Ottawa still isn’t planning the reforms that matter

Frontier Centre, Uncategorized, Worth A Look

As most people figure out in childhood, one sign of the approaching winter is the departure of birds for warmer climates.

As most Canadians of voting age notice, when Liberals relax employment insurance rules in high-unemployment regions, it’s a signal of an approaching election.

But as usual, the federal government will create perverse incentives, especially unwise when B.C. and Alberta suffer from skilled labour shortages.

The new stay-at-home, put-your-feet-up-longer EI rules will only compound the likelihood that under-employed workers will stay put as opposed to moving to regions where jobs go begging.

Bizarrely, just as Ottawa encourages people not to move from, say, St. John’s, it wants more workers to pack it up in Shanghai and St. Petersburg and come to Canada to help us out with our labour shortages.

In case anyone mistakes this for an anti-immigrant rant, don’t bother. I’m pro-immigration. I’ll happily endorse anything that helps a carpenter or doctor arrive here from Vladimir Putin’s corrupt, autocratic Russia, Germany’s soul-destroying bloated welfare state, or China’s control-freak, one-party affair.

But while I’m keen on immigration, it’s also clear that new immigrants won’t solve our labour woes. A recent Statistics Canada survey showed that 87 per cent of recent arrivals in the skilled-worker category came here with a university degree.

That’s positive, except that such percentages don’t fill the need for skilled workers of other sorts, such as in the trades.

So Canada’s current immigration patterns won’t help much with the dearth of carpenters, plumbers and electricians; meanwhile, the federal government will give skilled Canadian workers in high unemployment regions just one more reason not to move: Election-time pogey cheques for extended periods.

And brace yourself; there’s more. Beyond employment insurance games, there are the other millions spent to persuade the unemployed to stay in uneconomic regions, and for businesses to locate there in a vain attempt to sop them up. It’s the equivalent of bringing the mountain to Mohammed rather than sensibly giving Mohammed a bus ticket to Vancouver.

So back in 2000, the federal government announced it would spend $700 million over five years through its Atlantic Canada Opportunities Agency (ACOA); this past July another $708 million was dished out with plans for more to come.

And what will this latest installment for Atlantic Canada buy, at least in the misguided hopes of Ottawa’s central planning departments? ACOA trumpets it will spend $50 million to “foster entrepreneurship and business expansion” and to attract and retain skills in the region.

The agency-to-fund-non-movement-of-labour will spend $175 million to “develop competitive, productive, strategic industry sectors.”

More pork: ACOA will throw $300 million at “investment in innovation” but what others might label picking corporate winners and losers. ACOA cash will also be used to “maximize the region’s ability to access national R&D funding programs.”

How brilliant. Tax dollars will be used to leverage even more tax dollars. Why didn’t I think of that strategy when I was a kid and with my allowance vis-a-vis my parents?

Ottawa’s Orwellian apologists can use all the feel-good euphemisms they like. But their stay-at-home programs are costly, inefficient, and persuade people not to think about new opportunities. Western Canadians should have a Charlie Brown “good grief!” moment over such misdirected spending.

And the ACOA example is only one agency. There are multiple other such schemes, including the bizarre negative incentives in federal equalization and transfer payments.

British Columbia’s unemployment rate is 5.7 per cent while Alberta’s is 4.1 per cent; the rates in Newfoundland, Prince Edward Island, Nova Scotia and New Brunswick are 15.3 per cent, 11.2 per cent, 8.4 per cent and 10.4 per cent respectively.

If the federal government wants to help ease the West’s labour shortage, it can rectify existing perverse labour incentives. And sure, spend the cash to attract immigrants and help them adjust. But the last thing Ottawa should do is “help” the unemployed stay put.

Alas, go outside and put on a jacket; in addition to the approaching winter, you’ll also sense the approaching silly season of electioneering.