Canada West Foundation Blog

In 1999, during the Pan American Games in Winnipeg, the political cartoonist of the Winnipeg Free Press drew a cartoon depicting the pictographs for major sports.  It included the symbols for seven real sports and added a new one: a runner carrying a suitcase.  He labeled it “defections.”

Making a refugee claim during a major sporting event is not a new phenomenon in Canada.  There have been spectators and participants who have made refugee claims at the Pan Am Games in Winnipeg in 1967 and, again, in 1999; at the Calgary Winter Olympics in 1988, at the Victoria Commonwealth Games in 1994 and at the Francophone Games, hosted by Ottawa and Hull in 2001.  Citizenship and Immigration Canada and Canada Border Service Agency officials plan for the likelihood of claims being made and have procedures in place to deal with such cases.

So the news that four people who came to Canada, ostensibly to watch the Vancouver Olympics, have made refugee claims should not come as a shock to anyone.  Canada is an exceedingly attractive country to most people in the world and the opportunity to come to Canada is an opportunity to try to stay.

The Immigration and Refugee Board reports that some thirty six thousand refugee claims were filed in 2008-09.  Given the thousands of athletes and officials and hundreds of thousands of visitors to the Olympics, it is almost a statistical certainty that some refugee claims would be made.  Some might be legitimate and others may not be.

It is the job of the Immigration and Refugee Board to decide which are well-founded claims and which are not and due process will take its course.  As a signatory to the United Nations Convention relating to the Status of Refugees, Canada is generally obliged to hear all refugee claims made within her territory.

Some may say, we should keep all potential claimants out of Canada, but that is an impossible task, unless we close our border to all visitors and never hold an international sporting event.  Indeed, Section 53 of the Olympic Charter requires countries to accept the Olympic identity and accreditation card as “a document which establishes the identity of its holder and confers upon the latter the right to take part in the Olympic Games.

Together with a passport or other official travel documents of the holder, the Olympic identity and accreditation card authorises entry into the country of the host city.  It allows the holder to stay and perform his Olympic function for the duration of the Olympic Games, including a period not exceeding one month before and one month after the Olympic Games.”

So the price of holding the Olympics is allowing the International Olympic Committee to decide which athletes and officials come into Canada for a period of up to two months.  If a few of the participants or visiting spectators make a refugee claim, let’s not get too excited about it.

They are really paying Canada the ultimate compliment!

Posted By: Robert Vineberg

NOTE: This is the fourth installment of a series of posts on reinvigorating western Canada’s drive toward increased international economic competitiveness. The recession distracted us from this task but it is time to return to sharpening our competitive edge.

“There may be a limit to the number of good factory jobs in the world, but there is no limit to the number of idea-generated jobs in the world.” —Thomas Friedman, The World is Flat: A Brief History of the Twenty-First Century

It is no secret that manufacturing that relies on low wages is not a comparative advantage of advanced economies like western Canada and it is no secret that most (though not all) of the “good” jobs (i.e., well-paying and stimulating) are not found on the floor of sweat shops, call centres, or chicken packaging factories.

Robots have not yet entirely taken over these jobs as Jeremy Rifkin predicted in his prophetic bestseller The End of Work (human labour is still cheaper), but they are clearly not the jobs that will propel and keep western Canada at the leading edge of economic growth, (good) job creation, and international competitiveness over the long-term.

What kind of jobs will keep the West at the forefront of the global economy? The answer lies in the much-used concept of “value-added,” but not in the way it is traditionally applied in western Canada. We often think of value-added as turning a tree into lumber, bitumen into synthetic crude, or wheat into pasta. While these are all laudable forms of value-added manufacturing, the real growth potential lies in capturing more of the activity that takes place further along the value chain.

It is not about cutting costs and a race to the bottom; it is about who has the brightest minds and who can put them to the best use. It is not enough to build more factories for secondary manufacturing: “Adding value to our resources is not likely to come from labour intensive, assembly line production facilities. It is most likely to come from the intellectual resources of the West: our minds. We may not build the chairs, but we will design them. We may not make the pasta, but we will research and engineer higher protein-yielding grains” (Coming Up Next by Todd Hirsch – page 108.)

The idea is to think big and not settle for outdated definitions of economic diversification, but embrace the upper end of the value chain rooted in the knowledge economy. We will still hew wood and draw water (and hopefully shape the wood and make the water into beer), but we can also sell our professional and creative services at a high price in the global marketplace.

Just as our athletes at the Olympics know that you have to “go for it” if you want to win, it is time for western Canadians to embrace the opportunities presented by the knowledge economy. If we hold back, other countries will scoop up these jobs.

