Ontario has no eerie, overgrown church graveyards. There are no dangerously angled tombstones, no grave markers obscured by rambling vines, nor ancient trees with branches sweeping the ground.
In Ontario, cemetery operators are required to maintain graveyards properly. There must be an accessible entrance. Grave markers must be stabilized. Section 29 of the Funeral, Burial and Cremation Services Act, 2002, states: "An operator that has an interest in a cemetery shall maintain the cemetery if the registrar is of the opinion that the cemetery appears to be abandoned or neglected."
The law is a response to a grave moral hazard problem. It is more profitable to sell burial plots than to maintain them. Cemetery operators have an incentive to promise their clients an idyllic and well-tended eternal resting place, and then renege on their commitment. After all, the dead are unlikely to complain.
The Funeral, Burial and Cremation Services Act attempts to solve the moral hazard problem by forcing cemetery operators to set aside adequate funds for future upkeep in a "care and maintenance account". For example, according to section 168 of the Act, "in the case of an in-ground grave that is 2.23 square metres or 24 square feet or larger," the cemetery operator must deposit "the greater of 40 per cent of the price of the interment rights as set out on the price list and $250" into a care and maintenance account to pay for the future upkeep of the site.
I learned about the Funeral, Burial and Cremation Services Act on a recent visit to a small, none-too-wealthy town, three or four hours out of Toronto - the kind of place that's just big enough to have a Tim Horton's, but too poor to have a Starbucks. There's a white clapboard United Church right on the main road; a Catholic church and an Anglican one, as well as houses of worship for other smaller denominations.
Because it's an old town, the old churches have old graveyards. There lie the young men who died in war and the old men who survived it all; the women who died in childbirth and the little children lost. Whole family histories are told in the tombstones.
But the churches have a problem. Their cemeteries were created long before the Funeral, Burial and Cremation Services Act came into place. When Frank Blake died and was buried back in 1918, no one thought to charge his estate for future upkeep costs, and invest those funds wisely. Yet his grave is still there, and the church is required to maintain it. For generations, volunteers kept the churchyards neat and tidy. But today vigorous and healthy parishioners are few and far between. Some of the young folk have left town to find jobs in the city or out west. Others are still present, but have either abandoned their faith, or are simply too busy working and raising a family to donate their time to the church. The church can hire a landscaping service to maintain the cemetery - but if they do that, their care and maintenance account will soon be depleted.
So what is an appropriate policy response?
As a practical matter, it is impossible to find the descendants of those buried in small-town church yards, and ask them to pay for their ancestors' upkeep.
A more realistic solution would be to seize the assets of cemetery operators who disregard their duties, and use those assets to pay for on-going maintenance costs. That might work for commercial, for-profit cemeteries. I'm less convinced about the wisdom of selling off historic small town churches to raise sufficient funds to keep the graveyard neatly mown.
Another solution is to use tax revenue to subsidize cemetery operations. Setting aside the moral hazard problems created by the possibility of a government bail-out, it is worth asking: why spend money on the dead, when there is so much need among the living?
The British solution has been to permit neglect; to let the brambles and ivy and weeds grow, as shown in the picture. That's a good solution to contemplate on Hallowe'en.
The care and maintenance of graveyards might seem like an obscure economic problem. But cemetery economics is, from an analytical point of view, pretty much identical to pension economics, except that the "pension obligations" last forever. With pensions, as with cemeteries, we have chosen to switch from pay-as-you-go funding, combined with direct in-kind transfers from younger generations, to a regime of pre-funded savings plans. Yet both pensions and cemeteries are exposed to the same risks of moral hazard on the part of providers, and of the funds set aside proving to be in inadequate, especially in a low-interest rate regime.
All we can hope is that, when we get old, no one figures "neglect" is the best policy response!
