guaranteed annual income a non-starter · gai a non-starter canadian student ... or submit via...

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GAI A Non-Starter . . . . . . . . . . . . . . . . . . . .1

Things Folks Know . . . . . . . . . . . . . . . . . . .3

Professors Write Love Story . . . . . . . . . . . . .5

Organic Food Hardly Utopian . . . . . . . . . . .6

Polls, Schmolls . . . . . . . . . . . . . . . . . . . . . . .7

New Releases . . . . . . . . . . . . . . . . . . . . . . . .9

Upcoming Student Seminars . . . . . . . . . . .11

Question of the Month . . . . . . . . . . . . . . .12

Shortly after the last federal electioncampaign ended, it was revealed thatCanada’s current Prime Minister hadasked Ian Green, the deputy secretaryto the Cabinet, to lead a top-levelcommittee to determine the possibilityof establishing a lifelong guaranteedannual income (GAI) program. TheGAI would be created by integratingall or some of the federal child benefit,employment insurance, and old agepension programs.

Putting aside the fact that such amassive overhaul of social programswould require significant provincialcooperation and the fact that anyproposed reform along these lines wasabsent from the election campaign,the GAI is an idea that should be putto rest. Proponents of the GAI are often the

first to point out that the idea wasdevised by Milton Friedman, anardent defender of free markets.

However, what they often forget tomention is that Friedman proposedthe idea because he believed such aprogram would allow for a scalingback of other anti-poverty programs,with substantial cost-savings as aresult. What he soon realized is thatgovernments and politicians weremore inclined to add the GAI to themyriad of other social programswithout making the necessary cuts.

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Welcome! Welcome to the first Canadian Student Review of the newmillennium. We are pleased to bring you articles on organicfoods, the Guaranteed Annual Income proposal, andoverpopulation and famine.

Thanks to the sponsorship of the Lotte & John Hecht MemorialFoundation, we are able to distribute this newsletter free of chargeto students across Canada, through a network of professors andcampus clubs. If you’re interested in distributing copies at yourschool, please contact us at 1-800-665-3558, [email protected]

Enjoy!

Guaranteed Annual Income A Non-StarterBy Chris Schafer, Honours Political Science, Wilfrid Laurier University

GAI A Non-Starter

Canadian Student Review February 2001 2

1 http://www.taxpayer.com/ltts/federal/December13-00.htm

The concept of a GAI first crept intothe minds of Canadian politicians andbureaucrats in 1974. The province ofManitoba and the federal governmentconducted a GAI experiment.Subsequently, the report was more orless shelved. However, the idea wasresuscitated in 1994 by HumanResources Development Canada(HRDC), but was dismissed by thethen Minister Lloyd Axworthy.According to Axworthy, “we could notprovide anything more than a tokenguaranteed income without raisingtaxes sharply.”

In addition, not only did HRDCfind the GAI or its hybrid form undera Universal Demogrant or NegativeIncome Tax financially unfeasible, theCanadian Taxpayers Federationrecently calculated that the GAI wouldcost taxpayers $80-billion annually1.Considering the promises made by theLiberal party during the electioncampaign and the promised tax cutsthat started to take effect January 1,2001, the GAI it would seem, is ratheruntenable.

Nevertheless, perhaps the mostworrisome aspect of the GAI is theincentives it creates. The GAI containstwo important elements, those beingthe guarantee and the taxback rate.The guarantee is a sum of money thateach citizen would receive if they failedto earn any income on their own. Thetaxback rate involves how much of theguarantee one forfeits for every dollarthat is earned. Hence, any studentwith some exposure to economicsrealizes that the GAI could potentiallylead to a situation where currentproductive citizens may choose

unemployment over employment.Also, the tax revenue necessary to payfor such a scheme could furtheradvance the “brain drain” to theUnited States as productive Canadiancitizens seek lower tax jurisdictions.

