Governance and Game Design

Those who know me know I like to dabble in game design, and I have a published hobby game out on the market right now. I think a game designer comes at the concept of governance from a unique angle. A game designer's goal is to create a competitive experience that the players feel is both fair and enjoyable. Oddly enough, a policy designer in a democratic and capitalist system has the task of moulding a competitive system both fair and enjoyable. Both work with rules and objectives, both try to encourage competitive activity within the bounds of civilised society, and both attempt to use their understanding of human nature in order to make their designs better.

When you design a game, there are a couple things you use to make the experience fun and fair for the players: rules and objectives. Objectives are the winning conditions of the game, the payoff structures, the stuff that people complete for. Rules are the things that keep the game fair, the bounds to the game, the stuff that ensures the game itself is neutral. Many believe the rules are what makes the game, but that's not how it works. The game exists as soon as you have an objective. The rules are just there to make certain everyone has an equal chance of attaining that objective. The true art of game design, then, is to make the objectives, the incentives, and the inducements so perfect that the game only needs a minimum of rules. Rules create a kind of friction. They can limit creativity and expression, and they certainly take time to learn. The less of them, the better - so long as the game is fun and fair.

Policy should be thought of more like game design. Objectives themselves change player behaviour, and rules are a necessary evil. As Laozi said:

A leader is best when people barely know that he exists, not so good when people obey and acclaim him, worst when they despise him. Fail to honour people, They fail to honour you. But of a good leader, who talks little, when his work is done, his aims fulfilled, they will all say, "We did this ourselves."

Just so, a game should take its players seamlessly into a joyful place without their even noticing. Equally so, the incentives in society must be structured such that simply by acting in accordance with self-interest, all are able to chase their own objectives on a level playing field. Game theory is a great example of how to study the structuring of incentives. If incentives make cooperation easier, then cooperation will happen. If cooperation happens, you don't need to make a rule against being a killjoy. By structuring the incentives, you can eliminate rules. By eliminating rules, you make the game self-ordering based not on fiat but on the simple self-interest of the players. In other words, good policy makes certain laws obsolete simply through incentives.

The interesting thing about real life is that everyone more or less sets their own objectives and sets out to attain them... but most lose track along the way. Both conveniently and sadly, the medium of exchange and competition in real life is money. The place through and in which we compete is the market. Since money is so relevant to achieving so many objectives, many people take it for an objective in itself. Part of helping people play the game of life is helping them discover what their objectives are, and how to attain them. Me, personally, I'd like to have a nice place in the country and perhaps an alpaca or two. That will take money, but if someone offered me a place in the country (and a couple alpacas) for the price of three kilos of dandelion fluff, my value system would shift to the collection of dandelion fluff. For everything, there is a medium of exchange, and it is not always money. For some human needs, money does not provide satisfaction. Knowledge of self and a sense of imagination regarding how to attain one's goals should be a prerequisite to playing the game. The first key to structuring incentives is to engage the players to seek their own goals, and not simply to seek the medium with which some goals may be attained.

Corporations are so structured as to make the accumulation value (denominated in money) their sole objective. Corporations, being individuals with objectives, are also players - albeit rather mechanistic ones. Since their objective is money, it is all the more important that incentives are structured through the use of money. Money flows to where it will make the most money, and the market will act according to price. If, in the words of Hawken, price reflected cost, the market - and corporations - would begin acting in a manner that had a lower or negligible negative impact on society. The market is a place in which choices are made, and corporate choices are reasonably predictable. If corporate choices are predictable, then they can be manipulated to do good rather than evil through incentives, not rules.

So what is the key to a good game? It must be fun and it must be fair. What is the key to good policy? It must be fun and it must be fair. The more incentives and prices reflect actual cost, the more positive decisions will be made by the market. The more positive decisions are made by the market, the less rules are required. The less rules are required, the greater the range human ingenuity can roam. The greater human ingenuity is employed, the more rich the ecology of ideas is, and the more fun the game becomes.

