Making Canada Relevant Again- The Economic Super-Thread

[GAP]

Terence Corcoran: The Big McGuinty switch
Terence Corcoran  Feb 16, 2012
Article Link

Despite report’s spending focus, tax increases are on the way

Ontario, get ready for The Big McGuinty. The 562-page report from the government-appointed Commission on the Reform of Ontario’s Public Services, chaired by economist Don Drummond, has all the makings of a diversionary shell game in which everybody is directed to follow the pea of spending cuts while the real game is something else.

With attention now focused on carving Mr. Drummond’s 362 recommended slices off the great Ontario spending bologna, the real bait-and-switch objective, The Big McGuinty of this giant exercise in fiscal self-flagellation, is something else altogether: tax increases.

Does anybody seriously think the Liberal government of the Rev. Dalton McGuinty, after a decade of installing feel-good spending increases and extravagant policy schemes, is suddenly going to roll it all back and reverse a decade of ideological commitment to government intervention and liberal spending programs?

The Drummond report would require policy-backtracking on a vast scale. Somewhere in the near-eternal labyrinth of the Drummond report there must be evidence that the McGuinty’s Liberal government did something right over the last decade. If there is, I haven’t found it yet.

Aside from setting Canada’s largest province on a death spiralish plunge into what could become a $30-billion deficit by 2017-18, and a debt load of $411-billion equal to 51% of GDP — establishing the McGuinty Liberals as neo-Greek fiscal managers — the government comes off as the regime that couldn’t do anything right.

From health care to electricity regulation and energy policy, from transit planning and business subsidies, Ontario emerges as a province in need of a top-to-bottom big fix, a revamp of every policy, priority and plan on file in the bureaucracy.

Ontario spends more on health care than other jurisdictions but gets fewer results. Its electricity sector, with its feed-in-tariff subsidies, is driving electricity costs higher. The government’s sneaky energy price rebate, deceptively named the Ontario Clean Energy Benefit — designed to hide the fact that wind and solar subsidies are driving electricity costs skyward — was also dismissed by the Drummond commission as wrongheaded.

The fiscal gap runs to $30-billion by 2017-8, or up to 25% of total program spending. Even if Mr. Drummond’s economic projections are extreme — they look to be more pessimistic than recent projections by the Conference Board of Canada — spending cuts of that magnitude seem beyond the capacity of any government, let alone one of Mr. McGuinty’s persuasion.

Will this government really give up subsidies to business and job creation? During the last election, Mr. McGuinty personally attended to the grant of cash to a pizza-making company, one of scores of election giveaways. Said Mr. Drummond of the McGuinty business subsidies: “The government’s business support programs require a reset in light of Ontario’s fiscal and economic challenges. If we were to design business support programs from scratch, they would not look like what we have now.”
More on link

 

[larry Strong]

All supports should end after four years, then be renewed only if they are working, the report recommended.

I will admit that I am not a business person, however I feel that if you can't make it on your own as a business after 4 years, either not enough buyers are interested in your product, and you might want to consider scaling back the size of your business, or your business plan is not thought out properly.

And the suggestion that Ontario cut its tax support for horse racing and eliminate the sharing of slot machine revenue drew howls of outrage from the racing industry.

According to the link posted, just under 5% of the population in Ontario, approximately 1 in 21 have a gambling addiction problem in Ontario. So would fewer race tracks and casino's really be a bad thing?

http://www.adstv.on.ca/gambling_adults.htm

 

[Redeye]

I will admit that I am not a business person, however I feel that if you can't make it on your own as a business after 4 years, either not enough buyers are interested in your product, and you might want to consider scaling back the size of your business, or your business plan is not thought out properly.


According to the link posted, just under 5% of the population in Ontario, approximately 1 in 21 have a gambling addiction problem in Ontario. So would fewer race tracks and casino's really be a bad thing?

http://www.adstv.on.ca/gambling_adults.htm

Gambling revenue is one of those things where the cost/benefit issue seems trickier than normal. Nova Scotia has a gambling problem, the rate of addition according to a 2007 report was around six percent - but it also supplies 2.5% of the province's budget - $175 million isn't to be scoffed at. Can we afford to do without it? Yes. Most likely. But it'll possibly sting. I wonder what the social costs balance it out to.

