Canada West Foundation Blog

By: Larissa Sommerfeld, Policy Analyst

Canada’s budget was tabled on March 29 and it includes some interesting changes related to water policy. Here are the highlights:

• Department of Fisheries and Oceans (DFO): While we’ll have to wait until the Government’s Budget Omnibus Bill is tabled to find out whether there will be changes to the Fisheries Act, Minister Flaherty announced $10.5 million for the DFO to support “key fisheries science activities”—which is essentially monitoring of key commercial fish stocks. But overall, the DFO faces cuts of about $4 million this year, $13 million for 2013-14 and $79 million after that.
• Elimination of the National Roundtable on the Environment and the Economy (NRTEE): The NRTEE is over twenty years old and is a well-respected, arms-length organization with a Parliamentary mandate to “promote sustainable development advice and solutions”. Over its history, the NRTEE has focused on economic and environment issues related to climate, water, energy, biodiversity and governance. In fact, Canada West Foundation’s Shawna Stirrett authored the Round Table’s most recent publication. It’s unfortunate that this reputable organization will be dissolved—particularly when issues related to the interface between the economy and the environment are arguably more important than they’ve ever been.
• Environment Canada: Environment Canada will face large cuts for the foreseeable future: $20 million (2012-13), $60 million (2013-14) and $90 million after that. 
•  First Nations: The federal government committed $330.8 million over the next two years to build and renovate water infrastructure on reserves. This money is also meant to support the development of a long-term “strategy to improve water quality in First Nations communities.” This is a step in the right direction; a prosperous nation like Canada shouldn’t have the water problems of developing countries, as many argue is the case on reserves across the country.
• Flood mitigation: In response to the devastating floods of 2011, the government has committed $99.2 million over three years to “ assist the provinces and territories with the cost of permanent flood mitigation measures undertaken for the 2011 floods.” Better still, the government wants to move toward a nationally led program: “the Government is also committed to discussing with the provinces and territories the development of a national disaster mitigation program, recognizing that mitigation can lessen the impact of natural disasters on vulnerable communities and reduce the costs associated with these events.” This is a move that should be applauded; proactive measures in flood management are always good news.
• Infrastructure: A series of financial commitments were made to both the provinces and the Federation of Canadian Municipalities to improve water infrastructure. While municipalities will likely see this as positive, others may argue that continuing grants isn’t a good policy choice. While Canada does indeed face a major water infrastructure deficit that requires billions to fix, many argue that the prices of water treatment and conveyance should be increased to fund the upgrades rather than relying on government funding.
• Lake Winnipeg: Since 2008, the federal government has funded the Lake Winnipeg Basin Initiative. The Initiative has goals that include: reducing blue-green algae blooms, ensuring fewer beach closings, and restoring the ecological integrity of the lake. While no dollar amount was specified in the budget, the Government stated that it’s committed to continue funding activities targeted at restoring the lake.
• Mining Regulations: Environment Canada administers the Metal Mining Effluent Regulations, which regulate the deposit of mine tailings and other waste “produced during mining operations into natural fish bearing waters.” According to the DFO, these regulations are “among the most comprehensive and stringent national standards for mining effluents in the world.” These regulations will be expanded to non-metal diamond and coal mines. This is a change that truly makes sense, and probably should’ve been made much earlier.
• National Resources Canada (NRCAN): NRCAN is slated to receive $23 million over two years for new satellite data reception facilities as well as the development of a data management system. These systems can be used for a variety of activities ranging from flood mapping to detecting oil spills. This is a step in the right direction: more knowledge and data will lead to well-informed policy.

Overall, there’s a mix of positive and negative developments outlined in the 2012 budget. We’ll just have to wait and see what impacts these changes will have.

By: Michael Holden

“The fiscal restraint that many expected from this budget is more akin to paper cuts than deep wounds.”