It is likely that the Harper government will continue to press forward with its Senate reform agenda when the House of Commons goes back to work in March.

At present, the Harper government is going ahead with Senate reform without a clearly articulated vision of the destination. Term limits, while important, just don’t capture the imagination of Canadians (most would probably be quite surprised to learn that Senators can stick around until they reach age 75).

Simply referencing the old Triple E model is also not good enough. “Equal, elected and effective” for what? Why should Canadians care?

Four powerful arguments why Canadians should care spring to mind that need to be fleshed-out and vigorously debated.

First, a reformed Senate could be used to overcome the chronic inability of the House of Commons to reflect the diversity of the Canadian people. Women, visible minorities, Aboriginals, small political parties and other minority groups are poorly represented in the current House of Commons. This doesn’t mean that MPs don’t care about these groups, but it is a problem when the country’s main legislative body does not include the same diversity as the population it represents.

Fixing this shortfall can’t be done via appointments to the Senate because this is, no matter how sincere, a form of tokenism. The shortfall must be fixed by way of an electoral process.

Second, a reformed Senate could help ensure that federal policy is based on a wider variety of input with a premium placed on compromise and consensus among diverse perspectives. Admittedly, this makes for a slower, more complex and generally messier legislative process, but that’s how a healthy democracy works.

Third, a reformed Senate could serve as a check on what virtually everyone agrees is the alarming concentration of power in the hands of the Prime Minister and the central agencies that report to his office. Even in boring old Canada, too much power in the hands of one individual is a bad idea. With an elected Senate hovering over the Prime Minister’s shoulder, the concentration of power would be greatly dissipated.

Fourth, there is the longstanding need to use the Senate to better capture, express and institutionalize Canada’s regional diversity. A properly designed elected Senate could achieve this and help knit the country together.

Not everyone will agree with these arguments while others will suggest alternative reasons for reforming the Senate. The point is that we need more debate about the ultimate goals of Senate reform. To this end, a new Canada West Foundation paper coming out in a few weeks examines this issue in more detail.

The goal is to help initiate a broad public debate about how we want ourselves to be governed. If this is not an important enough issue for Canadians to spend some time and energy on, our country is in deep trouble.

Tell us what you think.

Posted By: Roger Gibbins

Each year, Canada West Foundation holds The Jim Hume Memorial Student Essay Contest. The contest provides students attending western Canadian universities and colleges to share their thoughts on key public policy issues. And they can win up to $5,000 cash to put toward their tuition, books, rent or beer. Yes, I said $5,000!

This year’s essay question is: What has to be done to ensure that Canada’s economy benefits from the transition to a low-carbon world? The deadline is March 15, 2010.

The question is rooted in the notion that there is a gold rush underway to take advantage of the opportunities presented by the green economy. How does Canada get out in front of this gold rush? What is the role of public policy? What is the role of industry?

We want to hear what you think. The best essays will be published by Canada West Foundation this summer.

In a recent column by L. Ian MacDonald (Calgary Herald, Feb. 9, 2010), Stephen Harper is criticized for not doing anything big. Mac-Donald argues that “while [Harper] has done a good job of running the country, he hasn’t yet done much to change it.”

The problem with this analysis is twofold. First, it assumes that the Prime Minister wants to do something big. Second, it fails to see that not initiating huge changes is itself a major change of direction for the federal government.

Harper’s ideological bent is conservative. Conservatives are suspicious of big government projects on the grounds that they grow the state at the expense of personal freedom and tend to have all sorts of negative unintended consequences. For a true blue conservative, running the country is not about changing it, but making sure that there is “peace, order and good government.” It’s up to Canadians to change their country, not the Prime Minister.

There is little doubt that Harper has had to compromise some of his conservative beliefs to win two elections and hold onto two minority governments. I don’t even want to think about the stomach ache he probably had while overseeing the use of taxpayer dollars to bail out auto companies.

And while the idea of a secret agenda has always been nonsense, this doesn’t mean that the Prime Minister doesn’t have a different vision for the federal government than his predecessors.

Harper is a fan of small (or at least smaller) government. He used to rail against politicians who went to Ottawa to impose their big ideas while spending truckloads of tax dollars doing it. It should not, therefore, be a surprise that he has not proposed a lot of big ideas.

Harper wants to be “transformational” (to borrow MacDonald’s word), but not by leaving a legacy of major federal initiatives. He wants to transform the approach of the federal government from a “let’s create a new program” to “let’s see if we can get by without a new program, let the provinces look after their areas of jurisdiction, and generally be less, not more, present in the lives of Canadians.”