I'm pretty sure that Ontario has neglected and abandoned cemeteries; old family cemeteries from abandoned homesteads. There's an entire local history genre devoted to isolated burials. More specifically, didn't there used to be one on an island on the off ramp of one of the expressways on the way from Toronto to the airport?
See also: https://en.wikipedia.org/wiki/List_of_ghost_towns_in_Ontario.
A pretty scarey picture is there painted for those hoping not to be "neglected" in old age. (Again I say to my generation, and the generations that come after: your death will be in a cot on the floor of an abandoned municipal hockey rink, surrounded by the fellow victims of an influenza outbreak. You will be comforted in your last moments by a Congolese Licensed Nurse Practitioner Associate Assistant, who will hold your hands as you cough out your last breath, and write a two line note to cc: to your email contact list before she goes home to her motel to Skype her family eerie pictures of half-abandoned Canadian towns.)
Posted by: Erik Lund | October 31, 2016 at 07:44 AM
Erik - I've changed the first line of the post to make it refer to church graveyards instead of cemeteries.
The act does make some provisions for cemetery closures - there is a whole procedure that needs to be followed. And there are some exemptions e.g. Mennonite and Amish cemeteries. I guess the issue is more specifically for church graveyards, where closure isn't such an easy option.
I remember that one from the airport, too.
Posted by: Frances Woolley | October 31, 2016 at 08:13 AM
The Richview Memorial Cemetery still lies within the 401-427 interchange, but apparently, its maintenance funding is precarious. It has been augmented by graves from two other cemeteries, the Willow Grove Burying Ground and the McFarland Family Burying Ground; these were moved to make room for other road junctions.
Posted by: Phil Koop | October 31, 2016 at 08:29 AM
We can adjust the pension age to influence the ratio of working to non-working population. We'll have to work damned hard to increase life expectancy if we want to influence the ratio between the dead and the, uhm undead human population. :-)
Posted by: Oliver | October 31, 2016 at 08:45 AM
Oliver:
"We'll have to work damned hard to increase life expectancy if we want to influence the ratio between the dead and the, uhm undead human population. :-)"
That's an interesting point. I'd be willing to bet that - given immigration, spectacular decrease in death rates after introduction of antibiotics, etc - the overall ratio of dead/undead in Canada is actually pretty low in historical terms. Certainly compared to what it would be in, say, Europe in 1800, where you've got hundreds of years of deaths and almost zero net population growth. So why is graveyard maintenance a problem - or, at least, a problem for the folks I know in small town Ontario? I'd figure it's because of changing institutions, social structures, and perhaps demography that make the pay-as-you-go informal care model unsustainable. But it is interesting to see how well the alternatives to pay-as-you-go plus informal care are working!
Posted by: Frances Woolley | October 31, 2016 at 08:52 AM
Phil - thanks, as always amazed by the depth of knowledge of the WCI readership!
Posted by: Frances Woolley | October 31, 2016 at 08:53 AM
Obviously what's needed is a kind of palliative care and grief counseling model analogous to people's response to terminal illness. People who have trouble letting go of cemeteries need to accept that they have to say goodbye. Pouring money into life support isn't working.
Bill Bryson's book Home has a story in the opening chapter about old church cemeteries in England. Over the centuries, bodies were piled up so high on top of older burials, that the churches now appear to be sinking into the ground, whereas it's really because the ground has been rising....
Posted by: Shangwen | October 31, 2016 at 09:31 AM
Shangwen: "Over the centuries, bodies were piled up so high on top of older burials"
That makes sense. Even if the dead/living ratio tends to rise over time, the graves/living ratio can be kept in check in the way that you describe.
Not sure if that's permitted under Ontario legislation though!
Posted by: Frances Woolley | October 31, 2016 at 09:47 AM
> I'd figure it's because of changing institutions, social structures, and perhaps demography that make the pay-as-you-go informal care model unsustainable.
