Whither Canada?

Wither Canada?

We are in a relatively good place right now in comparison with other nations in the world, but putting national policy on cruise control is always a dangerous move. Federally at the moment the choice is quite clear between the 'right' and the 'left'. The Conservatives and the NDP have starkly contrasting visions of where they want to take Canada.

An interesting way to look at this is to compare nations based on the amount of government expenditure as a percentage of GDP and their tax burden as a percentage of GDP. The numbers should be somewhat similar, otherwise there will be a serious shortfall. (See Greece and Britain)

Former NDP MP Tony Martin looks back on his time in Ottawa.

I thought we had a real chance at a progressive government in the fall and winter of 2008-2009 – the coalition. For me, the lowlight was not being able to achieve that. I thought we had a chance to achieve a progressive government that would have allowed us to do a whole bunch of things, including working on the reduction of poverty. The government we have has no interest in doing anything about poverty. The lowlight was we didn’t achieve it and that the Liberals walked away from an opportunity to throw Harper out.

Do not be fooled. You cannot say they haven't indicated whither they will take us.

Some samples (this is taken from OECD stats) for 2011:

Country	Gov’t Tax Burden % of GDP	Gov’t Expenditure % of GDP
Argentina	26.1	24.7
Australia	30.8	34.3
Austria	42.9	49.0
Belgium	46.5	50.0
Brazi	l 34.4	41.0
Canada	32.2	39.7
Chile	18.6	21.1
China	18.0	20.8
Cuba	41.2	78.1
Czech Republic	36.2	42.9
Denmark	49.0	51.8
Finland	43.2	49.5
France	44.6	52.8
Germany	40.6	43.7
Greece	35.1	46.8
Hong Kong	13.0	18.6
Israel	33.5	42.9
Italy	43.1	48.8
Japan	28.3	37.1
Malaysia	15.3	26.3
Mexico	8.2	23.7
Netherlands	39.	8 45.9
New Zealand	34.5	41.1
Norway	42.1	40.2
Singapore	14.2	17.0
South Korea	26.6	30.0
Spain	33.9	41.1
Sweden	47.9	52.5
Switzerland	29.4	32.0
Taiwan	12.9	18.5
UK	38.9	47.3
US	26.9	38.9

Sources:
http://en.wikipedia.org/wiki/Government_spending#Government_spending_as_a_percentage_of_GDP

http://stats.oecd.org/Index.aspx?DataSetCode=SNA_TABLE11



Right now I would estimate the OECD average to be about 42%, but I need to do a little number crunching. Two important points to consider:

1. Know your competition. For example, Singapore and Hong Kong must keep their taxes and government spending similar to compete, as must
South Korea and Japan, Australia and New Zealand, Canada and America.
It makes no sense to say we must compete with the likes of China or Taiwan, but we must remember they are breathing down our necks.

2. In public policy, one establishes models (stated or unstated). Governments can move their expenditure and tax numbers up or down over time, depending on different factors. Canada right now, at about 40% government spending is in a comfortable spot for many (but not the hard core libertarians). I can live with this. The problem is that demographic forces will cause this to grow (as it will in many other nations) unless we re-allocate spending.

Here, we must be careful. If the feds cut, but provinces make up the difference by increased spending, then we gain nothing. And the fastest growing bit of government in North America in recent years has been the one most off the radar (except the radar of the public sector unions) has been local government. How much do your local city and school board administrators make these days? How much has the staffing size and costs increased in recent years. It doesn't make headlines, but it should.

Now back to Jack. The darling of the NDP for oh so many years has been the lovely social democratic country of Sweden, where the government cares for your from cradle to grave, where daycare is free, retirement is comfortable (and health care is a mix of public and private services!). In Sweden, government spending is 52.5% of GDP. Taxes are 47.9%. And these will grow in coming years. For Canada to get here, our total taxes would have to rise by 49% and government spending by 32%. I guess the only comfort is that the NDP mainstream has quietly written off Cuba
(78% government expenditure)! Maybe the NDP equivocates and claims that Sweden isn't their only model. The other Scandinavian countries are similar in government spending: Denmark 51.8%, Netherlands 45.9, Finland 49.5%. Norway is the exception, but their numbers are distorted by their immense North Sea oil revenues.

Some things to consider in coming years. Do you want more government in your life? Do you want more taxes? This is what Jack Layton said in response to the recent federal cabinet appointments. His priorities are:

Making life more affordable for ordinary Canadians
More health care
Better Retirement security
Family supporting jobs (?!)

It is nice to say, but it must be squared with the reality of the situation. Look at the stats. Compare countries. Remember demographics.







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Libertarians of Canada despair!

