A modest proposal

Just when Britain’s Prime Minister David Cameron was hoping that relations between the UK and the EU could not get any worse, they suddenly did. It happened last month when London was informed that the country had to come up with an extra £1.7bn as its contribution to the EU budget. The Prime Minister huffed and puffed and announced defiantly that Britain would not pay. But this was no shakedown by Brussels and Cameron knew it.

The problem is that the UK is a far more prosperous country than records have shown. In the past, the country had even managed to extract the occasional rebate from the EU, but times have changed. In 2013, the Treasury adopted a new method of calculating the size of Britain’s economy that took into consideration activities such as prostitution and drug trafficking dating back to 2002. In 2009, this black economy was worth £10 billion ($18-billion). Is there a lesson here for Canada?

Canada, of course, worries about its own underground economy but the term usually refers to the comparatively chaste area of undeclared restaurant tips, rental income and under-the-table construction wages. Statistics Canada reported that in 2011 this economy amounted to $40.9 billion. Drug trafficking and prostitution, however, were deliberately excluded from the calculations. Is Canada hung up on immorality? The Supreme Court’s decision a year ago to strike down the country’s anti-prostitution laws would suggest not.

The government now has to come up with face-saving legislation that will satisfy even its most hardline supporters. The solution lies in following economic logic alone. Decriminalization of prostitution and the regulation of the drug trade are inevitable – it is just a matter of time. Why shouldn’t Canada enjoy the social and economic benefits of such a reform sooner rather than later? It’s today’s prosperity after all that wins elections.

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