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thepeel
Joined: 08 Aug 2004
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 Posted: Mon Aug 13, 2007 12:19 am Post subject: Canada lags behind peers in raising standard of living |
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Canada lags behind peers in raising standard of living
Paul Vieira
CanWest News Service
Friday, May 18, 2007
OTTAWA - With the exception of Alberta, Canada is badly lagging the rest of the industrialized world in boosting its standard of living, according to a respected think-tank.
The portrait is particularly ugly when Canada's record is compared to other Group of Seven industrial nations, the C.D. Howe Institute said in an analysis released Thursday.
The institute justifies its findings by calculating how much new capital - or money deployed to upgrade physical assets such as machinery and equipment - Canada invests on a per employee basis. Evidence suggests there is a direct link between capital deployed per worker and a country's standard of living.
The institute compares Canada's performance on this measure against its G7 peers and members of the Organization for Economic Co-operation and Development.
"The short message from this comparison is that Canada is not keeping up," the analysis said.
The institute said that by its calculations, roughly $11,000 of new capital would be deployed per worker this year. That compares to $11,700 per OECD worker, $12,300 per G7 employee, and $13,300 per U.S. worker.
"New capital investment in plant and equipment allows Canadian workers to earn more and live better at less cost in time, effort, and environmental stress," the report's authors say. "Sadly, however, the performance of most Canadian provinces, and of Canada as a whole, in fostering new capital formation is not impressive."
The exception to the rule is Alberta, where workers are expected to receive more than $2 of investment for every $1 invested in the United States. The next best province is Saskatchewan, but its workers would obtain only 88 cents for every $1 spent in the United States.
Furthermore, the developing economic powers of Brazil, India and China are starting to catch up with Canada. Investment per worker in those countries has gone from 16 per cent to more than 30 per cent of Canada's total in the last 15 years.
"Canadians should realize that their own place in the forefront of the world's societies depends on the their own ability to attract investment," the analysis said. "Canada is becoming a relatively small fish in a fast-growing pond. Canadians need to learn to swim faster in this more competitive environment."
The federal government acknowledged that business investment is lagging in its Advantage Canada economic strategy, tabled last November. The document recognizes that businesses in other OECD countries are investing on average more in machinery and equipment than do Canadian businesses. The strategy recommends that Canada recognize that challenge if it is to boost economic growth prospects in the future.
Efforts aimed at boosting capital spending should be focused on the tax regime, the institute recommended. Taxes, on personal and business side, are generally higher in Canada than the rest of the industrialized world. Moreover, economists have long argued there remain taxes on capital that dissuade investors from spending money on upgrading assets.
Financial Post |
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endo
Joined: 14 Mar 2004
Location: Seoul...my home
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| Posted: Mon Aug 13, 2007 1:25 am Post subject: |
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hmmm......what's the name if this "institute"?
If it's so "well respected" you'd think the article would mention it's actual name.
Could it be the Fraser Institute by any chance? |
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On the other hand
Joined: 19 Apr 2003
Location: I walk along the avenue
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| Posted: Mon Aug 13, 2007 1:42 am Post subject: |
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| endo wrote: |
hmmm......what's the name if this "institute"?
If it's so "well respected" you'd think the article would mention it's actual name.
Could it be the Fraser Institute by any chance? |
According to the second paragraph of the article, it's the C.D. Howe Institute.
But yeah. Their agenda is generally regarded as being right-of-centre, named as they are for the patron saint of pro-business Liberalism. |
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thepeel
Joined: 08 Aug 2004
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| Posted: Mon Aug 13, 2007 1:49 am Post subject: |
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Yeah, it could be. Is that bad?
Why do you ignore the argument, and just move towards discrediting the source? Do you follow Canadian economics at all?
But the fact remains. Why does Canada export their young university educated to developing Asian crapshoots at a rate that far exceeds her peers? Why does Toronto have hundreds and hundreds of PhD's driving taxis? Why is there no Canadian Nokia, Ikea or Saab? Samsung, Kia, Daewoo came from little Korea but Canada has only RIM?
