The recent news about tolling highways hit me in the head like a freight train. I mean, this means the Beatle’s song, Taxman, is becoming a reality. Remember the line….”if you drive a car, I’ll tax the street.” It used to be a poetic joke? You know, an exaggeration not intended to deceive. Now the political and government leaders are serious.

The second image that flashed before me after hearing about the new tax idea was Translink. You know, the financial black hole in the lower Mainland of British Columbia that keeps sucking up millions of dollars that vanish forever, never to be seen again – but whose hunger is never satisfied for tax dollars. It’s a bit like a horror film where an invisible creature that only eats tax dollars never gets satisfied or full.

In the past, highways and bridges were an indisputable destination for tax dollars. Governments did not complain about not having enough money to build and maintain transportation routes. It was one of the prime reasons for taxation.

Gradually and quietly, the practice of disguising tax increases by calling them tolls has become popular. Most recently, the toll on the Port Mann Bridge avoided extreme criticism against governments by tolling just the users. This was a grandiose version of the user pay principle. The toll lost its tax quality because it made sense to everyone else (except the users) that only those who used the new bridge would or should be tolled. (Taxed)

In my view this unending demand for more and more taxes, fees, levies, and tolls needs to be better studied, more thoroughly understood and for transit authorities to operate more efficiently. We need to get a close-up digital picture of the insatiable appetite.  

I’m very surprised the topic of telecommuting hasn’t entered the discussion of congestion on our highways and bridges. How many people are ‘forced’ to commute because of their employer? How many people must use a car to get to work because they have children to take and pick up from day cares and school? Would it not be better to find a way for parents to work from home that would also mean more quality time with their children?

It seems to me that the great promise of Skytrain in the beginning was to get people off the highways and bridges and get them to and from work faster, in a more environmentally friendly and affordable manner. For some reason Translink’s problems have multiplied since its inception. Translink has been transformed into a neo-feudal institution with kings and queens, barons and knights and peasants at the bottom (which are now called commuters) where the notion of affordable and efficient public transit has left the building.

Albert Einstein once remarked, “Insanity: doing the same thing over and over again and expecting different results.”

There is no light at the end of the tunnel as long as we keep doing what we’ve always done. We desperately need change instead of tolls and higher taxes.

It seems we’ve evolved from a world of prevention for protecting the public from a long list of hazards and perils to one that posts signs, like, “Use At Your Own Risk”. We see them everywhere. At beaches with empty lifeguard towers. At public and private facilities alike. Everywhere warning signs are posted to protect people from real dangers.

These signs seem to be a substitute for the real thing, such as trying to advise people with helpful details and preventative steps to avoid injury – or seriously discouraging people from going for a swim in a polluted river or lake – or by replacing real lifeguards or safety trained personnel with signs – or removing the danger.

It seems that warning signs protect merchants and governments from liability. It shields them from law suits by doing the very minimum. Signs have become proof that whatever happens on the other side of the sign, people have been duly warned.

Of course these signs don’t say, Do Not Use. (or perhaps build a fence to prevent trouble)  I’ve wondered about that when I see children playing on polluted beaches.

The recent public warnings about escalating household debt seem to follow this successful example to prove that business and governments are doing their due diligence by warning Canadians there is too much household debt.

They don’t say, “Do not use household credit because it could be harmful to your financial health.” They don’t even say, “Use At Your Own Risk.” All we hear from time to time is how household debt in Canada is too high. The same root causes are blamed - low interest rates and the cost of housing in Ontario and British Columbia being held hostage by hot housing markets.

The current warnings in the media include:

  • Household debt ratio grows in second quarter as debt increases faster than income
  • Hot housing markets in B.C. and Ontario are pushing mortgage growth, despite softness in oil producing regions.
  • Household debt in Canada continues to get heavier as the ratio of household credit market debt to disposable income climbed to 164.6 per cent from 163.0 per cent in the first quarter.
  • The increased borrowing comes at a time of low interest rates.
  • Overall, total household credit market debt amounted to $1.874 trillion at the end of the second quarter, up 1.8 per cent from the previous quarter.

