Author: Robert Roach
In early 2009, the Canada West Foundation conducted a survey of 500 economic experts drawn from business, government and academia. The web survey was designed to help get a handle on what governments should and should not be doing to maintain and increase western Canada’s—and by extension Canada’s—international economic competitiveness.
There is a notable disconnect evident in the survey results between the desire to diversify the regional economy and embrace knowledge industries on the one hand and the preoccupation with the region’s resource base on the other. Western Canadians talk a lot about using our educated workforce and entrepreneurial spirit to transform the economy into a knowledge economy powerhouse, but down in the trenches where it counts, we are focused on natural resources.
There is, however, also an element of uneasiness about this focus on natural resources. When respondents were asked to identify the region’s strengths, the overwhelming answer was natural resources. When asked to identify provincial weaknesses, the main answer was overreliance on natural resources. When asked about external opportunities, selling natural resources tops the list and when asked about external threats, reduced demand for those resources and low cost resource producers dominate the answers. This contradictory attitude toward the West’s bounty of natural resources is not new and not likely to go away any time soon. We are well aware in the West that the resource economy is a mixed blessing. It has enabled the region to become very prosperous even as its erratic and uncertain trajectory fills us with anxiety about the sustainability of that prosperity in the face of global change.
The survey asked respondents to rank the importance of 48 distinct public policy options for improving the international economic competitiveness of western Canada. Even though every option could be ranked as high or as low on the scale as any other, a hierarchy emerged as some options received more support than others.
Only a handful of respondents were against any of the options. The number of respondents ranking options as “not important” or as “do not take government action in this area” was very low in almost all cases. The differences lie in the number of respondents who felt that an option was worthy of a 1 or a 2 versus being lumped into the “mushy middle” with a ranking of 3 on the scale. As such, there is a lot that experts think governments could be doing to help keep the economy competitive, but they clearly see some things as more important than others.
Three policy options top the list with each receiving the highest score on the importance scale from more than 50% of respondents: expanding trade with countries other than the US, maintaining and enhancing free trade with the US, and reducing barriers to interprovincial trade.
More intergovernmental cooperation is fourth on the list. Just as the free movement of goods, labour and capital enhances the region’s, and the country’s, economic efficiency, so too does greater intergovernmental cooperation.
One of the most often cited criticisms of government is that it operates in silos. Among the many costs of this balkanization is reduced economic efficiency. Citizens do not care about turf protection, the extra work required, ideological differences, the fear of competition or whatever it is that is holding back a seamless economic union in the West and in Canada. They expect their governments to figure this out and get on with it.
Rounding out the top five policy priorities is the recognition of foreign credentials. We have all heard the stories of engineers and physicians driving cabs because their foreign education and lack of Canadian experience are for some reason not good enough to allow them to work in their chosen profession in Canada. Notwithstanding the need to ensure high standards, there is widespread agreement that the vetting process is too slow, the deck is stacked against full recognition and, even if you manage to get accredited, language barriers, a lack of Canadian work experience, and discrimination remain in the way.
As with interprovincial trade and cooperation, the survey results suggest that there is an impatience with the squandering of the human capital new Canadians bring to the table.
In general, reducing taxes, although one of the most important traditional options for improving competitiveness, ranks quite low compared to options that would see more tax dollars spent. Again, this does not mean that the experts we surveyed are against tax cuts, but it does indicate that their preference is to focus on other policy options.