Civil Society - Part 1: The People, Chapter II: Protest

Perhaps unlike many people, I believe that protest - in democracies - is not only noble but necessary. Protest is a very specific form of feedback, and one that should be singled out not only for its energy but for its contagion. One man self-immolating in Tunisia sparked a wildfire of revolution across North Africa and the Middle East. A key to the power of protest is actually the opposite of a standard feedback loop: protest occurs when feedback is blocked. The feeling of utter and complete powerlessness can transform most readily into rage. Powerlessness comes from being unheard, or from being silenced. Powerlessness comes from when the lines of communication with the powers that be have either broken down or never existed in the first place. Consider the fate of Zhao Lianhai, who was one of the people who blew the whistle on the Sanlu tainted milk scandal. While loving his country and hoping for China to be great, he was moved to criticise it in order to improve it. For doing so, he was detained. In a way, his protest is a greater sign of patriotism, because he knew he risked detention for his protest, but did so in the belief that the leaders would hear his plea and rectify the system. In the end, the protester wants something to improve, and is left with no other avenue to voice his concerns except protest. Dissent is the highest form of loyalty, for it is necessary, yet almost certainly ends poorly for the dissenter.

I remember the Kananaskis G8 summit in 2002 when I think about how to deal with protest. In Calgary, the scene of the most numerous protests (and where I was living at the time) the police response had a stark difference to police responses at other such events elsewhere in the world. Protests were mainly policed by lightly-clothed officers on bicycles. When an unplanned (and, effectively, illegal) snake march began in the downtown core, the police didn't attempt to stop it. They blocked intersections along the route and made certain it progressed safely. While Calgary's police may have been considered aloof by some of the protesters (they did decline to play a street soccer game with some anarchists), they cannot be considered non-responsive, and they certainly didn't escalate the tension level at any of the protest venues. In sum, they professionally protected the public peace, and showed restraint and discipline, just as they were supposed to do. This is, after all, a democracy, and people have a right to be heard... even if it means holding up traffic a bit. Blocking the progress of the protest would simply have fuelled greater demonstrations.

But what if we could harness that energy?

THE PEOPLE

Harnessing the power of protest

The government is a giant system with its own series of feedbacks. As I have indicated in previous posts, it makes sense that the people be allowed to give feedback on important topics within set guidelines. It's equally important that the government react to that feedback automatically and uniformly, so that the populace has faith in the system. When I worked in Sri Lanka, I was in charge of an occasionally unruly line-up of clients. They would line up perfectly fine until someone managed to sweet-talk their way past the line-up. At that point, the system changed. I hesitate to use the word "broke down", though that is what appeared to have happened. No, the system changed to a less fair and equitable system. Once the fiction of the line-up was shattered, the line degraded into a crushing mob. This was not the fault of the people in line; it was the fault of the people who were rewarded for bucking the system. If people are not mechanistically provided with uniform feedback based on their inputs, the system changes. If the people do what they are supposed to do and they don't get the result they expect, they stop upholding the previous system.

Protest is feedback that hasn't got a channel. This type of feedback, too, must be heard - even if there is no extant process to deal with it. The unique problem that protest presents is that it is a form of feedback that has noplace to go - so it bursts out onto the street. Protest that is allowed to proceed - just as it did during the Calgary anti-G8 parade - can be dissipated before it meets resistance. Resistance amplifies protest because protest is, by definition, an aggressive reaction to resistance. The best reaction to protest, then, is to put it someplace.

While I don't think the police approach to protest should change that much from what I saw in Calgary way back when, there needs to be a general way to deal with protest. Protest is not a special case. It happens. Regularly. Just as the people should have expectations of how their feedback should be treated, they should also have expectations about how their protests will be treated. Opacity works for nobody when it comes to issues of the law. Police should be given rules of engagement that allow them to balance collective good against minor infractions. Though many people may think otherwise, especially after the most recent G8 issues, police are neither dumb nor unsympathetic. They don't actually want to ruin people's lives. Their interest is in preserving order, and when given the freedom to exercise their discretion to do so, they do. Just as police understand the occasional need to allow petty crime to go unpunished to facilitate a greater investigation, police are fully capable of comprehending the need to let obstructing traffic go unpunished in order to avoid a larger (and utterly preventable) confrontation. In the end, they understand that punishing a minor crime can lead to the commission of more serious crimes. When given the rules of engagement that allow them to make that judgement, I would have confidence in their ability to do so. Rigid rules of engagement do not take dynamic situations into account, as projections cannot take all possible futures into account. Delegation of greater power to ground level would potentially solve this problem. It's not like you want to congratulate people for mucking up traffic, but you don't want to muck up traffic worse by writing two jaywalking tickets and making two hundred people angry at you.