There are no lifeguards on duty to rescue the casualties of high credit card interest rates or unaffordable housing. No tangible advice is given to a nation of debtors who have borrowed more each and every year since the 1970s, through periods of high and low interest rates, on how to stop borrowing.

It seems to me that neither governments nor the business community really want anyone to stop borrowing. They don’t want anyone shopping less. They just want to display their concerns in public, like a warning sign pointing the finger at a vague abstract phenomenon (hot real estate markets, low interest rates) that no-one controls.

Unfortunately, with credit and debt, no-one can shield themselves from the growing liabilities that accompany unaffordable housing, unaffordable day-care, unaffordable post-secondary education and insufficient wages for middle and lower income families. Everyone is paying a high price for these unspoken root causes that cry out for immediate attention and real action.

I remember the good old days when finance companies roamed the land with ‘good guy’ loans and interest rates so high that Superman wouldn’t be able to break free from the contract. The world of Daniel Bell (The End of Ideology 1960) and John Diefenbaker softened the blow of harsh and unconscionable credit contracts by calling them – ‘poverty lenders.’

Accordingly, a poverty lender basically provided credit services to those who could not qualify for loans with ‘conventional’ lenders like banks and credit unions. The poverty lenders provided a valuable service to those unfortunate people who needed credit – who needed a car loan or needed to consolidate their other debts into one big loan with easy monthly payments.

Of course, the reason why they couldn’t qualify for a loan at a bank or credit union was this: they were poor. These people were too poor to qualify. They didn’t have any real assets. They didn’t have well-paying or stable jobs. The banks were not prepared to take the risk that the loan would not be repaid.

The poverty lenders employed the best lawyers to write and defend their high interest or otherwise impossible credit contracts. The poverty lenders tended to be the harshest debt collectors who vigorously opposed any customer who dared file for bankruptcy. The poverty lenders wouldn’t hesitate to seize all of the debtor’s household furniture, seize cars, garnishee bank accounts and wages and harass debtors without restraint or mercy. In other words, the poverty lenders were the most vicious debt collectors of all and inflicted maximum pain and suffering on people whose only deficiency was poverty.

Flash forward to 2015. Today, the student loan program in Canada lends huge amounts of money to poor people who would never qualify for a loan at a bank or credit union because they have no income, no assets or both. The government(s) call this a public service that helps poor people get a post-secondary school education.

From time to time, such as in a recent article in the Vancouver Sun, someone blows the whistle on the government’s student loan losses. According to the article a Nov. 17, 2014, briefing note to CRA commissioner Andrew Treusch said that in 2012-2013, 162,000 borrowers had their debts written off for a combined value of $308 million.

Rather than examine the underlying issue of poverty being the source of the student loan program it goes unmentioned and unquestioned. Instead of looking at the high cost of tuition and post-secondary education as probable factors in a national dilemma with student loans, the government  ramps up its collection machine a few notches to ‘improve recoveries’ and silence critics.

The student loan program has already used parliament to collect its debts by prohibiting student loan debtors from a bankruptcy discharge for 7 years and refusing to co-operate with any proposals outside of bankruptcy for insolvent debtors. The net effect of using bankruptcy law to collect debts has been the creation of a new social class of debtors – student loan debtors – who are treated worse than any other debtor in a bankruptcy except for family maintenance arrears, fraudsters and miscreants with court orders against them. This isn’t exactly what was intended by the Canadian social justice framework when bankruptcy legislation was created and overhauled in 1992.

Of course, ratcheting up the merciless wheels of a debt collection process designed to inflict maximum pain regardless of the causes of the financial problems people have, hasn’t and never will stop the so called student loan ‘losses’. Funny how the student loan program uses the term ‘losses’ rather than ‘casualties’.

I might add that the student loan debts all by themselves can evolve into a financial problem of monstrous proportions just because of their humungous size. Every student loan has an unpredictable future. Every student loan borrower faces the possibility of a debt problem that can ruin their lives.

