appalachian region. As well, Garrett County experienced above average employment and income growth between 2002 and 2009, with more recent years bringing stable employment and some small employment gains in the manufacturing and recreation sectors. By working with local stakeholders from the beginning, the local government could respond quickly to funding opportunities at the state or federal level. That is, rather than spending time forging coalitions, businesses, community organizations, and local leaders could instead draw on pre-existing partnerships when presented with funding opportunities. The area’s success stems not only from this collaborative approach, but from that fact that the country’s economic diversification strategy was effectively implemented. In particular, the strategy was reviewed every few years, thereby ensuring that Garrett County’s economic diversification strategy was attuned to the community’s current circumstances. Moreover, the partners involved in the planning process agreed on how to measure the outcomes of their economic diversification efforts. This allowed communities to hold those involved in implementing the plan accountable. Garrett County’s response to local economic decline could therefore prove fruitful for post-industrial communities in Atlantic Canada facing similar challenges.

Beyond the local level, regional economic development agencies, particularly the Atlantic Canada Opportunities Agency, could take a new—and potentially more successful—approach to economic diversification. As this article notes, regional economic development agencies could improve public confidence in their operations, promote openness and accountability, and potentially make more informed decisions by adopting a transparent, depoliticized process for selecting which communities will receive funding. Additionally, these agencies could further promote economic diversification by placing a greater focus on funding the programs needed to support economic diversification—such as education and training programs, or high-speed Internet in isolated communities—rather than emphasizing more traditional programs like business loans.

Ultimately, while businesses, workers, organizations, and policymakers seek to ensure Atlantic Canada’s long-term economic prosperity, it is essential that we not only diversify the region’s economies, but carefully consider how we will achieve economic diversification. As the experiences of Bridgewater and Garrett County illustrate, direction, accountability, and adaptability are needed if the region is to prepare for its economic future. In the words of Mr. Mitchell, “Economic and community development are linked…we have to look at every component and determine the strengths we have and identify areas that still need work.” Communities throughout Atlantic Canada would do well to take heed.