Reversing The Brain Drain

Commentary, Education, Frontier Centre, Taxation, Uncategorized

The Medical Research Council of Canada (MRC) recently sounded an alarm about the continuing loss of the country’s brightest and best, who, in growing numbers, are choosing to leave and pursue their careers elsewhere.

According to the MRC, in 1997 alone, more than 500 of Canada’s "top-drawer medical brains" saw their incomes dry up because of federal government cutbacks. The MRC estimates that many of these scientists will end up in the United States.

Some of this brain drain ended up not very far from home. In September, a new health clinic opened in Grafton, North Dakota. It offers highly technical services such as CT scans, magnetic resonance imaging, and ultrasounds.

Grafton, a sleepy farm town, population 5,000, has little need for the well-equipped clinic. However, it lies just 100 miles from the Canadian border. Early last summer, its founders hired a company to conduct market research in southern Manitoba and gauge the demand for services. Since "non-urgent" waiting lists for such marvels are long and arguably dangerous 3/4 four to five months for a MRI, six months for a CT scan, and eight months to a year for an ultrasound 3/4 it is no surprise that the clinic was constructed quickly.

What would happen if the clinic were built closer to its target patients, i.e. right in Canada? Six eye clinics and the Pan Am Sports Medicine Centre in Winnipeg offer service for fees, contrary to the Canada Health Act. The province of Manitoba pays $49,000 a month in fines to the federal government for the infractions, about $1.2 million over the last two years. The Grafton clinic would never be built in Canada because it contravenes a very silly law.

It is not just the brain drain. If the Canada Health Act allowed citizens to choose and pay for homegrown alternatives, the construction of the Grafton clinic, the purchase of its equipment, and the tax revenues generated from the employees’ incomes would have stayed here. Not to mention the benefits of very expensive educations, which were paid for by Canadian taxes and delivered by Canadian universities, none of which is recoverable when its recipients head for other jurisdictions. An expatriate doctor in Bowling Green, Ohio reports in the Globe and Mail that he is aware of thirty Canadian physicians within a 50-mile radius of his practice.

A recent Royal Bank survey revealed that 2.5-million Canadians are "self-employed," a 30 per cent increase since 1990. These jobs are independent of geography. The skills the self-employed offer can generate just as much income, and often more, in other countries, many of which have much freer economies and much lower tax rates. Why should these people stay in Canada where they may be forbidden to work in their field or have to pay through the nose for the privilege? For the six-month winters?

After the Nouvel Economiste magazine in Paris carried a story about French businessmen and professionals who felt they had to flee the country if they wanted to succeed in their careers, the editors were deluged with letters from disbelieving readers. Exorbitant tax rates and widespread monopolization of whole sectors of the economy bedevil France, like Canada. Until these imbalances are corrected, the brain drain will continue to depopulate our countries of the most skilled and talented people.

Prosperity and a highly educated workforce are not phenomena that happen by accident. They require a climate of rewards and incentives that make it attractive to work and invest in that region of the world.

If we want to keep our people here, we had better set up that climate.