B.C. Spends Less On Health, Has Healthiest Population in Canada

Vancouver General Hospital in British Columbia, Canada. B.C. is ranked as having one of the best health care systems in Canada thanks to high ratings on the health-related lifestyle habits and health outcomes of its residents (Arnold C.)

British Columbia has the healthiest residents among the Canadian provinces according to a new Conference Board of Canada (CBoC) study.

The B.C. provincial government spends less than almost all other Canadian provinces on health care, but still comes out on top in the health care ranking thanks to the healthy lifestyles of B.C. residents, who have the lowest smoking rates in the country.

The CBoC report rates provincial health care system performance according to a total of 90 indicators within four categories: Lifestyle Factors, Health Status, Health Resources, and Health Care System Performance.

Lifestyle Factors measures the behavior of a province’s population that affects health, including the rate of smoking, heavy drinking, obesity, fruit and vegetable consumption and physical activity.

B.C. has the best score in both the Lifestyle Factors and Health Status categories, which was enough to earn it one of only three As granted in the Overall Performance rating.

The other provinces scoring an A in Overall Performance were Alberta and Ontario. Both provinces have more government spending on health care than B.C., and both received a higher score in Health Care System Performance, which measures disease screening, waiting times and accessibility for procedures, effectiveness of treatments and the appropriateness of treatments.

Residents of Alberta and Ontario fell short of British Columbians in their health status however, with lower birth weights, higher infant mortality, and more years of life lost to illness.

More American Visitors to Canada in March

The Canada-U.S. border crossing at Osoyoos in British Columbia’s Okanagan valley (Joe Mabel)

Via the Victoria Times Colonist, new data from Statistics Canada shows the number of visitors to Canada from the U.S. is increasing.

The number of trips overall to Canada increased 2.6 percent in March from levels in February, and most of that was attributed to a 3.2 percent increase in the number of trips from the United States, which is the primary origin of foreign visits to Canada.

American residents made approximately 1.7 million trips to Canada in March, including over one million overnight trips, the highest number since February 2010.

Trips from countries other than the U.S. to Canada increased by only 0.2 percent in March from February. Trips from Mexico saw the biggest decline, with 8.9 percent fewer trips made from that country in March than in February.

For their own part, Canadians traveled abroad 1.7 percent less in March than February, and most of the decline was due to a reduction in trips to the U.S.

Taxes Up 1,787% For Canadians Since 1961

The tax bill of the average Canadian family has grown at a faster rate than expenditures on basic necessities since 1961 (The Canadian Consumer Tax Index 2013)

Two Canadian economists say taxes are rising faster than wages for typical Canadians, and that the average Canadian family now pays a greater share of their income in taxes than on basic necessities.

The report, by Milagros Palacios and Charles Lammam, was released as part of the 2013 edition of the Canadian Consumer Tax Index.

The index tracks the total tax bill of the average Canadian family from 1961 to 2012, and finds that while taxes to all levels of government have increased 1,787 percent since the beginning of the period, spending on shelter, clothing and food increased by only 1,290 percent, 607 percent, and 578 percent, respectively, over the same period.

The average Canadian family now spends 42.7 percent of their income on taxes, and 36.9 percent on basic necessities. In contrast, the average family spent 56.5 percent of their income on necessities, and only 33.5 percent on taxes in 1961.

The report authors are also concerned that the current tax bill does not capture the full tax obligations being placed on Canadians, as many provincial governments, as well as the federal government, are funding their spending with deficits, which will need to be paid for with future taxes.

The Canadian government has made significant efforts to control the growth in government deficits over the last two decades. Facing a large fiscal deficit and growing debt in the 1990s, the federal government under then Prime Minister Jean Chretien reduced its spending by 10 percent from 1995 to 1997.

These efforts led to total government spending levels declining from 53 percent of GDP in 1992, to 43 percent of GDP in 1998, and the federal deficit being eliminated by 1997.

The decline, in the 1990s, in the share of Canada’s GDP made up by government spending is credited by some economists for the improvement in wage growth in recent years, as Canadians saw average wages increase by 10 percent in the 13 years from 1998 to 2011, compared to a gain of only 4 percent in the 17 year period from 1981 to 1998.

In Defense of the Petro-State: Canada Should Not Shun Oil Riches

Doha, pictured above, has become one of the wealthiest cities in the Middle East thanks to Qatar’s abundance of natural gas

An article that appeared in last week’s New York Times, by Thomas Homer-Dixon, a professor at Canada’s University of Waterloo, claims that Canada is slowly turning into a petro-state, and that the U.S. would be doing the country a favor by putting obstacles in the way of this evolution and rejecting the Keystone XL pipeline.

