National launch of The Canadian Century

My new book (co-authored with Jason Clemens and Niels Veldhuis), The Canadian Century: Moving Out of America’s Shadow, is coming out soon! We’re having a national launch party in Ottawa on May 20. Click here to register for this event.

Book launch event – The Canadian Century

My new book, co-authored with Jason Clemens and Niels Veldhuis, is out!  I will be talking about The Canadian Century: Moving Out of America’s Shadow, at the GTA launch party in Toronto on May 25, at an event sponsored by Bennett Jones and chaired by Allan Gotlieb. The invitation is below. To RSVP, please click here.

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.

For economics and decency’s sake, let’s help our Indian students

Here is a great op-ed, by Calvin Helin and Dave Snow, that appeared in the Globe and Mail on March 16 about the Macdonald-Laurier Institute’s inaugural paper, Free To Learn.

Despite years of effort and billions of dollars spent, aboriginals continue to fare worse than all other Canadians on almost every social and economic indicator. Education, particularly higher education, is undeniably one of the keys to fixing this iniquitous state of affairs.

According to one study, if aboriginal Canadians were able to increase their educational attainment to the level of other Canadians, our cumulative economic output would grow by an additional $179-billion by 2026 and government tax revenue would be $3.5-billion higher. That would be good for aboriginals and all Canadians.

So for economic as well as moral reasons, Canada needs to do better at helping aboriginal youth attend colleges, universities and trade schools. How we pay the bill isn’t the entire answer, but it’s a key part. And the way we now pay that bill is failing aboriginal youth.

The current federal program, the Post-Secondary Student Support Program (PSSSP), does a lousy job of helping status Indian students get into postsecondary education. It fails because the money too often doesn’t reach the students themselves. Even when it does reach them, it comes in a form that helps to perpetuate a system of dependence and lack of accountability that is the hallmark of failed aboriginal policy in Canada.

Each year, taxpayers put $314-million into PSSSP. Unfortunately, this money does not go directly to registered Indian students. Instead, it is given to Indian bands to distribute, with virtually no government oversight. It’s not even required that the money be spent on aboriginal postsecondary education.

It doesn’t have to be this way. We believe that a relatively simple solution exists, one that breaks with dependency and puts into the hands of young aboriginals the power and the means to make the educational choices that are right for them: The PSSSP should be phased out, and the money should be given directly to qualifying Indian students, subject to appropriate safeguards, for them to spend solely for purposes of legitimate postsecondary education.

Here’s how it would work. The government should create an Aboriginal Post-Secondary Savings Account (APSSA) program, opening an APSSA at birth for every registered Indian, regardless of whether they live on or off reserve. A basic amount would be paid into each account when established, and the money would earn interest until the account holder finished high school. An additional sum would be added for each year of secondary education completed, creating a powerful incentive to finish high school. And when the student enrolled in a bona fide college, university or trade school, the money would be used to pay tuition and contribute to living expenses.

The institutions must be accredited, and tuition fees would be paid directly from the APSSA to the institution without passing through the student, let alone a band council. Living expenses could be drawn only in accordance with established criteria. This would ensure transparency while avoiding opportunities for waste or corruption. It would mean fairness and consistency for Indian students, regardless of band or region. And by having the money follow the students rather than the other way around would encourage postsecondary institutions to recruit and retain Indian students.

Improving educational opportunities for young aboriginals offers substantial economic benefits to Canadians. As the population ages and baby boomers retire, Canada faces a double demographic crisis: a looming shortage of workers for the private sector and taxpayers for the public sector. Studies consistently show that immigration alone cannot alleviate this shortage. Unlike the rest of the population, aboriginals are on average quite young, and because their current educational results are so poor, it’s a very promising place to look for a dramatic increase in the supply of young skilled workers.

But the key argument for the APSSA isn’t economics – it’s decency and fairness. The aboriginal grassroots are increasingly clamouring for change. Indian policy in this country is an expensive, shameful failure harmful to the intended beneficiaries and infuriating to taxpayers. What we need, if we really want to help aboriginal students help themselves, is not more money. What we need is fresh thinking.

Calvin Helin is president of the Native Investment and Trade Association. Dave Snow is a PhD candidate in political science at the University of Calgary . They are the authors of Free to Learn: Giving Aboriginal Youth Control Over Their Post-Secondary Education, published yesterday by the Macdonald-Laurier Institute.

Why cuts are how to balance the budget

In all the blather surrounding Red Ed Clark’s call for higher taxes, and the federal Tories response, most of the attention has been focused on either the issue of whether wealthy bankers should be volunteering other people to pay higher taxes OR whether the PM should be criticising private citizens for voicing their opinions about such matters.

Interesting as those questions are, they are not the most important matter. What really matters is whether raising taxes is the right way to fix the deficit. On this, history and human nature respond with a resounding “No”.

History first: the last time we wrestled successfully with the deficit, under Paul Martin’s stewardship at Finance, we did so chiefly by reducing the size of government. The most startling measure of our success: We went from spending a historic high of 53% of GDP on government in 1993 to roughly 40% in 2008, an unprecedented decline in our history. We were able to do so, by the way, while increasing spending on programmes AND cutting taxes because our fiscal discipline allowed us to stop spending so much on interest on our debt. And we ushered in an era of strong economic growth: we outperformed all the other G7 nations for over a decade after Paul Martin tabled the first balanced budget in the late nineties.

Remember that all other attempts to deal with the budget, including the gig tax reform that led to the creation of the GST, did not bring the budget into balance. It was *only* when we got our *spending* under control that that happened.

And that brings us to the human nature side of the equation. The fact of the matter is that politicians are human beings and subject to many pressures and incentives. When a dollar gets in their hands, it does not come with an endorsement saying “May only be used to reduce the deficit”. Instead it becomes the prize in a tug of war between various interests all wanting to get something out of government. Many and perhaps most politicians regard a dollar in the consolidated revenue fund as a reason to spend that dollar on their favourite programme.

That may be one reason why a recent poll in the US shows Americans deeply sceptical about using tax increases to bring their own public finances into balance. They told Rasmussen pollsters by a margin of 58% that politicians “are more likely to spend the money on new government programs.”

The reality is that if we want to balance the budget, the strategy that has proven itself without a doubt is to control spending. Raising taxes too often just gives politicians comfort that they can continue in the bad old habits. And it is those habits that have to be broken.

Fearful Symmetry on the 2009 “Global Thinkers Book Club list”

Read what Liberal Leader Michael Ignatieff has to say about Fearful Symmetry in the December 2009 edition of Foreign Policy Magazine. FS is his choice for the Global Thinkers Book Club (“What the smart set is reading”).Of course he suggests the book is an attack on modern Canadian liberalism, and I don’t really agree –… I think of it as a call for the Liberal Party to return to the values that served it, and the country, so well for Canada’s first century. But he certainly sees the book as a reasoned critique of the last 50 years of Canadian public policy, and on that we agree…

Here’s what he says: “It’s an attack on everything I believe, so it’s very bracing and interesting…. He’s saying that Canadian liberalism has damaged Canada, and as the Liberal Party leader I have to disagree. But it’s very intelligent and it’s very important to take your adversaries seriously, so I’m taking him seriously.”

For what it’s worth, I think Michael deserves to be taken a lot more seriously by his adversaries…

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.”

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