 

[Edward Campbell]

Jeffrey Simpson adds his voice to those supporting both restraints and tax increases in this column which is reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail:

http://www.theglobeandmail.com/news/opinions/jeffrey-simpson/ontario-can-no-longer-hide-from-taxes-restraint/article2341000/

Ontario can no longer hide from taxes, restraint

JEFFREY SIMPSON

From Friday's Globe and Mail
Published Friday, Feb. 17, 2012

“There are only hard answers and difficult solutions.” So said Don Drummond and his three fellow commissioners about reforming Ontario’s health-care system. They could have used the same words for the entire government of Ontario.

Ontario’s problem is not that it has big government, per se. If you want to see that, on a per capita basis, head to Alberta or Quebec. As the commission correctly noted, “Ontario runs one of the lowest-cost provincial governments in Canada relative to its GDP and has done so for decades.”

Ontario is at or near the bottom in funding universities. The health-care system is not the most expensive in Canada; the welfare rates are not the most generous. It doesn’t offer $7-a-day daycare, as in Quebec.

No, Ontario’s problem is that the size of its government doesn’t fit its revenues, and hasn’t for a long time. Those revenues have been hit by the slow, steady erosion of Ontario’s competitive position, in the face of which governments kept adding spending for which there were insufficient revenues.

As a result, like the frog in boiling water, the province’s fiscal situation slowly weakened. Over the past quarter of a century, Ontario’s debt ratio more than doubled to 35 per cent from 14 per cent. Ontario now finds itself lumped in with the three Maritime provinces; unless it changes course, it will find itself level with Quebec’s 50-per-cent ratio.

For most of the past decade, Ontario’s growth rate lagged behind the rest of Canada. From being an economic motor for the country, capable of sharing its surplus, Ontario became a drag, incapable of sharing but still required to do so by the perversity of various federal-provincial programs.

Worse, Canada entered into a form of the dreaded “Dutch disease,” whereby the currency soars on the back of high commodity prices, thereby diluting the economy’s competitive position. Ontario has suffered from the Canadian version of “Dutch disease”: High oil prices and large oil exports keep the currency high, causing competitive problems elsewhere.

Ontario has itself to blame, too. Its companies, like many across Canada, didn’t innovate enough; its wage rates in too many industries were uncompetitive; and – to come to the nub of the Drummond report – its public sector was too flabby for the revenue base on which it rested.

The largely unionized providers in all major public services – health, K-12, universities, courts, policing – essentially took new moneys the provincial government poured into their institutions and turned them into wage gains rather than productivity improvements.

Since about half of the provincial budget is taken up by wages and benefits for the million or so public-sector employees, higher remuneration coupled with no productivity gains spelled trouble. Under Premier Dalton McGuinty, these wage gains bought labour peace but no corresponding improvement in output, a politically satisfying but economically deadening outcome.

Governments, especially the McGuinty government, refused to tell the truth to the electorate. They kept assuming, and hoping, that the robust economic times of yesteryear would return. And they did two things simultaneously: They refused to raise taxes, and they kept on adding new spending programs or letting existing ones expand. In the last election campaign, none of the parties came remotely close to levelling with the voters.

The NDP answered every challenge with a call for higher corporate taxes, as if that alone would make difficulties vanish. A more puerile, populist response could scarcely be imagined, except for those proposed by the other parties.

The flight from reality that has characterized Ontario’s political culture has been completely challenged by the Drummond report. There’s no longer any place to hide – although, if one exists, we can expect the politicians at Queen’s Park to discover it.

Mr. Drummond’s mandate precluded any study of tax hikes. Ontario will need them (a rise in the sales tax and personal income tax surtax on the affluent), along with serious spending restraints, to climb out of the fiscal hole so accurately and painstakingly described by Mr. Drummond’s team.

