Canada West Foundation Blog

By: Robert Roach, VP, Research

While the recession has affected countries throughout the globe in the past few years, Canada’s economy has done reasonably well. Yet, things are not all that they seem. Like a frog in a pot of warm water, Canadians have not yet realized the danger. A rapidly changing global economy is heating up the water in the pot.

The Boiling Frog Dilemma: Saving Canada from Economic Decline by Todd Hirsch, Senior Economist, ATB Financial and Robert Roach, Vice President of Research, Canada West Foundation, outlines ways that Canadians can get out of the pot before the water boils—and not only survive, but thrive, in the global race for good jobs.

Canadians need to become much more creative and this means a revolution in education and how creativity is harnessed in the workplace. Canadians need to embrace risk and stop lamenting the good old days when more things were made in Canada. They need to see the potential in lodging themselves at the top of the global value chain as the world’s designers, managers, educators, investors and creators. Canadians need to integrate their business practices with environmental stewardship, see the world as their oyster rather than a threat, and be much better neighbours to one another at home.

It is individual Canadians who need to change their own attitudes and habits. Governments can’t do it for them. The Boiling Frog Dilemma envisions new Canadian entrepreneurs who will move Canada from being largely invisible to totally indispensible in the global economy of the 21st century. The new entrepreneur puts into action the argument that nothing generates economic wealth except the power of ideas.

Read Rob and Todd’s op-ed in the Calgary Herald “People, not tax credits, will power the economy.”

To order The Boiling Frog Dilemma: Saving Canada from Economic Decline, visit www.toddhirsch.com

By: Dr. Roslyn Kunin, Director of BC Office

In the 19th century, young men in North America who wanted to seek their fortunes were advised to go west. In the 21st century, those who are already in western Canada are advised to keep looking west, where Canada’s best opportunities to participate in the global economy lie across the Pacific Ocean. However, opportunities only become reality for the prepared. To benefit from growth in the trans-Pacific trade that is so important to Canada’s present and future wellbeing, western Canada must have the infrastructure and capacity in place to receive, move and dispatch goods in growing volumes. Otherwise, our growth may be limited not by lack of supply or demand, but by the lack of capacity at its ports and elsewhere to handle the flow, as illustrated in Brazil.

Fortunately, federal and provincial leaders in Canada have taken steps to remove this potential limitation. The Asia Pacific Gateway and Corridor Initiative (APGCI), now at the midpoint of its lifecycle, is a connected series of major projects to improve both port and inland goods moving capacity in western Canada.

First, we should note that the benefits will not be limited to Canada’s Pacific ports. This is because the APGCI deals not only with gateways (ports and related facilities) but also with hubs (inland distribution centres such as Edmonton and Regina). The results of this increased trade volume will be spread not only throughout western Canada but to the rest of Canada and the United States.

There are several advantages in western Canada that will be created or enhanced by the APGCI. One is the very short transit time from BC across the Pacific, especially from the port of Prince Rupert. The tonnage through Prince Rupert has been soaring given very strong markets for products like coal, and the port facilities have been enhanced to meet this demand. In 2008, volume through Prince Rupert increased 20%.

Another advantage is the very efficient and competitive rail system that goes from Canada’s west coast ports across the country and into the United States, which is emphasized by the fact that Canadian rail transport systems are much more cost effective than those in the United States. A third, often called the hidden advantage, is that many people of Asian origin currently reside in BC and are increasingly spreading across the western provinces.

Not surprisingly, there are also challenges that come with developments of this magnitude. Much of the development is primarily focused on container movements, which is ideal for all the manufactured goods that are imported, since they travel in containers. However, it may be a limiting factor for what are western Canada’s biggest exports—commodities. Demand for minerals, food, energy and wood is strong and rising rapidly, particularly in Asia. In particular, China’s demand is not only increasing sharply, but China has become a dominant player in world markets for copper and other commodities. Other developing Asian economies are expected to follow. To take advantage of these long-term markets, our inland and port facilities need be able to handle not only bulk commodities like coal and grain, but also fluid energy sources like oil and, ultimately, liquefied natural gas.

APGCI developments, like any others, must deal wisely with the continuing realities that affect all major investment projects. First, agreements must be reached with affected First Nations on whose territories the developments occur. By negotiating in good faith, arrangements can be made that are win/win for all the parties involved. As always, attention must be paid to the environmental impact of any developments. Steps can be taken to minimize environmental impacts and to compensate for any unavoidable effects.

Finally, given that taxpayer dollars are contributing to the APGCI, Canadians must be assured that they are getting value for money. Cost benefit analysis is the best tool and should be comprehensive; looking at all costs including the environmental impact. Potential competition must be considered such as the newly widened Panama Canal.

