Brian Lee Crowley

Guaranteed Annual Income: Wrong solution, wrong problem

In my never-ending campaign to épater les bourgeois (aka the commenters on the Globe’s comments page), my latest column takes aim at one of their favourite policy prescriptions: a guaranteed annual income for Canadians, delivered through the tax system (also called a “negative income tax”). Almost all the arguments advanced in favour of this alleged panacea are deeply flawed and take little account of incentives, human motivation or of the complexity of administering fairly or cheaply a system that will not be simple but rather devilishly complicated.

This column appeared in the 11 Dec. 2015 edition of the Globe’s ROB in their Economy Lab feature.

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Of unicorns, sasquatches and supply management

At the exact moment where Canada is risking its spot at the Trans-Pacific Partnership negotiations in a quixotic effort to buttress supply management, the EU, that bastion of neo-liberalism, is abandoning milk quotas to the delight of both consumers and entrepreneurial dairy farmers. In my column for the Globe’s Economy Lab (Aug. 21st edition), I walk readers through the massive changes shaking the milk world globally, and why Canada’s efforts (endorsed by every political party) to “protect” dairy farmers are in fact harming the industry and costing consumers handsomely to boot.

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Separated at birth: Ottawa budget, 1995; Quebec budget, 2015

My latest musings for the Globe/ROB’s Economy Lab revolves around the context and significance of the year’s most important budget: Quebec’s. After years of failed attempts, the new Liberal government of Philippe Couillard will make another stab at fixing Quebec’s self-imposed economic decline by wrestling with the out-of-control growth of the Quebec state over the last 50 years. The stakes couldn’t be higher, but it is not at all clear that Couillard will be more successful than his predecessors. That very uncontrolled growth of the state has created a political climate in which a democratic mandate may not be enough to overcome the organised resistance to reform. In the column I draw parallels between the historical significance of Paul Martin’s 1995 budget and this one, 20 years later. Both aimed to fix the damage done by several generations’ worth of bribing Quebeckers to support federalism or sovereignty. Martin pulled it off, but his task was more manageable.

Wish Couillard well. He’ll need it.

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Why we need Clarity Act Mark II before next referendum

In my latest column for the Ottawa Citizen and other Postmedia papers I call for Ottawa to supplement the Clarity Act with another law that fills in the gaps left by that original landmark legislation. Mark I gives legislative form to the Supreme Court’s ruling in the Secession Reference, but only with regard to the Court’s rules about the standard Quebec must reach to trigger an obligation on the ROC to sit down and negotiate. The SCC went on to say a lot about what would have to happen wrt the negotiations themselves for them to be regarded as constitutional and respectful of the rule of law. Once the April 7th Quebec election is out of the way, if the PQ has their majority Ottawa should table Mark II, laying out what its negotiating mandate would be in any eventual negotiations (e.g. protection of minority rights, which means dismembering Quebec), and well as how Ottawa should respond if Quebec flouts the SCC rules on things like a clear question. Stern but bracing stuff!

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Tom Courchene responds, after a fashion

One of Canada’s most respected social thinkers and a man who has been a great inspiration to me personally, Tom Courchene of Queen’s University, wrote an op-ed in The Globe responding to my own. Mine was a summary of some of the arguments in Fearful Symmetry, focused in particular on the recent news that Ottawa was about to expand the number of seats in the Commons to reflect the growth of BC, Alberta and Ontario. Quebec and all the other provinces would gain no seats, implying a relative loss of not only population but political influence as well. Professor Courchene’s article was clearly intended to be a rebuttal to my piece, but like Andrew Coyne and several other readers who wrote to me, I found its arguments to be a bit mystifying.

OK, he spends the first third of the article agreeing with me. But the place where apparently he and I diverge is when I wrote that the shifting distribution of seats was a symptom of a larger malaise, especially for Quebec, which I described as “a society that cannot pay its own way or reproduce itself, that is highly dependent on transfers from the rest of the country, and that is losing its political influence.” Professor Courchene felt called upon to defend Quebec’s honour.

