There is no doubt that Canada is in the midst of an economic malaise. This can be grasped from the simple fact that it is now 26th among the countries of the world in per capita annual income. Even when petrostates (Norway and Qatar), tax haven states (Monaco, Liechtenstein, Luxembourg), non-countries (Bermuda, Cayman Islands, Isle of Man, Macao, Faroe Islands), and unreasonably small states (Iceland, San Marino) are excluded, our position has still deteriorated badly. We are behind Ireland, Switzerland, Singapore, the United States, Denmark, the Netherlands, Australia, Sweden, Israel, Austria, Germany, Belgium, and the United Kingdom.
Canada has superior resources, at least as competent a workforce, and more advantageous trade relationships than most of that last group of countries that has surpassed us. For almost all of the 20th century, Canada was modestly behind the United States and slightly behind Australia, but apart from that was the wealthiest per capita substantial country in the world. This was particularly the case at the start of that era, when oil was not so necessary or expensive and there weren’t really any petrostates or tax haven states because there was little income taxation in the world.
Even in the 1970s, Ireland, Israel, and Singapore were relatively poor countries, and the Netherlands and Belgium, which had never been more prosperous than Canada, were still reconstructing after World War II. Belgium and the Netherlands were largely liberated by the Canadian First Army in 1945: they had been very severely damaged by the trampling down of the German and Western armies, and the Netherlands had flooded itself out by releasing the dikes to harass the Germans. Famine was severe in the Netherlands, and they and the Belgians remain today countries with very little resources, so it is completely inexplicable that they should have a higher standard of living than Canada—other than by recourse to the competitively poor government in this country for the last decade.
All Canadians are at least dimly aware of the fact that their country is a treasure house of resources, a cornucopia including everything except most varieties of tropical fruit. Almost all base and precious metals, forest products, sources of energy, agriculture, and even diamonds are abundant in Canada and we have a large, skilled, and well-motivated workforce, reliable political and judicial institutions, and executive and management personnel in such numbers to ensure the competent direction of a much larger corporate and industrial country than we are.
For most of its history, Canada’s per capita income was within 5–10 percent of that of the United States, but it is now only 65 percent of the American level (US$60,000 compared to $94,000). Our standard of living is lower than in every American state. It is true that we have fewer poverty-stricken people than the United States just as we have fewer extremely wealthy people, but the level of assistance given to the poor, like the level of taxation it is attempted to inflict upon the wealthy, are collective policy issues. The United States is a more individualistic society than Canada.
We could easily raise our standard of living while significantly diminishing the number of Canadians who are poor. We should start by using the absurdly exaggerated threats from the United States as the excuse for a federal-provincial conference that would be dedicated to strengthening our defence against this (conjured) threat by reducing expenditure through elimination of duplicative activities and strengthening Canada’s internal market. Supply management is a euphemism and an outrage that costs the whole country more than it should have to pay for dairy products. It should be abolished and replaced, where provinces desire it, with straight income supplements to designated categories of farmers.
Canada currently has approximately 11 percent of its entire population working for the public sector: municipal and local, provincial, and federal governments. That’s 4.59 million people in a population of 41 million—almost 22 percent of all employed people. The corresponding figure in the United States would be approximately 40 million, and the real number, notwithstanding the very large American military establishment, is 25 million. Canadians may in general be better served by the public sector than Americans, though that is not obvious and the difference would not be great.
The federal government should announce that it will incentivize both negatively and positively its status as a major funder of costly provincial obligations such as education and health care. To the extent that the provinces and the local jurisdictions within them adopted a policy of not replacing employees who reach retirement age—whether as employees or as outside providers of work—until the percentage of the workforce in the public service falls to no more than 8 percent of the population, the result would be a gradual reduction of approximately 1.3 million people.
Such a reduction in expenditure would permit a reduction in the corporate income tax to 26–18 percent, three points below the American level, which would enable Canada to compete for investment and to reverse the approximately $400 billion flight of capital we have endured in the last 11 years.
The federal government should similarly use the tax system to incentivize a reduction of the provincial school systems by encouraging independent and separate schools that are not unionized. The entire nature of federal aid to provincial education should be based on the achievement of administrative efficiencies in the provincial departments, and student achievement in their matriculation scores. Universities should be substantially defunded because of their bloated administrations. They should also be required to raise the academic recognition of the skilled trades and require that a majority of students, at least as undergraduates, pursue courses that will enable them to earn an adequate living. We don’t need an unlimited number of graduates in gender and decolonization studies.
We have to centralize the national health-care system, slash the scandalous administrative costs—the greatest of any country in the world—and permit tax-deductible private education while directly incentivizing the admission and creation of more doctors in Canada. We have the fewest doctors per capita of any advanced country. With a reasonable respect for the environment and for native sensibilities, we should encourage the swiftest possible development of all of our natural resources and promote their sale in the world.
The combination of these measures would bring Canada swiftly back up the ladder of the world’s most prosperous countries, where it belongs.