In the end, nothing much has beenheard from Jean Chretien or theLiberal party in regards to the GAIsince it was first made public. One canonly hope that unless a serious socialpolicy overhaul is planned, the Liberalgovernment has decided, much like itdid with its plan to subsidizeCanadian NHL teams, to ice thisproposal once and for all.

Editor’s note: For more information onthis topic, see Journal of LabourEconomics, Volume II, #1, Part 2,January 1993.

Thanks to all of you whoattended our student seminarsthis year! The Fraser Institutehosted a number of verysuccessful seminars across thecountry. Students from allareas and levels of study cametogether for these one-dayevents to explore policy issuesand interact with experts, andother students. (For those ofyou on the Prairies, checkpage 11 for the details of theupcoming Saskatoon andWinnipeg student seminars!)

Throughout this issue, youwill see photos from this year’sseminars.

Above: Students listen to a presentation at the Vancouver high school seminar, Toolsfor Critical Thinking, held on October 6th, 2000 at the Empire Landmark Hotel.

thank you


Export Capitalism not Condoms

Things Folks Know That Just Ain�t So...

What folks know . . .

The world is over-populated.

The notion of over-population isn’tnew. Thomas Malthus in 1798 wasone of the first people to warn of theimpending population disaster. Heasserted that human population alwaysgrows faster than food supplies,ultimately leading to famine. Sincethen, many doomsayers haveexpanded on the Malthusianargument.

Why it ain�t so . . .

Part I: Food Production and Famine

Paul Ehrlich, in his 1968 bestsellerThe Population Bomb, predicted thatunless we curbed our populationgrowth we were facing a disaster. As faras Ehrlich was concerned, the “battleto feed all of humanity is over” andstarvation has won. Among his mostdire predictions was that “. . .Englandwill not exist in the year 2000.”Luckily for us, reality has never caughtup with Erlich’s scenarios. (Peron, p. 7)

The reason for this is that there aretwo factors in the equation: thenumber of people, and the availabilityof the food supply. If the worldpopulation is growing each year butthe food supply is growing at a fasterrate, then each year there will be moreand more food per person. Underthese circumstances we would have to

say that each year the world is lessover-populated despite the increase inthe number of people. And the fact isthat world food production hasregularly and consistently grown at afaster rate that world population.(Peron, p. 8)

Nations where famine was commonjust a few years ago have now becomefood exporters. Only a few decadesago, for example, India was consideredover-populated and doomed to mass

starvation. Paul Ehrlich wrote in 1968,“I have yet to meet anyone familiarwith the situation who thinks Indiawill be self-sufficient in food by 1971,if ever.” Yet India today exports food,and mass starvation is not very likelythere anymore. Ehrlich must havenoted this himself, since in 1971 hequietly deleted this comment from hisbook. (Peron, p. 9)

It is true, of course, that somenations still cannot feed themselves,but the reason for this tends to bepolitical. For instance, Cuba, once ahighly industrialized and well-fednation, is having major problemsunder Castro’s brand of socialism.Africa is the last bastion of state

planning and socialism, and it is noaccident that it is also the last bastionof famine.

Nations that abandon state andeconomic planning for free marketssee dramatic increase in foodproduction and even the poorest ofthe poor are better fed because of thatincrease. The crumbs of capitalism arecapable of feeding more people thanthe planned banquets of socialism.(Peron, p. 10)

This report was excerpted primarilyfrom Exploding Population Myths byJim Peron, Critical Issues Bulletin(The Fraser Institute: Vancouver, BC)October 1995, pp. 7-10. Full textavailable on-line at: http://www.fraserinstitute.ca/publications/critical_issues/1995/exploding/

Editor’s note: This is part one of a three-part series on Overpopulation. Look forPart II: Resource Scarcity, and PartIII: Population Density in future issuesof CSR.

Don’t go around saying the world owes you a living. The world owes you nothing. It was here first.- Mark Twain

- Samuel Longhorne Clemens (1835 - 1910)

The crumbs of capitalism are capable of

feeding more people than the planned

banquets of socialism.