But I digress. Protests may happen, but the interest of the government is to stem the need to protest by allowing that energy to be put into a beneficial place. If we classify feedback as "public opinion that has a natural place to go" and protest as "public opinion that has no natural place to go", then what is protest, really? It's a kind of meta-feedback. It's feedback that tells the government that existing modes of feedback are not functioning properly. The mechanism for handling protest should be some form of tribunal with the executive power to request the implementation of changes in the way government feedback is administered (if it is a matter of changing an existing feedback mechanism), or to deliver a report to the House of Commons (if it is a matter of creating a new feedback mechanism). The perfect place for such a tribunal would be under the Office of the Auditor General. Based on the information provided by would-be protesters, the Auditor General would be able to provide a report either to Commons or to the Department in charge of the feedback system in question. Unless the tribunal itself was found to be insufficient to fulfil the needs of the people, protest itself would become redundant. Since the tribunal would be able to escalate matters directly to the Commons, there would be an established mechanism for attenuating its own mandate via Parliament. Protesters would instead become petitioners, and have full right to due process under the law.

The issue here is that protest, in and of itself, is a legitimate voicing of opinion that has nowhere else to go but the streets. The people shouldn't be congratulated for inconveniencing shopowners and commuters, but they should be given the right to due process with regard to their grievances. While being accepting of protest and dissent as a legitimate way in which to express dissatisfaction, I would rather know that the people have a way to avoid the need for protest by having a mechanism by which their needs can be expressed. By turning protesters into petitioners, the government can constantly adapt and improve is feedback mechanisms, and both improve governance while responding directly to the will of the people. What's more, you don't even have to get an MP out of bed for it... the police and bureaucrats can take care of the whole deal.

If we let them.

Civil Society - Part 1: The People, Chapter I: Feedback

I have a bit of experience with turning disparate and occasionally disconnected information into useful analysis. It's hard. It takes a lot of work and three very rare things: a the ability to make and defend a thesis, a penchant for lateral thinking, and a great data storage/retrieval methodology. Yes, there are other qualities that make the production of reports and analysis better, such as expertise in one's craft, profound subject-matter knowledge, or broad-ranging interests; but starting from those three basic things, one can maintain a good data-synthesis capacity. In most organisations that do this kind of data-synthesis, they rely on individuals to put all this together. Perhaps individuals with small teams, but the typical "producer" of analysis is the analyst - a person. One single person. Bureaucracies and think tanks are constantly in need of more "processor power" to deal with all the information they collect and have to report on. Collection itself is onerous - requiring its own specific and hard-to-find skillsets - let alone the ability to synthesise data together into a useful piece of information. There will always be more data around than the group assigned to processing it will be able to process.

For example, in a classical intelligence operation, assets are run by an operator. The assets are key contacts that the operator uses to gather information to report back to either a handler or his operational unit at headquarters. The operations unit collates and synthesises the work of several operators into briefs and assessments that are then passed to a strategic unit. The strategic unit produces more broad or deep situational reports based on the briefs and assessments from the operational unit. This hierarchy of information gathering requires that at each level, the information gathered becomes more compact and dense. This requires skilled officers at every level to accomplish, and each level is mission-critical. Given the fallibility of humans, the efficiency of a trim organisation can occasionally be a weakness, and when possible, overlap and numbers help overcome this problem. With numbers comes the problem of a greater amount of information to handle, and we are back again at the beginning: the more data you have, the more people you need to parse it. Who better to collect and parse that information than the people you're parsing it for? The people.

PEOPLE POWER

Feedback: crowdsourcing monitoring of government initiatives

Feedback applies to everything a government does to maintain law, order, and a free flow of goods and people within and through its borders. Things like food safety inspections, water quality indexes, air pollution sampling, ice cores, soil monitoring, and even stuff as mundane as traffic flow analysis are all examples of data collection that the government performs to provide feedbacks for its initiatives. Every department of the government collects and maintains catalogues of indices and datapoints to better maintain its programs and make certain the public purse is being employed responsibly. All that data gets fed into huge and broad-ranging analysis to assist in steering the ship of state. That's why there's an entire department of the government called StatsCan, and it's a lot more important than people give it credit for. Monitoring what the government does is almost like a double expenditure on a program: not only does a department have to pay to implement a program, but they have to pay the administrative overhead to manage and measure its output. This is no small amount of money or manpower (expressed in "full time equivalents" or "FTEs").