The 2012 federal budget was, for all intents and purposes, the first delivered by the Conservative government under majority rule. It was expected to give us our first glimpse at how the Conservatives intend to govern over the next several years. Many assumed that the result would be a fairly dramatic shift toward fiscal conservatism and smaller government. The reality, by contrast, is decidedly middle-of-the-road. The Conservatives have delivered a prudent budget, one that largely fails to live up to the hopes of strong fiscal conservatives, but also largely fails to live up to the fears of their opponents.

To be sure, specific elements of the budget, such as delaying Old Age Security (OAS) and Guaranteed Income Supplement (GIS) benefits until age 67, are bound to attract controversy and spark debate over the coming weeks and months. There are also deep cuts in some areas, among them foreign aid and the CBC. However, the budget also contains several initiatives that are either welcome or overdue (eliminating the penny leaps to mind). But in the final analysis, while the budget itself is a thick document, filled with a wide range of initiatives, this is, on the whole, a cautious and incremental plan. This is true especially considering initial expectations that the budget would pare back government spending in a big way.

In terms of the priorities outlined in the budget – once again called an “Economic Action Plan” – there is a clear emphasis on measures aimed at promoting economic growth and job creation. In particular there are several programs and initiatives that are recognizable as clear priorities for western Canada. These are discussed further below.

Budget Overview

As expected, the budget established an accelerated timeframe for eliminating the deficit and restoring fiscal balance, primarily focusing on the expenditure side of the equation. In last year’s budget, the deficit for the current year was expected to be $32.2 billion, a figure amended in November to $31 billion. Owing to a combination of resurgent revenue growth at the end of the year, spending restraint and lower-than-expected interest payments on the national debt, the deficit for this year is expected to be $24.9 billion. Moreover, the federal government now plans to balance the books in four years (2015-2016), one year ahead of the schedule laid out in last year’s fiscal plan. In fact, barring an unexpected downturn in economic fortunes, the budget will most likely be balanced within three years.

One of the big items that everyone was waiting for in this budget was news on the extent to which the government would be cutting program spending in the years ahead. This is the part of the budget where, depending on their point of view, people will be either the most disappointed or the most relieved.

Although many of the details still have to be ironed out, the federal government announced that its review of department spending will yield ongoing savings of $5.2 billion per year by 2016-2017. This total represents about 6.9% of the spending that was subject to the review process, but only 2% of overall federal spending. In addition, about 19,200 federal government jobs will be cut, about one third of which will be through attrition.

While these cuts represent real reductions for individual departments and agencies, it’s important to keep in mind that, in the aggregate, they are based on spending levels that have grown dramatically in recent years. Since the first Conservative minority government in 2006, federal spending has increased by 38.7%, while the federal public service expanded by 15.3% (adding more than 60,000 jobs in the process). When viewed in that context, the proposed budget cuts do not exactly suggest a broad-scale withdrawal of the federal government from the public arena.

In addition, other components of federal spending, like transfers to the provinces and to persons, will be rising throughout that period. Old age benefits are the obvious exception, but those changes don’t even begin to kick in until 2023. As a result, the overall effect of the government’s spending restraint will not be a decrease in total program expenditures as much as a slightly lower rate of growth over the forecast period.

Specific Programs and Initiatives

For the most part, the federal government’s fiscal plan delivers on the expectations set out in the Canada West Foundation’s pre-budget commentary. Perhaps most notably, it includes a commitment to modernize the regulatory system for major project reviews with the goal of a “one project, one review” approach. This approach is designed to reduce duplication, the administrative burden on businesses and the timelines for approval. While the specifics are still to be determined, this is a welcome development for western Canada, provided that it does not result in an abdication of government responsibility in the area of environmental stewardship.

The budget also contains measures aimed at job creation and addressing labour shortages in western Canada. These include some modest reforms to the Employment Insurance program, an enhanced youth employment strategy, hiring credits for small businesses and improvements to the Temporary Foreign Worker Program. The budget also mentions improvements to Canada’s immigration system, focusing on economic migrants that meet the labour needs of specific provinces and territories. However, there are few details on what that might mean.

