Go North, Young Man, Go North


Washington Times published this column yesterday. I didn’t expect much attention. But before noon, I had enjoyed my 15 minutes of fame — in Canada. After a PostMedia wire reporter wrote a story… about me writing an op-ed… and distributed it nationally, Toronto’s National Post asked to republish the piece, the director of an Ottowa think tank contacted me, and I landed two radio interviews in British Columbia. I mention all this not to brag but because I am bemused by the attention. (Unfortunately, I don’t think any of the activity sold any books.) The Canadians feel very much ignored by us Yanks, and they perk up when anyone, even someone as obscure as me, has something complimentary to say.

So, why do I post this on Bacon’s Rebellion. First, to share with my online friends. And second… uh, well, oh, yeah, because Canada is Virginia’s largest trading partner!

Canada Is Quietly Surpassing the U.S. as the Land of Opportunity

Unless the Winter Olympics are on television or someone is clubbing baby seals, Americans don’t pay much attention to what’s happening in Canada. It’s as if we live in a house with a set of quiet, orderly neighbors on one side and a bachelor pad with drunken parties, girls in the hot tub and occasional gunshot eruptions on the other. To whom would you pay more attention?

I dare say Americans could correctly name the president of Mexico (Filipe Calderon) over the prime minister of Canada (Stephen Harper) by a margin of 5-to-1. That’s too bad. While we have every reason to fear the disorder spilling over from our increasingly lawless neighbor to the south, our well-mannered Canadian neighbors have pulled their act together. We could learn a lot from them.

Look what’s not happening in Canada. There is no real estate crisis. There is no banking crisis. There is no unemployment crisis. There is no sovereign debt crisis. Recent reports suggest that consumers are loading up too much debt, but Canada shares that problem with nearly every other country in the industrialized world.

Among the Group of Seven nations, which also include the United States, France, Japan, Germany, the United Kingdom and Italy, Canada’s economic activity has come the closest to returning to the pre-recession peak. The country has recovered three-quarters of all jobs it lost. The International Monetary Fund estimates that Canada will be the only country among the G-7 have achieved a balanced budget by 2015.

Now, instead of expanding Canada’s welfare state, the conservative government led by Mr. Harper is intent upon building the nation’s global competitiveness. Our friends in the Great White North cut their corporate tax rate to 16.5 percent on Jan. 1 and will see it drop to 15 percent next year. That compares to the current U.S. corporate tax rate of 35 percent. That will give Canada the lowest corporate tax rate among the G-7 nations and an eye-popping advantage for businesses wondering whether to locate on the U.S. or Canadian side of the border.

The last time Canadians really caught Americans’ eyes was when prime ministers such as Jean Chretien and Paul Martin, both leaders of the Liberal Party, were proving uncooperative in the realm of foreign policy. American media played up disagreements over the invasion of Iraq and Canadian participation in the American National Missile Defense Program, which made President George W. Bush look bad and confirmed the narrative that his cowboy foreign policy had alienated old friends around the world. By contrast, when Canadian soldiers became active combatants in Afghanistan, the American media showed little interest.

But that’s nothing new. Except to note how well or how poorly Canada’s national health care system was working, Americans have paid little heed to news coming out of Ottawa. The titanic effort of both Canada’s liberal and conservative parties in the 1990s and 2000s to rein in government spending largely escaped our notice. Nor did it ever occur to anyone to wonder why, with our economies so closely entwined, U.S. housing prices were busting through the roof while Canadian houses remained so sensible.

It turns out that Ottawa’s housing policies and banking regulations tempered the boom in real estate prices. No tax deductions for mortgage interest payments. And get this: Buyers actually had to make down payments on their houses. Because there was no real estate bust, there was no banking crisis. (Indeed, healthy Canadian banks are snapping up U.S. financial assets.) Despite the lack of public policies geared toward stimulating homeownership, Canadian homeownership was 68.4 percent in 2008. That would be a higher number than in the United States , which was 67.4 percent in 2009.

Lesson to Americans: If you want affordable housing, stop promoting policies to make it more “affordable.”

Meanwhile, Canada has many of the same assets that Americans like to brag about, such as an immigrant tradition that invites foreigners to live and work in the country. On a per-capita basis, the rate of legal immigration to Canada is comparable to that to the U.S. Settling in world-class, creative cities like Toronto and Vancouver, foreigners add immeasurably to the nation’s wealth-creating capacity.

Talented Canadians have long regarded the United States as the land of opportunity. It may not be long before Americans see our northern neighbor as the land of the future.

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9 responses to “Go North, Young Man, Go North”

  1. Groveton Avatar

    Great post.

    I am in Canada on a regular basis (usually, but not always, Toronto). I always make it a point to talk to my friends about Canadian government and politics.

    They do have their act together.

    One aspect of their approach involved considerable visibility. They carefully watch the "transfer payments" among provinces. This very public discussion of the producers and the takers causes some problems. It was not long ago that the western half of Canada came within a whisper of independence from the eastern half (roughly speaking). However, the transparency also has great benefits. Politicians are much less likely to fund absurd projects when the national debate includes an ongoing discussion of provincial surplus and deficit. America (and Virginia) would benefit from a similar accurate, open and complete discussion of national finances.