It is not clear that tax hikes are necessary.

We should believe Drummond - he has waaay more economic credibility than McGuinty/Duncan - and implement the spending cuts, including the payoffs to unions programmes, like all day kindergarten, Duncan has already said will stay in place. Then, when the cuts are in place, we can see if tax increases are necessary. Raising taxes just gives politicians room to buy your vote with my money.

 

[Edward Campbell]

I fear this column, which is reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail is a realistic appraisal of Ontario's near term future:

(My emphasis added)
http://www.theglobeandmail.com/news/opinions/margaret-wente/can-dalton-mcguinty-morph-into-mr-mean/article2342608/

Can Dalton McGuinty morph into Mr. Mean?

MARGARET WENTE

From Saturday's Globe and Mail
Published Saturday, Feb. 18, 2012


Thanks to Don Drummond, the smart economist with the impeccable reputation, we now have a detailed blueprint for restoring fiscal sanity to Ontario. The choice is clear: Either we get a grip on our finances, or a kid with red suspenders will show up and downgrade the province’s credit rating.

There’s just one problem. The likelihood that the Ontario government can do what Don Drummond says it has to do is approximately zero.

Dalton McGuinty got elected three times because he seems so nice. All he ever promised was good things – good things for kindergarteners and postsecondary students, for teachers and solar-energy producers. He was Premier Dad. He even gave us Family Day. He said Ontario was the most prosperous and progressive place on Earth.

Well, it’s not. It’s the rust belt of Confederation. And now Ontarians need a Mean Dad. We need someone who’s willing to make the Harris years look like the Teddy Bears’ Picnic. We need someone who is willing to alienate all of Mr. McGuinty’s core supporters – the teachers, nurses and government workers he worked so hard to keep on side. Mr. McGuinty is constitutionally unable to enrage and betray them. Besides, he has already declared that all-day kindergarten is untouchable.

The Premier has not primed the public for austerity. Instead, he has plied them with candy and ice cream, which they now regard as entitlements. According to a Forum Research poll this week, 53 per cent of respondents want to keep all-day kindergarten, and 57 per cent want to keep the new tuition grant for postsecondary students. Austerity is someone else’s problem.

Mr. McGuinty does not want to end his career as Mike Harris, the premier whose name is synonymous with hardball tactics and bitter labour confrontations. Even today, decades later, teachers cannot utter his name without loathing. The vile Mr. Harris cut provincial spending by 4 per cent in his first term. To balance the books by 2018, in real per capita terms Mr. McGuinty will have to cut by the equivalent of 16 per cent. Mr. Drummond accurately said that cuts of such magnitude are “unprecedented in postwar Canada.”

When Mike Harris was elected premier, at least people knew what was coming. The province was in rotten shape and he had a mandate to set things right. He was also lucky. The world’s economy was on a roll, and Ontario’s revenues soon shot up. Mr. McGuinty is not so lucky. The world’s economy has flat-lined, and he can’t count on growth to bail him out.

Mr. Drummond has come up with hundreds of recommendations for cost-cutting. Most of them will be excruciatingly hard to implement. They are not simply about restraining pay. They require fundamental reforms to deeply entrenched work practices and rigid professional boundaries. Every affected group – all the public-sector workers in the province, to say nothing of seniors with their Lipitor prescriptions – will fight like cornered rats to protect their turf. No appeals to the broader public interest will persuade them to sacrifice what Mr. Drummond says they must. Besides, if kindergarten is exempt, then why not them?

Education – the Premier’s pet portfolio – provides a snapshot of the challenge. Mr. McGuinty’s aim for education was to buy labour peace and improve outcomes. Noble goals, providing you can contain costs. Ontario did not. Over the past decade, student enrolment shrank by 6 per cent, but education staff grew by 24,000. Most of those are non-teaching jobs. The combination of increased funding and declining enrolment means that per-pupil funding has soared by 56 per cent – from $7,201 to $11,207. Special education funding alone went up by $893-million, or 55 per cent. Fourteen per cent of Grade 12 students spend an extra year in Grade 12 – for free. Teachers’ entitlements include up to six months of unused sick days when they retire. Teachers’ retirement benefits will have to be reduced. And so on.