Libertarians of Canada despair! Where is less government in our lives when the size of cabinet grows? When the senate grows? One thing Jack Layton and I may agree with is the need to abolish the senate as I doubt it will ever be seriously reformed. In power, even Smilin' Jack could succumb to the temptation of rewarding cronies with a senate seat. (The argument then would be "Quebec won't agree to abolishment. It's all constitutional."


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Elevate the common man, reject the elites.

The late William F. Buckley, one of the founders of the modern conservative movement in America once said: "I'd rather be governed by the first 2000 people of the Boston telephone directory than the faculty of Harvard." He thus placed his greater political faith in ordinary people (the demos) than in the elites. This makes for an interesting consideration. How many people in Canada today would agree with Buckley? Certainly, our recent rejection of a Harvard scholar for prime minister reflected in part an anti-intellectual bias. But he was just one scholar. Had it been the whole faculty of Harvard (or U of T -- McGill is now suspect), how would we have chosen?

In the recent book First Democracy: The Challenge of an Ancient Idea
the author, Paul Woodruff lambastes America's political failings, holding up seven ideals of democracy that ancient Athens exemplified.
1. Freedom from tyranny.
2. Harmony
3. The rule of law.
4. Natural equality
5. Citizen wisdom
6. Reasoning without knowledge
7. Education (paideia)

I highly recommend the book. Woodruff looks more favorably upon parliamentary democracies like Canada than he does upon America. He is a great fan of proportional representations and other political modifications that bring political systems more in line with his 7 ideals.

All these ideals strongly conflict with rule by elites. The very success of Athenian democracy was founded on a rejection of rule by elites, who had become tyrants. Elites come to believe they know better than the common man. (This is the disease that plagues the Liberal house now.)

Woodruff recommends the creation of something like the ancient Greek assembly whereby citizens were chosen at random (like a jury) to debate and vote on issues of governance. I rather like this idea as a replacement for our current senate. This council of 500 founded on IT and social media could re-inject the public spirit into the political process that we need in Canada.


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On proportional representation and democratic reforms

The recent UK plebiscite on electoral reform, which sought to replace the current first past the post system with a variation on proportional representation was defeated. The status quo remains.

This defeat joins others in recent years, particularly in Canada. The province of Ontario rejected proportional representation in 2007, British Columbia twice in 2005 and 2009, and Prince Edward Island in 2005.
While one can argue that political manipulation by entrenched interests prevented the success of these referenda, it seems clear that there is not a huge desire on the part of Canadians for PR. Despite all the shortcomings of our first past the post electoral system, the stability that majority governments provide has put us in good stead. Compared to most other nations of the world, we are a strong and healthy country.

Some good websites that discuss the issue:

http://www.proportional-representation.org/

http://economics.about.com/cs/issues/a/proportionalrep.htm

http://www.economist.com/debate/days/view/689


This does not bode well for underrepresented parties in federal and provincial parliaments in Canada. The Greens are unlikely to see a national plebiscite on this. However, the need for electoral reform remains if we are to realize the full potential of democracy and satisfy the needs of people. The voting turn-out in Canada is abysmal. It is dangerous to leave democracy to the elites. If not PR, then what other routes can we pursue to a fairer political system?


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Friedrich von Hayek: His Life and Thought (Socialists wise up)

A monumental political and economic theorist:

Friedrich von Hayek: His Life and Thought

Friedrich A. Hayek interviewed by John O'Sullivan in 1985

Hoisted with their own petard

NDP talking points return to haunt them.

I'm tired of hearing that 60% of Canadian voters didn't vote for the Conservatives. Jack Layton and the NDP love to repeat this fact, as if to suggest the majority government is not legitimate. Well then, best case scenario, 70 % of Canadians didn't vote for the NDP. But wait, Quebec is an anomaly in this election. Let's take them out of the equation and look at all of Canada with Quebec excluded. Now, the Conservatives receive 48% of the national votes (vs. 40% Quebec included) and the NDP drops to 20%. 80% of Canadian voters outside Quebec didn't support the NDP. Remember this, Jack!

Now the NDP is changing their tactics, not being satisfied with the 40-60 stats for the Conservatives. In the May 5th edition of the Nanaimo News Bulletin, the re-elected Nanaimo-Cowichan NDP MP Jean Crowder crowed "It's important to remember the country has a Conservative majority with less than a quarter of the registered voting population supporting it."

What about the NDP? Less than 20% of registered Canadian voters supported the NDP. Again, let's exclude Quebec from the equation. Outside of Quebec, a mere 12% of Canadians supported the NDP. You can call the newly minted official opposition "Smiling Jack and the 12% Party".

And if you want to enter into the whole quagmire about proportional representation? The NDP received 42.9% of the vote in Quebec but got 77% of the seats (58 of 75 seats) Let's take away 26 of those seats to more fairly represent their share of the popular vote. We could start with the Vegas MP without much protest!


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