Perhaps most significant for the West is new money for First Nations infrastructure, education and measures to improve training and incentives for the on-reserve Aboriginal population to enter the labour force. In its various consultations and roundtable discussions, the Canada West Foundation has heard repeatedly from western Canadian business and policy leaders that more needs to be done to improve living conditions on reserves as well as to improve Aboriginal participation in the workforce. In contrast with the aging population generally, the Aboriginal population is young and growing quickly. As such, they represent a significant, relatively untapped resource of labour in the West. On this issue, the measures contained in the 2012 budget represent a step in the right direction.

As we looked for in our pre-budget commentary, the 2012 budget also targeted spending cuts to specific areas and avoided cross-the-board measures that might have penalized effective or valuable programs. To be sure, there were few details, as usual, offered in the budget as to which exact programs would be affected by the plan, and as noted earlier, some will be unhappy about the areas that were targeted relatively heavily. But in general, the spending cuts reflected a gradual reshaping of government priorities and not a thoughtless chopping exercise.

The budget also emphasized measures related to innovation and research. This focus was signalled widely in advance of the budget, but the approach taken differed from the norm of recent years. Productivity improvements in Canada have been much sought-after, but elusive as previous government initiatives like lower corporate taxation and tax credits failed to deliver on that promise. With this budget, the government has signalled that it is changing tack. In a “Back to the Future” kind of way, there appears to be a return to more direct government involvement and incentives for high-risk venture capital and business innovation. While this type of direct involvement was (and still is) derided as the government getting into the game of “picking winners and losers,” the initiatives proposed in the budget echo many of the suggestions that we heard from business and policy leaders during our most recent series of Honourable James A. Richardson Roundtables this past autumn.

Another recurrent theme was a continued focus on trade and accessing new markets. In a sense, the budget offered nothing new on the subject; it mostly just restated the government’s recent accomplishments and highlighted the various trade- and investment-related initiatives currently underway. Although there was no new money for trade (in fact, foreign diplomacy and aid received disproportionately heavy cuts in funding), this budget signals that international trade remains a high priority for this government.

There were also some policy issues on which, in our view, the budget was disappointing or disappointingly silent. As noted above, in spite of the fact that trade and market access are stated priorities of this government, financial support for foreign affairs and diplomacy was cut. In addition, the budget includes no significant new measures or financial support relating to environmental protection, conservation, curbing greenhouse gas emissions or renewable energy. There was also disappointing silence on the subject of a Canadian energy strategy. Finally, there were no significant new funds for urban or trade-related infrastructure. While the federal government has made significant investments in this area in recent years, there remains a large infrastructure deficit in many parts of the West.

As a concluding note, it seems appropriate to devote a final thought to bidding adieu to the much-maligned penny which will cease to be minted in April, and stop being distributed later this year. Over the years we’ve all complained about the space pennies take up, we’ve gotten into trouble in school for flicking them at classmates, we’ve thrown them in fountains, used them for ill-advised science experiments and we’ve refused to pick them up when they lie alone and half-forgotten on the street. And now they will be no more.

Goodnight sweet penny. No longer will you fool me into thinking I’m rich based on the thickness of my wallet. May flights of angels sing thee to thy rest.

by Shawna Ritchie, Policy Analyst

In a recent article in the Calgary Herald, the Canadian Diabetes Association (CDA) warned that the cases, and the costs, of diabetes will balloon in Alberta if the government doesn’t take aggressive action.

Michael Cloutier, president and CEO of the CDA, cautions that the burden of diabetes is rising sharply in Alberta. He attributes this to “a growing population and because many immigrants are from Asian or South Asian background and others born with a higher predisposition to the disease.”