We need to take into account all the benefits, many of which are long term. In comparing present costs against future benefits, we should not be discounting future benefits too heavily. Otherwise, we will find that we have lost long term benefits to defer short term costs.

Photo Courtesy: Prince Rupert Port Authority

They are as different from each other as St. John’s is from Vancouver, but all of Canada’s provincial health care systems fall under two “laws.” The first law is the Canada Health Act, which defines the national rules of the game. The second law you may be more familiar with: it is the law of continuously growing costs.

Health care costs represent the largest single expense in every province’s budget and they keep on rising and rising. Unless something changes, governments will soon have no choice but to scale down health services or go bankrupt. The only way to avoid a reduction in services is to use expenditure and/or income measures to return to health care financial sustainability.

On the expenditure side, many of this year’s provincial budgets featured a section on each province’s plan to curb health care costs over the next three, four or five years. The majority of observers expressed skepticism about those plans, and rightly so. Provinces have shady track records in this area. In short, an expenditure-based solution is very unlikely in the near future.

As to the income side, two obstacles stand in the way of any province that wants to raise revenues to mitigate rising health care costs. First, the Canada Health Act says that necessary medical services must be available to all on a prepaid basis. (In other words, the sick do not pay more than the healthy). Second, tax increases are very unpopular and most of the time they spell doom for the governments who implement them. No elected provincial government in their right mind would want to increase its revenues to finance health care.

Well, wait a minute. That’s what the Quebec government just did. Last March, the province’s budget introduced a new annual tax levy earmarked for health care, as well as a user fee to be applied each time someone uses the public health system. Not surprisingly, there was a strong backlash in Quebec against the Charest government following those announcements. However, as unpopular as those measures may be, they are the right thing to do.

But why Quebec? Quebec faces the same pressures as the other provinces: increasing costs due to expensive new technology, and losses in service quality. But on top of this, Quebec’s public debt is the worst across the country on a per capita basis. Also, within a few years, Quebec’s working-age population will start shrinking: there will be fewer workers to finance health care for an increasingly aging population. So Quebec is the canary in the health care coal mine: it is closer to the danger zone than other provinces are.

What happens next? Health care premiums are nothing new (many provinces had or still have them in place), but user fees are a whole different story. The federal government may very well challenge the new “Quebec way” under the Canada Health Act. This should be a cue for other provinces, including the West, to add their voices to the debate. All should make sure that unrestricted availability doesn’t make health care financially unsustainable. Otherwise, the best would become the enemy of the good.

There is some room for negotiation here. If one reads between the lines of the last Flaherty budget, it looks like the federal government wants to gradually move out of provincial areas of jurisdiction. Health is one of those areas. Why not revise the Canada Health Act to reflect today’s and tomorrow’s demographics, and allow provinces to seek new forms of revenue to support their health care systems?

Eventually, all provinces will have to face this issue as Quebec did. In Canadian health care, demographic timing is the only real difference between jurisdictions. Time to open the discussions. Federal-provincial negotiations are not the most exciting way to enjoy a weekend, but they sure beat spending it in the waiting room of an underfunded hospital.

Jacques Marcil is Senior Economist for the Canada West Foundation. This opinion editorial can also be found in the May issue of Currents, the monthly economic snapshot newsletter. Read more Canada West Foundation op-eds.

Posted By: Jacques Marcil

On March 30, 2010, Minister of Citizenship, Immigration and Multiculturalism, Jason Kenney, introduced long overdue reforms to the refugee determination process in Canada (Bill C-11).

In its famous 1985 “Singh Decision,” the Supreme Court of Canada ruled that the paper process for refugee determination, then in place, did not provide the opportunity for an oral presentation by the claimant and this constituted a denial of Charter rights. This was a wise decision as the old process gave claimants no opportunity to state their case and to know the Minister’s case against them.

In response, the Federal Government created the Immigration and Refugee Board (IRB) and provided that all refugee claimants in Canada would have an in-person hearing before a panel of members of the Immigration and Refugee Board. These members are Governor-in-Council or political appointees. The Government reaction was an over-reaction because the process soon became bogged down by the sheer volume of claimants.

The problem was that legitimate refugees had to wait in line with all the bogus claims, resulting in waits of up to five years for a decision. The Supreme Court decision only required that claimants being refused would be entitled to an oral hearing. There should have been a faster process to deal with legitimate claims.

Later reforms have reduced waiting periods to the current 19 months and the new proposals aim to conclude refugee determination within 60 days. However, it is unclear how new cases can be dealt with in this time period.