The editorial, titled The Tar Sands Disaster, makes the case that countries reliant on oil production suffer from more drastic boom-bust cycles, and are less innovative and democratic, and that for these reasons, as well as its environmental effects, Canada is better off without the oil sands.

A cursory look at a list of the world’s oil producers would seem to support this argument, with a number of despotic Middle Eastern states, autocratic Russia, and Venezuela, which is a democracy, but an unstable one with a dysfunctional and imbalanced economy, among the biggest producers.

A closer review of the world’s petro-states suggests however that oil revenues are not the culprit behind the problems that afflict them, and that in many cases, a robust oil industry mitigates their problems and contributes significantly to boosting their innovation and civil institutions, and raising the standard of living of their citizens.

The Middle East

Saudi Arabia, with its absolute monarchy, restrictive religious laws and single-faceted petro-economy is the principal example that a proponent of Homer-Dixon’s argument would likely cite to show how oil wealth can distort a country into something that Canada doesn’t want to become, but such an assumption would ignore the fact that Saudi Arabia’s political structure is not very different from its oil-less neighbours.

Next-door Oman for instance has no oil and a very similar culture and ethno-religious make-up as Saudi Arabia, and is also an absolute monarchy with strict Islamic laws.

For every oil-rich absolute monarchy, like Abu Dhabi, there is an oil-less absolute monarchy, like Jordan.

It’s true that oil-poor Middle Eastern countries are not singularly dependent on oil revenues the way Middle Eastern petro-states are, but it’s also true that they are much poorer, and are producing considerably less innovation as a result.

A boom bust cycle comes with oil-revenue dependency, but then we must ask ourselves: is it better to suffer the boom and bust of going from being very rich, to merely rich, that residents of Abu Dhabi face, or being consistently poor like Jordanians?

Innovation has also not been shown to suffer as a result of oil wealth.

Dubai, a relatively oil-rich emirate within the very oil-rich United Arab Emirates, is now the centre of entrepreneurial activity in the Arab Middle East. Other Persian Gulf states like Qatar are managing to attract investment from multinational technology companies like Microsoft by using their energy wealth to make themselves attractive locations for opening new research facilities and regional headquarters.

Dubai also contradicts Homer-Dixon’s argument that oil wealth encourages a closed culture, given it is one of the most international and open jurisdictions in the region.

Homer-Dixon might point to Iran, with a political structure combining authoritarian religious theocracy and parliamentary government, extensive press restrictions, and a foreign policy marked by conflict and tension, as an example of what oil wealth can do to a country.

He would have to explain though why Afghanistan, which is just across the border from Iran, shares many of the same languages and ethnicities with its larger neighbour, and has no oil, was for 20 years under some of the most fundamentalist Islamic political movements in the world, most notably the Taliban.

Iran, even now as it is targeted by a Western alliance seeking to choke its economy, is an island of stability and moderation relative to Afghanistan, which is why millions of Afghan refugees live in Iran and not the other way of around. Oil revenues, even depleted by sanctions, are likely the reason for the difference.

This is by no means an exhaustive analysis of the region’s oil producers and their oil-poor counterparts, but it shows how easily Homer-Dixon’s theory can be put into question by teasing the effects oil revenues from those of culture and regional dynamics.

Dutch disease

The editorial repeats the oft-made claim that Canada, as a result of its oil sands riches, is suffering from Dutch disease, which is a theorized economic phenomenon whereby natural resource extraction expands at the expense of a country’s manufacturing sector, by diverting labour to service sectors that support the resource sectors, and capital to resource extraction projects.

He writes that “Canada’s record on technical innovation, except in resource extraction, is notoriously poor. Capital and talent flow to the tar sands, while investments in manufacturing productivity and high technology elsewhere languish.”

The assumption inherent here is that technical innovation in resource extraction is less valuable than innovation in manufacturing productivity.

A review of American economic history contradicts this belief. A recent study on the causes of the breakneck rate of industrialization the United States experienced during the 19th century concludes that extraction of its more abundant natural resources was one of the major factors that gave the rising American power the developmental advantage over its contemporaries in Europe and elsewhere.

Norway is another example of a country prospering as a result of a robust resource sector. It is the sixth largest oil exporter in the world, which has made it the wealthiest of the Nordic countries, with a per capita income of $97,254.