Diabetes is a growing problem in Canada and I commend them for speaking out. I was struck, however, by a surprising omission. Nowhere did they mention or discuss the prevalence of diabetes in the Canadian Aboriginal population (unless that is what is meant by, “others born with a higher predisposition?”), which seems like a very large oversight. Here’s why:

• Diabetes has become so prevalent in Canadian Aboriginal communities, particularly in First Nations communities, that the National Aboriginal Diabetes Association says it has “reached epidemic levels.”
• The rates of diabetes diagnosis are three to five times higher in Aboriginal populations than in the general population. 
• In a study published in the Canadian Medical Association Journal in 2010, Dr. Roland Dyck of the University of Saskatchewan revealed that by the age of 60 almost half of First Nations women and more than 40 per cent of First Nations men have diabetes!
• The rates of Aboriginal diabetes are expected to continue to increase as Aboriginal peoples typically develop the disease at much younger ages, and as children and teenagers—who make up almost half the Aboriginal population—become adults.

This is a particularly acute issue for western Canada, which is home to the majority Canada’s Aboriginals, both in absolute terms and in terms of population percentages.

For example, in 2009 Manitoba released the results of a 20-year study on diabetes in the province, with an emphasis on diabetes in the First Nations population. Based on what they learned, they forecast that the number of First Nations diabetes cases will increase three-fold in the next 20 years resulting in a prevalence rate of 27% in the province—more than one in four of the population.

Because diabetes is a disease with many side effects, this same study estimates that over the next 20 years, as rates of diabetes increase, there will be “a 10-fold increase in the rate of cardiovascular disease; a 5-fold increase in strokes; 10 times as many dialysis starts; 10 times the rate of lower extremity amputations; and 5 times the rate of blindness” in the province.

Rising diabetes rates will have tremendous impacts on the economy and health care requirements of Manitoba. This is also ominous for Saskatchewan and Alberta, which have similar proportions of Aboriginal peoples.  

The reality is, you can’t talk about diabetes in western Canada and ignore diabetes in the Aboriginal population. Not only because the rates are so high and the complications so severe. But also because effective solutions for diabetes in Aboriginal communities must take into account their unique cultural and geographical situation.  

In many developed countries, Aboriginal peoples fall behind the rest of the population in a host of health, education and prosperity indicators. Diabetes rates amongst Aboriginal peoples in Canada are a symptom of these broader and deeply entrenched set of issues. As such, diabetes must be tackled as part of an integrated public policy strategy for Aboriginal Canadians.    

It isn’t enough to launch an education campaign about the importance of following the Canada Food Guide, when many of those foods are not part of traditional Aboriginal diets and when many Aboriginal communities are in isolated areas that don’t have access to fresh fruits and vegetables for most of the year. The first step to solving a complex problem is admitting that there is a problem to solve, and that’s why we need to tell the whole story of diabetes in western Canada.

by Robert Roach, Senior Researcher and
Director of The West in Canada Project

Like Canadians in general, western Canadians tend to be uncomfortable when it comes to tooting their own horn. It is worthwhile, therefore, to take a moment and celebrate some of the incredible strengths possessed by the West as outlined in the latest edition of the Canada West Foundation’s “State of the West” report.

Western Canada is often described as a small economy. The way we talk, you would think the region’s economic output was on par with Estonia or some other tiny place (no offence to our Estonian friends, of course). In fact, if western Canada is placed on the list of the world’s largest national economies, it would be eighteenth (Canada is eleventh).

Western Canada’s economy is much smaller than, for example, the US or German economies, but it is hardly a bit player on the world stage. At well over half a trillion US dollars in 2008, western Canada’s economic output is nothing to snuff at.

Western Canada is also a major player when it comes to international trade. The West exported just over $180 billion US dollars worth of goods in 2008. This would place it twenty-sixth on the list of the world’s leading export countries (Canada is once again just out of the top ten in eleventh spot). We may not be the Sidney Crosbie of international trade, but we are still playing in the big league.

