Photo by Michelle Spollen

Back in April, a friend and I had met up to grab smoothies at a café before going on a lockdown walk.

We each ordered, and I pulled out my debit card to pay. “Sorry, cash only,” said the woman behind the counter. I stared blankly at her, then my friend. “I don’t have any cash,” I said; my friend confirmed that she didn’t either. We apologized to the woman, then made our way to another café that took cards.

Even before the pandemic, Canada had been trending toward becoming a cash-free society: cash transactions have been declining steadily since 2011, when contactless debit and credit (i.e. tap) first gained popularity. While two-thirds of Canadians reported using contactless credit or debit in 2018, 90 percent of unbanked people (meaning those who have no relationship to a bank) report using cash.

Since the start of the pandemic, many businesses started banning cash transactions due to concerns about it being a nesting ground for the COVID-19 virus. A new report by FIS Global, an international FinTech company that uses technology to better engage in financial markets, states that since the COVID-19 pandemic began, cash transactions have declined by more than half. It also states that FIS Global expects cash to be used for only four percent of in-store payments by 2024.

It seems like very few banked people I know use cash these days. The friend that I had been walking with said she hadn’t taken cash out of an ATM since March 2020, before the pandemic—something I realized was true for me too, after thinking about it.

With what seems like the imminent death of cash, sped up by the COVID-19 pandemic, I wonder if the things we give cash to, being mainly small businesses and each other, will also disappear. As some of us adapt, who might get left behind?

The history of widespread cash use is a relatively short one. Standardized currency was first implemented in some regions of the world in the Axial Age, from 800 to 300 BCE, then again after periods of disuse in East Asia and Europe during the 15th century. Before its employment, people would use whatever was relatively abundant around them as a surrogate, like metal nails or cod, or would run up personal credits with each other’s businesses.

The second attempt to introduce a mass standardized currency coincided with the advent of capitalism in the 16th century. Adam Smith, a prominent economist of the 18th century, believed that it would be advantageous for a country to bring everyday transactions into a uniform currency, and to abandon the practice of mercantilism, which involved the crown accumulating as much bullion (gold or silver, before coining) as it could.

As the colonial exploits of Spain and Portugal brought massive amounts of silver into the European economy, it became more possible to regulate currency, and to remunerate everyone with the same reward. Near the same time, standardized paper money, backed by bullion, became more common, and was another means to regulate transactions.

In the 18th and 19th centuries, central banks increasingly assumed control of printing paper money.
In Canada, Indigenous people had longstanding practices of trading, using items of copper, precious metals, and furs as the basis of a currency. Early settlers used a variety of items as currency, including playing cards with royal stamps, French and Spanish silver coins, the British pound, Nova Scotian money (a currency used in Nova Scotia until 1871), American money and “army bills,” before a standardized Canadian currency eventually became more circulated in the decades after confederation.

The many types of currencies meant that money had many forms up until the 20th century. Money then became pretty standardized, with cash as the main method of payment, until two new forms of payment were introduced in Canada: credit in 1968 and debit in 1988. It took a while for debit to catch on, though, and it wasn’t until 1994 that it was offered by all banks and accepted by retailers in every province.
By 2009, however, cash accounted for only 54 percent of transactions, and this dropped to 33 percent by 2017.

The question then is, who uses cash these days? In the U.S., 55 percent of small businesses don’t accept credit cards. In a study conducted in Canada in 2008, 93 percent of businesses accepted debit, while 92 percent accepted credit, and all accepted cash.

Many small businesses prefer cash because they don’t incur processing surcharges. Salon SLiJ, a longtime hairdressing salon in Montreal, used to accept cash and e-transfers but began accepting only e-transfers during the waves of the COVID-19 pandemic. Oleg, the manager of the salon, who prefers to go by first name only, says that, like many salons through the pandemic, “our sales were down more than fifty percent.”

Nikhil Tangirala, an urban planner who lives in Montreal, says that he stopped using cash during the pandemic due to hygiene reasons. “I don’t use much cash anyway, but I definitely began using less during COVID,” he says. “I stopped going to my local depanneur,” which is cash-predominant and accepts debit with surcharges, he adds.

Beyond small businesses, those who predominantly use cash tend to be those on the lower end of the socio-economic scale. In Canada, three percent of Canadians, the equivalent of over one million people, are unbanked and 15 percent of Canadians, or nearly five million people, are underbanked, meaning that they have no or limited access to credit and debit for a variety of reasons, such as having a poor credit score or living in a location underserviced by banks. Correspondingly, proportional to those who are unbanked or underbanked, 15 percent of Canadians report being heavy cash users.

Étienne, who prefers to go by first name only, is an unbanked person living in Montreal who is also unhoused. His primary income is obtained through asking people on the streets for money. “It was tough, it was really tough,” Étienne says, in reference to his income during the pandemic. “It’s been tough now too, but it’s been better since COVID … More and more people use debit cards now instead of cash … they say ‘sorry, I only have debit.’”

As of 2019, cash transactions accounted for 21 percent of all transaction volume, and 80 percent of Canadians reported making at least one cash transaction per week. Of those 80 percent, over half reported giving cash to people (rather than using it for purchases) through the week.

As cash is increasingly fading out, a new player in the game, cryptocurrency, has been entering circulation, digital coin by digital coin. Cryptocurrencies, such as Bitcoin, have no physical form at all and can only be used for online transactions, which are processed in a decentralized fashion by brokers who cash in on every trade. Cryptocurrencies typically have finite quantities of money which ensures that the currency doesn’t lose value. This differs from physical currencies, which are protected by interest rates.

The latest figures available on cryptocurrency usage in Canada are from 2019, when it was reported that nearly four percent of Canadians were using bitcoin, and close to one percent were using the next most popular cryptocurrency, Ethereum. In 2016, 64 percent of Canadians were aware of Bitcoin, and this percentage jumped to 85 percent in 2017.

While cryptocurrency circulation is growing, increasing pressure on central banks to create their own digital currencies to facilitate transactions, in their current private form they present significant barriers to access. For one, the limited quantity of cryptocurrencies mean that they are very expensive; at the time of writing, for example, one bitcoin is equivalent to $47,784 CAD. Another major issue is that cryptocurrency transactions are expensive, with bitcoin transactions costing nearly $60 in April 2021.

Cryptocurrencies also are also uniquely digital currencies, meaning that they are again reserved for those who choose or are able to process electronic payments. Even though there were nearly 900 Bitcoin ATMs in Canada as of 2020, these only service people who want to trade in physical currency for bitcoin, not the other way around.

Professor Matt Tiessen researches digital economy at Ryerson University. He thinks that cryptocurrencies are on the rise because they can potentially circulate money quicker. “Money likes to move,” he says, “and the liquidity of cryptocurrencies permits that.” At the same time, he agrees that the cost and means of processing private cryptocurrencies present significant barriers of access. “It’s prohibitive,” he says.
Tiessen is wary, however, of the concept of a central bank-produced digital currency, thinking that it could create significant and novel annexations of economic control. “[A national cryptocurrency] would create a system of surveillance and power,” Tiessen says. “Cash just sits around.”