It's important though, because fairness is expensive. Government must pay more for everything because it must be certain it acts without fear or favour. The process of establishing the need for an expenditure, securing budget for the expenditure, making a tender call, reviewing tenders, selecting a contractor, monitoring the performance of the contractor, assessing whether the final product meets specifications, and completing the contract (and yes, I left out a lot of steps there) must be reviewably fair, transparent, and equitable. Reviewably fair means there is a process established before the activity begins that explains how the process will proceed and why, and that all results of all steps of the process are recorded and judged as part of this established process. Transparent means that all stakeholders in the process must be given adequate and appropriate information for them to be able to take part in the process. Equitable means that no one stakeholder can have a privilege over any other stakeholder. That is, in a nutshell, what government has to do every time it does something. That means you don't simply pay for services, you pay for responsibility. That costs more than just services in the short run, but in the long run, actually costs less. A joke (from a country that shall remain nameless) explains why this is so:

"J", a member of the government of a (country that shall remain nameless) went to America to see how things were done. He visited the palatial mansion of a senator and asked the senator how he got so much money to buy such a lovely house. The senator took J to the porch and pointed to a bridge over the river. "You see that bridge?" said the senator, "I hired the contractors, got the money for double the value of the bridge from the treasury, paid the contractors and he kicked back half to me!" J was amazed. He went back to his homeland thoroughly edified.

Five years later, the senator went to visit his friend J. J, at that time, lived in a veritable resort village surrounded with parks and gardens, and was attended by all manner of servants. "Well, J," said the senator, "how did you get all this? I thought you weren't paid well at all by your government!" J smiled and pointed to a distant pair of mountain peaks. "Do you see that bridge, senator, there between the peaks?"

"No... I don't..." said the senator.

"Exactly!" said J.

In effect, we pay extra so that our government does what we ask it to. We are interested in our government doing what we ask it to because it means better services for us. In effect, it's in our own self interest to have established processes and feedbacks in order to make sure the public purse is being used effectively and efficiently. So this is good, right? Well, yes, actually, it is. Canadians get good governance, no matter what anybody says about it. You can make a low salary in Canada and still have all the security of fully paid medical services and education... and there's the added bonus that we don't have much social stratification. If you're a janitor, other Canadians don't think any less of you than if you were a car salesman or a pipefitter. In other countries, what you do establishes your social standing. In Canada, generally speaking, people's people. I really appreciate that.

Some feedback comes from civil society groups already. Think of Greenpeace, or Mothers Against Drunk Driving, or the Friends of Nose Hill Society. These are groups that band together to advance a given idea, or to defend laws that are already on the books. They have specific or broad interests, they develop expertise in their subject matter, and they effectively bring together hundreds of thousands of person-hours of work for free. In some cases, these civil society groups have direct input on policy. The Friends of Nose Hill certainly do. Some people take things to heart, and are willing to take their own personal time out to raise awareness, or advance a cause, or even just pick up litter. It's a part of civic pride, and such organisation is a civic virtue, whether it be to protect or oppose a given idea. The avenues by which these groups advance their aims are many and varied, but most deal with public education and awareness. If they want the government to do something, the typical way to do so is through unofficial - but broadly accepted and respected - channels such as a letter-writing campaign to the local MP/MLA/Alderman or a petition to the relevant department. There is relatively little in the way of official policy inputs that civil society groups can make, though all parts of government have places where people can give feedback.

So, to recap: this system of feedbacks is in our interest. The government does stuff, monitors it, measures it, reports on it, and has built-in methods of correcting things when they go awry. That's good. It's expensive, but it's good. It's also in our own self-interest for this monitoring to occur. Some groups even do monitoring and advocacy of their own for this very reason. This organisation of civil society is a profound virtue in a democratic society and should be cultivated and nurtured by government policy. This is because - if we really thought about it - wouldn't be in our own self-interest to get these groups to participate in monitoring in a more official way? Certainly not all of the monitoring and analysis... but couldn't the public contribute a little to lightening the load of government and adding to government's feedback systems? The answer is yes, and it requires two things: freedom of information and an effective procedure through which the feedback can happen.

I've already alluded to this in the previous section. Using civil society groups to monitor the management of feebates is simply a good way to make certain that the fox isn't left guarding the henhouse. The important thing is that the groups used to monitor and report on the projects implemented and the standards set by the government must adhere to strict procedure and exemplify the governmental qualities of fairness, transparency, and equity. This means they should be certified and registered with a central agency (or with the department responsible for the bailiwick in which they operate). It also means there must be very neatly-defined parameters for their feedback as well as clearly-stated process that the government must follow in the event feedback is generated.