Student Essay Contest


STUDENT ESSAY CONTEST1st Prize: $1,0002nd Prize: $500

High school category: $250

How Can the Market Provide for the Well-Being of Canadians?

Recommendations:Essay topics may include, but are not limited to, private alternatives to government provision of: welfare,health care, education, retirement and pensions, or other important services currently provided by government.Students may also consider ways in which market transactions can solve problems of environmental quality,poverty, childcare, or other important social problems.

Application Rules:1. Submissions will be considered from secondary and post-secondary (undergraduate and graduate) students in

all disciplines. New this year, secondary students will be considered in a separate category, with a cash prize of$250. Outstanding high school submissions will not be excluded from winning the $500 and $1,000 post-

secondary prizes.

2. Entry must include two clean copies of a typed essay of 1,000-1,500 words, and a cover sheet including the student’s name, mailing address and phone number, and date of birth. High school students include school and grade. Post-secondary students, include school, major, and year of graduation.

3. Entries will be accepted in English and French.

4. Entries may be submitted by e-mail, as attachments only, not as text in the body of an e-mail message.

5. Entries will be judged on originality, expression of ideas, presentation, and understanding of competitive markets.

6. All entries become the property of The Fraser Institute. In addition to receiving cash prizes, winners may havetheir essays published in Fraser Institute periodicals.

SUBMISSION DEADLINE: JUNE 1, 2001Send entries to: Student Programs

The Fraser Institute 1770 Burrard St., 4th FloorVancouver, BC • V6J 3G7 • Canada

Or submit via e-mail: [email protected] more information call: 1-800-665-3558 Ext. 571

NEW!

How to order Life, Love and Economics:

Log on to Pearson Custom Publishing’s website: http://www.pearsoncustom.com/

Select Review/Order Books under the heading Instructor’s Resources.

On that page, http://www.pearsoncustom.com/best/index.html, click onBusiness & Career Development.

The Life, Love and Economics icon is on the top left of that page,http://www.pearsoncustom.com/best/index.html. Follow instructions to order the book or receive a review copy.

Love Stories

Three professors at Purdue Universityin Indiana have borrowed a page fromdimestore romance novels to teachbasic economic principles. They havewritten a textbook, “Life, Love andEconomics,” which follows twocollege graduates and the economicdecisions they make as they meet,marry, take jobs and raise children.

The three professors, Sinclair, Cuttelland Taylor, say they wrote thetextbook to reach a generation ofstudents turned off by traditionaleconomics texts. “There are a lot ofgood economics texts. The trouble is,students don’t like them.” Taylor says.“We wanted a textbook they wouldread.”

The book tells the fictional story ofJason Cooley and Samantha Fletcher.The two university graduates meetwhile in line at a frozen custard stand.They discover they’ve acceptedpositions at the same computercompany, and their relationshipblossoms from there.

Each chapter covers a differenteconomic topic, such as financialplanning, conservative vs. liberaleconomic philosophies, entrepreneur-ship, and welfare. For example, inChapter 2, “Watching a SoccerGame: The Economics of a SocietyChapter,” Uncle Mitchell easilyexplains supply and demand to Jason,a concept that he had previously notunderstood in his Economics 101class. Using an analogy of big screentelevisions and by drawing supply anddemand schedules and curves onnapkins, Uncle Mitchell helps Jason tounderstand the concepts.

Each chapter in the book is followedby a summary of “key economicterms.” In addition, the text contains acomprehensive glossary and writtenassignments section.

Professor Cuttell says the book ismeant only as a supplement totraditional classroom lectures. He sayssome educators may frown on thetreatment economics is given in the

book, but he, Sinclair and Taylor aremore concerned about connectingwith students.

So far, students are devouring everyparagraph of “Life, Love andEconomics.” Even Purdue staff havefound the book hard to put down.Sinclair says a staff member in theDepartment of AgriculturalEconomics was asked by her boss whyshe hadn’t placed the new text in afaculty display case.

“She said, ‘I haven’t finished readingit yet,’” Sinclair says.