The oil revenues have helped Norway amass $684 billion in the Government Pension Fund of Norway, the second largest sovereign wealth fund in the world, making the country among the most prepared for an economic bust, not the most vulnerable as Homer-Dixon’s thesis on petro-states contends.

On the innovation front, Norway does not have a Nokia, like Finland, or an Ericsson, like Sweden, but it leads the world in offshore oil production and exploration technology, and last year began a four year trial of running a thorium nuclear reactor, which holds the potential to make cheap and environmentally friendly energy available to the world.

These areas of innovation, while not glamorous, are no less important than mobile phones.

Ideology over economy

Homer-Dixon’s economic ideology, which is very popular among that segment of the Canadian population which strives to have a social conscience, is ultimately one that does not see fossil fuels as a worthy resource.

The long-term cost of the pollution, environmental degradation, profiteering, materialism and waste that the availability of cheap hydrocarbon resources encourages is seen to outweigh its benefits.

The road to prosperity and a better quality of life, according to this world-view, is to focus on developing technology that increases energy efficiency and allows a country to do more with less, like clean energy, information technology and high-tech manufacturing.

It is a world-view that holds that no compromises need to be made in the interest of environmentally friendly economic development, but it is idealism, not reality.

Energy consumption has expanded 30 fold since the beginning of the 1800s, and without this ramp up in the availability of energy, the gains in life expectancy and standard of living would not have been possible, and seven billion people, each of whom contributes to the world’s repertoire of knowledge, could not be supported.

Without a doubt, the resource extraction required for the increase in energy production over the last two century has disturbed large swathes of pristine wilderness, has dumped billions of tons of pollutants into the air, ground and water, and has cost millions of lives through its environmental effects, but in the aggregate, greater availability of cheap energy has improved living conditions more than it has degraded them, as every human development indicator makes evident.

Ultimately, it is ideology, not objective economic or quality of life metrics, that is at the root of Homer-Dixon’s anti-oil-industry advocacy, and an honest debate about whether Canadians want their country to become a petro-state would acknowledge that.

Canada Among Most Welcoming Countries to Foreign Visitors

Tourists visiting Stanley Park, one of Canada’s most popular tourist spots. Canada was found to be the 12th most welcoming country in the world to foreign visitors in a World Economic Forum study on the global Travel and Tourism industry (Rachel K. So)

A new travel and tourism study from the World Economic Forum (WEF) ranks Canada as one of the most welcoming countries to foreign visitors, ahead of the United States and most European countries.

The rankings, revealed by Max Fisher in a Washington Post story, can be found in a 400-plus page WEF analysis on national tourism sectors around the world.

According to the WEF’s Executive Opinion Survey, the most welcoming country in the world to foreign visitors is Iceland, followed by New Zealand. Canada is 12th out of the 140 jurisdictions included in the survey.

Among the countries most welcoming to foreign visitors, many are island-nations, have small populations, and are not heavily militarized.

Canada, with its modest 35 million population, small military, lack of significant foreign threats, and long shoreline, shares many of these characteristics.

Burlington, Ontario Ranks as Best City in Canada for Immigrants

Burlington, Ontario, pictured above, was ranked as the best place to live in Canada for new immigrants by MoneySense magazine in their 2013 quality of life index (Andrew Lynes)

MoneySense, a Canadian personal finance magazine, has released its annual Best Places to Live for 2013 index, and Calgary takes the number one spot as the best place to live in Canada overall, while Burlington, Ontario is ranked as the best city for new immigrants.

The index scores cities according to 11 groups of indicators, which include commuting, crime, housing, weather, and wealth, and which are weighted according to what the authors think is most relevant to quality of life.

Calgary and Burlington both ranked at the top largely thanks to their strong economies, which gives them an average household income of $125,733 and $110,031, respectively.

The index’s Best Places to Live for New Immigrants ranking also looks at the percentage of the city’s population that is made up of immigrants, and the cost of a one bedroom apartment, to tally its final score, based on the assumption that a large existing immigrant population and affordable rent make it easier for a new immigrant to settle in a city.

One notable omission from the top rankings was Vancouver and its neighbouring municipalities. Vancouver historically has ranked at the top of not just Canadian, but international quality of life indices, but MoneySense gave the city a ranking of 52nd in its overall index, while it performed better in the Best Places for New Immigrants index, at 10th, thanks to its large existing immigrant communities.

North Vancouver was the best performing municipality in the Greater Vancouver region, at 21st overall, followed by Port Coquitlam, at 31st.