In so doing he said, for example, that while obviously Quebec’s weight would fall in the Commons, it would remain the same in the Senate. True but, as the French say, quel rapport? Is Professor Courchene seriously suggesting that the ultimate backwater in Canadian political institutions, our unelected Senate, will suddenly become the new avenue through which Quebec will exercise the kind of powerful political influence it has enjoyed in recent decades? If that were the case, I think you’d find Senate reform, giving Quebec the same number of seats as all other provinces, would rapidly move up the public agenda. He argues that falling seats in the Commons for Quebec will mean an abandonment by Quebec voters of the Bloc and a return to the fold of one or more federalist parties. But part of the argument I made in my op-ed is that as the Commons expands, and Quebec’s representation remains static, their ability to cause minority governments (as is the case today thanks to the Bloc) or to bestow majorities (as in much of the previous century), will be heavily diluted. It won’t disappear. It will just become less and less decisive. It is just arithmetic. Michael Bliss makes a similar point about Conservative Party electoral fortunes in today’s Globe.

But what really mystified me, coming from the father of the argument about “transfer dependency” which Professor Courchene helped to popularize in Canada in the 70s and 80s, was his attempt to make it appear that Quebec was the source of many highly desirable changes in Canada, most of which were only made possible by big, and badly designed, transfer programmes. Now far be it from me to deny that Quebec has been a valued and welcome member of Confederation, and I agree with him that the legal and linguistic diversity that Canada enjoys is in large part due to our perfectly legitimate efforts to accommodate Quebec and French-speakers. But as Professor Courchene quite well knows, because he has read my book and I have discussed it with him, many of the changes he singles out as gifts Quebec has bestowed on Canada, I argue have been the result of a sordid bidding war between Ottawa and Quebec City to keep Quebeckers from voting to leave Canada. Moreover this bidding war, by putting huge piles of cash on the table for Quebeckers to quarrel over, has created a society deeply mired in rent-seeking, or what I call PUPPETRY (people using political power to enrich themselves by plundering you).

The whole reason that Quebec is losing political and demographic weight is because its vast expansion of the state and its shift from being a society concerned with productive effort to one concerned with PUPPETRY have caused the emergence of that “society that cannot pay its own way or reproduce itself, that is highly dependent on transfers from the rest of the country, and that is losing its political influence.”

Among the many social dysfunctions that have emerged in Quebec since the Quiet Revolution, let’s list a few: low employment rates, low productivity per capita, low investment rates, low in-migration, low fertility, low family formation rates, high welfare dependency, high out-migration, high taxes, high debt, high divorce, suicide and abortion rates. Now why ever would you describe that as “a society that cannot pay its own way or reproduce itself, that is highly dependent on transfers from the rest of the country, and that is losing its political influence”?

Yes, as Professor Courchene points out, Quebec has been an innovator in social policy, although my gloss on that is that the innovation helps to create dependence on the state and is part of the problem. He cites cheap daycare as an example. On the other hand, that is a policy so far looked on in much of the rest of the country with scepticism, is very expensive and by no means an unalloyed blessing to parents and children, and is only possible in Quebec because of large transfers from other provinces who do not offer such services, when the transfers are supposed to guarantee that less well-off provinces can offer reasonably comparable services to richer ones. I think our history of transfers has been an unhappy one that has fuelled Quebec’s economic and population weakness and Professor Courchene’s defence of them makes him, in my view, a defender of a system that has done Quebec little good and much harm.

He attributes our “multiculturalism” to Quebec. Again, I disagree. In fact multiculturalism was opposed by Quebec as a dilution of their preference for a narrower and old-fashioned two-nation Canada, and the debate over the extent to which cultural minorities should be accommodated has been loudest and most ill-tempered in Quebec, leaving aside the extent to which Quebec has used its provincial powers under the constitution to marginalize the English-speaking population, a stain on Canada’s record of linguistic tolerance and diversity which I document in Fearful Symmetry.

And that brings us to Professor Courchene’s last point: Quebec has been the spear-tip of a movement in favour of “collective rights” that helps to distinguish us from the United States. Well, as a Laurier liberal, a believer in individual liberty, responsibility and accountability under the rule of law, I personally think that “collective rights” are harmful to democracy, are an unwelcome departure from our legal, moral and political tradition, and are unnecessary to distinguish us from the United States. Canadians were different from Americans before e.g. Bill 101 allowed the French-speaking majority in Quebec to oppress the French-speaking minority that wanted to send their kids to English-language schools (an example of how collective rights are really code for majorities oppressing minorities). Surely we only need to distinguish ourselves from American on points where they are wrong and we can do better. Anything else is difference for its own sake, an unworthy prize and one for which we should be unwilling to sacrifice our freedoms and moral tradition.