“Part of the allure for government in creating a national cryptocurrency would be that it could be quickly distributed, and then also expire, which would ensure that it was always being spent.” (This comes up while he is speaking about a potential Universal Basic Income issued by the government.) A national digital currency could then side-step some of the barriers to access of private cryptocurrencies, but could also reduce autonomy. “It could limit your financial freedom,” Tiessen says.

As we slowly transition out of the COVID-19 pandemic, into a version of life that involves touching, hugging, filtering between stores and homes, and feeling near to the people and things we care about, where will we go with cash? Back before the loonie, we had lots of different forms of money, but these had widespread circulation within localized communities, and, within these communities, had relative accessibility, despite general inequality.

Contactless tap might run in the same vein of magic as buying physical goods with invisible currency, or of “mining” intangible bounty. Cash, though, links us to a current, a common denominator, of which we are all a part.

In the 1951 animated film Alice in Wonderland, Alice was trying to find a party when she fell down the rabbit hole. Perhaps it’s no surprise, then, that this has become the favourite cliché for people struggling to explain what it’s like to enter the disorienting world of Bitcoin.

We’ve all heard stories about the mad crypto-party, and we’ve likely heard them from a glint-eyed friend, urgently trying to communicate why Bitcoin, the world’s first decentralized cryptocurrency, and its underlying blockchain technology are so important.

Bitcoin is digital money that solves the problems of reproducibility and security. You can’t copy-paste coins, save multiple versions, or make counterfeits. It’s generated by a computer program, not a government-backed bank. The program gives out bitcoins to people as a reward for using their computer processing power to solve the difficult math problems, or cryptography, that make Bitcoin virtually impossible to hack. The more secure Bitcoin is, the more people use it; the more valuable it is, the more incentive there is to secure it. Eventually, the computer program will stop generating new bitcoins. The finite supply is one reason why it has become so expensive, like gold. By all accounts, Bitcoin breeds obsession. And if you do find yourself tumbling down the rabbit hole of hype, you’ll quickly get the terrible feeling that what the rabbit told Alice was right: “I’m late.”

Consider the following: If you invested $100 in Bitcoin on June 1, 2011, the day gossip blog Gawker made the then-still-infant cryptocurrency semi-famous with its article on Silk Road—the notorious dark-web marketplace where early adopters could use their bitcoins, albeit mostly for drugs—your investment would be worth nearly $85,000 USD (at the time of writing). If you got in a year earlier, it would be $17 million. Feel that pang in your chest? It’s called “Fear of Missing Out,” and a great many people have been experiencing it. Binance, the world’s most active cryptocurrency exchange, is adding as many as 240,000 new users an hour.

The cryptocurrency market is frequently compared to the dot-com bubble in the late 1990s that eventually burst. The analogy has some merit, but blowing off cryptocurrency entirely because the market is overheated would be like rejecting the internet because a few hare-brained websites didn’t make any money back when people were still figuring out how to use email. The current speculative frenzy will thrill some and repel others. But the problem isn’t that it engenders greed or attracts scams. Instead, fevered speculation is obscuring and possibly hindering the true potential of blockchain technology to shift the balance of power from large institutions to individuals across many sectors of society.

***

My experience falling down the blockchain rabbit hole for the first time in mid-December 2017 was an anxious, emotionally exhausting affair. I decided to buy a few hundred dollars’ worth of bitcoins and leave it at that—not a big bet, but at least I’d catch a draft if the price kept skyrocketing, as it had started to do in November. (The price has since experienced what investors call a “massive correction,” falling all the way back down to where it was then.) A few hours after the initial purchase, I invested more. Within a day, I had shoved an uncomfortable chunk of my savings into the digital currency. Retirement solved.

Anyone who’s sampled the chaotic crypto-markets knows what came next: “Fear, Uncertainty, and Doubt,” or FUD in the vernacular of the movement. I encountered a lot of bearish voices, all of them huffing and puffing about the bubble. The price of Bitcoin is floating on hot air, they growled. It could pop at any minute. So in a panic, I sold it all.

Even with the accumulated value of my labour restored safely to Canadian dollars, I was already deep into Wonderland, for better or worse. I wanted to know more, but so-called crypto experts online just made me uncertain and confused.

I needed someone sensible to show me around. Jessie Cortes is a 33-year-old Toronto-based “crypto-consultant” who’s been day-trading cryptocurrencies full-time since last summer. When we meet in early January, Cortes wears a crisp haircut and stylish wireframe glasses. He gently shuts his chrome MacBook as we begin to talk, but he keeps an eye on the steady stream of messages pinging on his phone, from fellow “scalpers” (those who buy and sell on a minute-by-minute basis) on crypto forums and online discussion groups. He absorbs these updates seamlessly while he overviews the crypto-landscape and the various ways to profit. “I help people find ways to make money in this game,” he explains.

To most people, cryptocurrencies still seem like a forbidding fringe technology, but early adopters like Cortes are now well-established and ready for business. A new generation of entrepreneurs is emerging, and they’re all trying to catch the wave of mainstream adoption before it crests. “The goal right now is just to get as many people as possible to participate and understand what’s going on,” says Cortes.

Cortes will set you up with a wallet and an exchange, teach you different trading styles, offer tips and advice about the ecosystem, or help you code a bot to do it all automatically. He’ll even help you set up a miniature mining operation on a spare computer, through which you can earn a couple bucks a day. Mining, or “proof-of-work,” is one of the key tools that makes blockchain technology effective. The blockchain is an unchangeable record of transactions within a network. Usually it’s referred to as an immutable ledger. The ledger is distributed across the network, so it’s public—like a spreadsheet that everyone can see. Everyone can add to the spreadsheet by making a transaction, such as sending bitcoins, but no one can change an entry once it’s been made (not even the person who made it). Mining is the process whereby participants in the network are incentivized to secure the ledger. Miners are paid in bitcoins to make Bitcoin safe.

If you remove all the steps, you could say that blockchain mining turns electricity into currency. That’s why large-scale mining operations have attached themselves to coal plants in China, and Quebec is trying to sell off its excess hydro energy to crypto miners. Cortes helps individuals join mining pools, which amalgamate their collective computing power and divide the profits among their members.

But don’t try to hire Cortes to manage your portfolio; he’s not interested. The whole point is that people are individually engaged and empowered to do what they want with their currency, he says. “You have to look at yourself as a bank.”

That’s not a metaphor. What is a bank if not a place that holds your money? If you want to move your money somewhere—to a family member in another country, to a portfolio manager, or to your own purse from an ATM—you have to ask the bank, and they might charge a fee for their trouble. But blockchain technology obviates the need for a bank—you can hold onto your money yourself with perfect security, and send it to whoever you want without asking.

You have every reason to be skeptical when you hear a promise of perfect digital security, but that’s because until now, data was always kept in centralized servers surrounded by firewalls. If the data is valuable enough, it’s basically inevitable that some hacker will find a way in, as countless breaches— from credit reporting agency Equifax’s massive leak of information for 143 million people, to a Yahoo breach affecting three billion accounts—have proven.

