Social Programs

This is just one of the provoking questions that was raised during "Equalization: Welfare Trap or Helping Hand?" a conference sponsored by the Montreal Economic Institute, the Atlantic Institute for Market Studies, the Frontier Centre for Public Policy and the Conseil des relations internationales de Montréal. This article from the Montreal Gazette discusses why Nobel laureate James Buchanan and a room full of senior economists called equalisation a bribe. Exploring the idea that, without this money, thousands more from Saskatchewan and Newfoundland and the rest would flood into Toronto and Calgary creating bigger cities, concentrating the money and skill needed for excellence, and world-class competitiveness

In taking a serious look at recent proposals for new economic development spending in Atlantic Canada the National Post turned to “Retreat from Growth” as a definitive source for why this is not the way to go. “Retreat from Growth” is AIMS’ most recent book and a finalist for the Donner Book Prize for the best public policy book of 2000. In it, author Fred McMahon notes that by the late 1960s, employment and business activity in Atlantic Canada had nearly caught up to the rest of the country, after suffering years of stagnation, only to lose that ground and more after 1972 when then prime minister Pierre Trudeau lavished transfers, economic development schemes and improved unemployment insurance benefits on the region.

In the August/September edition of Atlantic Business the Honourable John Crosbie, former federal minister and current AIMS Board member, profiles two recent AIMS studies on equalization. In the first part of a serial article for upcoming issues Crosbie argues there can be no question that equalization is a generous program but he looks beyond this generosity to question its effectiveness. Looking at the continuing gaps in provincial fiscal capacity he concludes equalization has failed of its basic intent. Recognizing this failure, Crosbie says we must now look at ways to fix the problem.

The globalization protesters are gearing up to disrupt the Summit of the Americas in Quebec City as they have disrupted other major international gatherings in the past year. One of the key objections to the growth of global markets and trade was summed up by Lori Wallach, one of the leaders of the anti-WTO protests in Seattle. Globalization, she claimed, harmed the poor, preying on the world's most vulnerable: "While the macroeconomic indicators have often looked good, real wages in many countries have declined, and wage inequality has increased both within and between countries." If accurate, that's a pretty damning indictment of global market capitalism. Unfortunately for Ms. Wallach - but not for the poor - it is just the opposite of the truth.