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Rep follows pop

Some readers of this blog will have noticed that the Globe’s front page story yesterday concerned the yet-to-be announced plans of the federal government to add roughly 30 seats to the House of Commons, taking it to approximately 340 seats from the current 308. Those same readers may have also noticed that this was immediately followed by nationalist sabre-rattling in Quebec and craven commentary by so-called “experts” to the effect that Canada might well not survive an attempt to guarantee that the votes of all Canadians might have roughly equal weight in the election of the Commons and therefore the government of Canada. Check this out from the Montreal Gazette:

Bloc House leader Pierre Paquette noted that Quebec’s National Assembly had adopted a motion unanimously denouncing the federal government’s previous attempt to redraw the electoral map. He said the issue would give Quebecers an additional reason to turn away from the Conservatives in the next election.

“I’m convinced there will be a public outcry in Quebec over the Conservative proposal,” said Paquette. “For us this is a major issue, and I think it shows once again that the Conservatives have crossed out (appealing to voters in) Quebec.”

Even Michael Ignatieff succumbed to this shameful pandering, trying to make an attempt by the government to level the electoral playing field appear to be a Tory plan to do down Quebec, a province that, like 6 others, will receive no new MPs.

Only the growing provinces that have remained closest to Canada’s founding values, BC, Alberta, and Ontario, will get new seats. And they’ll do so not as a result of some mean-spirited political plot, but because those are the successful dynamic parts of the country where more and more Canadians live. That’s what believing in lower taxes, smaller government, a strong work ethic, well designed social programmes, economic growth, openness to immigration and so on will do for you.

For my take in this issue, have a look at the op-ed I wrote in today’s Globe (26/9/09), in which I draw on research in Fearful Symmetry to show that Quebec’s loss of demographic, economic and political weight is the direct outcome of the bidding war for the loyalty of Quebeckers, and that this loss of power and influence cannot be ignored in our political institutions. Indeed I point out that this is just the beginning of the coming shift in political power. By 2031, on current trends, Quebec should expect to have only 75 seats out of 375, with virtually all of the oncrease going to the new power coalition of BC, Alberta and Ontario. They have the people — they get the votes.

The nerve and hypocrisy of the extreme elements of the nationalist movement in Quebec never ceases to amaze me. Here are Gilles Duceppe and his colleagues saying that Quebec’s weight in parliament must not fall; they promise to do everything they can to frustrate the new seat distribution. These are the same people who, in the name of sacred and inviolable democracy, say that any vote by Quebeckers to leave Confederation is final and unquestionable. Apparently, however, they have no problem with waving democracy (in the form of one person, one vote) aside when its application may be inconvenient to them. Have they no shame?

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Fearful Symmetry in La Presse

I was asked by Andre Pratte, the editor in chief of La Presse, to prepare a brief overview of the argument in Fearful Symmetry about how Ottawa should accommodate Quebec in the coming years. Especially because the article (which appeared on Tuesday, 22nd September, 2009) does not appear on-line and is therefore not searchable, I reproduce the article as I originally submitted it below.

La fin de la surenchère

Paru dans La Presse du 22 septembre 2009 (cet article n’est pas disponible à l’Internet)

 

Par Brian Lee Crowley

 

La présence simultanée durant les années soixante d’une bulle démographique et d’un mouvement crédible prônant l’indépendance du Québec a déclenché une espèce de surenchère pour capter la loyauté des jeunes Boomers francophones. Des programmes fédéraux visant à rendre les francophones financièrement dépendants envers le Canada furent, par la logique du fédéralisme, généralisés à toutes les provinces.

Il en a résulté un Canada de nouveau composé de deux « nations », mais d’un caractère très diffèrent : une nation qui produit la richesse (‘Making Canada’, composé principalement de l’Ontario, de l’Alberta et de la Colombie-Britannique) et une autre qui la détourne (‘Taking Canada’, composé surtout des autres provinces, mais avec le Québec dans le peloton de tête).

Sans les changements profonds que la Révolution tranquille ainsi que la montée des Boomers ont enclenchés au Québec, le Canada n’aurait pas connu l’expansion démesurée de l’État qu’on constate depuis les années soixante. Cette dynamique est cependant en sérieuse perte de vitesse.

La surenchère opposant Québec et Ottawa a alimenté une croissance démesurée de l’État au Québec qui a, à son tour, miné la croissance économique, approfondi la dépendance d’une certaine couche de la population vis-à-vis de l’État-providence, multiplié les emplois improductifs dans le secteur public, renforcé le pouvoir de chantage des syndicats, des entreprises et d’autres groupes qui cherchent à s’abreuver à la fontaine des deniers publics, affaibli la famille, et encouragé l’émigration toute en décourageant l’immigration. Le poids politique, économique et démographique du Québec s’en est trouvé amenuisé, tout comme sa capacité de poursuivre la surenchère.