Not surprisingly, teachers unions have already started to bite back. The Ontario Secondary School Teachers’ Federation has pronounced the recommendations “extremely confrontational,” and warns that if implemented, they will do irreparable harm to our children.

Health care is even worse. The status quo is almost impossible to change. Ask doctors if pharmacists should be allowed to prescribe drugs, and they’ll go ballistic. I once asked a room full of family doctors why I needed to see a doctor (instead of, say, a nurse-practitioner) to be diagnosed for a simple urinary tract infection. They were aghast. What if I had cancer? Multiply this example by a thousand and you’ll start to understand how hard it is to reform health care.

“The built-in bias for the status quo reflects the reality that the various parts of government are understood, defended and changed mainly by those who benefit from their existence,” wrote economics writer Robert Samuelson. “What’s sacrificed is the broader public good.”

As for why politicians would rather give in than fight, the answer is obvious. “We know what we have to do,” one beleaguered European politician said. “ We just don’t know how to get re-elected after we do it.”

So keep an eye out for the kid in red suspenders. If Dalton can’t shake things up, he will.

It will be harder and harder to do the longer we postpone the inevitable paying of the piper.

 

[Brad Sallows]

Ironically, one of the reasons teachers in BC continue to assert their demands is that they feel they are underpaid in comparison with Ontario teachers.

 

[Kirkhill]

It will be harder and harder to do the longer we postpone the inevitable paying of the piper.

While it may be harder for society at large, the longer that the inevitable is delayed, it seems to me to be an unfortunate fact that the politician and the survivalist share a common hidden joy at the prospect of the end of days.  As the European Politician implies, as long as the status quo holds the status quo will hold.  Until such time as the status quo fails nothing is possible.  Once the status quo does fail everything is possible.

The risk for the politician is to be the one on watch when everything fails.  The reward will go to "the other guy". 

Anyone for a game of "Hot Potato"?

 

[Edward Campbell]

A reminder about why Ontario's woes matter to all Canadians and a look at the perverse effects of "fiscal federalism" in this article which is reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail:

My emphasisadded
http://www.theglobeandmail.com/news/politics/john-ibbitson/other-provinces-have-no-cause-to-gloat-over-ontarios-economic-woes/article2343676/

Other provinces have no cause to gloat over Ontario’s economic woes

JOHN IBBITSON

OTTAWA— From Monday's Globe and Mail
Published Monday, Feb. 20, 2012

Anyone who might take satisfaction in watching Ontario, once the richest province in Canada, get its comeuppance as it grapples with low growth and high debt should remember that the province’s troubles are everyone’s troubles. In this country, when Ontario suffers, everyone else suffers, too.

Many of us remember the waves of public-sector strikes and repeated civil disturbances that accompanied the Mike Harris government’s efforts to eliminate a chronic deficit in the 1990s. Economist Don Drummond in his report on Ontario’s current situation warns that this time “the government will have to cut program spending more deeply … and over a much longer period of time than the Harris government did.”

Things have gotten so bad because over the past decade the province has become two Ontarios.

The first Ontario is Toronto, a Canadian New York whose economy is powered by financial services, education, biosciences, cultural industries, tourism and more. Living in or near Toronto, it can feel as though things are still going reasonably well.

But outside Greater Toronto is a whole lot of Ohio, as the manufacturing sector follows other Great Lakes economies into rustbelt status. This is why unemployment has been above the national average for five years, and why the last recession was far worse in Ontario than elsewhere. It is why, amazingly, average personal income has dropped below the national average. And it is why real growth of about 2 per cent annually is the most the province can expect for years to come.