The Government’s “backgrounder” on the reforms states that “individuals who are determined to be eligible to make an asylum claim would meet with a public servant at the IRB within only eight days of being referred to the IRB. During this information-gathering interview, information on the claim would be collected, forms properly completed and a hearing scheduled before another public servant at the IRB within 60 days.”

The problem with this new proposed process is that the IRB is not in a position to meet these time standards. It only has offices in Ottawa, Montreal, Toronto and Vancouver and while the bulk of refugee claimants are in those three cities, at the end of 2008, over 4600 claimants were living outside of Quebec, Ontario and British Columbia. The largest number of these claimants is in Alberta but there are over 100 claimants in every province except Newfoundland and PEI.

These claimants should be treated in the same way as claimants where the IRB has offices but they will either have to wait for an IRB officer to visit their city or they will be expected to travel to an IRB office, at their own expense or, perhaps, make their all-important claim by video conference. This is not satisfactory and not equitable.

Meanwhile, Citizenship and Immigration Canada (CIC) has some thirty offices from St. John’s to Victoria to Yellowknife.

If public servants with the IRB are going to make the initial refugee determination, why not give this responsibility to public servants with CIC? After all, CIC officers overseas already do refugee selection abroad. CIC has the network of offices and trained officers in every major community in Canada.

If this plan is to work, the government should amend Bill C-11 to provide that CIC officers make the initial refugee determination in Canada with the IRB having responsibility to hear appeals, as is the case for all other immigrant decisions. It will also eliminate the possibility of conflict of interest in IRB appeal decisions.

Will the IRB members, at appeal, be more likely to overturn a decision made by a CIC officer, who they do not know, or that of an IRB officer with whom they work closely?

Clearly, assigning responsibility for the initial refugee determination decision to CIC is the more cost effective and the fairer way to implement these important refugee reforms.

Posted By: Robert Vineberg

The intense public and scientific debate in recent years over global warming and climate change has overshadowed and even submerged a domestic environmental agenda. Our attention has been directed to the international environment and away from more local concerns. Rather than thinking globally and acting locally, we have been both thinking and acting globally.

However, the ambivalent outcome of the December UN climate change conference in Copenhagen, and the even more ambivalent stance of Americans and their governments toward global warming, have created a breathing space that we should occupy by resurrecting a Canadian environmental agenda.

This Green Canada agenda would stand apart from the broader debate on climate change and global warming, although it would not be aloof from that debate. The focus would be on conservation, on the environmental trinity of reduce, reuse and recycle. The goal would be to build a conservation ethic at home, and the pillars would be land stewardship, water management, air quality, and the health of our urban environments.

Although the agenda would be national, western Canadians would have a particular interest in building a sustainable resource economy, in ensuring that today’s resource wealth supports sustainable economic prosperity for generations to come.

This Green Canada agenda would not preclude a continued interest in international environmental challenges, in global warming and the potential impact of climate change. However, the primary focus would be on the here and now, on our land, water and urban environments. All of these are areas where we can have a direct and immediate impact whereas our potential impact on global warming is slight and uncertain.

We know that a stronger conservation ethic will make Canada a better place for now, and for our kids. We also know that this ethic is compatible with, indeed essential to, economic prosperity in a world where environmental quality will count more and more in terms of market access and the recruitment of talent. Environmental protection and economic prosperity will go hand in glove.

But is there a public appetite for such an initiative, and thus a political appetite? Recent public opinion data is encouraging. Not surprisingly, the priority Canadians attach to environmental concerns has waned during the recession. Nor have environmental concerns replaced concerns about health care, but the latter are perennial features of public opinion surveys in Canada.

However, environmental concerns have by no means evaporated. They have not gone away. The polls also suggest that concerns about the environment reach well beyond concerns about global warming and climate change, that Canadians are most animated by the environment they can see, touch and smell. As in so many other respects, home is where the heart is.

Thus a public foundation is in place for a Green Canada agenda. Think for a moment of the incredible film from B.C. that aired during the Olympics, and the tourism ads that have been running lately for Newfoundland and Labrador; the potential public appeal of an environmental agenda is obvious.

The opportunity is also there for parties from the right, left and centre to build upon that foundation. The Green Canada agenda is too important to be captured by the Green party alone.

Now some will argue that any retreat from a global climate change agenda to a more domestic, Canadian agenda will be a retreat from the most pressing issue of our time, that we will be fiddling while Rome burns. I suspect, however, that this concern is unwarranted, that anything that draws Canadians into supporting a domestic environmental agenda will spill over into support for climate change action. It is not a zero sum game, and a broader environmental coalition will strengthen public support for actions designed to address climate change.

If I’m wrong, then the loss of Canada’s relatively modest contribution to the global-warming challenge will be more than offset by better environmental outcomes within Canada. In this way at least, the world will be a better place for a Green Canada agenda.