Unless you go with a provincial bailout model, the problem isn't one of "Ontario's living:dead ratio," it's the ratio of those small towns with neglected church graveyards. The most specific ratio is that of living to dead parishoners.
Here, urbanization is the killer. As small towns lose people to out-migration to city centres, the graveyard maintenance problem is similar to that of 1800s Europe. On top of that, we've imported modern sensibilities such as standards for burials and prohibiting the aforementioned body-stacking, compounding the caretaking problem.
Posted by: Majromax | October 31, 2016 at 09:55 AM
Cemetaries are, by definition, stable, immobile and local. I have never visited the graves of my grand-parents ,two of which I never knew. I barely remember where they are. All grand-children have moved out long ago.
This is an obverse side of urbanisation and geo-socio-economic mobility.
Like pensions funds aod OAP replacing family care, maybe,indeed , will we move to socialisation of care of the dead, as we are doing to the care of the living.
One day, I hope, we will have socialzed housing to facilitate labor mobility and prevent tying people to their home.
We will at long last estsblish a regime where the main capital is the human capital of the living...
Posted by: Jacques René Giguère | October 31, 2016 at 11:29 AM
Here in Switzerland, graves expire to make way for newly deceased unless surviving relatives cough up enough to keep them in place. Not sure how that translates into pensions. Expiring sounds somewhat Orwellian.
Posted by: Oliver | October 31, 2016 at 02:33 PM
Oliver - really, how fascinating, and how Swiss!
Posted by: Frances Woolley | October 31, 2016 at 02:59 PM
Like Switzerland, Singapore has a limit on burial. "the burial period for all graves will be limited to 15 years. At the end of the 15 years, the graves will be exhumed. For those whose religion permits cremation, the exhumed remains will be cremated and stored in columbaria niches. Where compulsory burial is required due to religious reasons, the remains will be re-buried in smaller individual plots". There are a couple 'historic' cemeteries which are unkept and being removed to make way for the living. There are a few private graves on private land which are left to the decedents to maintain.
Posted by: Squeeky Wheel | November 01, 2016 at 12:32 AM
This is problem is not really a public good problem. The solution does not require tax revenue. It’s actually pretty absurd to use tax money to solve this problem when the subsidies are going to a church that is already tax exempt. In the public finance world, I’d love to see the analysis that says we need to give Christian churches even more money!
More problematically, this post attempts to link the issue of cemetery upkeep with pension funding. That’s really a non sequitur. The issue with public pension plans is the failure to pay attention to the basic lessons of Finance 101: almost all pension funds – the CPP included – discount a riskless liability with a risky return rate. Hence, we see the absolute nonsense of rate of return targets in the CPP etc. Why do they do make this rather simple mistake? They’re not stupid. It’s rational because they know they have a government bail out. Pension underfunding has nothing to do with high or low interest rates – it has to do with a mismatch between the nature of the liabilities and the assets, and the use of inappropriate discount rates. Your statement “...the funds set aside proving to be in inadequate...” is just that basic error in finance coming home to roost.
Work place pensions don’t really make much sense. It’s pretty odd that anyone would want to attach their retirement to their employer in the first place (ask Nortel employees how that worked out), but it seems to me to be really inefficient (unless there’s an expectation of a government bail out). From the firm’s perspective, the pension is just a form of funding. You have to pay employees, but the firm creates a riskless liability as part of the compensation. But the liability is just part of the capital structure of the firm – it’s like borrowing from the employees. Is it true that paying your employees by creating a riskless liability is the most efficient way to structure the firm? Probably not. If the employees are so risk averse that they discount at a super low rate, then it might make sense, but most pension funds discount with a risky rate. After all, employees want the biggest take home paycheque they can get. With a pension plan, the firm’s capital structure includes a riskless liability but the firm funds it at a risky rate. No wonder workplace pensions are a thing of the past! Unlike the government, corporations don’t have an army!!