When it comes to the natural resources the global economy is hungry for, western Canada is home to some of the largest reserves and industries in the world. Alberta’s oil sands place it second only to Saudi Arabia’s oil reserves and Saskatchewan is one of the world’s largest suppliers of uranium and has the world’s largest reserve of potash (a key ingredient in the fertilizer that helps feed the world).

The region’s stock of human capital is also very impressive with over 1 in 5 western Canadians holding a university degree. When university and college education is combined, the western provinces have higher education levels than places like Germany, France, the UK, and Australia. BC’s education level is second only to Ontario’s and is higher than in both the US and Japan.

Western Canada is a magnet for international and domestic migrants. BC’s net international migration rate is more than double the average for the European Union. Between 1971 and 2008, 671,543 more people moved to the West from another part of Canada than left. Vancouver and Calgary appear on the Mercer ranking of the cities with the best quality of life and the urban West is growing at a nice pace.

Western Canada is a cosmopolitan, dynamic, growing, economically powerful and highly educated place. It is ideally situated as Canada’s gateway to the growing economies of Asia, it is blessed with abundant natural resources and it is a major driver of the Canadian economy and, increasingly, of the Canadian identity.

None of this is meant to gloss over the many challenges faced by the region. If the West is to take full advantage of its current assets, it has a lot of work to do. The global economy is getting more competitive, not less. Social challenges such as the high unemployment and low education levels that dog the West’s Aboriginal population and the constant need to innovate and step up our economic game remain critical concerns.

Nonetheless, it is worth stepping back from both the day-to-day and long-term challenges and celebrate our strengths. Too much modesty can result in missed opportunities. Western Canadians need to see that their region has the skills to compete in the big league and recognize the importance of honing those skills so they can continue to do so.

Download State of the West 2010.

Robert Roach is Senior Researcher and the Director of the Canada West Foundation’s The West in Canada Project. Canada West Foundation is the only think tank dedicated to being the objective, nonpartisan voice for issues of vital concern to Western Canadians.

This last month celebrations were held for the 125^th anniversary of two significant and unrelated events to western Canada: the creation of Banff National Park and the Métis Northwest Rebellion led by Louis Riel.

If you aren’t familiar, here’s a little bit of the history:

• Banff National Park was created in 1885, the first national park in Canada and the third such park in the world. The park was created to protect the Banff hot springs, which had been discovered by two railway workers in 1883 and were the focus of conflicting commercial plans. Instead of allowing the hot springs to be developed, John A. Macdonald declared the area a protected space. Banff is now one of the primary tourist destinations in Canada and the world, receiving almost 5 million visitors a year.
• The Northwest Rebellion was a brief and, ultimately, unsuccessful uprising by the Métis people. It was some 15 years after the Red River Rebellion, but the issues were much the same. The Métis people were concerned about the distribution of land following the influx of immigrant settlers, the effects of poverty and the fate of the buffalo, which were being hunted to extinction. There were numerous skirmishes and battles—including the Battle of Batoche, where Métis people gather annually in July to celebrate their culture and heritage—that resulted in the defeat of the Métis people and the hanging of Louis Riel.

Both of these events are significant to the character and development of western Canada and for this reason alone they are important to remember. It also strikes me that the larger issues they represent are still ones that we are dealing with as a region today. Namely, we are still trying to figure out how to balance environmental conservation with economic development, the rights and roles of aboriginal people in western Canada and everything in between.

Today, Canada’s environmental record is one of the worst among OECD countries and the West contributes substantially to that record. Across 25 environmental performance indicators used by the OECD, Canada is not among the five best countries on any measure and is among the five worst on 17 of them. We have a resource-based economy that relies on high energy and water inputs and extraction techniques that are detrimental to environmental conservation. There is an ongoing debate between industry, governments, NGOs and citizens on precisely where the balancing point between economic development and environmental conservation should be.  One of John A. MacDonald’s legacy from this debate was the creation of Banff National Park. I wonder if we can hope to be as successful in carving out a positive legacy from today’s environmental debate?