Source:“Kiss and sell: Profs writeeconomic ‘Love Story’,” News Release.Steve Leer, Agricultural Commu-nication Service, Purdue University,April 2000. For more information onthis book, please contact Steve Leer at(765) 494-8415.


Professors Write Economic �Love Story�Gavin Sinclair, Robert W. Taylor and Dee E. Cuttell, Life, Love and Economics (Pearson Custom Publishing: Needham Heights MA, 2000). US $42.50

Organic Food


If you were an organic vegetable intoday’s market, you would be onehappy piece of produce.

Not only are you worth more, butaccording to polls, 70 per cent ofpeople think you are safer, morenutritious and better for theenvironment.

Much of this rhetoric is based onmyths that influence the way peopleshop.

It’s a myth that the pesticides used byconventional farmers to protect theircrops from insect damage are anunchecked cause of cancer. Both theCanadian Network of ToxicologyCentres and the Canadian CancerSociety agree that they can find nocancer risk from modern pesticideresidues.

Massive doses of these chemicals canbe dangerous, but Canadian andAmerican regulators only allowexposure to residues at levels that aredetermined to be acceptable forhuman health.1 The AmericanCouncil on Science and Healthconcurs, “no child (or adult) has everbeen harmed by eating any amount offruits and vegetables produced usingapproved, regulated pesticides.” 2

Another common myth states that

organic food is more nutritious. Thistoo is false. The Organic TradeAssociation, which represents theorganic industry in North America,states “there is no conclusive evidenceat this time to suggest that organicallyproduced food are more nutritious.”3

In July 2000, the AdvertisingStandards Authority, a governmentagency in the United Kingdom,instructed organic farmers to removemisleading and erroneous claims fromtheir pamphlets – namely, that organicfood tasted better and was healthierand safer for the environment.4

Organic farming has been depictedas a form of environmental protectionin an age of modern, technology-enriched agriculture. However, thistoo constitutes yet another mythabout organic farming. Newtechnology is responsible for triplingcrop yields in the last half-century onexisting farmland.

Indur Goklany, an official at the U.S.Department of Interior, estimates thatif agricultural technology had frozen at1961 levels, 61 per cent of the world’sland would now be used foragriculture as opposed to the presentlevel, 34 per cent.4

Goklany says unless technology can

keep up with the pace of populationexpansion, we may still have to doublethe amount of land used globally forfarming over the next 50 years.Organic farming uses more land toproduce the same amount of foodthan conventional farming. If theworld were to switch to organicfarming, says Dennis Avery, a formeragricultural analyst at the U.S. StateDepartment, it would be necessary toplough 10-15 million square miles ofwild land for the “green manure”crops that produce the fertilizer usedby organic farmers.5 That is over threetimes Canada’s land mass.

It would be disastrous forconservation efforts to convert asignificant portion of the world’sfarmland to organic methods.

Both organic and conventionalfarming hold a valuable position inour agricultural marketplace.Consumers deserve choice; if theyagree with the simple, back-to-the-land ethic of organic farming, let thempurchase these goods. But they needaccurate information about theirchoices, not a bunch of myths thatdemonize modern agriculture andpaint a picture of a utopian organicworld that doesn’t exist.

Organic Food Hardly UtopianBy Tracy Wates, Bachelor’s of Journalism, Carleton University

1 For more information on Canada’s regulations regarding pesticides see www.cpma.ca/english/pesticides.htm2 “We Can Eat Our Vegetables Without Risk” by Gilbert L. Ross, MD, Medical Director of the American Council

on Science and Health. New York Times, February 23, 1999. http://www.acsh.org/press/editorials/vegetables022699.html 3 www.ota.org, see Frequently Asked Questions4 www.monsanto.co.uk/news/2000/july2000/12072000ananova.html4 To read more of Goklany’s work, see www.pacificresearch.org/issues/enviro/00eindex/sustain.html5 www.cgfi.com/new_detail.cfm?Art_ID=190. See Dennis Avery’s book, Saving the Planet with Pesticides and Plastic, 2nd

edition (Hudson Institute: Indianapolis) 2000.