This boggles the minds of those who want, or are used to, the idea of an interventionist federal government. Harper appears to have no vision because “vision” is typically associated with more government. Harper’s vision is less government.

Whether you agree with this or not, it’s “transformational” — if it can outlast Harper. Unlike some of the accomplishments of previous PMs, Harper is not leaving behind a lot of programs that will be hard to dump when he is gone. Cracking down on crime, good relations with the United States and a predilection toward less rather than more government are simply not as durable as Medicare or the Canada Pension Plan.

There is at least one major exception to this: the GST cut. Harper and every economist worth their salt know that cutting a consumption tax is not as good in economic terms as cutting income or corporate taxes. But, as Maclean’s columnist Paul Wells has noticed, Harper’s goal was not good economics but good conservative politics. “Harper’s GST cuts were designed to deprive future governments of an income source” (Maclean’s, May 26, 2008).

The two percentage points shaved off the GST mean that every time someone spends a dollar on something, two cents less goes to Ottawa to fund more ambitious government programs.

This looks less smart in the wake of the recession and the deficits that will follow it, but it still makes a great deal of sense if your goal is to rein in government rather than unleash it. It is important to note that the federal government is not withering away under Harper’s leadership — it remains a massive operation with a huge influence on the lives of Canadians. The difference is one of degree, albeit an important degree.

It remains to be seen if Harper’s vision for the federal government can stand a third electoral test. Canadians like social programs and we are generally not shy about asking our governments to do more (even if we ask for less in the next breath). O Canada, indeed.

Posted By: Robert Roach

Budgets are a bit like Indian restaurant buffets: everyone can find an area to pick at (in both senses of the word). At the lock-up preceding the budget speech, I was seated beside a municipal official who was looking all over the hundreds of tables for “the” line that meant life or death for some of his city’s projects. My approach was to look at the overall budget with two different views: the short-term one and the long-term one.

In the short term, what the Alberta budget did was try to shore up the popularity of the government by addressing one of the main areas of dissatisfaction in the province: health care. A funding boost of $1.3 billion in 2010-11 was provided to health and other “priority areas” such as education and seniors. The boost did not require any tax increase. It was funded by a 3.9% haircut endured by all the other ministries combined.  In addition, Alberta Health Services’ deficit was erased, and the government committed to providing AHS with increasing base funding over five year.

Whether the record $4.75 billion deficit will turn out to be a short term issue, is another matter entirely.  The government sure hopes it does. Its fiscal plan calls for the elimination of the deficit by 2012-13.  If all goes as planned, revenues will be 20% higher three years from now driven by increases in tax receipts (+29%) and natural resources income (+72%).

Can royalties really increase that much? The forecasts in the Budget assume that prices for crude oil and natural gas will rise steadily to $90 and $5.50 respectively over those three years. While this is not unrealistic (some forecasts do call for price increases of this scale), given the government’s recent bad experience with resource price volatility, a more prudent forecast would have been welcome, even if it required a few explanations and footnotes.

Unfortunately, I find that this Budget doesn’t really hint at the government’s long term intentions. The Alberta government needs new economic policy targets. It is likely that the government’s transformative work will start after the release of the oil and gas competitiveness review, but hopefully Minister Morton won’t limit his policy innovations to oil and gas taxation.

For starters, the list of policy targets should include: tax reform, bringing structural spending under control, and planning for a return to the long-gone days when a fraction of natural resources revenues was systematically put aside for future generations (nowadays one can only dream about all of that money being saved).  Feel free to expand this list in the comments section below.

All in all, while this budget fights the public opinion fires and signals the transition to a new Minister, the majority of the prep work on this document had already been done before he took the position. Expect the “real” first Morton Budget in 2011.

Posted By: Jacques Marcil

This is the third installment of a series of posts on reinvigorating western Canada’s drive toward increased international economic competitiveness. The recession distracted us from this task but it is time to return to sharpening our competitive edge.

While it is naïve to think that opportunities in the green economy will magically transform western Canada into a land of elves making hacky sacks out of hemp for the international market, it is equally naïve to ignore the advantages of getting greener. The green economy is not a panacea. We should not, for example, expect green jobs to automatically fill the void that would be created if climate policy hammers the oil and gas sector.

It is also important to note that getting greener is not just about reducing greenhouse gases.  There are many other environmental opportunities and challenges out there other than climate change.