Selon Statistiques Canada, en 2031, le Québec représentera à peine 21 % de la population canadienne. Par contre la Colombie-Britannique, l’Alberta et l’Ontario compteront pour les deux tiers de la population et s’accapareront trois fois plus de sièges que le Québec à la Chambre des communes.

Cette coalition (Making Canada) représentera également 70 % de l’économie nationale. Comparée au Québec, sa population, sa natalité, son immigration, sa productivité et son niveau d’emploi seront tous plus élevés alors que son fardeau fiscal et son taux de retraites anticipées seront de beaucoup inférieurs. La pénurie de travailleurs qu’annonce le vieillissement des Boomers rendra cette région du pays de plus en plus réfractaire à participer au financement d’une partie non-négligeable de l’État-providence obèse du Québec.

Il va sans dire qu’un Québec qui représente une cinquième de la population et de l’économie continuera d’être influent, et tous ces développements auront aussi des conséquences positives.

Par exemple, l’invasion par Ottawa de bien des domaines de politique sociale a eu pour mobile la poursuite de la surenchère. Sciemment ou non, le gouvernement fédéral a ainsi fini par subventionner une série de politiques, notamment au Québec, mais ailleurs aussi, qui ont profondément endommagé les économies provinciales.

On pourra résoudre ce problème en mettant fin aux transferts fiscaux et en les remplaçant par un transfert de capacité fiscale. Lorsque les provinces auront à défrayer la note de leurs politiques sociales à partir de leurs propres ressources, elles seront plus attentives aux résultats obtenus.

En contrepartie, les provinces seraient appelées à reconnaître, une fois pour toutes, le rôle prépondérant du fédéral en ce qui a trait à la création d’un marché libre et sans entrave à l’échelle du Canada.

Le Québec s’opposera évidemment à ce renouvellement de la présence d’Ottawa dans la vie des Canadiens. Par contre, sortir Ottawa des politiques sociales de ressort provincial toute en s’enrichissant d’une partie de la capacité fiscale du gouvernement fédéral constituerait une victoire importante vu sous l’angle des revendications traditionnelles du Québec. Tout compte fait, on pourrait assister à un renouvellement du pacte confédératif qui sera dans l’intérêt de tous.

 

Brian Lee Crowley est auteur de Fearful Symmetry : the fall and rise of Canada’s founding values qui vient de paraître chez Key Porter.

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The bidding war explained

One of the central features of the argument of Fearful Symmetry is that the entry of a vast wave of unilingual French-speaking Quebeckers helped to trigger a vast expansion of the state in both Quebec City and Ottawa as both governments vied to be the conduit through which these young people’s aspirations would be channelled. In an excerpt from the book published in the National Post of 18th September, I outline the origins of the bidding war and how it drove much of Ottawa expansion in the sixties and seventies, including its infamous use of its spending power to insinuate itself into many areas of provincial jurisdiction, such as social policy:

“A bidding war was thus unleashed, pitting the government of Canada against the government of Quebec in a battle for the loyalty of Quebecers. Both sides in this battle of the purse have taken it as axiomatic that, while emotion and sentiment would play their role, the most powerful force binding Quebecers to one government or the other, and hence to one or the other of our competing national projects, was and is self-interest; that in turn they have defined in terms of dependence. A citizen dependent on a flow of benefits from one government will likely not vote to quit that government’s jurisdiction. Thus the feds ramped up EI, regional development, equalization, marketing boards and a host of other programs, including in areas of provincial jurisdiction, and did so across the country.”

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What it all means

Two forces have shaped Canada profoundly in the last fifty years: the entry of  Boomers into the workforce and the rise of a separatist Quebec nationalism. Large-scale unemployment plus the threat of the breakup of the country caused Canada to jettison its traditional values—a ferocious work ethic, a commitment to the family as the most important social institution, a suspicion of overweening government and an aversion to dependence—in favour of a vast expansion of the welfare state. We rapidly became a nation of “takers” rather than the “makers” we had always been. But the tide is about to turn with a vengeance: the Boomers are retiring and Quebec nationalism is increasingly a spent force, presaging a resurgence of our founders’ values that had served us so well. Thought-provoking and meticulously documented, Fearful Symmetry will change the way you think about Canada.

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Brian Lee Crowley