The blockchain doesn’t keep the transaction data on a particular set of servers that hackers might gain access to. Instead, it decentralizes the record of transactions, storing it everywhere for all to see while keeping your identity and your crypto-wallet safe. Even if a hacker managed to perform the virtually impossible task of unravelling the cryptography to change one instance of the ledger, such that someone else’s bitcoins transferred to their own wallet rather than the intended wallet, they’d still have to perform the same feat on all the other versions of the ledger, all at the same time. Instead of robbing the bank’s vault, they’d have to rob every house at once. People who believe in cryptocurrencies are those who accept the principle that blockchains are so secure, they extinguish the need to trust powerful institutions to keep the books.

Maybe that doesn’t sound fun. For Cortes, it is. He possesses the two necessary attributes to excel at crypto-trading: a do-it-yourself approach to tech and a gambler’s flair for risk. He uses apps and games to play around with stocks, though primarily with fake money. But he’s also into online gambling, and as an amateur boxer, he likes to bet on matches. Through his 20s, Cortes made his income independently as a DJ and Airbnb host. Now he lives inside the crypto-universe, reading whitepapers about new alternative currencies, scanning for tips on different forums, and watching the price charts rise and fall. It’s profitable, but it’s also a full-time job. The price of agency is effort.

***

The blockchain revolution isn’t about how we exchange money, but how we exchange value. So-called tokenized ecosystems may be the new marketplaces for personal goods and resources—such as the spare storage space on your laptop, or even your time, energy, thoughts, and attention. Is your art valuable? Or the energy from the solar panel on your roof? Tokenized ecosystems are the decentralized networks that will enable people to trade independently on the value they create.

Consider Steemit, a decentralized social network that runs on blockchain software. Steemit rewards people for contributing and curating content by paying them with its own digital assets, some of which are then spent on other creators within the ecosystem as tips, and some which can be traded for other currencies.

At the time of publication, one Steem Dollar was valued at $3.84 USD, and some people are getting better returns for their posts than many online publishers pay for articles. Steemit generates a system of value for people who invest in the network through their effort and talents, and that system touches other systems of value, like Bitcoin or dollars, or a token from another ecosystem.

For the true believer, these blockchain-based decentralized apps—ones with their own tokenized ecosystems—will soon overtake and replace the apps we currently use to relate to each other online.

Will Salmon is a self-described “blockchain evangelist.” A slender man in his forties with thick facial stubble, he runs a meet-up six days a week at 7:30 a.m. at the Depanneur Café in Montreal. The group is spiritedly titled, “Blockchain Coffee: Be the Change You Wish to See in The World,” and it’s meant to be a welcoming spot for newbies trying to make sense of the tech. The curious should seek out the tennis ball-sized globe perched on a saucer, with the words “collective brain” scrawled in sharpie over the Pacific Ocean. There you’ll find Salmon, scribbling in a thick notebook and ready to explain everything in his strong Parisian accent.

Salmon used to work for an accounting software company in Ireland, where he had the opportunity to study blockchain as a potential solution early on. After researching the technology at length, he was convinced that it would bring massive disruption to society. So, four years ago, he took a leap of faith. He quit his job and devoted himself full-time to the revolution. “For me, it’s the beginning of the 21st century,” he says.

But Salmon is anxious about the way that blockchain tech has inspired a gambling culture. When he first began educating people about the tech, few even knew what it was, and those who’d heard of Bitcoin were mostly skeptical. Now, he says that the old men in his neighbourhood talk to him about alternative cryptocurrencies like they’re discussing race horses. Salmon realized that he didn’t want to obsess about prices or treat the blockchain like a get-rich-quick scheme, so he sold all of his bitcoins a few years ago.

Bitcoin has made plenty of early investors into millionaires, but today Salmon freely admits that he’s broke, though he prefers to say that he has “the luxury to think about money outside the box.” When he’s not organizing meet-ups, he’s working at the Depanneur Café.

While people like Cortes make blockchain enthusiasm look suave, Salmon plays the part of the Mad Hatter. In conversation, he stitches together futurist postulations and blockchain hypotheses with dizzying speed. Instead of hustling on the cryptocurrency exchanges, Salmon focuses on networking within Montreal’s crypto community as he searches for other true believers who share his long-term outlook. It’s not this wave of blockchain adoption Salmon wants to catch, the one that’s supposed to do to banks what email did to fax machines; it’s the next wave he’s watching, when decentralized apps take over everything else.

For example, Salmon is anticipating the day when autonomous cars relieve traffic congestion, liberating the streets for more public use. Into this imminent future Salmon wants to launch a tokenized ecosystem called Fitcoin, similar to an initiative founded in Austin, Texas. Just as Bitcoin rewards miners with bitcoins and Steemit rewards engaged community members with steem, Salmon wants the city of Montreal to reward people with Fitcoins to, say, use public bike transit. These Fitcoins could then be redeemed for city services, like at the library, or traded for other cryptocurrency. Salmon believes tokenized ecosystems enable win-win scenarios, where people are incentivized to be healthier and the burden on health care is thus diminished.

If this or similar schemes ever come into effect, life will feel a lot more like a video game, with everyone speeding around picking up coins. But what about people with different abilities? Will Fitcoin adjust its parameters for those in motorized wheelchairs, or will they excel in some other tokenized ecosystem? Needless to say, there isn’t a cryptoutopia ahead.

The blockchain isn’t a panacea, but it could redefine ownership. Your bike to work would be yours in a whole new way if you could buy something with it.

***

Whether Salmon ever manages to convince the city to invest in his vision, others are looking to blockchain technology to solve even bigger problems. Laurent Lamothe was the prime minister of Haiti from May 2012 to December 2014, while the country was still recovering from the 7.0-magnitude earthquake that struck near the nation’s capital Port-au-Prince on January 12, 2010. He’d just returned to his home in Florida the night before the earthquake struck, and he watched the images of the devastation on TV along with the rest of the world.

“I lost a lot of family members and friends,” he told me over video chat, pacing around his sunny Miami home. “A quarter of a million people passed away. It was the most difficult experience of my life, seeing the tragedies and horror stories from every single family in the country.”

One year after the earthquake, popular Haitian performer Michel Martelly was elected president and named Lamothe his adviser, making him responsible for the reconstruction effort. Lamothe’s responsibilities included helping coordinate the international aid effort and collaborating with groups like the American Red Cross, which had received nearly half a billion dollars in donations earmarked for Haiti, more than any other organization. But reporting in 2015 by ProPublica and NPR suggested that very little of that money went to directly helping Haitians. For example, the Red Cross had promised to house 130,000, but five years later, only six permanent homes had been built. (The Red Cross disputes this reporting, and points to investments in hospitals and a wastewater treatment plant as some examples of how that money has made an impact.)

Although Lamothe has publicly praised the Red Cross’s efforts in Haiti, he also criticizes aid organization’s lack of transparency during the crisis: “When we said we wanted to know [where their funds were to be spent], to discuss it and have shared priorities, they told us that everything was spent. But that did not translate into the streets. We didn’t really see anything that happened with that money.”

The same year the Red Cross’s work in Haiti was exposed to public scrutiny, Lamothe learned that blockchain technology could solve some of Haiti’s most pressing problems. Lamothe first heard about the blockchain at a special conference hosted by Richard Branson, Virgin’s grinning CEO, on his private island. “That’s when I discovered the power of the blockchain and its potential to change the world as we know it,” he says.

