Posted on 01/03/2003 8:36:22 PM PST by Sparta
Canadians feel like they're working harder, but they don't seem to be getting ahead. It's not just an illusion; our standard of living, compared to other industrialized nations, has been in freefall since the end of the Second World War.
Two years ago, Industry Canada reported that Canada's standard of living was equal to that of Mississippi, the poorest state in the U.S. In early December, a study on innovation by the Conference Board of Canada ranked Canada last out of 10 countries. Last week, the Centre for the Study of Living Standards reported that Canada had slipped -- again -- in its annual ranking of 23 nations. We're now in sixth place, ousted by the Celtic Tiger of Ireland which leapfrogged to third.
The irony is not lost that it is a nation whose people once flocked to Canada for a better life, which is now providing a far better one for its citizens.
Ottawa's response to such gloomy numbers has been to first deny them, then defend them, and then, thankfully, to declare improving productivity a high priority. Industry Minister Allan Rock held a summit this fall, and unveiled his innovation agenda in November.
Unhappily, many of his ideas were met with snorts of skepticism from business leaders.
Rock wants to create, through federal intervention, 10 internationally recognized industry clusters spread across the country by 2010.
A worthy enough goal, but as other nations have learned, micro-managing innovation isn't possible. Instead, governments must create the right macroeconomic conditions for entrepreneurship to thrive.
Ireland, for example, was mired in economic torpor in the 1980s. In 1987, it elected new, fiscally responsible leaders who launched aggressive reforms.
The size and cost of government was severely reduced, corporate and income taxes were slashed, and a deal brokered with the unions to keep wage increases low. Labour leaders were smart enough to see the benefits to them of a healthy economy. Besides, when accompanied with deep income-tax cuts, even modest wage increases still resulted in more money in their members' pockets.
These changes made Ireland an attractive place to invest, not just for the Irish themselves, but for more than 1,000 foreign firms, who were warmly welcomed. About 600 U.S. firms landed on the tiny island in the late 1980s and helped fuel its recovery.
As the economy roared forward, government revenues quickly rose again. Tax levels were kept low, but, with growth so high, the net effect was that government regained the means to provide a high level of core services, such as a massive expansion of post-secondary training programs and free university tuition.
Ireland now leads the world in GDP and job growth and provides a standard of living below only that of the U.S. and Norway.
Rock's New Year's resolution should be to listen to Canadian business leaders, who are begging for similar types of reforms.
First, Ottawa needs to eliminate the capital tax, which provides a huge disincentive for corporations to invest their profits. Second, it must slash corporate taxes. Ireland's rate is 12.5 per cent; in Canada, it can run as high as 43 per cent.
Marginal income taxes have to come down, too, as they are also a disincentive to work longer or to try for a better job. Canada's top rate kicks in at around $103,000 federally, and $65,000 provincially, compared to $300,000 Cdn in the U.S.
Follow those moves by cutting red tape for entrepreneurs, eliminating domestic trade barriers and removing limits to foreign investment, and Canada would soon be able to earn the title it so covets -- Northern Tiger.
The key is to learn from others' successes and to listen to those who know.
So do we... That highest marginal tax rate in the US takes effect at a very low level.
These days, Poland has an unemployment rate of about 18%, no growth, per capita GDP of $8000 USD and is quickly reverting back to Marxism. Poland is only a marginal success when comparing it to the other disasters in Eastern Europe.
Even the ones you taught how to fly commercial airliners and gave visas to after they're dead? Are all americans irresponsible dumbasses like you, who like to blame others for your own problems?
Why is that? None of the 9/11 terrorists came to the USA from Canada. They were practically invited there by the americans and given room and board, and a few flying lessons. US immigration is so utterly lame, even after 9/11, that a terrorist wouldn't have to bother going through Canada. You let in millions of illegals each year from your southern border, cozy up to countries like Saudi Arabia, Egypt, and Yemen (where the terrorists usually come from) and yet you have the nerve to point fingers at another country like Canada because of your own inept policies and security. It's Canada that should be worried about all of the freaks that end up in the US and whether they'll someday spill across the border. Actually, that's already occuring since 75% of immigration to Canada comes from the US.
It's moribund in Europe, too.
C'est la vie.
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