    Yet all is not totally rosy up north. My fishing buddies tell me that many formerly productive trout streams are now much less productive. My friends believe that Canada's increasing focus on extracting natural resources of all kinds has begun to hurt the environment. Now, this is the speculation of fishermen who are not catching as many fish as they used to catch. However, I have noticed that the people who hunt and fish (either for recreation or commercial purposes) are often a harbinger of news to come. I certainly knew the Chesapeake Bay was having a good year last year when watermen complained that a bushel of crabs wouldn't fetch the same price as in years gone by and when I started catching Spanish Mackeral just south of Poole's Island. As it turned out, the Bay health index climbed from 28 to 31 in a single year with the blue crab population leading the way. I'll bet my fishing buddies in Canada are right. I'll bet there are some brewing ecological issues beneath the observably strong economy.

    Maybe things are never perfect anywhere. However, Canada has done a much better job than most countries in navigating these recent difficulties.

    I'd suggest Australia as another country that has been well managed. However, they are starting to see a housing bubble which may spoil their economic party in time.

  2. So….

    What role do lobbyists/special interests play in the The Parliament of Canada?

    Also, how do they go about running their elections in regards to corporate donations, etc.?

    If I am not mistaken, there are several relevant political parties in Canada, no?

    And, the 64k question – how do they REALLY feel about their health care system?

  3. Gooze Views Avatar
    Gooze Views

    Next time you are on Canadian radio, tell them this joke.

    Q: Why is Canada always colored pink on any map you see?

    A: From embarassment!

    Peter Galuszka

  4. Larry G Avatar

    re: health care

    the thing we don't keep in mind about government-sanctioned universal health care – whether it be in Canada or Germany or even the U.S. with Medicare is that you are never forced to accept ONLY that health care.

    It's the MINIMUM Universal Health Care and in places like Canada where jobs can be scarce and transient at times – it is, in fact a Godsend to those who have families – knowing they can continue to look for work – and find it – without having to worry about their kids or spouses not able to seek care when they need it.

    If you have a better job and want more/better care – you are free to seek it – wherever you wish to pursue it.

    The famous Canadian lady on TV that complained about the Canadian health care system was free to seek other medical care but others in more modest circumstances would be glad to have that health care as health care of last resort.

    That's BETTER than having NO HEALTH CARE at all and having to go to the ER and wait for hours only to be told that they don't think you need more care and send you away until you literally are dying and then they'll treat you.

    The Polls show that most Canadians are glad to have SOME minimal health care even if it's not the best they would want but it certainly is a Godsend for many, many families that live on the margins and struggle to make ends meet.

    Canadians pay 1/2 what we do for health care – and they live longer than us and they have a lower childhood death rate.

  5. It seems like innumeracy in action.

    For example, there is no housing crisis in Canada, however because the 30 year mortgage is rare the vast amjority of homeowners are over 55. meaning they cannot start accumulating wealth as early as American homeowners. If you are in your late 20's there is a housing crisis: you can't get any.

    Likewise the nominal corporate rate is 35% but almost no corporation pays that (a few software companies with allost no production costs and huge profit margins do, but they are busy acquiring companies that will offer them some protection.)

    Canadian companies do not have to provide health care, either.

    then again, at the time I was disabled my Social Security advisor suggested I go north, where I could get health care.

  6. "It turns out that Ottawa’s housing policies and banking regulations tempered the boom in real estate prices."


    Well, yeah. If there is nothing to buy and no way to fnance it, then you do without, and that keeps prices low. As I pointed out most Canadian homeowners are much older, and younger Candians do without.

    It isn't clear to me how that makes them better off or offer them more housing choices, which is what we would expect an unfettered market to do.

  7. E M Risse Avatar
    E M Risse

    Canada IS a great place – all of it.

    EMR grew up next door. He walked to Canada often and rode there even more often. Saw a lot of Southwest Alberta and South East British Columbia in the 40s and 50s.

    During his professional career EMR did work in the Urbanside related to transport / land use patterns in Victoria, Vancouver, Ottawa, Toronto and Montreal. And in the Countryside – for nearly three decades he spent part of each summer in Southern Ontario.

    Word is that there is growing understanding of the need for Fundamental Transformation. A number of steps have already been taken.

    Over the past 50 years it was a cliche that going to Canada was like going back two decades in the US. Of course a lot of things were better in Canada – like Mobility and Access due to more functional settlement patterns and much more functional transport systems – and most ENJOYED ‘going back.’

    Canada is now enjoying the brand of ‘prosperity’ that the US was enjoying in the 60s and 70s.

    So here is some advice from an old friend:

    Stop importing people and start to narrow the Wealth Gap.

    Stop exporting natural resources at bargain prices – that means start to fairly allocate the FULL cost of natural resource extraction and processing. Making some Canadian Enterprises and their stockholders more rich will not make future generations of Canadians more happy or more safe.

    Work for REGIONAL and SubRegion Resiliency and Balance. Three of the five largest Enterprises are banks.

    Hope to see you soon.


  8. How would you narrow the wealth gap? Bring the high values down, or the low values up?

    Bringing the low values up will increase consumption.

  9. How do you allocate the costs?

    Charge more?

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