Polls, Schmolls


We are threatened by polls. In theguise of determining the people’s willin aid of doing the people’s will, ourpolitical representatives are abnegatingtheir responsibilities as leaders. Thereare several aspects of polling that areparticularly troublesome:

1. Context

The emotion of the moment mayhave a profound effect on people’sviews. It should surprise nobody thatpolls done in the wake of horrificevents may be more emotional thanrational. The results of polls andreferenda are dependent on the moodof the people and that mood can beprofoundly affected by events. For thisreason, Quebec separatists await“winning conditions” for their nextreferendum; and for this reasonOttawa’s main counter-measure is toavoid any situation with Quebec thatcould sour the mood of Quebecers.

2. Language

Words, nuances, intonation, andinflection (and facial expression andbody language during in-person polls)all contribute to the meaning milieu towhich poll respondents respond. Forexample, inclusion of the word“violence” in a poll question related togun control legislation would likelyaffect the responses. The justice,efficacy, practicality, cost andconstitutionality of such aims are allmuted, if not downright over-ridden,by the fear mongering inherent in theword “violence.”

3. Sample

Although pollsters claim randomrepresentatives for their poll results,there must always be great skepticismabout such claims. The 1948 USpresidential election is a classic case:telephone polling was so sure of itsresults that the famous “Dewey Wins”newspaper headline was printed,despite Truman’s win. Only later didpollsters realize that their telephonepolling was over-representative ofwealthier people in a nation in whichmany poorer people did not yet havetelephones. More recently, there is theexample of the US election, where exitpolls indicated victories in Oregon,Florida and Arizona, only to later bereversed.

4. Limited choice

For practical reasons, polls must limitthe categories in which responses arerecorded. This limiting often forcesrespondents to choose betweenextremes A and B, when in fact theymay prefer a compromise–with partsof Plan A combined with parts of PlanB; or they may have their own Plan C,totally unanticipated by the pollstersand therefore not recordable. Pollingrelated to capital punishment may beillustrative here. “In favour” or “not infavour” questions are too limiting,because they may not address themethods used, or the crimes worthy ofcapital punishment. This problem oflimited choice presents poll designerswith the serious challenge of balancingat least some degree of responsecomplexity with the large degree ofadministrative ease, speed and

simplicity that is an inherentrequirement in all polling.

5. Time

Polls must be quickly administered. Inthe span of a few minutes, mostpeople cannot respond with muchbreadth or depth to issues about whichthey may not have much background,exposure or interest. Just as firstimpressions very often prove wrong, sotoo are first opinions very oftensuperseded by the more consideredopinions wrought by the passage oftime and the gaining of experience.Meaningful polling is difficult to do inour fast-paced society. Polling musttherefore walk a tightrope betweengathering serious information anddoing it quickly. Unfortunately,seriousness and quickness areinevitably in inverse proportion to oneanother.

continued on page 8

Polls, SchmollsBy Wayne Kelly, Master of Education, University of Victoria

Dangers of Polling


6. Manipulation

Constraints imposed by the abovedifficulties make polling verysusceptible to manipulation. Politicalelites, media elites, and special interestgroups can exploit these difficulties toset agendas for public policy discourseand to control the parameters of thatdiscourse. The right context, craftywording, skewed representatives,limited response choice and speedyquestioning can all be exploited to getthe poll results that suit manipulators.

7. Democracy

Rule of the majority is a fundamentaltenet of democracy. Since polls canmake known the will of the majority,polling appears at first blush to be auseful handmaiden to democracy.

However, our democracy is aconstitutional democracy, aconstitution being needed forprotection of individuals from thepotential tyranny of unfetteredmajority rule. What is popular is notalways the best decision, and the bestdecision is not always popular. Pollsmay be useful in determining what ispopular, but they are much less usefulin determining what is right. Pollsthreaten our constitutional democracyby blurring this distinction.