Yet Ontario continues to finance the social programs that many provinces depend on. Its taxpayers contribute 39 per cent of federal revenues, but receive only 34 per cent of federal spending. Each year, 2 per cent of the province’s GDP, or $12.3-billion, bleeds to the rest of the country, even as Queen’s Park records a deficit of $14-billion, which Mr. Drummond calls “a clear demonstration of the perverse structure of Canadian fiscal federalism.”

Ontario voters can no longer afford to finance Employment Insurance programs that favour Atlantic fishermen over laid-off auto workers. No Ontario government can tolerate equalization programs that subsidize university tuition outside the province, even as Mr. Drummond calls for annual increases to postsecondary education of no more than 1.5 per cent, less than the rate of inflation.

Voters in the Prairie and Pacific provinces may shrug and say this is an Eastern problem for the Eastern provinces to sort out. This attitude is delusional. Even the most resource-rich provinces and Ottawa, as well, face lean years as they try to balance their books.

“People shouldn’t have any illusions,” said Craig Alexander, Mr. Drummond’s successor as chief economist of the Toronto Dominion Bank. “Keeping program spending to around the pace of inflation or below is extraordinarily difficult.

“If governments actually managed to do what they have committed to do up to this point, it would be one of the longest and most painful periods of fiscal austerity the country has ever had.”

And this time the economic engine in the heartland won’t be there to cushion the pain and take up the slack.

The Drummond report won’t be fully implemented. At best, the McGuinty government is likely to slow the growth of the debt. It lacks the mandate, and probably the political will, to slash spending as severely as needed to balance the budget.

This will leave the province dangerously vulnerable to another recession, an oil shock or a sharp rise in interest rates, which could swiftly bring on a fiscal emergency.

Alberta defaulted on its debt during the Depression. In more recent times, Saskatchewan and Newfoundland came close. If any province found itself unable to service its debt, “we explicitly assume that there is a high probability that the federal government would help the province,” said Jennifer Wong, assistant vice-president at Moody’s Investors Service, in an interview.

If things go badly, Ontario’s problem could become everyone’s problem, with a vengeance.

'Nuff said, I think.

 

[Haletown]

Dalton must be taking lessons  from Obama in The Management of Public Finances.

He's doing the same thing, pandering to public service unions and organized labor.  The only difference is Dalton is jogging down the road of fiscal insanity to Hell, while Obamassiah is sprinting.

 

[Kirkhill]

Alberta defaulted on its debt during the Depression. In more recent times, Saskatchewan and Newfoundland came close. If any province found itself unable to service its debt, “we explicitly assume that there is a high probability that the federal government would help the province,” said Jennifer Wong, assistant vice-president at Moody’s Investors Service, in an interview

There's the difference between Canada's dollar and the EU's euro.  We are on the hook for each other's debt.  Thankfully.  Because in so doing we spread the risk around.

Having said that, that doesn't mean we can't whinge, moan and gripe about the idiots that wilfully cause their own problems - and - hopefully - convince them of the error of their ways.

Someone, somewhere once told me a story about seven fat years followed by seven lean years and storing up corn during the fat times for the lean times...... but that was a lifetime ago.

 

[GAP]

well there's always family.............

 

[Edward Campbell]

Well, the faint hope disappears, according to a report in the Ottawa Citizen which has Premier McGuinty saying that while the Drummond report is a "helpful road map," he will not implement all the recommendation and he will not raise taxes.

Article link

The Drummond report says "the province must implement all of the 362 recommendations laid out in the massive cost-cutting plan if it wants to "just make" its target of eliminating a projected $30.2-billion deficit by 2017-18."

Since McGuinty says he will not implement all 362 recommendations nor raise taxes he is also saying, implicitly, that a balanced budget is not in Ontario's future - Ontario will, in other words, edge closer and closer to a lower credit rating (higher cost of borrowing even more money) and default.

 

[Kirkhill]

How long before McGuinty does a Campbell and decide he has "done enough"?  Sinecure as Ontario's High Commissioner to somewhere or other?