The West is home to one of the greatest stores of natural capital in the world. From the northern lights and diamonds to the boreal forest, from vast stores of oil and gas to the eastern slopes of the Rockies and the lakes of Manitoba, western Canada overflows with natural beauty, natural resources, and is home to an array of ecological “goods and services.” Harvesting this bounty as well as maintaining it are at the core of the region’s comparative advantage and its quality of life.

There is growing awareness that economic competitiveness and environmental issues are becoming linked in three key ways: 1) jurisdictions that do not take action on environmental issues, such as reducing greenhouse gas emissions, may be penalized by a global marketplace and policy space that are increasingly demanding greener processes and products; 2) there are significant direct and indirect economic costs created by degrading a jurisdiction’s natural capital (e.g., if the water supply becomes contaminated); and 3) there are opportunities to participate in new markets for green products and services, and to save money through less wasteful production systems (“eco-efficiency”). In addition, there are quality of life factors that argue in favour of greener practices that, while of value on their own, also play a role in attracting and retaining skilled labour and investment.

Conversely, it is sometimes argued that jurisdictions that do not adhere to greener practices have the advantage over those that adopt the new approaches. For example, if country X requires a reduction of greenhouse gases that adds to the price of a particular product and country Y does not, country Y has the upper hand in terms of price. While this may be true in the short-term, it is imperative that decision-makers consider the long-term and hidden costs of various policy alternatives, and that businesses adapt now to a higher standard of environmental performance rather than wait and play catch-up down the road.

Managing forest and water resources, reducing greenhouse gases, maintaining agricultural land, addressing conflicting land uses, and improving urban natural capital assets are just a sample of policy areas that have ramifications on competitiveness. An even tighter linkage between “the environment” and “the economy” than is currently in place is essential to the long-term economic success of the region.

Two policy recommendations come to mind:

1. Increase investment in the development of alternative energy production technology and generation.  The West can be a global leader in energy of all types.
2. Develop and implement a comprehensive regional ecological goods and services inventory and introduce pilot projects for paying land owners to provide those services with the goal of increasing the region’s stock of natural capital. There is much that the West can learn here from experiments with market-based incentives for environmental outcomes from Australia.

Posted By: Robert Roach

Oil sands protesters, be they environmental organizations like Greenpeace, First Nations leaders or Quebec politicians all seem to have the same basic demand: “shut down the tar sands.” There is rarely any middle ground. Any large scale protest against Alberta’s oil sands and the companies extracting them will boil down to those five words. And as protest slogans go, I suppose “shut down the tar sands” is simpler to chant than “reduce your footprint” or “accelerate the reclamation of tailings ponds,” but is it really a good option? Or even a rational one?

Let’s say we take the protester’s advice. Stop researching carbon capture and storage, stop all the research being done into other ways of cleaning up oil sands operations and just shut the whole thing down.  The oil sands will be no more, and global carbon emissions will be reduced by a whopping tenth of a percent.

Big pain, little gain
Not as high a number as you were expecting? I know, it seems small, given how environmentalists seem to focus on the oil sands above all other carbon sources, but the fact is the oil sands only contribute 5% of Canada’s carbon emissions. And since Canada only contributes 2% of global emissions, that means the oil sands clock in at about 0.1% of the global total.

So the oil sands are far from Canada’s greatest climate villain. In fact, according to climate change expert Dr. Andrew Weaver, pine beetles are a greater threat: decomposition of trees killed by pine beetles produces nearly twice the carbon emissions of the oil sands. But I suppose you can hardly scale Parliament draping banners that read “Shut down the pine beetles.”

Supply and demand
The largest source of carbon emissions is when fossil fuels are burned for energy. The millions of cars on Canada’s streets produce more emissions than all of the oil sands mines and upgraders ever will, and ceasing to extract bitumen isn’t going to change that. Cutting off one source of the supply does nothing to reduce demand, and demand for oil is soaring. Shutting down the oil sands won’t make people stop driving or cause wind power to miraculously replace coal-fired electricity. If anything, removing billions of dollars in revenue from the Alberta and federal governments will just slow down the search for greener sources of power.

Other references:

• Oil companies say they got a raw deal in Denmark – Montreal Gazette, Dec. 12, 2009
• Putting oilsands in context requires push from premier – Calgary Herald, Dec. 9, 2009

Posted By: Dan Gibbins

Do you remember the not-so-long-ago good times, when all western Canadians had to worry about was sustaining long-term growth?  An aging workforce, the pending skill shortages and underemployment were the headline issues just 18 months ago.  How things change.  These issues haven’t gone away, but there is nothing like an economic downturn to focus us on the here and now problems and hope the future will take care of itself.

