Have you seen the British TV shows, "Daylight Robbery" and Daylight Robbery, Part Two"? They are about squirrels and bird feeders, etc. etc. In the first one they show a squirrel-proof bird feeder (which I saw some of in Kew Gardens). In the second part they show how squirrels beat the squirrel proof bird feeder.
That's what capsaicin is for.