Take international aid. A new platform called Alice uses blockchain technology to help charities and social enterprises operate transparently. With a secure decentralized ledger, it becomes possible to publicly track where every donation goes and how every dollar is spent. But that’s not the only way that blockchain tech could help Haiti and countries like it.

Buying and selling property in Haiti can be hopelessly complex. One of the challenges that hampered the Red Cross’s efforts was the country’s dysfunctional land title system. Haiti’s National Land Registry Office has only registered a tiny fraction of the country’s more than 17,200 square kilometres, while other agencies keep their own separate records. Land disputes have interfered with and ultimately defeated many reconstruction and development projects. After the earthquake, the situation was even worse. “Everything was lost,” says Lamothe. “All the records were held in a single office, and that office collapsed.” Blockchain technology offers a secure, paperless method of recording property transactions that virtually eliminates the possibility of dispute. Sweden and Russia are already in the advanced stages of implementing land registry systems on their own private blockchains.

Lamothe is advocating for blockchain solutions in other areas of governance as well. He believes blockchain technology could bring much-needed transparency and accessibility to elections, and platforms like Follow My Vote and Polys have already launched blockchain applications to disrupt this space. Whether it’s voting, financial inclusion, or charitable donations, Lamothe hopes that blockchain developers will turn their gaze to Haiti as “a good test case.”

***

When Alice finally found the mad tea party in Wonderland, she couldn’t understand what anyone was talking about. The world of blockchain tech can feel equally baffling, but one can always find a candid perspective among those who are basing their approach on betting odds. “It’s the purest democracy,” says Cortes. “Wouldn’t you want to invest $500 or $1,000 in that and see how it goes?”

On a mild February afternoon in 2014, a pastor named Chris from the Maritimes sat outside his Jeep in a park near his home by the water, and smoked a joint. There was a sense of experimentation, curiosity even. Having never smoked weed as a teenager, Chris barely knew what he was doing. He got his hands on his first quarter ounce of weed less than two weeks earlier, and was still looking for the answer to a question: What did cannabis have to offer?

“I was sitting outside and smoking it, and running through my mind was, ‘I really want this to work,’” he says. “‘Please let this work.’”

Chris drove a minute or two down the road back to his house, and got out of the car. For any other pot smoker, on any other day, the act of getting out of your car and walking is entirely unremarkable. Remarkable, though, were the things left behind: a cane, left sitting in the front seat of his Jeep. The constant, debilitating pain in his back, resulting from seven herniated and two compressed discs that had left him bedridden and opiated for the better part of the past decade, had for the moment disappeared. (Chris has asked This Magazine to withhold his last name and the city where he resides, since not everyone at the church and in his community knows he uses cannabis.)

“Instantly, I could feel relief in my back,” he says. He made a decision: “I’m willing to do this. It seems to be working.”

It was an easy choice, because the alternative was so awful. The number of different medications he was on at one point or another stretched well into the double digits, and Chris can’t even remember how many he tried.“I was on fentanyl. I was on OxyContin,” he recalls. “It wasn’t actually doing anything for my pain, it was just numbing my brain.” At one point he was put on six opiates at the same time.

Chris is religious, a literal Man of the Cloth, a minister and technical director for a small church out east. The metaphors that come to mind—a come-to-Jesus moment, a revelation, an epiphany—seem to ring hollow. But the cannabis-induced relief in his back did show him that there was a way out of the heavy cocktail of opioids and chronic pain that had consumed his life. “Within a month, I had stopped taking almost all the other medications [my doctor] had me on,” he says.

The thing most cannabis patients have in common is that they are, in some fashion or another, always fighting: fighting illness and chronic pain; fighting a Byzantine system of medical administration; fighting to be taken seriously as medical patients. In just about every way, Chris could be the poster child for the possibilities of medical cannabis, but that realization meant he would need to fight for it. He had to detox, spending a week on the bathroom floor, when “every bone in my body felt like it was breaking,” as his body suddenly came back online after years of opiated numbness. These fights are tolerable, because many patients are getting so much back. Not long after he had smoked his first joint, cannabis had “given me my life back, given [my wife] her husband back, and given my kids their father back,” says Chris.

But four years later, Chris can barely afford it. Nearly two decades after medical cannabis was first legalized in Canada, and months before it will be legal for all adults, many medical cannabis patients still struggle to pay for weed. Many are out of work or, like Chris, can only work limited hours, and have to buy their weed out of pocket; those who can work rarely have their medication covered by drug benefit plans.

Medical cannabis patients are among the country’s sickest, its poorest, its most opiated. As the country lurches towards the dawn of legalization, the patients who most rely on cannabis are still struggling to pay for it. And there doesn’t appear to be any help on the way.

***

Medical cannabis, which has been legal in Canada since 2001, has always come with a steep price tag for patients. For many years, the fight was for access to weed; affordability was an afterthought. It was difficult to get the medical exemptions required to buy and use cannabis, and possession remained illegal. Affordability for medical patients, however, has emerged as a major concern in recent years, particularly as a result of major overhauls of the system at the federal level.

In medical cannabis’ original iteration—a program called the Medical Marihuana Access Regulations (MMAR) scheme—patients could buy their pot for $2 to $5 per gram. In 2013, that single-source system was overhauled, and the Marihuana for Medical Purposes Regulations (MMPR) scheme was introduced, allowing patients to purchase their cannabis from licensed producers (LPs). (The system would be further updated after the 2014 Allard v. Canada court challenge, which loosened restrictions around growing your own cannabis. The system is now known as the Access to Cannabis for Medical Purposes Regulations, or ACMPR.)

Were Chris a cancer patient, or had he suffered a broken leg, his care would likely be paid for by our system of socialized medicine. But weed comes with a sticker price

The new system improved access—a 33-page medical document was replaced with a two-page form, and a growing number of licensed producers meant that patients had far more selection when it came to what strain they could use—but hurt affordability in the process. The move to the private market, albeit a highly regulated one, meant that prices increased, getting closer to matching the established street price of about $10 per gram. Prices rose to their current level, with the average gram costing patients about $8.40.

The wide variation within the prices means that patients often find themselves on a sliding scale where the quality of their medication depends largely on how much they are willing to pay for it. The Markham, Ont.-based LP MedReleaf, for instance, sells a strain called Rex at $17.50 per gram, while some of the weaker strains from other LPs go for around $4 or $5 a gram. “Even at some of the crummier strains, I’m at $900 to a $1,000 [a month],” says Chris. Which end of the spectrum you end up on depends largely on what costs you are willing— or able—to bear.

As a result, “some patients have to choose between continuing to take their opioids, which are often covered by insurance, and pursuing medical cannabis as an alternative or supplementary medicine, which is not covered but might be more effective for their needs and have less negative side effects than traditional medicine,” writes Bryan Hendin, president of Apollo Cannabis Clinics, a medical cannabis clinic in Toronto, in an email statement. From a medical and health care standpoint, this kind of system creates other stressors that can exacerbate health problems. “Even for patients who can technically ‘afford’ medical cannabis, we’ve seen how the financial decision to pursue medical cannabis versus traditional medicine covered by insurance can even exacerbate symptoms related to pain, such as anxiety and poor sleep,” Hendin adds.

