The latest federal budget has the potential to put Canada on a new track, encouraging investment and moving the country in the direction of "sunny ways, and sunny days"!
Much remains to be done.
Here are four obvious changes that will enhance Canada's competitiveness, reduce government expenditures while increasing efficiency, and encourage investment.
1. Require Canadian Pension Funds to Invest at least 50% of their holdings in Canada, and no more than 25% in the USA. The Government recently encouraged Canadian pension funds to reconsider the investment strategies, with an emphasis on more investment in Canada. While laudable, "moral suasion" is not enough.
The federal government should both mandate a specific level of investments in Canada, and limit investments in the USA, the first to build this country, and the second to signal to the Americans that we intend that our international investments go to our new partners in Europe, Asia and elsewhere. Weaning ourselves off of America is not just about where we sell goods and services. It should also be about betting on ourselves first, about where we invest outside of Canada, and who's economies we are interested in building as we refocus our economy.
2. Launch a new Royal Commission on Tax Reform with a mandate to dramatically simplify personal and corporate income taxes. Are we serious about being competitive? If yes, then we need to admit that our tax code is a significant disincentive to investment, and compliance is a huge burden on Canadian investors and businesses. This isn't just our opinion. Of Canada's accountants, 88% believe reforming personal and corporate income tax is important; 84% say Canada’s income tax system overall is too complex; and 67% believe the tax system is inhibiting economic growth.
Reforming the tax system to emphasize fairness, ease of compliance, and enhanced competitiveness is a "no-brainer". The board here at Mewetree.blogspot.com was was shocked that this wasn't in the budget.
3. Move to a Guaranteed Annual Income that replaces the majority of income support programs in Canada. According to the Parliamentary Budget Officer, the federal government has a whopping 75 income support programs for low-income and other Canadians, including 55 specific programs and 20 tax expenditures. The provinces and municipalities also have multiple programs designed to support low-income residents.
Reality - Canada already has a universal basic/guaranteed annual income, but is it delivered across what may be up to 100 different programs across three levels of government.
This is unbelievably inefficient. Canada is spending multiple billions of dollars a year in administrative and bureaucratic expenditures, across these many different programs to do basically the same thing - provide income support to Canadian citizens. Creating one national program to do this could significantly reduce the tax burden and/or free up billions of dollars for other expenditures and programs.
Not all income support programs could or should be replaced. For example, the Canada Pension Plan is a stand-alone "pay as you go" scheme into which working Canadians have paid and out of which they received defined benefits. Nonetheless, rolling the vast majority of these programs into a new guaranteed annual income that is designed to provide incentives to work and delivered through the income tax system would save all three levels of government multiple billions of dollars a year. It would also be fairer, as it could eliminate different income support levels provided by different programs that evolved out of political expediency with no reference whatsoever to the issue of relative fairness between such programs.
4. Introduce mandatory deadlines for all required activities in the federal civil service. There are some deadlines that must be followed in the federal bureaucracy, especially ones mandated by legislation and/or regulations. Beyond that, the vast majority of what federal bureaucrats do is done "when we get to it, in the fullness of time, making our best efforts."
The federal government is now planning to move major projects forward on abbreviated time frames. It has also proposed making the civil service more efficient, including through the use of Artificial Intelligence. Before doing this, maybe the federal civil service should meet the challenges first laid out by "new public management" thirty years ago, and build efficiency into everything it already does?
Requiring deadlines for the specific and measurable activities in every policy, directive, requirement etc that federal civil servants do on a regular basis would mean that: 1) these would first have to be recognized; 2) that a reasonable time frame for completion would have to be agreed-upon and recorded; and 3) that performance against those deadlines would have to be tracked in a consistent way and on a regular basis across all departments and agencies.
This would represent a sea change in how the federal civil service operates, with efficiency being built into every single specific and measurable activity that civil servants perform. The advantages extend beyond just enhanced efficiency and accountability for performance. Where policies, directive and other requirements are of an intergovernmental nature, having mandatory deadlines for the completion of the federal activities in these intergovernmental efforts will show Canada's partners that it is serious about the said requirements, and that it will be accountable for its performance.
To be blunt, Canada can't speed up the "forest" without also speeding up the "trees"! The civil service may not want this. Nonetheless, if Canada hasn't bored down into the bowels of federal civil service performance and mandated new levels of efficiency through required deadlines for everything they do, is isn't actually in the game.
Canada's challenge includes being more efficient and effective than any of its competitors. We are nowhere close to that goal. The four issues noted above, if acted upon, will help get us there.
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