Commentary: Why Canada is working and the U.S. isn’t

By Stephen Marche
On July 1, Canada Day, Canadians awoke to a startling, if pleasant, piece of news: For the first time in recent history, according to Environics Analytics WealthScapes, the average Canadian is richer than the average American.
A few days later, Canada and the United States released the latest job figures. Canada’s unemployment rate fell, again, to 7.2 percent, and America’s was a stagnant 8.2 percent. The difference grows starker by the month: The Canadian system is working; the American system is not. And it’s not just Canadians who are noticing. As Iceland considers switching its currency, its leaders’ primary focus of interest is the loonie — the Canadian dollar.
As a study in the New York University Law Review pointed out, national constitutions based on the American model are disappearing. Supreme Court Justice Ruth Bader Ginsburg, in an interview on Egyptian television, admitted, “I would not look to the United States Constitution if I were drafting a constitution in the year 2012.” The natural replacement? The Canadian Charter of Rights and Freedoms, just turning 30.
Good politics do not account entirely for recent economic triumphs. Luck has played a major part. The Alberta tar sands — an environmental catastrophe in waiting — are the third-largest oil reserves in the world, and if America is too squeamish to buy Canada’s filthy energy, there’s always China. Policy, though, has played a significant part.
Liberals and conservatives in the U.S. have tried to use the Canadian example to promote their arguments. The left says Canada shows the rewards of financial regulation and socialism, while the right touts the brutal cuts made to Canadian social programs in the 1990s, which set the stage for economic recovery. Both sides are right.
Since the 1990s, Canada has pursued a hardheaded, even ruthless fiscally conservative form of socialism. Its originator was Paul Martin, who was finance minister for most of the ‘90s and prime minister from 2003 to 2006. Alone among finance ministers in the Group of Eight nations, he “resisted the siren call of deregulation,” in his words, and insisted that banks tighten their loan-loss and reserve requirements. He also made a courageous decision not to allow Canadian banks to merge, even though their CEOs claimed they would never be globally competitive unless they did. The stability of Canadian banks and the concomitant stability in the housing market provide the clearest explanation for why Canadians are richer than Americans.
Martin also slashed funding to social programs. He foresaw that crippling deficits imperiled Canada’s education and health- care systems, which even his Conservative predecessor, Brian Mulroney, described as a “sacred trust.” He cut corporate taxes, too. Social programs and robust capitalism are not inherently opposed propositions. Both are required for meaningful national prosperity.
Mr. Martin’s balanced policies emerged out of Canadian culture, which is fair-minded and rule-following to a fault. The Canadian obsession with order can make for strange politics. Of all the world’s societies, Canada’s is one of the most open to immigrants. Yet Canada also imposes a mandatory one-year prison sentence on illegal immigrants, and the majority of Canadians favor deportation. Canadians insist that their compassion be orderly, too.
This immigration policy is neither “liberal” nor “conservative” in the American political sense. It just works. You could say the same thing about Canada’s economic policies.
Two hundred years ago last month, the War of 1812 began. Thomas Jefferson declared, “The acquisition of Canada, this year, as far as the neighborhood of Quebec, will be a mere matter of marching.” The U.S. had almost 8 million people, compared with Canada’s 300,000. The Canadians nonetheless turned back the assault.
Through good luck, excellent policy and even some heroism, Canada survived the war. But it has taken 200 years for Canada to become winners.
Stephen Marche is a columnist for Esquire magazine. He wrote this for Bloomberg News.

Foreign worker hiring fast-tracked

English: The National Institute for Nanotechno...
English: The National Institute for Nanotechnology on the north campus of the University of Alberta in Edmonton, Alberta, Canada. (Photo credit: Wikipedia)

The door is open much wider for temporary foreign workers in six construction jobs, and tradesmen from the U.S. can now pick up work permits at the airport, the federal immigration minister announced Monday.
But organized labour is worried Canadians may be left out if companies are no longer required to consider them first in six job categories.
At Alberta's request, the federal government has agreed to eliminate the requirement that an employer must prove that Canadians were not available (called a labour market opinion) in six job categories - welder, ironworker, carpenter, estimator, millwright and heavy duty equipment mechanic. Pipefitters have been coming for a year without a requirement for the LMO.
These are high-demand occupations and employers need to be able to recruit workers much faster to meet growing demand in the oilsands and in Edmonton, where the unemployment rate is 4.4 per cent, Immigration Minister Jason Kenney said.
Once inside the province, temporary workers will now be able to take jobs with other employers when their first contracts are over, Kenney said. Previously, foreign workers could not change employers.
Kenney said he had no concerns about eliminating the requirement for the LMO, a document outlining evidence of a shortage in a particular category of worker and proof the employer had advertised in Canada for workers but got no response.
Kenney stressed he would rely on the provincial government to keep an eye on trends in construction employment to determine if the shortage turns into an oversupply of labour in those categories.
Kenney said he doesn't think the federal government will be "so keen" to open the doors that wide in other areas, including for unskilled temporary foreign workers.
Temporary foreign workers must have job offers and documents to prove they are qualified in a trade before getting work permits.
The new rules will help companies recruit in the U.S., where many construction workers remain unemployed, Kenney said. U.S. workers can work for three weeks and spend a week back home - a pattern common for many Canadians working in the oilsands.
But Gil McGowan, head of the Alberta Federation of Labour, said it's a mistake to eliminate the LMO, the one check in the system that protected Canadian access to such jobs.
Alberta's non-union contractors gain a big advantage under the new system, he said. Along with elimination of the LMO, Prime Minister Stephen Harper three months ago announced foreign workers can be paid up to 15 per cent less than the going Canadian wage.
But union employers must abide by the collective agreement, said McGowan.
"This will help make foreign workers the first choice, not the last resort," said McGowan.
"This is not about a labour shortage, it's a low-wage strategy. This is mostly designed to give companies access to a big pool of construction labour in the U.S. that is desperate for jobs."
McGowan noted that half the companies looking for construction workers do not have apprenticeship training programs, and said those companies should not be allowed to bring in temporary workers.
"They don't want long-term solutions, they want quick fixes, and that's what Harper will give them."
Stephen Khan, Alberta's minister for enterprise and advanced education, said he's pleased with the new rules, which will create a fast track for six occupations by eliminating paperwork and weeks of waiting involved to obtain the LMO.
"We are engaging industry" to take a bigger role in recruiting labour, he said.
In a meeting Monday with the Journal editorial board, Kenney noted there is high unemployment among aboriginal youth and up to 14 per cent of immigrants are jobless or chronically underemployed. "I think employers have to do a lot more about skill training."

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