So it’s not surprising if you have missed hearing about an important little agreement that might go along way to stabilizing Canada’s future workforce needs, particularly across the West.  At the end of November, the federal government, provinces and territories agreed to a Pan-Canadian Framework for the Assessment and Recognition of Foreign Qualifications. Take notice, as this may be the long awaited breakthrough that will start to make credential recognition faster and easier.

Inside the Framework
The stated goal of the Framework is to “articulate a new, joint vision for governments to take concerted action to improve the integration of immigrants and other internationally-trained workers into the Canadian labour market.”

The Framework is merely a statement and is not a legal document.  However it is the first government commitment to improve qualification assessment and recognition practices across Canada.  The Framework commits governments to develop a fair, transparent, timely and consistent qualification recognition process.  The fairness criteria will be crucial to the success or failure of the system.  They are:

• Standards must be objective, reasonable and bias-free.
• Methods for assessment must be not only necessary but also sufficient for determining whether occupational standards are met.
• Canadians and internationally-trained applicants must be treated equally respecting requirements to be met.
• Assessment results have to include a clear explanation for the decision.
• Assessment processes must be efficient and avoid duplication, particularly where multiple assessments are required by different authorities.

For those whose credentials are not recognized, skills upgrading has to be available if they are close to meeting requirements and guidance on employment in related occupations has to be in place if they have no chance of qualifying.

Timeliness is also crucial. The stated goal of rendering decisions within one year of application will be a vast improvement over most situations that exist today.

Priority will be placed on regulated occupations and this is appropriate because this is where the biggest obstacles lie.  The first goal is to implement the Framework for Architects, Engineers, Financial Auditors and Accountants, Medical Laboratory Technologists, Occupational Therapists, Pharmacists, Physiotherapists and Registered Nurses by December 31, 2010.  By December 2012, a second group of occupations consisting of Dentists, Engineering Technicians, Licensed Practical Nurses, Medical Radiation Technologists, Physicians and Teachers (K-12) is to be added.

Filling the Holes
Western provinces will face shortages of skilled workers in the coming years and immigrants can and should fill many of these expected vacancies given a better system of credential recognition.  For far too long, many skilled immigrants who have chosen Canada arrived here only to find that Canadian institutions chose to ignore the contribution they wanted to make to this country.  Thanks to this Framework the first step toward resolving a waste of talent has been taken.

Posted By: Robert Vineberg

In a previous post, I stressed the need to shake off the doldrums of the recession and get back to engineering an economy that can keep pace with, and pass, our international competitors. Just like every other region and country in the world, the West must be constantly improving its economic game—from education and transportation infrastructure to business acumen and profitability—if it wants to increase, or even just maintain, its prosperity.

The forces that sharpen or dull an economy’s competitive edge are relatively straightforward and have not changed as a result of the recession. These “pillars” of economic success include stable government and the rule of law, modern infrastructure, a healthy and educated workforce, competition and the ability to innovate.

Given the unique context of western Canada, eight key drivers of economic success have been identified by the Canada West Foundation:

• tax policy;
• transportation infrastructure;
• human capital;
• cities and the importance of place;
• green economy;
• innovation;
• moving up the value chain; and
• intergovernmental cooperation.

Tax Policy
Although tax policy is only one tool for fostering economic growth and enhanced competitiveness, it arguably has the most immediate impact on output, incomes and the attraction of domestic and foreign investment. Hence, tax policy is an essential element of any government competitiveness strategy.

At present, governments are frozen in the headlights of current and future deficits and Canadians are leery of tax increases, but there is much that can be done to reform the tax system without raising taxes.

Governments should:

• continually review their tax regimes with the goal of keeping them as simple as possible; simplicity lowers compliance costs for businesses, collection costs for government and increases transparency and accountability;
• pursue broad-based tax reductions as opposed to targeted tax relief, thereby better positioning the entire economy and enhancing simplicity; targeted tax incentives and credits divert investment from its most productive use toward favoured ends to the detriment of the wider market that is the source of economic growth;
• shift taxation away from taxing income and investment and toward more consumption taxes; and
• reduce corporate tax rates in order to increase investment and growth.

At a time when there are fewer tax dollars than needed to cover government spending, it may seem a bit insane to suggest cutting corporate tax rates, but at least one study shows that this can be done without reducing government revenue over the long-term (see Ken McKenzie, Business Taxation in Western Canada: Settling for a Personal Best?).

The prime mover of the region’s economic success is the individuals and businesses that take the risks in the free market. Governments, however, have a significant role to play and tax policy is one of the main tools they have at their disposal.

Future posts will discuss the importance of the other key drivers.

Posted By: Robert Roach