For example: through engagement with the truffula society, the department of truffulas has determined that the thneed factory can only harvest 1000 truffula trees per year. The truffula society has the right to monitor truffula harvest by giving three days' advance notice to the thneed factory before inspection. Inspection may then proceed, and if all is in order, no problem. If the truffula society determines an overharvest has occurred, they flag this to the department of truffulas, which is then mandated by law to inspect themselves. If they find the truffula society was correct, a penalty is levied against the thneed factory, part of which goes to the truffula society for their services. If the truffula society raised a false positive, they would be given an administrative penalty for crying wolf. A certain amount of crying wolf would get them de-listed as a certified monitoring group, as would the flagrant abuse of their right to inspect (for instance, forcing work stoppages by inspecting every three days). So there would be a mode for redress from the thneed factory if they felt they were being improperly targeted. The truffula society would also have to agree to an open-books policy of allowing not only the government, but the thneed factory and the public, to view all their communications and reporting regarding truffula harvest monitoring. The main necessity is for fairness for both sides, but also the right to monitor must also be held inviolable. While excessive monitoring could be construed as unfair obstruction, regular monitoring should be expected. There should be no mechanism by which regular monitoring could be upheld or obstructed so long as it was not overly intrusive.

The benefits of this are manifold. The government gets free monitoring for certain initiatives and standards. They are then able to employ their overworked monitors in a more parsimonious and effective manner. The government spends less for more coverage, and would gain greater revenue from greater discovery of infractions against standards. Civil society, however, is the big winner - not simply from the fact that it would have more power and input - but from the fact that it gets immediate response from government regarding a subject that interests it. That direct action spurs on a culture of civic responsibility. When your action makes a positive (or even negative!) reaction, you are more likely to keep up the good work.

A government that gives more avenues for people to participate will be blessed with more popular participation. When the people feel empowered, they will be more likely to feel part of the process (and by extension, the solution) rather than separate from it. The civic pride that is engendered from simply doing the right thing will build and empower civil society to do more, and to speak more about the things that are important to it. That feedback will assist in making government more responsive to its people, and the virtuous circle can build on from there. How do you get the government's work done for free? Let the people in, by tapping into the flow of interest that already exists in society. That is how to harness feedback that improves the systems set in motion by the government.

I've heard this somewhere before...

This sounds a lot like what I've been writing lately.

As a matter of fact, not only does he come to the same conclusions...

First, growing inequality is the flip side of something else: shrinking opportunity. Whenever we diminish equality of opportunity, it means that we are not using some of our most valuable assets—our people—in the most productive way possible. Second, many of the distortions that lead to inequality—such as those associated with monopoly power and preferential tax treatment for special interests—undermine the efficiency of the economy.

He even finishes off where I have on past occasions:

Alexis de Tocqueville once described what he saw as a chief part of the peculiar genius of American society—something he called “self-interest properly understood.” The last two words were the key. Everyone possesses self-interest in a narrow sense: I want what’s good for me right now! Self-interest “properly understood” is different. It means appreciating that paying attention to everyone else’s self-interest—in other words, the common welfare—is in fact a precondition for one’s own ultimate well-being. Tocqueville was not suggesting that there was anything noble or idealistic about this outlook—in fact, he was suggesting the opposite. It was a mark of American pragmatism. Those canny Americans understood a basic fact: looking out for the other guy isn’t just good for the soul—it’s good for business. [emphasis mine]

Do yourself a favour and pass the article around. It's sobering, it's correct, and it's important. We need to reclaim the power of the middle class.

Tax the Wealthy

Seriously.

Allowing someone to profit from the fruits of their labour is about just rewards, it's about advancement, it's about  creating growth and economic resilience.

Wealth redistribution is about equality, it's about humanity, and it's about doing the right thing.

Somewhere between the justice inherent in being rewarded for one's work and the humanity that is manifest in helping the downtrodden out of their vicious circles of poverty is a tenuous middle ground. In this middle ground, the rich are rich because they have contributed, and by deriving profit continue to contribute to society. In this middle ground, the poor are only poor because they are just starting out, but are given ample opportunity to apply themselves to their own emancipation from poverty. That's a pretty dynamic middle ground, and it would require good, stable governance to keep on such an even keel. That's why it's important to learn from our mistakes and make small but continuous error corrections to our budgetary calculations.