 

[a_majoor]

I think the more probable outcome will be the NDP joins forces with the Ontario Liberals. The Drummond report is a repudiation of all of Dalton McGuinty's policies and programs, so to use the report is to basically admit "hey, I was totally out to lunch these last eight years..."

Preimier McGuinty has never been shy of trying to cover a spending problem with more taxes, and the NDP veiw the report as a joke, with the leader clearly stating the problem is there is simply not enough revenue, so we have a meeting of kindred spirits.

I rather doubt that Tim Hudac has the will to force an election (and a possible coalition of the free spending makes that unlikely), nor has he demonstrated the spine required to march forward with something like the Drummond Report (otherwise he would have fought the election using his own version of the report), so things are looking very poorly for Ontario for the next decade or so.

 

[Kirkhill]

....
Preimier McGuinty has never been shy of trying to cover a spending problem with more taxes, and the NDP veiw the report as a joke, with the leader clearly stating the problem is there is simply not enough revenue, so we have a meeting of kindred spirits.

......

Blood from stone?

 

[Edward Campbell]

There is one thing about which the Good Grey Globe's national affairs columnist Jeffrey Simpson and I agree: Canada has a productivity problem. He outlines part of it in this column which is reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail:

http://www.theglobeandmail.com/news/opinions/jeffrey-simpson/exploiting-canadas-resources-can-be-a-fools-game/article2345076/

Exploiting Canada’s resources can be a fool’s game

JEFFREY SIMPSON

From Wednesday's Globe and Mail
Published Wednesday, Feb. 22, 2012

Everywhere in Canada, the news is about natural resources: forestry and mines in British Columbia; oil and coal in Alberta; potash in Saskatchewan; hydro in Manitoba; the “ring of fire” minerals in Ontario; hydro and Old Harry oil and shale gas in Quebec; offshore oil and hydro in Newfoundland.

Canadians are so damn lucky. We just dig and pump and cut and ship, and we never seem to run out. We just hope commodities prices remain high.

All those resources can be a fool’s game. Pumping and digging and cutting can keep the country comfortable, but they do little to address the country’s biggest challenge – a sagging competitive position. All those natural resources soak up capital; they usually don’t require much innovation or processing.

The Harper government, possessed of a majority government, seems to have its mind around elements of the long-term challenge. Whether it can persuade the country to confront them is another matter, in part because this government doesn’t like “visionary” politics, and in part because of its relentless partisanship, which waxes so many ears beyond its own supporters.

Canada has one of the worst productivity records in the industrialized world. Upon productivity improvements household incomes depend, not burgeoning household debt. When you ask why median household incomes stagnated for a long time in Canada, and why the lowest-income Canadians have gotten poorer, one reason (among many) is low productivity.

Part of the country’s long-term challenge is demographics. The population is aging (the first of the baby boomers hit 65 in 2011). Slowly, aging will influence everything for the next quarter-century. It will strain public finances in two ways. First, social programs for seniors will cost more. Second, there will be fewer people in the work force relative to those who are not.

If nothing changes, taxes will certainly have to rise on them just to deal with aging alone, unless those who remain in the work force are more productive. You don’t have to like the Harper government, or agree with its yet-unknown prescriptions, to understand that it has identified this inescapable issue. And you don’t have to like any particular government to know that a Canada Pension Plan worked out almost half a century ago (and Old Age Security somewhat later), when people lived shorter lives, has to be revisited. And that a health-care program devised at about the same time also needs an overhaul.

The government has also grabbed hold of the immigration challenge, a major determinant of long-term productivity for a country such as Canada. Immigration is not working for Canada as it did for so long. Many recent studies have shown that immigrants are falling faster into poverty, taking much longer to reach average Canadian incomes and are collectively a drag on productivity, instead of giving it a boost.

Some of this reversal undoubtedly relates to domestic policies; some relates to who the immigrants are, where they come from, what they don’t know when they arrive, and what languages they do not speak. The government is right to try to change criteria for admission to make immigration work better for Canada. (It is also right to change the refugee-determination system to fast-track out of Canada those coming from a list of democratic countries.)

