More Government Is Wrong Course – Advisory Council on the Economy Report

Canada ‘s Approach

The Advisory Council on The Economy, a group set up by Minister of Finance Morneau , has submitted its second report to the Minister. Like  its first report I have a lot of problems with this report.

First and foremost , I disagree with the inherent philosophy underlying the reports i.e. Government has got to get more involved in the economy. Sadly , these reports come from so called business leaders etc. Secondly, there is no mention of producitivity per se, governments’ deficit and debt problems . Can’t one see from Ontario’s experience just how disaterous Government involvement can be?

Here is a snapshot of what the report is saying:

‘  More specifically, today’s release includes three detailed recommendations . . . ƒ

Unlocking innovation to drive productivity and help new companies scale up more rapidly, including five sub-recommendations to improve the innovation ecosystem ƒ

Accelerating the building of a highly skilled and resilient Canadian workforce by establishing a “FutureSkills Lab” ƒ

Unleashing the growth potential of key sectors such as the agfood sector . . . and two broader recommendations where the Council has identified specific opportunities, but felt the Government was better positioned to develop the detailed implementation plan: ƒ

Positioning Canada more effectively as a central global trading hub ƒ

Tapping into our economic potential through broader workforce participation.’

Now this all sounds “good’ but in each case it involves more Government involvement if one reads the detailed report.

Here would be my themes;

A. Governments have to get their fiscal house in order –balanced budgets must begin now. All Canadian Governments are now running deficits.

Fred McMahon of the Fraser Institute reports:

‘On the spending side, a simple set of figures tell the story. Government spending rose from 39.0 per cent of our economy in 2014 to 41.4 per cent in 2016, an increase of 6 per cent in just two years—don’t you wish your wages went up that fast. Meanwhile, federal and Ontario debts are skyrocketing and Alberta’s fiscal situation is deteriorating.’

B. We are 15 in the world competitiveness rankings . Our goal must be to be in the top 5 in ten years.Out largest trading partner, the US  is 3rd.   How?

Develop  an Entrepreneurial culture by :

—-  Productivity enhancement INVOLVING

—a national review of legislation and regulations Federally and Provincially that overlap and are  counter productive and have them eliminated over a five year period.

—–Streamlining labour standards across the country–3 years

—–Total Free trade among all jurisdictions in Canada—3 years

—– Developing a tax system that is competitive with our OECD partners–3 years.

Fred McMahon of the Fraser Institute reports:

‘Ontario’s personal tax rate rose by 15.3 per cent between 2009 and 2016. And the federal government has been piling on, raising the top federal tax rate from 29 per cent to 33 per cent on incomes over $200,000. In 2009, all provinces had combined federal-provincial top rates were all below 50 per cent; now three are above 50 per cent, Ontario, Quebec and Nova Scotia.’

—–Innovation is key. Use of the tax system to spur greater private sector business  innovation—5 years .

——Streamlining  the approval process  for all large energy projects with a maximum of three  years to approval or rejection–in place in 3 years

——A national strategy for an education curriculum where it is mandatory to study economics and civics–5 years

——A national skills strategy –3 years.

——-An international fair trade strategy –3 years.

In other words a true free market economy. Let Government create the environment and then get out of the way.

Without this type of agressive approach , mediocrity will continue to prevail , and whining about out lot , especially attacking the US , will challenge hockey as our national pastime.

 

 

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