The Canadian Century in InsiderOnline

InsiderOnline has a post about The Canadian Century that once again shows that the book’s analysis is attracting wide assent among those knowledgeable about conditions in both Canada and the US:

Thanks in part to the U.S. government’s recent spending binges, a group of Canadian authors say that Canada now has the better business environment. “If the United States continues on its current course,” write Brian Lee Crowley, Jason Clemens, and Niels Veldhuis, “Canada will find itself without peer as a magnet for investment, immigrants, innovation, and growth.” They make this prediction in their new book, The Canadian Century: Moving Out of America’s Shadow.

But the issue isn’t just fiscal overstretch by the United States. They point to what they call Canada’s “redemptive decade” from 1988 to 1997, when politicians of all political stripes supported a program of free trade, trimming the extensive Canadian welfare state, and reducing both taxes and the government’s debt burden. Despite some backsliding, those reforms will be the basis of Canada’s prosperity, say the authors.

They’re certainly right about the recent role reversal. In the latest issue of The Heritage Foundation’s Index of Economic Freedom, Canada ranks as the seventh freest economy in the world, one spot ahead of the United States. That’s the first time Canada has been ahead of the United States in the rankings, and most of that switch is attributable to a declining U.S. score.

The Canadian Century on the Michael Coren show

On May 27, I was on the Michael Coren show to discuss The Canadian Century. Also with me were three great panellists: John Nunziata, Adam Giambrone and Akaash Maharaj all under the firm but creative hand of Michael Coren in the chair. While we spent the first segment in a stimulating discussion of Canadian Century, we also tackled lots of great issues later in the show: the costs of the G20 summit, Canada’s relationship with Israel and lots more. Enjoy!

Click here to watch the episode.

The Future of Federal Transfers

I was recently invited by the Federal-Provincial Relations Division of Finance Canada to participate in a panel discussion in Ottawa on the future of federal transfers to the provinces. Here is the text of my remarks.

The best PM we’ll never have

Here is the full text of my review of Frank McKenna: Beyond Politics, which appeared in the Globe and Mail on February 11. Contrary to his critics, I believe that McKenna was a pivotal figure in New Brunswick’s political history, and also that he showed, in his brief time in that office, that he would have been one of the most influential ambassadors ever for Canada in Washington DC. And by the way, my proposed head for this review had nothing to do with the best PM we’ll never have. My suggestion was “Leave this Man Alone”.

The Sage of Chicago on Fearful Symmetry

Donald Coxe, Chairman, Coxe Advisors LLC, and Strategy Advisor, BMO Capital Markets, is a well-known and influential global investment strategist, based in Chicago but closely allied with BMO, giving him a high profile in Canada in particular.

Coxe does a regular conference call to brief clients and others about his view of where markets are going. In his call of February 5th, in honour of the Olympics, he gave a strongly Canadian spin to the discussion, focusing on the many reasons why Canada did so well in the recession and why its economic future is relatively bright. To introduce the discussion he spent some time talking about Fearful Symmetry and how it helps people to get a good grasp of the unique circumstances that await Canada as the coming labour shortages and demographic change really start to bite.

His commentary is on-line and available until the next one is posted on February 19th.

Here is a short excerpt:

 

Bélanger and Migué on Fearful Symmetry

Economists Gérard Bélanger and Jean-Luc Migué have an interesting piece in the National Post of 5th October arguing against some of the case I make in Fearful Symmetry attributing the rapid growth in government in Canada to a combination of the rise of the Boomer generation and a separatist Quebec nationalism.

One of the main points they raise against my argument is that growth in government was occurring all over the world, and especially in the western world, and therefore to attribute the growth in government in Canada to these two factors in Canada is to miss the larger picture of change affecting all western societies.

This would be a fair criticism, if it were true. But of course it isn’t. Indeed I spent an important part of the book tracing the growth of government spending in Canada, comparing it to our counterparts in the US (with whom we shared almost identical patterns of government growth for over a century, until the 1960s), and demonstrating that there were in fact two “camps” among Western industrialised societies. One was essentially the US, Canada and Australia, the other was much of Western Europe. The first group proved remarkably more resistant to the growth of government than the latter. But Canada in the Sixties and Seventies essentially changed teams. After a century of following in America’s footsteps, we suddenly and brutally changed camps. Over the ensuing few decades, America’s share of GDP devoted to government rose 6 percentage points. Ours rose over 20. As I say in the book, the zeitgeist in favour of larger government no doubt explains part of the growth in Canada. But it is the speed and size of the change over such a short period, that requires supplementary explanation in Canada, especially since the political class remained committed to small and limited government right up until the early 1960s, as I again show in the book.

As for the rise of a separatist Quebec nationalism only emerging in the 1970s, Migué and Bélanger must have lived through a very different history than I did. The Sixties were a time of radical nationalist ferment that was frightening the life out of the political class in Ottawa. The B&B Commission was named in response. The PQ was formed in the late Sixties from the merger of two other separatist political parties that had been agitating for some time. This was the time that mailboxes were blowing up in Montreal and the FLQ was issuing manifestos. Jean Lesage won the 1960s election on a platform of Maîtres chez nous, and Daniel Johnson won the 1966 election on the slogan of Égalité ou indépendence. The federal Liberal Party went and recruited les trois sages (Trudeau, Marchand and Pelletier) in the mid-Sixties as an attempt to strengthen their response and Trudeau was clearly made leader of the party because he was seen as the man able to respond forcefully to what was happening in Quebec, as indeed he did in the FLQ crisis in 1970.

It is historical revisionism pure and simple to say that because the PQ only made its entrée into the National Assembly in 1970 with a quarter of the vote or because the first referendum only occurred in the late Seventies (with half of French-speakers voting to give the government a mandate to negotiate sovereignty-association) that therefore nothing had happened in the decade preceding or that politicians in Quebec City and Ottawa were not already responding to the rise of a separatist nationalism in the province.

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.

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?

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.”

Labour Force’s Fearful Symmetry at a glance

 

We decided not to include many of the graphics in Fearful Symmetry, in part because of the technical difficulties in doing so, and in part because books with lots of graphs, charts and tables are, my publisher assures me, very unpopular with the reading public. They look like work rather than fun. That doesn’t mean, however, that we can’t make them available to you. From time to time I will publish some of them here on the blog. Here is one of my favourites: it shows in a very powerful way the turning point in the labour supply as we go from the Boomer-era of unemployment to the labour shortages of the post-Boomer period. This draws on some fine work by Roger Sauvé, Labour Crunch to 2021: National and Provincial Labour Force Projections, (Summerstown, Ont.: People Patterns Consulting, March 2007), amended with updated Finance projections.

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