8. Leadership

There is potential for great mischiefwhen political representatives andleaders pay too much attention topolls. Leaders become followers,merely reflecting stale ideas back to

their constituents, instead of inspiringthem with new ones. Polls cause toomany politicians to trade courage forpopularity, society’s long-termimprovement and sustainability fortheir own short-term survival andelectability. Serious problems may arisewhen governments becomepreoccupied with polls.

Perhaps Prime Minister JohnDiefenbaker was not merely jestingwhen, upon learning of an unflatteringpoll result, remarked, “You know whatdogs do to poles.” We could save dogsthe trouble if we refused to respond topolls. The big poll, held once everyfour years and called an election, is theonly one that should concern us.

National Post Editorial staff member Ezra Levant gives aluncheon presentation at the Toronto student seminar, HowCan the Market Provide for the Well-being of Canadians?, heldon November 4, 2000 at the Courtyard Marriott Hotel.

Paul Stanway, Editor in Chief at the Edmonton Sun, illustrateshis point while giving the luncheon presentation at theEdmonton student seminar, What is the Appropriate Role ofGovernment? on January 27, 2001 at the Westin EdmontonHotel.

Fraser Institute New Releases


Rewarding University Professors: APerformance-Based Approachby Professor Hymie RubensteinPublic Policy Sources, $7.49Available on-line at

http://www.fraserinstitute.ca/publications/pps/44/

This paper says that Canadian universities are failing toattract and retain the best faculty because they do notproperly reward and evaluate their academics.

“Many universities are suffering ‘academic flight’ ascompetition for the best brains increases between the ivorytower and the private sector, on the one hand, and Canadaand the United States on the other,” says the paper’s author,Professor Hymie Rubenstein, a highly-regarded academicfrom the University of Manitoba.

Rubenstein says that budget constraints at most universitiesmake it difficult to recruit and retain the best faculty, butblames the current compensation framework for the shortageof star performers in Canada. Existing remuneration policiesdo not link rewards to performance, and powerful facultyunions, timid administrations, government indifference, anda pervasive egalitarian mind-set have penalized excellenceand prevented reform.

In order for universities to attract and fairly reward the bestacademic faculty–and to reverse the academic braindrain–the following reforms must be considered:

University tenure systems should be replaced withrenewable performance-based contracts.Traditional lifetime tenure should be limited totruly exceptional scholars.

Collective agreements should be replaced byflexible private-sector-style contracts for individualsthat combine elements of basic employmentagreements with incentives for drive, imagination,and productivity.

Current performance reviews should be replacedwith rigorous and objective evaluations.

Performance and rewards must be closely linked.

Teaching and research should be evaluatedseparately. Faculty who neither conduct researchnor publish should have their compensationreduced accordingly. Average teachers who are not

also scholars would have their tenure revoked inaccordance with existing private-sector professorialjob descriptions.

Sabbaticals should not be automatic, but awardedin a system of unrestricted results-orientedcompetition.

Individual ability, not pay equity, should determinequestions of academic remuneration.

Editor’s note: Professor Hymie Rubenstein will be presenting thispaper at the upcoming student seminar in Winnipeg. See page11 for full details.

Shifting Priorities: From Deficit Spending to Paying Down the Debt and Lowering Taxes by Mebs Kanji and Barry Cooper

Public Policy Sources $7.49

Available on-line at

http://www.fraserinstitute.ca/publications/pps/46/pdf

/alberta-advantage6.pdf

Alberta’s Klein government has defied the traditionalpolitical strategy of undertaking short-term policies mostlikely to maximize voter support. Opinion polls indicate thatthis position has been rewarded with strong public supportfor the government’s long-term focus on fiscal prudence anddebt reduction, says this new study.

The analysis uses data from a series of public opinionsurveys- the Alberta Advantage Surveys conducted in 1995,1996, 1999, and 2000–to trace the impact on Albertans ofthe Klein government’s policies.

The government has drastically cut spending on highly-valued social programs, not immediately reduced taxes, andyet continued to become increasingly popular regardless ofthe criticism of a well-organized opposition.

