Self-praise won’t relaunch our economy—free enterprise will

Audacity is a thing to behold. The Prime Minister has responded to the steady stream of job losses, insolvencies and dropping investment with his same old triumphal talking points and self-admiration. It is reminiscent of the Greek legend Narcissus, who fell so in love with his own image that he drowned trying to kiss his reflection in the water. Where he died, grew a beautiful narcissus daffodil in his place.

However, Canada’s economy is not sprouting daffodils, but dandelions.

Let’s start with the government’s favourite bragging point: the unemployment rate of roughly 6%. Sounds good. But nothing special. Four G7 countries have a significantly lower unemployment rate than does Canada, including Japan, Germany, the United States, and the United Kingdom. In fact, the only two G7 countries with higher unemployment than Canada are France and Italy, whose socialist policies the Trudeau government is trying hard to emulate. Canada’s unemployment rate has been above the G7 average every year since Justin Trudeau took office.

This in the middle of what The Economist magazine called “The Great Jobs Boom” around the world. “In America the unemployment rate is only 3.6%, the lowest in half a century. …Two-thirds of the members of the OECD, a club of mostly rich countries, enjoy record-high employment among 15 to 64-year-olds…most of the rich world is enjoying a jobs boom of unprecedented scope.” In that context, 6 percent unemployment is no reason to pop open the champagne.

Mass layoffs hit 2,500 GM Oshawa workers, 6,000 mill and forestry workers, 3,000 Bombardier workers and most of all 200,000 energy-related jobs. It is no consolation that some of these workers are now driving UBER—even if such gig economy jobs are making unemployment numbers look deceptively low.

Growth numbers are not better. The United States outgrew Canada in three of the last four years and is projected to outgrow us by 50 percent this year.

Meanwhile, small, formerly-poor countries with few natural resources are leaving us in the dust. GDP-per-person is 40 percent higher in Singapore, 60 percent higher in Iceland and 70 percent higher in Ireland (YES, IRELAND!), than in Canada. Conservative Member of Parliament Michael Chong recounts a sad irony: “My dad left Hong Kong and my mother left the Netherlands for greater opportunity in Canada. Now, both Hong Kong and the Netherlands are richer than Canada.” He’s right. Both have significantly higher per capita GDP.

What does it mean for real people? It means they’re stuck. Despite grand Liberal promises to “help the middle class and those working hard to join it”, median income under Trudeau has gone from $54,015 in 2015 to $54,130 in 2018, a measly 0.07 percent annual increase. By comparison, median income grew $428-a-year under Prime Minister Harper and $38-a-year under Trudeau. Incomes grew more than ten times faster under Harper, who faced a U.S.-led economic meltdown, than under Trudeau who has enjoyed a growing world economy.

Low incomes and the rising cost of living, have left nearly half of Canadians less than $200 from insolvency, according to a report by leading accounting firm MNP. The firm’s insolvency practice might be in for a boost, as there were 13,200 of them in October, a 13 percent annual jump, the highest number in a decade. Only higher incomes can fix that.

Why are incomes flat? As renowned economist Jack Mintz calculated, our economy produces only $50 for every hour worked, where Switzerland produces $60, the U.S. $65 and Ireland $84. No wonder an Irish worker gets 36 percent more pay per hour than a Canadian worker.

Our workers are not to blame. They can only work with the tools and technology that their employers can afford to buy. That takes investment, which has plummeted in the last five years.

Taxes and red tape at all levels of government are driving money away. Deloitte reports that it takes 249 days to get approval to build a warehouse in Canada, three times longer than the 81 days it takes in the United States. We are ranked 63rd in the world for the time and cost of construction permits. Carbon and payroll tax hikes have made business more expensive and anti-resource development laws (C-48 and C-69) have made much of it impossible. If money cannot get to work here, it will get to work elsewhere.

Canada must become an enterprise zone, by fixing the tax system so it rewards rather than punishes work and investment; replacing tax-funded corporate welfare with lower taxes for all, so businesses profit by having the best product, not the best lobbyist; and freeing entrepreneurs from red tape, so they can build more, hire more and do more.