It can be hard to tease out the source of cannabis’ price. Despite costs being fairly low to produce—Aphria, another LP in the country, has brought their cost per gram under $2—prices soar. Few major LPs see massive profits (or any profits) at the end of the fiscal cycle, with most of their revenues going back into expanding their production capacity, both for existing medical demand and in anticipation of recreational legalization. Patients are but one part of a much larger industry, and the costs they bear will help finance the recreational market.

***

For many patients in Canada, cannabis is their saving grace. It has given Chris his life back—but getting there hasn’t been an easy process. Were he a cancer patient, or had he suffered a broken leg, his care would likely be paid for by our system of socialized medicine. But for Chris and those like him, it comes with a sticker price.

At the same time, the federal government is actively taking steps to make medical cannabis less affordable when legalization comes into effect by applying a $1 per gram excise tax to all cannabis, including medical weed. For patients, that amounts to a steep price hike for their medication.

Sarah Colero, a medical cannabis patient from Toronto, pays $864.45 every month for her cannabis. Two consecutive strokes when she was five years old left her with damage to her frontal lobe. She also suffers intense migraines. She began treating both with cannabis three years ago, after years on opioids.

But her illness means she can’t work. She receives $1,151 every month in disability payments—most of which is chewed up by the cost of cannabis, the only medication that lets her function properly. “No insurance companies cover it,” she says. The excise tax proposal will tack on an extra $90 to her monthly bills—about one-third of what she has left over each month. “Once I found out that the taxing was going to happen I totally broke down. What am I going to do?” she said. “My dad wants to retire, obviously. I don’t want to be reliant on him all my life, and obviously this isn’t working.”

When asked if Health Canada, who are responsible for the administration of the ACMPR system, would be taking steps to alleviate affordability concerns, spokesperson Andre Gagnon declined This’s request for an interview, but said in a statement that “costs of cannabis will be determined by the market.”

Stories like Colero’s are illustrative of a system that critics say favours the revenues of large cannabis producers over the well-being of patients. The country’s LPs—many of whom have seen major increases to their valuation in the stock market over the past year—acknowledge that affordability is top of mind for many customers. But they are also businesses, first and foremost, and balancing the demands of shareholders with the needs of patients is a challenge. Affordability is “a huge factor,” says Jordan Sinclair, a spokesperson for Canopy Growth, the country’s largest LP. “As Canadians, I think we’re lucky that most of the health care system is free, and pharmacare is mostly covered if you have a plan,” Sinclair says. “[But the cost of medical] cannabis falls outside of all of that.”

Canopy Growth was the first licensed producer in the country to introduce a compassionate pricing program. Customers who earn less than $29,000 a year get a 20 percent cut on the cost of their weed. That sort of scheme is more or less standard in the industry now, with most LPs offering some sort of compassionate pricing for people on low incomes. But even at discounted rates, the patient is paying for a hefty markup. According to recent financial filings, the all-in production cost for Canopy was $2.73 per gram, while the lowest you could buy it for is $4.80. Even that price is below what they could be selling it for, says Sinclair.

The industry is trying to avoid a race to the bottom. Driving prices down below sustainable levels will ultimately hurt patients, goes the theory, because without major companies to lead production, there simply won’t be anyone left to sell the weed. “It’s not a problem that can be explained away,” Sinclair says. “There is that reality that’s hard to escape—there’s a correlation between people who are using medical cannabis and people who tend to have a lower income.”

***

Few existing mechanisms by which medication and medical services are made affordable are available to patients who require medical cannabis. No provinces offer coverage for pot in their health or pharmacare plans, and none of the country’s major insurance providers—Manulife, and Desjardins, for example—cover medically prescribed cannabis as part of their standard package. “In terms of benefit plans, which are usually offered [by] a union or an employer, the decision really comes down to the plan sponsor,” explains Jonathan Zaid, co-founder of Canadians for Fair Access to Medical Marijuana (CFAMM).

Battling with administrators to try to get your pot covered is a battle that Zaid knows well. In 2014, he fought for his insurance provider at the University of Waterloo, where he is an undergraduate student, to directly cover the cost of his pot, which he used to treat a condition known as new daily persistent headache. When the insurance provider denied the claim—which almost always happens, since cannabis lacks what’s called a Drug Identification Number (DIN) from Health Canada that allows them to process claims—he went to his student union and asked for coverage.

That, he says, wasn’t easy. “That process still took eight months and a huge amount of deliberation on everyone’s side,” he says. In doing so, he became one of the first Canadian medical cannabis patients to have his medication covered by a private insurance plan.

Chris has to fight: to pay the bills, to afford his medication. He must grapple with policies that don’t always feel like they take his health seriously

Even in cases where an employer is open to covering the cost of an employee’s cannabis, it can be difficult to navigate. “That process is stressful and personal for many patients,” says Zaid. “The usual response is usually rooted in stigma. It’s about the fear of people getting high at work, employers not seeing it as a legitimate medicine, and so on.”

Patients, then, are sometimes put in the position where they not only have to advocate for the cost of their pot to be covered, but for medical cannabis patients to be taken seriously in the first place. The onset of legalization will leave the way the insurance industry handles medical cannabis claims more or less unchanged.

On February 15, Sun Life announced that it was changing its policy and would begin covering medical cannabis for patients whose plan sponsor is willing to include it in their benefit plan. The coverage will be available for specific ailments and symptoms, such as for those with cancer, rheumatoid arthritis, and multiple sclerosis.

***

More than two years after I first spoke to him about his cannabis use, Chris’s back pain is getting better—or at least more manageable. “The great thing is that it seems I haven’t had a lot of flare-ups,” he says. None of that was an easy fight; for cannabis patients, it never is. Doctors at first refused to prescribe him medical cannabis, forcing him to buy it off the street until he found a doctor who was willing to help him. Now, he is completely opiate-free. The pill bottles, the four years he spent on a fentanyl patch, and the week he spent on the bathroom floor toughing out his detox are now all behind him.

The beating heart of the fight for cannabis affordability is the people who have better lives because of it. It is an elemental fight for a form of health justice often ignored, cast in different language and different terms. Chris has to fight: to pay the bills, to afford his medication. He must grapple with policies that don’t always feel like they take his health seriously. But the fight to make medical cannabis more affordable underscores a deeper, more foundational problem for medical cannabis patients: The industry is becoming dominated by large corporations who serve a different master in their shareholders, and are increasingly serving as the main advocate for patients’ rights.

The degree to which the government is in the pocket of Big Weed is likely overstated by the industry’s critics, but its influence over policy can’t be denied, either. Without the successful development of an infrastructure that served medical cannabis patients from the private market, and without the flourishing of a regulated production model, it’s unlikely the legalization of cannabis would’ve ever gotten off the ground.

But then, the patients like Chris probably have a point: The launch and growth of the LP system has made millionaires of many people. Medically speaking, few of them have much in common with Chris and those like him.

Facing a multi-billion-dollar industry can feel, for patients, like a titanic problem, with their health and well-being hanging in the balance.