Similarly, across every measure of social and economic well being, the Aboriginal population in western Canada fares poorly compared to the general populace. According to census data the Aboriginal population is three times as likely to not have a high school education, more than twice as likely to be unemployed, roughly half of all Aboriginals survive on an annual income of $10,000 or less, over 20% report some form of physical or sexual abuse, they are much more likely to be incarcerated, have a diabetes prevalence rate of 3-5 times the general populace, and there are many other equally depressing statistics.  Many of these statistics reflect the symptoms of poverty, the same thing Aboriginal leaders were concerned about in 1885.

My point is that we have been dealing with the similar issues around the environment and Aboriginals for 125 years. While we pause to recognize these historic events, now is perhaps also a good time for new, out of the box, thinking and creative approaches. We should be looking very carefully at the policies and programs of other countries (e.g., Australia and New Zealand) with similar challenges to find and implement their best practices. Maybe we should create a policy platform to educate and then employ aboriginal people in environmental conservation. That might help both the social conditions of Canadian aboriginal peoples and our environmental record.

Whatever we do, we need to get serious about it now, 125 years seems long enough.

Posted by: Shawna Ritchie

The United Way of Winnipeg just released a report which other western provinces should study carefully. Entitled Eagle’s Eye View Second Edition, it updates an earlier 2004 report.  An environmental scan of the aboriginal community in Winnipeg, one of its objectives is to inform and influence policy in the public, private and voluntary sectors.  With its focus on Winnipeg, it neither describes the circumstances of aboriginal people throughout the Manitoba nor through the West. Nonetheless it is a useful document for western observers.

The media response on Thursday, June 24, 2010 was two draw out four bullets of good news and three bullets of bad news.  Those positive bullets briefly outlined improvements in employment, incomes, numbers of homeowners and reductions in the number of single-parent households. The bad news focused on a loss of native languages, the earnings gap and high rates of child poverty. The headline was “City aboriginals making gains” and, yes, it is important to underscore those markers of progress.

However, the pressure on a society to improve public policy seems inevitably to be proportional to the size of the fire on the burning platform. These first media stories might well leave the reader with the impression that since things have improved over the past decade all we need to do is to wait for another census or two and before long things will be substantially more equal.

But if you look more carefully at the numbers, you can see more clearly the pressing need for western Canadians to consider the policy that influences the trajectory of aboriginal people:

• Aboriginal unemployment (that is, the inability to get a job for those searching for one) dropped from 25% to 12% between 1996 and 2006 compared to the general population of Winnipeg where it dropped from 7% to 5%.  While it is a significant gain to reduce aboriginal unemployment in the city by more than a half over a decade, aboriginal people were still more than twice as likely to be unemployed.
• The proportion of Aboriginal people living below the poverty line dropped measurably from 75% to 62% between 1996 and 2006 compares to a drop from 21% to 17% in the general population. These data suggest that the significant improvement in employment over the past 10 years has not been associated with the kind of employment that generates salaries adequate for raising a family.  Aboriginal people are still more than  three times as likely to be living in poverty in Winnipeg.
• The aboriginal population 15 years and over who have achieved a high school certificate or higher education attainment, grew from 38.2 % to 60.2 % between 1996 and 2006. While this is a significant achievement, it also means that 39.8% of aboriginal people over 15 years of age have not gotten grade 12 or any postsecondary training. This compares to 21.5% in the general population. In other words, over that period, aboriginal people are almost twice as likely to have an education level that presents a barrier to meaningful employment.

Education is the most important policy instrument we have for improving employment, reducing poverty and strengthening the present and future economy of Western Canada.  Canada’s education systems, widely believed by most Canadians to be amongst the most important of our social programs are not yet robust enough create equitable results.

Tom Carson is the Director of the Canada West Foundation’s Manitoba Office.

Posted by: Tom Carson