Besides Calgary, other major Canadian cities that placed high in the rankings were:

6. Ottawa, Ontario

11. Edmonton, Alberta

12. Saskatoon, Saskatchewan

16. Winnipeg, Manitoba

17. Regina, Saskatchewan

Nearly all of the top ranking major cities were Western Canadian, thanks to the relatively strong economic performance of the region in recent years.

TD Bank Analysis Finds Even Wage Growth Among Canadian Occupation Groups, Skill Levels

A large increase in construction jobs helped buoy the total employment share and the rate of wage growth of medium skilled jobs in Canada since 1999

A report released on Tuesday and put together by TD Bank’s deputy chief economist finds that wages for Canadian workers have grown at roughly the same pace in all major occupational groupings and skill levels, and the number of high skilled jobs has increased at the expense of low-skilled and medium-skilled jobs.

The findings suggest either that the skills mismatch that has resulted in a severe shortage of workers skilled in the trades has existed for longer than a decade, and has not gotten any worse in the intervening time, or that immigration is increasing the number of skilled tradespeople in Canada at the same pace as demand for trades labour is increasing, or a combination of these two factors.

Unlike in the U.S., wages for medium-skilled workers in Canada have grown at nearly the same rate as those of highly skilled workers, a result that the report attributes to expansion of the energy, mining and construction sectors, which increase demand for well-paid medium skilled jobs.

The report finds that high-skilled jobs increased their share of total employment from 33.4 percent in 1999 to 36.3 percent in 2010, while the employment share of medium and low skilled jobs has declined from 57.3 and 9.3 percent to 54.6 and 9.1 percent over the same period, respectively.

Report author Derek Burleton calls the findings a refutation of common wisdom that wages between high skilled and medium-skilled workers and between tradespeople and other workers are diverging, and proposes more research be done on Canadian labour trends to increase understanding and avoid misconceptions.

Canadian Government Eliminates the Penny

The Canadian penny will continue to circulate and be accepted, but will no longer be provided as change by retailers or produced by the Royal Canadian Mint (CICS News)

The government of Canada ended distribution of the Canadian penny to financial institutions on February 4th, marking the end of the penny’s 155 year history in the country.

The decision came about due to the steady devaluation of the Canadian dollar, which has reduced the face value of the penny to one twentieth of what it was worth when it was first introduced.

Due to this decline in face value, the penny as legal tender is now worth approximately 63 percent of its production cost. This is unlike other denomination coins, on which the Royal Canadian Mint makes money on their sale to financial institutions, due to their face value exceeding the value of their metal content.

The elimination of the penny is expected to reduce government expenses by $11 million a year, and save financial institutions, retailers and consumers approximately $140 million in handling costs.

A graphic provided by the federal government showing how change will be rounded now that the penny is eliminated (Government of Canada)

The smallest denomination coin that will be given in change to consumers by businesses will now be the nickel, with change being rounded to the closest 5 cent increment. Electronic money will still be rounded to one cent increments.

Canadian Criminologist Praises Immigration’s Crime Fighting Effect

The drop in the Canadian crime rate since the early 1990s corresponds with an increase in immigration levels, a relationship criminologist Michael Kempa attributes to the strong family bonds of recent immigrants and the value they place on education and civic responsibility

In a special to cbc.ca, one of Canada’s largest online news publications, criminologist Michael Kempa says immigration is helping reduce the crime rate in Canada.

Kempa writes that the drop in the crime rate since the 1990s has corresponded to, and been helped by, a large increase in the rate of immigration.

He quotes Toronto Police chief Bill Blair as saying that “immigration is good for the crime rate”.

The reason? “Recent immigrants have strong bonds to their families, a commitment to the values of education and engagement in community and public institutions,” says Kempa.

The down-side is that as the immigrant groups integrate into Canadian communities and adopt Canadian culture, their crime and delinquency rates approach the Canadian average.

Kempa recommends to Canadians to try to adopt the values of strong family bonds and commitment to education and community/public-institutions that keep recent immigrant groups away from crime.

This is the second story in the past year by major Canadian news media trumpeting the crime-reducing effects of immigration. MacLean’s magazine published a story last summer on findings by University of Toronto researchers that link increased immigration with reduced crime rates.

Immigrant Income Levels Depend on Canadian Immigration Program

Data from the Statistics Canada report on the income of immigrants, released in December, shows large differences in the economic performance of immigrants depending on which immigration program they were admitted through (Moxy)

In the second part of our series on the recently released Statistics Canada report on the income of immigrants, we delve deeper into the data and look at how various economic class immigration programs compare for immigrants who arrived between 1986 and 2010. The first part can be found here.