“Greed does what greed does,” says Chris. “It comes back to that almighty dollar…. It’s just a money business for them. At the end of the day, it’s about the dollar.”

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Peter Victor. Photo by Molly Crealock.

Could you live on $14,000 a year? Could everyone in Canada? And could we live on $14,000 a year for the rest of history?

That’s the sort of uncomfortable, prickly question Peter Victor likes to ask. And the way you answer might say a lot about the future of the planet.

That’s because Victor is an economist at York University who is a leading pioneer in “no-growth” economics, a field that tries to figure out whether it’s possible to create an economy that stops growing—yet doesn’t collapse.

Environmentalists, of course, have long warned that humanity is chewing through the world’s natural resources— land, trees, minerals—at an unsustainable locust’s pace. But every country’s prosperity currently depends on constant growth: more people, more consumption, more stuff.

A few years ago, Victor wondered: Could an economy stop growing but still remain prosperous?

To find out, he began working on a computer model that replicated the Canadian economy. Once he’d built a model approximating reality, he began tweaking some of the major variables to cut growth: He lowered consumption, tweaked productivity, and halted the increase of population. He imposed a slew of government policies aimed at increasing taxes for the wealthy and reducing the use of fossil fuels. Then he extrapolated forward to see what would happen.

The upshot? Victor’s virtual Canada slowly stopped growing after 2010, and after a few turbulent decades, unemployment dwindled to just four percent. Greenhouse gases went down to Kyoto levels. And then…things just stayed the same. Ecological catastrophe was averted. In 2008, he published Managing Without Growth, and became the first economist to prove—virtually, anyway—that a steady-state economy is possible.

“I’m trying to the plant the seeds of this idea,” he tells me. “The climate is changing things rapidly, and people think, ‘Well, what are we going to do?’ They need ideas.” In the wake of his book, Victor has become something of a rock star amongst environmental economists, travelling the world to explain his ideas at conferences, and even meeting with the curious finance minister of Finland. People, he tells me, are fascinated by the details: What would it be like to live in a non-growing world? Could we handle it?

Could you? Well, there’d be one big upside: We would all work less—a lot less. That’s because technology naturally reduces workforces: say it takes 100 people to make one airplane this year. Next year, technological improvements will mean it only takes 90. Soon after, just 80; in a decade, perhaps as few as 50.

Currently, such rising productivity—the amount of work one person can do—creates unemployment, so governments push policies that grow the economy and create jobs for those 50 people who are no longer building airplanes.

Victor’s plan works differently. Instead of firing workers as we become more productive, we just share an ever-decreasing pile of work. Keep employed, but work fewer hours. In Victor’s computer model, Canadians gradually work their way down to a four-day workweek, perhaps even less. (“When I mention this to people,” Victor says, “you can hear their sigh of relief.”)

Working less would transform society in many ways: Imagine the spectacular upsides for health care and education if Canadians had more time to spend caring for themselves and teaching their children.

Sounds great—but it wouldn’t be easy. To achieve zero growth, Canadians would need to seriously curtail their consumption. In a recent paper, Victor plotted out a global nongrowing economy—the whole planet this time—then ran the numbers and found Canadians would need to decrease their average income to around $14,000—roughly our prosperity from the ’70s. Granted, the rest the world would see its income rise dramatically from hundreds of dollars to thousands: We go down, but Bangladesh shoots up. (Victor’s no-growth vision is decidedly in favor of more economic equality.) And since technology increases productivity, that $14,000 buys a lot more quality of life than it did in the ’70s. But it would still be a hard sell on most Canadians.

Even bleaker, though, is the challenge of stabilizing population. Victor’s model requires a flat population curve, and it’s hard to figure out how to achieve that without some pretty authoritarian family-planning policies (à la China’s one-child rule). Victor is well aware of how crazily difficult it would be to craft a no-growth world. For a guy with some of the most radical ideas around, he’s an unassuming, avuncular sort — more tweedy professor than ideological bomb-thrower.

“I know that these ideas are almost impossible for politicians to embrace now,” he says matter-of-factly. But as resources dwindle, Victor is starting a difficult and crucial conversation—one that we may soon have no choice but to join.

Noam Chomsky in "Encirclement: Neo-Liberalism Ensnares Democracy"

If ever there was a conspiracy theory that had every likelihood of being true, it’s that a shadowy cabal of billionaires are meeting at some remote location in the Swiss Alps (perhaps the Hotel Mont Pelerin, or the latest Bilderberg stronghold) to plot how to most effectively screw the rest of the world. Michael Moore’s new film Capitalism: A Love Story may have garnered the most attention this season for taking aim at the secret practices and predations of the super wealthy, but recently, an entire swathe of films has appeared that shine the light on the moneyed elite and their economic empire.

Erwin Wagenhofer’s Let’s Make Money, Leslie Cockburn’s American Casino, Renzo Martens’ Episode 3—Enjoy Poverty, Kevin Stocklin’s We All Fall Down, and Richard Brouillette’s three hour epic Encirclement: Neo-Liberalism Ensnares Democracy have all been released within the past year, and have popped up at film festivals around the globe.

Although this glut might appear to be a reaction to the current global money meltdown, many of the films were many years in the making—especially Brouillette’s, which took more than 12 years to create. That they should all should emerge roughly at the same time is serendipitous. (Or maybe it speaks to some even larger invisible hand at work.)

The one percent (or less) of the population that comprise the wealthiest demographic on the planet are different from the rest of us. Perhaps, much like the poor, they’ve always been with us, but never before in the history of human society has the entire collected wealth of the world, been so densely concentrated. How exactly did it come to be?

It may a simple enough question, but the answers are Byzantine in their complexity. There is simply too much to know, too many details filling the air with smoke and flying pieces of paper.

Nowhere is this more evident than in Brouillette’s film Encirclement, which is not even really so much a film as a lecture series. Even the title sounds like a treatise. All the same, if you can keep your eyes propped open, it may be one of the most chilling films in recent memory.

The film is divided into chapters, which is actually the best way to watch it. Take in some information, then go have a cup of tea before you dive back into dense stuff like “Chapter 8: Neo-Liberalism or Neo-Colonialism? Strong-Arm Tactics of the Financial Markets,” in which Noam Chomsky demonstrates the ability of financial power brokers to make global political decisions.

As the varied talking heads lay out exactly how neo-liberalism sacrificed public good for private profit and economic meltdown resulted, a shadow world is revealed in which real power, pooled in liquidities and off-shore reserves, is massaged and manipulated by an army of financiers, analysts, and grey-suited think-tanks. This shadow government surpasses all borders and agencies, and ultimately serves only one master. If you were about to say Satan, you’re not far wrong. It’s the bottom line.

The one thing watching all of these films en masse can do is at least clear up any residual or lingering uncertainty about “us” and “them.” The rich are definitely out to get us, and they have the means (be it private security firms, or the entire American army) and the methodology (untaxable offshore bank accounts housed in the Isle of Guernsey) to do it.

But against such a gargantuan world-eating monstrosity, what can one possibly do, except—as in a bear attack—roll over and play dead?

