The Importance of Growth

Of the current issues facing the Canadian economy, the biggest of them depend on how Canada’s trade negotiations with other countries settle. The Comprehensive Economic and Trade Agreement (CETA) with Europe, for instance, creates enormous potential for Canada’s export-oriented industry to expand. In Atlantic Canada, however, there could be severely negative consequences if the provinces fail to take steps that bolster economic growth and attract new talent to the region. The new method of determining health transfer payments, which focuses on population and GDP, is just one illustration of how important economic and demographic development is in Eastern Canada.

Canada’s economic success is rooted in exports, and the export-industry, which is composed primarily of natural resource extraction, has an opportunity to not only supply other countries with raw materials and manufactured goods, but also value-added products. Reducing and eliminating barriers to trade with the European Union (EU) will likely benefit key economic sectors, such as energy, manufacturing, and seafood, and freer trade between Canada and Europe will encourage domestic economic activity, as it expands the market available to Canadian industry. The EU is currently Canada’s second-largest trading partner–behind the United States–and, in 2012, exports to Europe totalled $41 billion. However, it is critical that Canadian industry remains competitive in foreign markets and focuses on value-added products, as well as supplying factors of production. In fact, CETA eliminates protective barriers that currently prevent Canadian industry from exporting value-added products into Europe, and vice-versa, which levels the competition, in addition to providing an opportunity for Canadian-EU businesses to produce the most desirable products.

CETA also creates enormous potential for the Atlantic Provinces to expand the agriculture and seafood sectors into the EU, but they face significant demographic challenges that could restrict new prospects. In the last several years, Atlantic Canada’s population has declined and the average age has increased dramatically. In 2011, roughly 16 per cent of Atlantic Canada’s population was aged 65 or above, compared to 14.4 per cent of Canada’s entire population, and by 2036, Statistics Canada expects it to be around 29.1 per cent (compared to 23.7 nationally). Furthermore, Canada’s labour force increased by 1.1 per cent between 2012 and 2013, however, Atlantic Canada’s increased by half that amount, which is due in large part to an outflow of young individuals and families and an influx of retirees. As a result, the region is not equipped to attract large-scale industry, especially compared to British Columbia, Alberta, and Saskatchewan, and has contributed much less than other regions to Canada’s GDP in recent years. This is an important caveat, considering the federal government will begin calculating the Canada Health Transfer using population and GDP in 2018. If the Atlantic Provinces fail to generate economic growth and attract newcomers, they will receive less than other provinces to fund their healthcare systems, which will become more cumbersome in the future due to an ageing population and declining tax base.

In coming years, these two developments–freer trade and the new healthcare funding mechanism–will play a large role in determining Canada’s economic prosperity and the viability of its healthcare system. Canada’s export sector and healthcare system are rooted historically in the country’s history and it is unclear what changes will materialize because of modifications to them. In any case, the Atlantic Provinces need to take measures that bolster economic growth and attract new talent, both of which will allow them to take full advantage of CETA and other free trade agreements and create a sustainable source of funding for their healthcare systems.

Rachel Lowe is a 2013-2014 Atlantic Institute for Market Studies’ Student Fellow. The views expressed are the opinion of the author and not necessarily the Institute

DFAA Funding and New Brunswick

The Province of New Brunswick has incurred millions of dollars in damages to highways, bridges, and other critical infrastructure this spring and there are currently over 75 road closures throughout the province, some more severe than others, and the timeline for repair remains uncertain. Many individuals have also suffered losses related to flooding from snowmelt and heavy rains. Yet, while weather is uncontrollable, it is necessary to ask whether the government could have taken steps to lessen the extent of damage. If they could have, it becomes more important to ask why it did not.

The Department of Transportation and Infrastructure’s budget had declined in years past. In 2013, the departmental budget was $272,296,000–although the Department spent $284,265,000–and grew roughly 0.5 per cent in 2014 to $273,447,000. There are several concerns about the Department’s budget, which funds construction, maintenance, and repairs, with some expressing concern about the state of provincial infrastructure and how to improve it.

Though the province has other financial obligations, the risk of damage from spring weather is perennial and poorly maintained infrastructure is very costly to repair. There is another political element, however, that determines how provinces allocate money in their budget: federal transfers.

