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Thursday 5 March 1998
Watch out, Martin set to
overhaul seniors' benefit
WEDNESDAY FEB 25th #834
Due to the bringing down of the Federal Budget on Tuesday, David MacDonald and Alexa Mc Donough were unable to be with us. We hope to be able to confirm their "rain cheque" in a couple of weeks.
A special guest this evening was Amber Phelan from Calgary. Amber is a student in the Concordia Journalism program and is covering Westmount as her semester project. She had selected "Wednesday Night" for one of her stories.
While the Budget was discussed at length, the presence of a former federal MP afforded Wednesday Night new insights into the political process surrounding nominations and party discipline.
The Budget
Initial reaction to the Budget included comments that the surplus was not substantial and therefore the Minister of Finance does not have a great deal of latitude. It is a cautious budget which may reflect fears that we have not seen the end of backlash from the Asian economic crisis. It appears that both Mr. Martin and his critics have exaggerated the impact of the Budget, failing to take into account the influence of globalization on the Canadian (or any other) economy. For example, unemployment levels are affected by the ability of companies to move operations to areas where labour costs and taxes are lower, materials or components readily available, end markets are closer, and/or local government regulations require limits on foreign ownership.
One economist pointed to the high proportion of Canada-U.S. trade and the relative lack of interest in Canada in developing closer ties with Eastern Europe or other developing markets. He also emphasized that American economic clout is omnipresent. In his view, government surpluses are not essential, but the "American way" is increase spending, pay down debt.
Has the Budget been balanced too quickly? We had no choice. The dollar is under attack. Another economist expressed concern about the Canadian dollar. The standard of living is declining in Canada. There are structural problems, therefore a balanced budget is necessary and a good thing.
Martin had little maneuvering room. However, it appears obvious that he still has some cards to play. This appears to be a prelude to the next budget, closer to the next election. Why is the U.I. fund being built up? Is the government anticipating a backlash?
The Education component of the Budget
Given the impact of globalization on unemployment, giving money to students is not going to solve the problem. However, it is a start and perhaps most importantly, will stimulate debate regarding the solutions. The restoration of funding for critical R&D activities is also a positive development.
Canadian companies are not paying enough compensation for the highly skilled, therefore young people are looking elsewhere, particularly because of the debts they have incurred obtaining their education. So, our educational institutions are supplying the foreign labour markets?
We live in a global society, but we want to keep our talent at home? Canadian employers do not make it attractive enough for our graduates. Companies need to wake up. But we also need tax and other incentives to stimulate new corporate investment, and lower taxes for individuals.
At another level, business interests dictate the areas which will be targeted for emphasis by educational institutions. What does this do for the soul of the country? If we concentrate on developing MBA's and electrical engineers, what will happen to our fine musicians, writers, educators and sociologists? A talented opera singer needs to audition abroad - a costly undertaking - how does she find financing, particularly when there are very ungenerous tax deductions for corporate sponsors? How can business be persuaded to help in the development of young talents who are not going to be their employees?
On the positive side, our graduates are working in other environments, opening their minds to globalization and honing their skills. Canada also benefits from the many immigrants who bring their talents here.
Saturday, February 28, 1998 By Edward Greenspon [Globe]
Parliamentary Bureau Chief
% Why some of our brightest are heading south
Summary: "They are graduating with high debt levels and they are being offered
jobs in the United States with higher pay, lower taxes and a higher standard of
living. When the graduating class of 240 computer scientists departs the University
of Waterloo this spring, about 100 of them will be heading south of the border." He
accepts that taxes are part of the equation, "but if I were a...
Thursday 26 February 1998 - Column - Jay Bryan -
Scholarships a foolish
alternative to tax cuts
But the lure of more money in your pocket is powerful. An
analysis by economists at Nesbitt Burns suggests that the
bright minds Canada is turning out through its subsidized
universities are already departing in large numbers and that
the outflow can only increase as long as taxes in Canada
remain so high.
The gap between the household tax burden in Canada and
the U.S. has grown to a record size, "and the gap will likely
widen further as the U.S. tax cuts continue in the wake of
budgetary surpluses," says Nesbitt Burns.
The damage already appears to be considerable. Statistics
Canada figures on the migration of professional workers
between Canada and the U.S. in the first five years of this
decade are disturbing.
During this period, an average of 142,000 computer
scientists left Canada each year, but only 75,000 arrived.
For other professions, the hemorrhage was much greater:
564,000 teachers and professors departed annually, but
only 233,000 arrived; 553,000 engineers went to the U.S.,
72,000 came to Canada; 742,000 doctors left, while only
64,000 entered.
Moreover, the impact of this brain drain is even more
severe than the figures suggest. Usually it is the most
talented and energetic who emigrate, and the loss of people
with essential talents can cost Canada many other jobs,
since Canadian companies have been forced to move whole
divisions to the U.S. in order to staff certain key functions.
Given this, it's bizarre indeed that the federal government,
having done a remarkable and courageous job of
deficit-fighting, now flinches at the idea of reaping its full
reward by running a few years of surpluses and thereby
cutting the tax burden Canadians must carry.
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What has to be done is to ensure that the business environment and socio-economic policies conspire to attract the Canadians back to build on what they have learned.
Solutions?
We are reminded that according to various international indices, Canada is one of the best places in the world to live and ranks fourth in terms of competitiveness. Yet, the country remains a "collection of garrisons". Canadian values are respected internationally, but we don't appreciate ourselves until and unless individuals are recognized internationally. This applies to culture, to international aid work, to business practices and research. Canadians object to American-style flag waving (see the Olympics), but somehow the country must develop quiet self-confidence and a sense of fun as it had during Centennial year.
Perhaps the balanced budget is a step in the right direction?
The Political Process and Party Discipline
Today, MP's are far more restricted than in the past with regard to representing their constituencies.
The Prime Minister's power to dissolve Parliament is antiquated and should be changed. This would enable MP's to vote against the party on occasion (as happens under the US system). The power of dissolution keeps everyone voting the party line, rather than supporting legislation that represents the interests of their constituents. This could, on occasion, result in regional voting blocks that would counter-balance the government and lead to compromises in legislation which could be both a good and a bad thing.
Too much power is centralized in the PM's office, particularly the control over candidacies. While there have been occasions in the past when the Leader of the Party has refused (correctly, in the opinion of most) to sign nomination papers for an individual whose beliefs ran counter to the party platform, this power now extends to virtually dictating who will run or not run in a riding. Both Westmount (Berger/Johnston/Robillard) and NDG (candidates wishing to run for the nomination to replace Warren Allmand) have recently experienced instances in which the choice of the electorate has been limited by the intervention of the Prime Minister as the Leader of the Party. There needs to be a more democratic balance of input to the selection of candidates.
This is a situation which has evolved since the 1970's and is now enshrined. Remember, there was a time when the candidates' names were not identified with his/her party on the ballot.
Most voters are unaware of the evolution of the process. It is time that the parties examine the options and recommend practical changes to improve the system.
Reported by Diana Thébaud Nicholson with notes from Michael Judson
An Average Gal’s Look at the Canadian Federal
Budget By Tracey Arial
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