I wish I had better answers, but after plowing through three hours of Encirclement, I felt utterly outflanked, outgunned and outmaneuvered. I’m sure most people would feel the same. The film does not end on an upbeat note; rather, the completeness of its argument squelches hope of resistance.

But before we collectively offer up our soft underbellies to the devouring maw, stop and think. Brouillette’s own stated intent for his documentary was to make “A film about mind-control, brainwashing, ideological conformism; about the omnipresent irrefutability of a new monotheism, with its engraved commandments, burning bushes and golden calves.”

Which all sounds rather biblical, but in the war against Mammon, perhaps, the symbolism is apt. The sense of religious convergence is similar to that of the conspiracy theory. The moment when you step over from denial to acceptance, and begin to believe that there is a bigger truth out there, everything shifts. In this guerrilla campaign, information is a weapon.

Documentaries, bless their stubborn contrary hearts, continue to be one of the few media forms that still squeak and squawk. Everything else has pretty much been bought up, silenced or infantilized into blithering stupidity (yes, I’m looking at you, mainstream media). Arm yourself with facts and arguments. Don’t trust anyone, especially not a man in a suit. Bankers, brokers, or real estate agents, are all in on it.

There’s a reason they call it free thinking. It may be the last free thing around.

Our guide to some of the sponsors who want their name associated with the biggest, sportiest, Spandex-iest show on earth. Click to enlarge!

Official sponsors of Vancouver 2010

Can $20,000 payments to recent grads prevent Saskatchewan from becoming the "Land of the Living Old"?

It hasn’t been easy being Alberta’s neighbour these last few years. While Canada’s economic wunderkind enjoyed double-digit growth, next-door Saskatchewan saw the near-disappearance of the family farm and watched 35,000 residents in five years flee to other provinces. So when the Conservative Saskatchewan Party swept to power in 2007, promising a $20,000 tuition rebate for recent graduates who settle in the province, it looked like the final desperate act for a province one blogger dubbed “land of the living old.”

The generous rebate “signals to post-secondary graduates from across the country and beyond that Saskatchewan is the best place to establish their careers and pursue their goals,” Saskatchewan’s advanced education, employment and labour minister, John Norris, says. The program originally started up in January 2008, promising rebates to just grads of Saskatchewan universities, but it has since been extended to out-of-province graduates of post-secondary institutions, thanks to the province’s thriving economy. The rebates do have a few catches. The money is paid out gradually over seven years and graduates of shorter, cheaper technical programs actually receive around $3,000 to $6,000. But the biggest catch of all is that the full bonus is available only if students graduated in 2010 or later. Graduates from 2006 are only eligible for a mere $5,000.

For many, though, Saskatchewan offers something better than a generous rebate: jobs. As most provinces panic over rising unemployment, Saskatchewan jobsite saskjobs.ca shows more than 6,000 unfilled jobs. For the approximately 460 out-of-province arrivals from the graduating class of 2008, who received their first cheques this spring just as Canada’s youth unemployment rate hit an 11-year high, Saskatchewan may be just the perfect cure for the recession.

The province has yet to decide how long it will continue with the program and whether the bonus will keep people in the province, especially if Saskatchewan’s economy begins to suffer, is also an open question. But for now it looks like Saskatchewan—which lured many original residents with a bargain of 160 acres for $10—is once again the land where opportunity is as wide open as the prairie. That should at least make for a better slogan.

House prices: what goes up, must come down? Illustration by Graham F. Scott.

So much for that buyer’s market. After it appeared that the balance of power in the real estate relationship had finally swung back to the buyer after almost a decade in the seller’s favour, home prices in most major markets in Canada have resumed their seemingly inexorable climb. According to the Canadian Real Estate Association, almost 150,000 sales of houses and condominiums were registered during the April-May-June period, the fourth-best quarter on record since the organization began collecting data in 1994. These near-record sales aren’t being driven by low prices, either, as the cost of the average home in Canada is at an all-time high of $318,700, higher than the record set in 2008 before the subprime mortgage crisis in the United States triggered a global recession that has resulted in hundreds of thousands of lost jobs and billions of dollars in government spending aimed at resuscitating a global economy in full cardiac arrest.

This doesn’t make any sense. How can a housing market rise in the face of an economic crisis that has pushed unemployment to near-record levels, forced provincial and federal governments to run massive budgetary deficits, and raised the possibility of deflation? Why are people investing huge sums of money in an asset class that, just a few miles to the south, is in the midst of a three-year freefall that has no obvious end in sight?

Free money is a powerful enticement to irrational behaviour, though, and the banks have been doling it out for months now, empowered by record-low interest rates and the tacit support of the federal government. In the midst of last fall’s crisis, Canada’s banking industry enjoyed a brief moment of near-respect, as its comparatively restrained approach to lending was contrasted against that of the United States, whose policy appeared to be, in the words of Rolling Stone writer Matt Taibi, “writing mortgages on the backs of napkins to cocktail waitresses and ex-cons carrying five bucks and a Snickers bar.”

Yet even that hallowed Canadian restraint appears to have all but vanished in the current economic climate. Stories abound of young couples with combined incomes barely higher than that of a Toronto garbage worker getting approved for zero-down loans of six or seven-times their annual paycheques. But to twist an old riddle, if a loan is pre-approved but it isn’t used to buy a $700,000 tear-down, does it even exist? As Japanese bankers learned in the 1990s during that country’s “lost decade,” banks can approve all the risky, half-cocked loans that the want, but they still need the home buyers to sign off on them. The reckless abandon with which Canadian banks are approving loans these days isn’t the reason why Canadians continue to dive head first into the increasingly shallow end of the Canadian real-estate market. It might get them onto the pool deck, but what’s making them take the leap is the relationship that most of them have with the idea of home ownership, one that has all the characteristics of a classic Ponzi scheme.

With the collapse of Bernie Madoff’s empire and the bizarre spectacle of Montreal fraudster Earl Jones, Ponzi schemes have been all over the news in recent months, and while the real estate market isn’t a Ponzi scheme per se, it does bear some striking similarities. Where traditional Ponzi schemes depend upon a relationship of trust created by a charismatic personality, Canadians have instead invested that trust in their homes and the identity associated with owning them. For example, the position of homeowner, once not much different than that of “blender owner,” has become an exalted one in our culture, while the owned home has evolved from a building with a bed into an unambiguous marker of success and status. The quest for home ownership has become so universal, and so feverishly pursued, that one almost expects “Peace, order, and granite countertops” to be installed as Canada’s new guiding principle.

As with other Ponzi schemes, the relationship between Canadians and home ownership is about making money, preferably of the easy variety. To that end, the most seductive enticement that the scheme’s practitioners provide prospective clients with is the notion that renting constitutes “throwing away” money. Nearly as attractive is the idea that the value of real estate rises inexorably—an idea that its recent recovery in the face of a vicious global recession appears to validate.