Ottawa’s Disaster Financial Assistance Arrangements (DFAA) has provided the provincial governments with $2.5 billion since inception in 1970 and eligible expenditures include damage to public infrastructure from natural disasters. The federal government allocates funds using a per-capita cost-sharing formula and the provinces are eligible for assistance once damages exceed $750,000.

Rural provinces like New Brunswick have a lower threshold before the federal government steeps in to help cover the cost of repairs because the funding uses a per-capita formula. They also have a very high ratio of infrastructure-to-population, which could theoretically incentivize them to allocate less in their budget to keeping infrastructure in good condition. Even though preventative measures help avoid some of the devastating effects of weather-related damage, the provincial government may benefit from spending less on infrastructure and using financial aid from the federal government instead. Furthermore, the fund covers damages to private property and compensates individuals for damage to their houses or land, creating more incentive issues. For instance, some individuals have received financial assistance multiple times and critics are questioning whether it is wise to subsidize living in risky areas. This is why it is important to look deeper into the DFAA program and analyze how it influences provincial expenditures, which also entails asking whether it is the best program for assisting the provinces during crises.

Rachel Lowe is a 2013-2014 Atlantic Institute for Market Studies’ Student Fellow. The views expressed are the opinion of the author and not necessarily the Institute

Debating the Merits of Assisted Suicide

New polls in Manitoba reveal public support for assisted suicide and the debate is making headlines throughout the country. Additionally, there have been several appeals to grant this right in recent years, one of which the Supreme Court of Canada will rule on later this year. Indeed, advancements in healthcare and changes in societal values since the Rodriguez decision twenty years ago, at which point the Supreme Court deemed unconstitutional doctor-assisted suicide, have been plenty and renewed inquiry is defensible.

Today, individuals with terminal illnesses stand a greater chance of living much longer than before. Importantly, though, it is not mandatory for them to accept provisions–refusing treatment, similar to suicide, is legal. By extension, assisted suicide, especially for those suffering without possibility of recovery, seems reasonable.

In any case, introducing the right of assisted suicide to the Canadian legal system deserves sincere scrutiny and consideration. Determining whether it is a legal procedure, as opposed to murder, for instance, requires specific determinants that ensure judicious use.  Designing and implementing the necessary regulations will, therefore, likely take a considerable amount of time, not to mention that the entire process will be controversial.

Canadians have supported euthanasia and assisted suicide for decades and several individuals and groups have pressed for its legalization. This month, for instance, polls showed that roughly 63 per cent of Manitobans support assisted suicide and a nationwide survey taken last year revealed that 68 per cent of Canadians support it. The Province of Quebec is currently debating legislation that would legalize physician-assisted suicide and, in 2012, the British Columbia Supreme Court ruled that assisted suicide was a right. Judges in British Columbia’s appeal court overturned this ruling in 2013 however, fearing that its acceptance could put some vulnerable people at risk and devalue human life.

On the other hand, several American states and European countries have passed legislation allowing individuals to exercise their right to die, albeit with varying stipulations. Furthermore, several individuals travel to countries where assisted suicide is legal as a means of ending their life peacefully. While these regions have experienced increasing numbers of assisted suicides, the totals remain dramatically low. For example, these methods only accounted for 2.35 deaths per 1,000 in Oregon in 2012 and the total rose from 41 to 53 in the Netherlands between 2003 and 2011.

Advances in healthcare and medicine provide terminal individuals with additional options to prolong their life. However, this can be emotionally burdensome, not to mention that it has a cost. In 2010, CBS ran a story titled, “The Cost of Dying,” which reported that 20-30 per cent of the $55 billion in medical expenditures on those in their final months had no meaningful impact on their overall livelihood. As the population ages, ailments and the medical costs associated with them are sometimes too onerous. For those who would rather end their life peacefully, as opposed to suffering, assisted suicide is a viable alternative.

Canadians are asking tough questions and policymakers can no longer avoid them. Indeed, determining whether assisted suicide fits Canada’s values is paramount, however, with proper regulations and sound methods of ensuring physicians and patients follow them, it could be beneficial. The debate will continue long after the Supreme Court rules on the matter, yet, Canadians obviously want an answer and the majority want to see change.

Rachel Lowe is a 2013-2014 Atlantic Institute for Market Studies’ Student Fellow. The views expressed are the opinion of the author and not necessarily the Institute