Government job creation a $1 trillion waste

Frontier Centre, Role of Government, Uncategorized, Worth A Look

Canada has squandered more than $1 trillion over the past 30 years in efforts to develop Atlantic Canada and it has done more harm than good, members of the Regina Chamber of Commerce were told Tuesday.

Brian Crowley, the founding president of an East Coast “think tank” known as the Atlantic Institute of Market Studies, said the failed efforts to develop Atlantic Canada’s economy provides key lessons for Canada and for Saskatchewan.

Those lessons are that direct government involvement in job creation and in the marketplace don’t work, Crowley said.

Governments would be better advised to keep business and personal income taxes low and to create an environment which allows businesses to be competitive and to flourish, he said.

“You cannot tax your way to growth and prosperity,” Crowley told an audience of nearly 100, at a breakfast meeting of the chamber of commerce.

“Wealth is created through investment, through risk taking, through work,” he said.

The net federal transfer to Atlantic Canada over the past 30 years — combined with the interest the money might have earned if it had not been transferred and spent — comes to more than $1 trillion, he said.

But that $1-trillion government involvement was actually harmful to Atlantic Canada’s economy because it was used to prop up inefficient industries and start up new businesses that often didn’t make sense, he said. As a result, he argued, a natural evolution of the region’s economy that would have made it more competitive and prosperous was stymied.

Touching on an issue that frequently causes discussions in Saskatchewan, Crowley expressed skepticism about the role Crown corporations play in the economy.

He cited an example of the Nova Scotia Power company (when it was still a Crown corporation) of buying low quality, expensive coal mined in Nova Scotia in a politically-motivated effort to maintain coal-mining jobs in that province.

While the jobs of some miners were preserved for a time, Crowley said the province’s overall economy was damaged because of the resulting high rates for electricity.

Crowley slammed the way Canada’s Employment Insurance system has been structured to make it easy for Atlantic fishermen, who sometimes only fish for a few weeks a year, to collect benefits.

That EI system for fishermen “is the sickest, most evil system I can imagine,” Crowley said.

It has discouraged an appropriate restructuring of what could be a smaller but more viable fishing industry and has provided a disincentive for fishermen to move on to alternative careers, Crowley added.

The EI system for fisherman makes as much sense as it would to provide EI payments to Saskatchewan farmers during the winter months when they are not farming, Crowley said.

While providing EI payments to farmers might in the short term enable more farmers to stay on the land, Crowley said such payment would in the longer term delay a restructuring of agriculture and leave more people in economic distress.

While generally advocating lower taxes, Crowley said governments have a role in providing quality, affordable services (such as good education) and in maintaining good infrastructure.

But government spending needs to be carefully monitored and analyzed, he said.

There is a difference between providing good education and good infrastructure where it is needed as opposed to building new schools and new roads in constituencies where elected government members are facing re-election, he said.

© Copyright 2003 The Leader-Post (Regina)