As with every Ponzi scheme, the investors are in up to their eyeballs, as Canadians have on average more than 80% of their wealth tied up in their homes. This is a dangerously high figure for any asset class, but as with every Ponzi scheme that risk is supposedly mitigated by a guarantee of safe and steady returns. But like all Ponzi schemes, the promise of a risk-free investment that delivers easy and exorbitant returns is a carefully constructed fiction. Its architects, that familiar combination of politicians, bankers, and industry operatives, have worked hard to transform a rational choice into a universal aspiration. With governments creating various incentives and programs that encourage ownership, the banks providing the easy credit, and the industry spokespeople relentlessly spinning the facts and figures—ones that they usually create and distribute themselves—they have managed to make home ownership look like a leap that only a self-destructive idiot wouldn’t take.

The disdain with which the home ownership narrative and those who push it reserve for those who refuse to conform to its values reveals the depths and dangers of the deception that is at its core. In our ownership-addled culture, those who rent by choice are regarded in the same way as a self-identified communist might have been 25 years ago: an eccentric figure whose views would be subject to ridicule if they weren’t so obviously ridiculous.

Yet, as former MP turned author and real estate blogger Garth Turner points out, “the financial goal is not to have a giant house making people think you’re wealthy,” but instead to be wealthy, and owning a home frequently interferes with that objective. Renting, for example, is often a prudent economic choice. Prospective buyers who have bought the industry line that renting is an unjustifiable waste of resources rarely stop to consider the money that they “throw away” on the costs associated with owning a home. They overlook the interest payments they make to their bank on their mortgage, which on the overleveraged, lowest-payment-possible loan that has become so popular these days often exceed the value of the home itself. That’s not all, either, as there are the thousands of dollars that home owners must spend each year on property taxes, insurance, condo fees, and regular maintenance, costs of home ownership that routinely get overlooked by over-anxious buyers.

Those tidy rent vs. own calculations that banks and real estate agents use to sell potential buyers on the myth that renting constitutes an unnecessary waste also neglect to mention that owners will be lucky to see fifty cents on every dollar they invest in renovations when it comes time to sell their home, or that they’ll have to set aside 4 percent from the proceeds of their sale to pay their real estate fees. Moreover, only the savviest buyer remembers to include the opportunity cost of having their money tied up in real estate in their calculations rather than invested in the market. In the absence of a significant down payment—25 per cent, at a minimum—the monthly cost of owning a home can be double or more that of renting one.

The notion that their homes will increase in value in perpetuity is equally flawed. As anybody who survived the housing crashes of the early 1980s and 1990s remembers, to say nothing of the debacle that continues to unfold in real-time in the United States, real-estate can go down, and when it does the ride is rarely a smooth one. Meanwhile, even in the best of conditions, real estate can be a dubious financial proposition. Despite the remarkable run-up in prices over the last decade in Canada’s hottest market, if you bought a home in 1992, at the tail end of the last significant correction, UBC’s Centre for Urban Economics and Real Estate’s calculations [PDF link] indicate that you would have only seen the inflation-adjusted value of your home rise by an annual rate of 5.3 percent, barely better than the return you might see on a GIC. There’s a reason why people used to routinely refer to houses as “money pits.”

Given that it has yet to collapse in on itself in the face of a recession that has bankrupted the domestic automobile industry, put hundreds of thousands of people out of work, and forced governments around the world to intervene in the economy in ways that we haven’t seen since the 1930s, it’s fair to wonder if the real estate market has managed to transcend the laws of logic and reason and will rise forever, divorced from trivial concerns like jobs, affordability, or even plain old common sense. Yet as Bernie Madoff demonstrated, even the most elaborate and well-supported Ponzi schemes are ultimately destined to fail. Their collapse is a matter of when, not if, and although Canadian home owners have the banks, the government, and an entire industry of consultants, brokers, and agents working to maintain the illusion in which they are all so heavily invested, their time will come. As with all Ponzi schemes, when that time does come it will be those who bought into the lie most earnestly who will suffer the most. The central bankers, the slick developers, or the elected officials who abet them will escape with no more than a few superficial scratches, while the young couple that just recently signed a zero-down mortgage at 2.5 per cent on a $500,000 house and will have to spend the rest of their thirties eating Kraft Dinner and enjoying romantic nights out at the public library when interest rates naturally rebound to more normal levels, their monthly payments balloon, and their dream home becomes a liability. For them and the thousands of other Canadians who are undercapitalized, overleveraged, or otherwise unsuited for the challenges of home ownership, the vaunted dream of real estate will become a nightmare from which they cannot escape.

The good news, if there is any in all this, is that the eventual collapse of the Canadian real estate Ponzi scheme may return the market to a more natural point of equilibrium. With it, the kind of near-insane behaviour associated with real estate transactions that have become commonplace might again begin to look as crazy as they truly are. People might stop engaging in ludicrous bidding wars for clapboard tear downs in Leslieville and East Vancouver, or spending half a million dollars on a condominium that is barely bigger than a bus shelter and is located in a neighbourhood with more crack houses than coffee shops. If we’re truly lucky, we might even get back to a point where people buy homes because they can afford them, not because they feel they can’t afford not to. We have a long way to go to get there, though, and the ride down isn’t going to be much fun for any of us.

It’s true in some circles that taking an active interest in one’s finances is considered anathema to being truly left-leaning, that it’s a distasteful, bourgeois hobby. And if you’re making millions off investments in tobacco companies and weapons manufacturers, it probably is. But that isn’t always the case. The flipside of that argument is that taking control of one’s finances is the ultimate expression of self-determination.

Learning about personal finance should be of most interest to those who don’t have much of it—and in that category we can safely include the many people who work for low-paying NGOs, non-profits and charities. After all, do you think Belinda Stronach reads personal finance magazines? Hardly—she can pay someone to manage her money for her, whereas the rest of us need to learn to do it ourselves.

It’s easy to understand why many lefties find personal finance literature so odious, as much of it is written with the same underlying conservative philosophy—that you need to master your finances in order to pay the least amount of tax possible. Most lefties naturally, and rightfully, disagree with such a position. As supporters of a social welfare state, we realize that if we didn’t pay taxes there would be no such thing as universal health care.

My take is a little different: I think you should bone up on personal finance in order to pay the least amount of money possible to the multinational corporations that control your life. According to the latest information from Statistics Canada, the average Canadian family carries a rather astounding $12,300 in credit card and “other” debts, to say nothing of what we owe on mortgages ($82,800), student loans ($10,400), lines of credit ($13,500) and car loans ($11,200). That means big bucks in interest payments for banks and credit card companies. But why are so many of us giving them more money than we have to?

What’s your interest in keeping the big banks profitable, the same ones that shutter small-town branches they deem not profitable enough and charge increasingly higher service fees for fewer services? Or what about credit card companies that charge interest rates that are more than 15 percent higher than the Bank of Canada’s prime lending rate and insist on giving consumers more credit to spend than they can ever hope to pay off? Surely if the money you shell out in unnecessary interest payments stayed in your hands, you could find better ways to spend it than bolstering the bottom line of these multinational money-making machines.

The same thinking applies to investing. Yes, most of the literature you’ll find is couched in terms of making RRSP contributions as a way to reduce your so-called tax burden. But try to look past that. Because if you don’t learn how to invest properly, and simply pour money into an ethical fund, you may end up more philosophically compromised than if you’d just bought a regular mutual fund. The fund manager’s idea of what is ethical may be quite different from yours. If you don’t learn what to look for, you won’t know what your money supports.