The Prime Minister’s recent trip to China symbolically pointed to another reality: the fast-developing countries of that region. It took him a long time to wake up, and Canada has a huge catch-up job in the Asia-Pacific region.

Governments, in fairness, can only do so much. Business has to do the rest. It’s been estimated that only 4 per cent of small- and medium-sized businesses export to developing markets. Sadly, Canada lacks a free-trade agreement with any of them in Asia. Canada isn’t of much interest to Brazil, and hasn’t pursued actively such countries as Turkey and Indonesia.

The old model of exploiting natural resources and shipping most of them (and everything else) to the United States will certainly keep Canada comfortable. But increasingly it won’t make Canada more productive at a time when the population is aging and immigration isn’t working. Without better productivity, forget real income growth. Without it, a comfortable stagnation.

Despite his unnecessary and uncalled for anti-Harper dig, Simpson gets most of it right.

At the risk of repeating myself: low productivity is not the workers' fault, although trade unions that try to stifle productivity in order to featherbed jobs are part of the problem. Governments are only a minor part of the problem: they can to better in some tax policies (making it cheaper/easier to import technology and tooling, for example), some support programmes (to offset those put in place by our trading partners) and promoting freer and freer trade, even in agriculture and food, and better and better focused R&D support. The main problem is a risk averse business culture.

But: our resource base does provide a nice cushion and we should not stop or even slow exploiting it. In fact we can, should be establishing new, productive resource extraction and distribution industries.

 

[a_majoor]

We may have a twofer here:

Prime Minister Harper suggested immigration reform must be on the table in his Davros speech.

We have a declining population of working age people due to the demographic bust, and are already hurting for skilled workers now

The United States is suffering an unemployment crisis with something like 11% unemployment and 15% when you add involuntarily underemployed.

Solution; adjust immigration policy to favour skille American workers. We already admit @200,000 people a year, why not have half of the slots come from the United States. (I seem to recall @ 30,000 Americans/year come already). We will get skilled workers from a culturally similar background, and they will get a chance to work at high wage jobs and repair their personal fortunes. The hidden benefit is they will also be bringing their workplace culture as well, bootstrapping some of the productivity issues we see here.

For people looking for a checksum; consider Alberta is the only province which was largely settlled from the United States, and has a very distinctive culture from the rest of Canada. Albertans have embraced a much greater willingness to take risks, and have prospered far beyond their size within Canada.

 

[ballz]

The only thing I wonder about for you idea Thucyclides (which I think is a good one) is that I was under the impression that the US, despite it's unemployment rate, also has a shortage of skilled workers, especially blue-collar / trades / etc which is largely what Alberta is hurting for.

 

[a_majoor]

Which is why this stands as a "maybe".

Still, with something like 39 million Americans unemployed there must be some percentage of skilled workers in a pool of that size with the training and aptitude needed, and who would be willing to come over to the Great White North.

 

[ballz]

The aptitude for sure... one thing about the big oil companies in Alberta (especially, because oil sands and the drilling are labour intensive) is that they don't only need skilled labour, the amount of money they are paying just to get grunt labour is insane. As an 18 and 19 year old in Fort Mac I was getting paid $26/hr (with as much OT as you want... time-and-half, double-time, and on site triple-time on Stat holidays) as a first-year apprentice, even though by boss knew I was not going to be there for the long-haul, and just needed me to be an extra set of hands / set of clamps for his journeyman. They are paying the same kind of money literally for a "general labourer."

Syncrude/Suncor/CNRL/Albian Sands (Shell) were all hiring people my age as unskilled workers and signing them to huge retention packages to train them into operators of various equipment.

However, these companies were also bringing foreign companies in because it was cheaper. I'm not sure if there is a way for the government to advertise to Americans to come up to Fort McMurray and actually get hired, instead of having the private companies pay for their own advertising campaigns in the south. Perhaps you won't agree with this, but they *could* agree to subsidize advertisement expenses that are geared towards advertising to the labour market south of the border what kind of opportunities are available up here.