The thought of lending less or perhaps reducing the costs of post-secondary institutions hasn’t received any serious attention except for the government of Newfoundland that has showed great wisdom and courage this year in using grants rather than loans to promote post-secondary school graduation for everyone. They openly admit that society benefits from a skilled and employable workforce – not just the student.

Lending more and more money to the poor hasn’t worked too well for the poor. Tightening the screws on the collection process will change nothing except for the costs of collection.

This aggression against basically vulnerable people who can’t afford to pay their debts or fight back hasn’t stopped the defaults or other deficiencies with the student loan program because we keep banging our heads on the principle of lending money to people who can’t afford to repay it – to the poor and the working poor.

Today’s youth deserve a better less encumbered way of getting the basics to find a productive and fulfilling life after spending years of study and hard work.

In a recent blog by a colleague of mine, the first thing that jumped off the page and metaphorically smacked me in the face was the phrase, ‘us good guys.’ If ever awards were being handed out for the top ten self-righteous, self-praising phrases then ‘us good guys’ would be in serious contention for an Oscar.

As is often the case with those who use these phrases, us good guys are never defined beyond the author’s rather vague opinion. The debt ugly is quite clear. They are called dragons that threaten the financial services of the land (in Ontario) with unlicensed debt settlement services.

According to the article, the nefarious ‘evil doers’ have risen from the dead to partner up with lawyers so they can circumvent a law that banished them from the land for excessive upfront fees, misleading contracts, and dubious debt negotiation practices. I’m sure those kinds of things have never happened from the legal profession all by itself – you know, without any help of the resurrected undead debt settlement service providers.

The good guys (who, one would rightly or wrongly assume, do not demand excessive upfront fees, misleading contracts and/or dubious debt negotiation practices) are further angered by how lawyers are exempt from providing debt settlement services that, presumably, only the good guys should be delivering.

So, now the good guys seem to suggest that lawyers are susceptible to unscrupulous debt settlement practices because they are not……you guessed it…….they are not properly regulated licensed credit counsellors.

Oh oh. Not so fast. An article from the Huffington Post was cited to introduce not-for-profit credit counselling agencies and mentioned that, “…debt settlement services across Canada operate in a competitive field alongside non-profit credit counselling agencies.”

I haven’t a clue what that means. It seems to suggest that not-for-profit credit counselling agencies are the only places blessed with angel-like qualities and, by omission, the licensed ‘for-profit’ agencies either don’t seem to exist or are simply not blessed. This makes me wonder who’s blessing who?”

It’s interesting to see the logic of sanctimony unfold and awkwardly conclude that, in Canada, there are blessed not-for-profit licensed credit counselling agencies and (by omission) unblessed for-profit licensed credit counselling agencies, and then there are evil dragons and lawyers. 

Bankruptcy trustees received a warm kiss of approval for adhering to industry standards and “…to assure fair play and professionalism in relation to debt services…” (this declaration is made knowing full well that bankruptcy trustees are for-profit corporations and have a legal duty to act on behalf of the creditors and not a debtor in a bankruptcy proceeding.)

The article and its omissions, unsubstantiated assumptions and abstract assertions all sound a bit like a fairy tale to me. The best way to liberate fantasy fiction from non-fiction is to provide factual and statistically valid proof.

By the way, the legal profession drafts the legislation of governments and plays a fundamental role in the jurisprudence of debt and bankruptcy for both debtors and creditors. I’m sure they can identify the good, the bad and the debt-ugly (dragons) all by themselves.

We, as a society, hate deprivation.  We love, on the other hand, instant gratification.  These two things are on opposite sides of the spectrum, so it’s not really surprising that we struggle with forming new habits, changes to our lifestyle, or sticking to new routines.  (Let me be clear – when I refer to deprivation, I mean deprivation of extra, non-essential goods, not basic needs.) 

Why do we hate deprivation?  It seems so obvious – because we have to deprive ourselves, or forgo something that we really want.  In a culture that is constantly encouraging us to ‘live in the moment’ and do the next great thing (or buy it!), how can we say no to ourselves?  More importantly, why should we say no?