Among the findings of this study:

Sixty-nine percent of Albertans approve of theKlein government’s performance.

continued on page 10

Fraser Institute New Releases

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Fraser Institute New Releases (Con’t)

Shifting Priorities: From Deficit Spending to PayingDown the Debt and Lowering Taxes

continued from page 9

Fifty-seven percent of Albertans believe thegovernment’s top priority should be to pay downthe debt or reduce taxes. This is a clear shift from1999 when nearly two of three Albertans (62%)said they would prefer to use the surplus revenuefor targeted spending on priority programs.

Most Albertans, some 92%, indicate they aresatisfied with the financial situation of theprovincial government, an 11% increase from1999. Nearly two out of three Albertans (63%) saythey are very satisfied, which is a 40% increasefrom 1999.

Although user fees were relatively popular in 1995,support for this particular policy appears to be indecline. The most recent results show that only

two in every five Albertans (40%) agree with theidea of having to pay user fees.

Support for deficit reduction is a far more powerfulpredictor of support for the government’sperformance than are attitudes toward the speedand size of budget cuts.

Albertans opposed to corporate and sales taxes aremore likely than those who support them toapprove of the government’s actions.

To OrderToll-free order line: 1-800-665-3558; in Vancouver, call(604) 688-0221. Students receive 40 percent off priceslisted above.All prices include GST, and shipping and handling charges.Fraser Institute publications are also available free of chargeon our website at www.fraserinstitute.ca.

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Student Seminars


What is the Appropriate Sizeof Government?Saskatoon, SK - Friday, March 9th, 2001Park Town Hotel - 924 Spadina Crescent East8:30 am to 4:15 pm Sponsored by Harvard Developments andCrown Life Insurance CompanyOrganized with The College of Commerce, University ofSaskatchewan and The Saskatoon Junior Chamber ofCommerce

This stimulating one-day seminar offers hands-onanalysis of issues important to Canadian students.Focusing on privatization, health care and taxation, thequestions that will be explored during interactivesessions include:

Is the process of privatization complete in Saskatchewan?Does the Canadian health care system provide bothequality and efficiency? What effect does tax competitionhave on neighbouring provinces? What are theramifications for Saskatchewan?

Don’t miss this opportunity to interact with local and nationalpolicy experts and to challenge your peers!

Privatization PanelJohn Brennan, Chief Executive Officer,CA School of Business, Edmonton Peter Holle, President of the Frontier Centrefor Public Policy, Winnipeg

Taxation PanelShelley Brown, CA , Ernst & YoungLLP Chartered Accountants, Saskatoon Jason Clemens, Director of Fiscal Studies,The Fraser Institute, Vancouver

Health Care PanelWalter Podiluk, CM, Health Consultant, Saskatoon Martin Zelder, Director of Health Policy Research,Fraser Institute, Vancouver

Getting Government RightWinnipeg, MB - Saturday, March 10, 2001Holiday Inn Winnipeg South - 1330 Pembina Hwy10:00 am to 3:30 pmSponsored by Coghlan’s Ltd., Mr. L.O. Pollard, W.H. Escott Co.Ltd. and Gemini Fashions of Canada Ltd.

At what size is government most efficient?How can individuals and communities provide for those in need?Can we prevent an academic “brain drain” in Canada?How can universities fairly reward the best academic faculty?How can we improve long-term and home care services?

Jason Clemens is the Director of Fiscal Studies at theFraser Institute, and has done extensive research in theareas of fiscal policy, taxation, charities and civilsociety. He will lead a discussion on the appropriaterole of government, and how voluntary actions, insteadof state intervention can best provide for those in need.His talk is called Getting Government Right: Alternativesfor Welfare Provision.

Hymie Rubenstein, Professor of Anthropology at theUniversity of Manitoba, will present How to MakeUniversity Professors More Productive. His recentpublication examines pay, tenure and sabbaticalpolicies at Canadian universities, and gives suggestionson how to better recognize and reward qualityprofessors.

