VICTORIA — As a New Year dawns, I’m reminded of Alexander Pope’s immortal words: "Hope springs eternal in the human breast." And so, despite being disappointed on my hopes for past years, I take heart that 2013 may bring progress.
My three wishes for Canada were the same in both 2011 and 2012.
The first was that private-sector efficiency and innovation would be introduced into our teetering, bureaucratic, government-run health care system. As patients suffer on ever-growing wait lists, Canada remains the only OECD country where it’s against the law for patients to pay for their own health care.
Regrettably, 2012 saw a step backward as British Columbia launched court action to shut down Dr. Brian Day’s private clinics, which have provided relief for hundreds of patients while reducing public system costs and shortening waiting lists.
The reality is that health care is devouring an ever larger share of provincial revenues. If we don’t act now, education and other social programs will face huge cutbacks. My hope for 2012 is that politicians find the vision and the courage to grant freedom of choice to patients and health-care providers.
My second wish was that Canadian universities get beyond their dysfunctional "academic independence" paradigm and re-allocate funding to fields critical to our country’s economic future.
Yet in 2012 the "skills gap" saw increasing numbers of unfilled jobs co-exist with high youth unemployment, while growing numbers of university graduates worked in low skills jobs. The number of university graduates turning to jobs-focused colleges also increased, meaning taxpayers are paying to educate students not once, but twice.
A report by The Canadian Council of Chief Executives concluded that this educational mismatch is causing the country to fall behind in the global skills race. A Canadian Chamber of Commerce report cited a "desperate labour shortage" as the No. 1 obstacle to the growth of Canadian companies. Meanwhile, OECD data shows that, while Canada has one of the world’s highest rates of university attendance, our schools rank second last in producing graduates able to find "high skill level employment." And, every year, failure to prioritize funding of in-demand skills means that thousands of qualified applicants are turned away from engineering, information technology, medicine and other skills-short fields.
My third wish was for our provinces to take concrete steps to get their finances under control. Yet, once again, debt and deficits grew in every province except Saskatchewan and Newfoundland.
With a per-capita debt of more than $21,000 for every man, woman and (unsuspecting) child, Quebec incurred a deficit of $10 billion despite federal equalization and other transfers totaling $17 billion. Ontario, whose debt increased by $16 billion to more than a quarter of a trillion dollars, is now a "have-not" province receiving $3 billion in equalization.
That leaves just British Colombia, Alberta, Saskatchewan and Newfoundland to fund equalization.
Yet social programs in these provinces are generally less generous than in recipient provinces, an unsustainable and politically indefensible situation. A recent study by Don Mackinnon for the Frontier Centre presents a compelling conclusion that equalization dooms its recipients to economic dysfunction and dependency.
Reviewing the economic performance of Manitoba, Quebec, New Brunswick, Nova Scotia and Prince Edward Island; the study revealed that:
- All have bloated public sectors, averaging 20 to 30 per cent larger than bankrupt Greece in proportion to population.
- Their private sectors are relatively small, crowded out by a bureaucratic public structure that stymies productively and discourages access to risk capital.
- They are subsidy dependent economies increasingly unable to cope in a market driven world.
Whether it’s the failing economies of southern Europe or of these provinces, it’s clear that government debt cannot be contained in the presence of unsustainable social programs combined with incentive-killing subsidies. My hope is that 2013 will mark the beginning of an end to our country’s counterproductive and economically debilitating equalization system.
Hope springs eternal, for without hope, we have nothing.
Gwyn Morgan is a Canadian business leader and director of two global corporations.