25 August 2008

We have no shortage of ideas, we just fail to execute

The following article is excerpted from the 25 August 2008 edition of “globeandmail.com”.

If you could whisper in Finance Minister Jim Flaherty's ear, what would you tell him?

What kind of policy recommendations would you offer up to fine-tune Canadian competitiveness and best equip the country for a rapidly shifting and increasingly volatile global economy?

That was the task put to some two dozen individuals last week - professors, CEOs, lawyers, think-tank types, community leaders and yes, even the odd journalist - who got to indulge their inner policy adviser.

For just over a day, cloistered at the historic retreat at Meech Lake, we had the undivided attention of one of the country's most powerful politicians and free rein to tackle a laundry list of perennial laments ranging from punishing government overregulation to ineffectual investment in research and development….

Health care? "Blow it up." The CBC? "Make funding contingent on voluntary taxpayer contributions." A suggestion to rename Mr. Flaherty's office the Department of Finance and Deregulation also got a few guffaws (although I'm not sure why - I was completely serious).
But while some offerings were perhaps more fanciful, most were pragmatic (if not politically expedient) and many have been bandied about for a while.

Not surprisingly, lowering taxes was high on the list. There was strong support for removing the middle personal income tax bracket altogether and creating a new, lower bracket for individuals earning more than $250,000. On the corporate side, getting rid of the sales tax on business inputs (still unbelievably in practice in five provinces) was an obvious no-brainer. There was also a pitch for a flat corporate income tax of 25 per cent across the country (15 per cent federal, 10 per cent provincial).

Human capital and replacing the aging work force, one-third of which is set to retire in the coming years, was a major preoccupation. …

There was also an impassioned plea for Canada to step up to the plate and take the initiative in revitalizing drifting relations with the United States.

Suggestions ranged from creating a dedicated cabinet position to harmonizing regulations, to the point of "being ready to give away some of our sovereignty to get rid of barriers."

There was the de rigueur pitch for a commercially dedicated bridge to the United States with virtual customs clearance for trucks and an interesting proposal to leverage Canada's purchase of billions in U.S. military equipment to ensure favoured access to American dual-use military technology….

Other submissions included unilaterally removing all trade tariffs, allowing bank mergers and enacting the recommendations of the recent Wilson Report on competition policy.

Cutting red tape and reforming the civil service also figured prominently, with one participant describing the Department of Indian Affairs as "the most inept bureaucracy in the history of Western civilization."

If any of these proposals were actually acted upon, I wondered, would my Boston-bound friends and many like them consider coming home? It would certainly help with the looming deficit in human capital.

And if Canada can't retain its own shining stars, why would the world's best and brightest want to come?

But for a country known for its grinding incrementalism and an affinity for talk over action, what is the likelihood of bold steps being taken?

It was hard not to notice that while our small group discussed how to raise Canada's game, four translators, brought in for the event, sat uselessly at one end of the room. There were two French speakers at the retreat, but both