Martin Zelder is the Director of Health PolicyResearch at the Fraser Institute, and his presentation iscalled Government Failure in Home and Long-TermCare. Government policies, including reimbursementand licensing arrangements, have substantialimplications for long-term and home care providers.Principal among these implications are the distortionsof resource allocations between hospitals andalternative care facilities, and the regulatory barriers toefficient growth of alternative care providers.Significant reforms, therefore, are necessary to allowthese alternatives to be efficiently, and thuscompassionately, employed.

UPCOMING STUDENT SEMINARSRegister today for the Student Seminar on Public Policy Issues near you!

For full program information or to register, please visit the Fraser Institute websiteat www.fraserinstitute.ca or call toll free 1-800-665-3558 Ext. 571.

Question of the Month

Canadian Student Review is published byThe Fraser Institute. The views containedwithin are strictly those of the authors.

Editor . . . . . . . . . . . . .Vanessa Schneider

ContributingEditors . . . . . . . . . . . .Jason Clemens . . . . . . . . . . . . . . . . . .Joel Emes . . . . . . . . . . . . . . . . . .Fred McMahon

Production . . . . . . . . .Kim Clarke

Administration . . . . . .Annabel Addington

Canadian Student Review is offered freeof charge to students across Canada. Toreceive a Subscription, or to write to usabout articles you read in this publication,contact us at:

CANADIAN STUDENT REVIEW1770 Burrard Street, 4th FloorVancouver, B.C., V6J 3G7Tel: (604) 688-0221, ext. 571 or

(416) 363-6575, ext. 571Fax: (604) 688-8539 or

(416) 601-7322

Web site: www.fraserinstitute.ca

E-mail address:[email protected]

Copyright © 2001; The Fraser Institute.Date of Issue: February 2001Printed in CanadaISSN 1192-49OX

The Fraser Institute is an independentCanadian economic and social research andeducational organization. It has as itsobjective the redirection of public attention tothe role of competitive markets in providingfor the well-being of Canadians. Wheremarkets work, the Institute’s interest lies intrying to discover prospects for improvement.Where markets do not work, its interest liesin finding the reasons. Where competitivemarkets have been replaced by governmentcontrol, the interest of the Institute lies indocumenting objectively the nature of theimprovement or deterioration resulting fromgovernment intervention. The Fraser Instituteis a national, federally, chartered non-profitorganization financed by the sale of itspublications and the contributions of itsmembers, foundations, and other supporters.

Q : What implications might Canada’s low dollar have for Canadians’ economic freedom?Stephen Graf, LL.B. Candidate, University of British Columbia

A : The falling dollar has a negative impact on economicfreedom. An unstable currency means that as people exchange things through the medium of currency the value becomes uncertain. This muddies the consequences of free exchange, which is clearly at its freest when both parties have a full understanding of the value exchanged and have freely agreed to this exchange at that understood value.

That said, however, the falling exchange rate has thus far had little impact on domestic levels of inflation, and thus little direct impact on economic freedom in Canada through this route. However, devaluation is a reflection of bad economic policies. These policies themselves have eroded Canadians economic freedom and also weakened Canada’s productivity growth.

The main culprit has been escalating taxes. These erode free-dom in two ways. They reduce your control of your own property - either the fruit of your labour or returns on investment in property, both of which government taxes away at unacceptable levels. And, by increasing government’s presencein the economy, they reduce the room available to free agents. This is somewhat analogous to free speech. If government controlled over 40 per cent of the media in Canada, our independent press would suffer. The government now taxes away and spends over 40 per cent of our economy.

The high taxes have made Canada a less attractive place to invest. This erodes our productivity. To continue to sell our products on world markets, we have to devalue our currency to make up for weak productivity growth. The value of every Canadian’s earning power and property are eroded by this devaluation, an indirect negative impact on economic freedom in that government policy is responsible for this diminution of our property.

Fred McMahon, Director of the Social Affairs Centre,The Fraser Institute

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