Simply put, we should reject the easy convenience of getting everything that we want, when we want it because it is often at odds with our goals.  I don’t mean our lofty goals of “I’ll quit smoking someday” or “I’ll read that book in a few months.”  I’m talking about defined, specific goals that we have put forethought and time into (“I will save $500 into my RRSPs by the end of the year.”).  Once we have decided and outlined these goals, there isn’t room for any hasty decisions that eat up our cash and our time.  All of your energy should be put towards the things that reflect who you are and the direction that you want your life to take.  Oftentimes, when I meet with prospective clients, they have avoided setting such specific goals because then it is easier to let them fall by the wayside.  If it’s undefined then you can’t really fail at it. 

Many people act in direct opposition to their stated priorities.  I’ll meet a person and they’ll tell me that creating financial security (an emergency fund, for example) is a priority; however, you’ll go over their budget and realize that there’s not any funds being set aside for an emergency.  When you question the person about how they can create a space for those funds (giving up their daily latte, smoking/drinking, or forgoing Disneyland this year), they have a puzzled or annoyed look on their face.  This tells me that they have not owned their priorities and aren’t ready to embrace them. 

Once you have stated priorities, you can begin the stage of ‘deprivation.’  This is really just a fancy way of stating that you can now start declining anything that doesn’t work toward your stated goal.  Of course, this will be harder than you anticipate.  And by depriving yourself of things, I really mean the opposite – because once you identify what you truly want and are ready to focus all of your energy towards that thing, it’s not really deprivation.  It’s strategy. 

So how can we deprive ourselves in a world that is seemingly at odds with forgoing luxuries?  Here’s some things to consider in order to stay strong:

  1. Compare and Contrast:   Is the thing that you want right now better than the thing that you want later on?  Will the thing that you want to buy immediately be worth more than the ultimate goal that you have?  If you’re having trouble comparing the items, contrast them – what makes them different and which one is better?  As we already know, a feeling means much more than an item.  This means that the book that you want to read today may not be more valuable than the trip that you want to take in six months, even though you would enjoy the book immensely.  (And you can probably get the book at the library, anyways.)
  2. 2)      Are you a person of your word?  Clichés are a writer’s enemy, but we all know that talk is cheap.  Being a person of your word – telling everyone what your goal is, and sticking with it – is important.  Letting yourself down constantly stops being an option once you realize that you aren’t making progress by lying to yourself or excusing your behaviour. 
  3. 3)      Stay away from temptation.  Getting away from your hotspots (coffee joints, clubs, malls, bookstores, etc.) will help curb your temptation.  Staying off store sites is an additional strategy, as online shopping often leads to curiosity, which leads to in person shopping. 
  4. 4)      Visualize.  We all know that little luxuries can have a big impact.  That coffee that we grab to perk us up on a terrible day, those concert tickets that we score in an effort to get us out of a funk….those are crutches that we use to get us through the boring times.  But do you know what isn’t boring?  Achieving a long-standing goal.  Really visualizing what we want (the feelings, sensations) sounds far-fetched and childish, but by putting ourselves in a different place for a small amount of time might just be enough to talk us down from purchasing. 
  5. 5)      Consider the additional expenditures.  Sometimes when we buy something, we don’t think about the ultimate costs.  If I go to a show, I’m going to want to drink or have a meal out.  If you buy a handbag, you want the matching wallet.  Eyeshadow usually requires a makeup brush to apply it.  All of your purchases probably have additional purchases attached to them, which makes the original purchase that much more expensive. 

Deprivation sounds awful, but it doesn’t have to be.  It isn’t even really deprivation, if you think about it – it’s postponing your pleasure for a different day.  It’s easy to get bogged down in the day-to-day grind (“I never get to go out,” etc.) when we can’t see immediate results, but the reality is that in order to get what we really want, we have to put off what we don’t – indefinitely.    

  

Remember, if you are experiencing financial difficulties do not wait. Call Solutions Credit Counselling at 1(877)588-9491 or fill out our Debt Consolidation Questionnaire and get your Free Credit Counselling Advice today.

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