Among the most important immigration-related issues for the federal government every year is picking the right mix of immigration programs to make up the annual quota that it sets aside for new permanent residents.

The major priorities that the federal government seeks to meet in selecting the allocation are:

  • meeting the humanitarian commitments it has set for itself to re-settle a certain portion of the world’s refugees
  • accommodating Canadians whose family members live abroad and who they would like to re-unite with through family class immigration sponsorship
  • admitting immigrants that will contribute to Canada’s economy and meet its investment and labour needs

To meet the last objective, the federal government currently allocates 60 percent of the permanent residence quota to economic class immigration programs, which consist of the Federal Skilled Worker Class (FSWC), the Canadian Experience Class (CEC), the business class programs, and the provincial nominee class programs.

Historically, the skilled worker program (FSWC) has contributed the largest portion of Canada’s economic class immigrants, but there have been calls to increase the proportion admitted through programs in the business and provincial nominee classes.

The provincial governments in particular have frequently called on the federal government to allow them to pick a greater share of Canada’s immigrants through their respective provincial nominee programs (PNPs), which has resulted in their quotas being increased from 2,500 in 1999, to over 30,000 in 2009.

Whether the FSWC should remain the mainstay of Canadian economic-class immigration or whether the PNPs, or perhaps business class programs, should continue to see their role expanded, is a question that the StatCan report can help answer.

The 30 year longitudinal study (we have only reproduced 24 years of it, as we assessed the data from 1980-1986 to be too limited to be useful) has a few surprising findings.

Income of immigrants by immigration program. Skilled worker class immigrants see the most wage growth over the 24 year period.

Early success for PNP immigrants, long-term success of the skilled worker class immigrants

Immigrants admitted through the FSWC earn significantly more than those admitted through the business classes, and after seven years in Canada, more than PNP class immigrants.

Average income in 2010 for skilled worker class immigrants. The graph shows rapid income gains in the first few years following immigration, followed by more gradual income growth

PNP-class immigrants earn nearly double what other immigrants earn in the first year of their permanent residence. This is most likely due to the fact that a person needs to already be in Canada and working to qualify for most provincial nominee programs, whereas immigrants who become permanent residents through the FSWC or business class programs arrive in Canada for the first time on the day they receive their permanent residency.

The data shows that the PNPs’ lead in income quickly closes, as FSWC immigrants see rapid income gains in their first few years in Canada.

Average income in 2010 for provincial nominee (PNP) class immigrants. PNP-class immigrants start out with much higher incomes than other economic-class immigrants

It should be taken into account however that the data on PNP-class immigrants that arrived in the early 2000s is quite limited, given the provincial nominee programs admitted fewer than 10,000 immigrants for most of the first of half of the 2000s, so the long term income growth statistics for the PNP class could change over-time.

Poor performance of business class immigrants

The business class immigrants, despite having met demanding minimum net worth requirements to qualify for immigration to Canada, have lower income levels than skilled worker and provincial nominee class immigrants, especially in the first few years after they arrive.

Over the long run, their income gradually converges with the skilled worker class, but this takes nearly 24 years and it never meets the level of their skilled worker counterparts.

One partial exception to this is immigrants from the Africa and Middle East region. Business class immigrants in this group see their income surpass skilled worker class-immigrants from the same region after 24 years.

Average income in 2010 for business class immigrants. Business class immigrants from the Africa and Middle East region see significant income growth over a 24 year period

Cause of business class under-performance

Ideally, business class immigrants, with their substantial capital and business experience, would be the biggest contributors to the Canadian economy among the country’s immigrant population.

One possible explanation for their lower than expected incomes is that they keep their investments abroad.

Canada, which has relatively high average personal income tax rates, is out-matched in investment opportunities by many regions in the world, like the rapidly developing Asian country of South Korea, which has average personal income tax rates and government expenditure levels that are one third lower than Canada.

While business-class immigrants could choose to remain invested abroad, skilled worker class immigrants likely benefit from working in Canada, since it is a high-income country that provides better wages than the vast majority of the world, and in any case they have few options other than working and earning their salary in Canada, since labour is not mobile like capital.

If investment opportunities in Canada being comparatively poor is in fact the cause of lower than expected income performance of business class immigrants, this is not a problem that the federal government can fix by changing immigration selection rules.