Here's one error correction we can make now.

Like I've said, giving more money to those with lots of money doesn't inspire job creation or economic expansion. That's what the lower 80% of income earners are good at. Sparing the rich from taxation is not a sacred cow. We can do it. It won't hurt the economy. As a matter of fact, it will assist the government in reducing debt, which, given the OECD's rosy picture for Canada's economy in 2011, should be a priority.

But it's also part and parcel of the humanity of wealth redistribution. Taxation isn't robbery or appropriation... it's just taxation. The rich still get to keep the fruits of their labour, but they get the additional karmic benefit of helping a new mother just starting out in life pay her rent and clothe her kids... or helping a guy starting his first job pay off his student loan. It's not only the right thing to do, but it creates more economic expansion and consumption than letting the rich keep the money. Who knew that doing the right thing would also help the economy?

Robbing from the Poor to Give to the Rich

This article has me just a little bit furious.

Specifically, the quote in the article that comes from a Citigroup publication entitled "Revisiting Plutonomy: the Rich Getting Richer" drove me to take a brief look at the document. I found these gems:

Our thesis is that the rich are the dominant drivers of demand in many economies around the world (the US, UK, Canada and Australia). These economies have seen the rich take an increasing share of income and wealth over the last 20 years, to the extent that the rich now dominate income, wealth and spending in these countries. Asset booms, a rising profit share and favorable treatment by market-friendly governments have allowed the rich to prosper and become a greater share of the economy in the plutonomy countries.

So the upper 10% of the population drive purchases... I guess that explains why food prices really aren't a bother then.

The latest Survey of Consumer Finances for 2004 from the Fed, just released, shows that the richest 20% of Americans have gotten even wealthier since the last survey was conducted in 2001, and continue to enjoy a disproportionately large share of both income (58%) and wealth (68%). We should make clear that we have no normative view on whether plutonomies are good or bad. Our analysis is based on the facts, not what the society should look like.
This lies at the heart of our plutonomy thesis: that the rich are the dominant source of income, wealth and demand in plutonomy countries such as the UK, US, Canada and Australia, countries that have an economically liberal approach to wealth creation. We believe that the actions of the rich and the proportion of rich people in an economy helps explain many of the nasty conundrums and fears that have vexed our equity clients recently, such as global imbalances or why high oil prices haven’t destroyed consumer demand. Plutonomy, we think explains these problems away, and tells us not to worry about them. If we shouldn’t worry, the risk premia on equity markets may be too high.

Hmm. Yeah, this isn't the way the world should be, it just kinda is... and therefore we should accept that and try to make money off it. I see.

Well, this doesn't provide any political capital at all, does it? I mean, if a politician ran on a campaign of taxing the top 10% of the population in order to provide better lives for the bottom 90%, he'd never win, right? I mean, it would be dumb to shoot for a majority of voters in a democracy, right? Yeah. That logic doesn't seem to hold. I wonder why politicians don't try to rein in the plutocracy? I wonder why they don't pick the issue that could get 90% of voters behind them?

I wonder indeed.

Taxes

The Economist is going through a nice short survey of taxes amongst OECD nations. They've covered consumption taxes, income taxes, and property taxes. I'm grabbing the graphs just in case I lose the permalinks.

Canada has low consumption taxes, high-ish income taxes (especially because we include provincial taxes), and exorbitant property taxes. You'll note that my thoughts regarding taxes exacerbate the income tax issue and increase consumption taxes, hopefully up more toward OECD average. The purpose is to allow consumption taxes to take up the slack and eventually reduce income taxes. However, I'll get into my thoughts on reducing property taxes by giving municipalities direct input from the treasury later. Canadian cities have very limited ways of raising funds, and most of the ways that would be effective for cities to raise funds are actually under provincial control. They therefore tax what they can tax, and unfortunately, that is mainly only property. The rest is user fees. 

The federal treasury has to penetrate the provincial barrier to give funds straight to municipalities, which will use it far more efficiently in some cases than the federal or provincial government. Policy, administration of national programs, defence, etc... these big things are best done by the federal level of government. Service delivery, however, should be a civic bailiwick. The holy trinity of Canadian politics is Education, Healthcare, and Social Services. These things are most efficiently delivered by cities and cities should be directly funded accordingly. Five billion bucks could do wonders for both the educational and health systems, and that's not too much to pay for the two most important things on the Canadian political to-do list.