Posted by: Avon Barksdale | November 01, 2016 at 02:09 AM
Wasting land on the dead seems very wasteful. On a personal note,burial gives me the willies. Gimme a nice big funeral pyre, or something like a sky-burial if cremation is uneconomical - I have no problem with feeding the scavengers. Or maybe some form of composting could be devised and I could be used to grow some nice plants. In any case, I don't want to be stuck 6 feet down below the active layer of the soil - keep my mortal remains circulating among the living (modulo whatever you have to do to control any unpleasant odours).
Posted by: Patrick | November 02, 2016 at 01:15 AM
«Work place pensions don’t really make much sense. [ ... ] But the liability is just part of the capital structure of the firm – it’s like borrowing from the employees.»
Pensions are deferred compensation, so indeed they are a form of lending from the employees to the company. Or put another a way for the company to defer some costs by indeed borrowing a large part of each employee's compensation: a raise in "headline" wage hits the company bottom line and cashflow immediately, a raise in the level of future pensions can be fudged much more easily, and the hit to the current cashflow is much smaller.
«It’s pretty odd that anyone would want to attach their retirement to their employer in the first place [ ... ] From the firm’s perspective, the pension is just a form of funding. You have to pay employees, but the firm creates a riskless liability as part of the compensation.»
This is all both true and false. Company-specific pension plans exist for two purposes:
* For current executives it is way to give more to employees in a way that can benefit themselves at the expense of future executives and shareholders, by capitalizing part of wages into a "book" liability that can be under-depreciated by current executives to the benefit of their bonuses.
* For employees it is a way to persuade current executives into getting pay raises in a way that hits the bonuses current executives, who are signing their employment contract, less than the bonuses of future executives and shareholders, who will have to pay those raises; hoping that future executives and shareholders will not renege on the promises of deferred compensation by previous ones.
In particular pension plan benefits in the USA in manufacturing started to be significant when they were used by big employers during WW2 to give raises to employees that avoided the wage controls imposed by the USA government to prevent excessive inflation during WW2.
"Defined benefit" company-specific pensions have become a lot less popular with current executives when two things happened:
* Current executives bonuses started to be hit by the need to pay out the pensions promised in the past by previous executives.
* To prevent the easiest ways to under-depreciate the pension contributions borrowed by the company, governments have increasingly forced company pension funds to become arms-length trusts. This has indeed reduced the ability of current executives to under-depreciate the pension liabilities at the expense of future executives and shareholders.
There is another reason for "defined benefit" pension plans, but it is incidental rather than essential: since deferred compensation used to be negotiated by trade unions, and trade unions tend to be controlled by long-term employees, "defined benefit" pension plans tend to favour, sometimes to ridiculous degrees, employee seniority (at the expense of employees with shorter seniority) usually by tying the pension benefit to "final salary". Since current executives tend to have longer seniority and higher "final salaries" that arrangement benefits them as well.
Also as a rule pensions are "riskless" only for the initial cohorts of retirees; they become quite riskier later on, especially when they have been grossly under-depreciated by companies in declining companies.
So in an ideal world pension plans would not be company specific, and could well be "defined benefit" without being "final salary", and managed entirely by independent large-scale trustees, ideally by the government.
But in practice it is much easier for employees to win them by playing the interests of current executives against those of future executives and shareholders, when that works.
Posted by: Blissex | November 02, 2016 at 06:23 AM
«But cemetery economics is, from an analytical point of view, pretty much identical to pension economics,»
That's not quite right, but they can be regarded as instances of the same concept: under-depreciation of future liabilities; it matters little whether the future liabilities are for replacing capital equipment, for paying pensions, or for keeping graves.
As to this I would like to mention a law and a lemma that I have "modestly" named after my nickname:
Blissex's Law: all non-trivial frauds are based on under-depreciation.
Blissex's Lemma: most cases of under-depreciations are the result of fraud.
Posted by: Blissex | November 02, 2016 at 07:35 AM