There is a book you need to read. It is called Why Mexicans Don't Drink Molson.
http://www.amazon.ca/Why-Mexicans-Dont-Drink-Molson/dp/1553652258
Here is an interview with the author:
http://www.cbc.ca/news/yourinterview/2007/05/author_andrea_mandelcampbell_w.html
We have an oversupply of professionals due to government-driven immigration and this is depressing wages. Also, Canadian productivity and productivity growth is lagging most of the G7. The Canadian economy involves digging up the country and throwing it across the border. There is little value-added in this.
For a variety of reasons, Canada will likely become a middle-income country in the next few decades. Here is the beginning:
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Surprise! We don't make that much money
John Caspar
By John Caspar
April 04, 2007
Last week, I regaled you with some interesting data from the good folks at Statistics Canada regarding retirement savings. That was all about what we save. This week, let's talk a little bit about what we make. Specifically, how much money are people making out there, and where do you stack up?
All the data here is for the 2004 calendar year, which is the most recent income data available.
Just so you can brace yourself, we'll start with median total income. The median is the mid-point, where half the included population is higher, and half is lower. �Total income� in this case includes income from employment, investment, government transfers, private pensions, registered retirement savings plans and other income. You know. Total. And the median total income for Canadians with an income was�$24,400. If you made more than $24,400 in 2004, congratulations, you were in the top half of income earners.
Now, before you calculate that fully half of Canadians work for less than $12.20 an hour, bear in mind that �total income� will capture part-time employees, after-school student jobs, etc. Those people will pull down the average with a low income that may not be representative of hardship. That being said, the bottom half of total income earners is also populated by people who are out of the work force and living on low incomes provided by pensions and government benefits. Many of those people do indeed have financial hardship.
The median employment income for Canadians in 2004 was $25,400. That's just counting the working folks. The highest median employment income by province was the Northwest Territories by a wide margin ($35,400), followed by the Yukon ($28,300), Ontario ($27,900) and Alberta ($27,500). Newfoundland was the lowest at $17,000.
But let's move back to total income for Canadians, and climb further up the scale to see where the meat is. Let's move all the way up to where about 2/3rds of individuals have lower incomes. In 2004, you were in the top third of incomes if you made more than�are you ready? $35,000.
I know what you're saying. Let's go higher! Okay, let's move up to the top quintile line. At this level of income, 80 percent of people made less than you. The number? Only 19.8 percent of Canadians with an income made $50,000 or more in 2004.
Now, although a bit over 12 percent of individuals had incomes between $50,000 and $75,000, the atmosphere thins out pretty quickly above that. Only 7.6 percent of people had incomes of $75,000 or more in 2004. Only 3.4 percent made $100,000 or more. And by the time we get to the $150,000 or more category, we're down to just 1.3 percent of income recipients.
People with 2004 incomes of $200,000 or more were a rounding error: only 0.7 percent made $200,000 or more. And you can be 99.5 percent sure that any randomly selected Canadian earned less than $250,000.
Those are the stats for individuals. The nice folks at Stats Canada also track the incomes of various family groupings, so we can get an idea of where entire households compare by income. �Couple families� are couples (married or common-law, including same-sex couples) living at the same address, with or without children. No singles or lone parents are included. The median total income from all sources for all members of such families in 2004 was $64,800. Less than a quarter of such households had total incomes of $100,000 or more. And just over 8 percent had incomes of $150,000 or greater.
So, there are the stats, and that's what we make. Now, consider some of the implications of this information. If there were folks who made $50,000 a year and didn't feel like they were making enough to get by (and there are), it would be useful for them to consider that based on 2004 figures, 80 percent of Canadians with an income make less. If their individual income was close to $65,000, that would be enough to push them into the top ten percent of incomes received by Canadians just two years ago. Ninety percent of the 23.4 million people with an income in Canada made less. If they felt they weren't getting by at an income level that's higher than that of the vast majority of the people in one of the richest countries in the history of the world, do they have an income problem? Or is it a problem related to something else, like choices or expectations?
Looking at the statistics of what we all make, it looks like it couldn't just be the money.
� 2007 John Caspar
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http://finance.sympatico.msn.ca/savingsdebt/johncaspar/article.aspx?cp-documentid=4633786#toolbar
Here is why:
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Canadian productivity growth third worst in OECD
By JULIAN BELTRAME
2007-04-10 18:45:00
TORONTO (CP) - A new report recommends Canada tighten the unemployment insurance system for seasonal workers, wind down marketing boards and bring down inter-provincial barriers to reverse Canada's dismal productivity record.
The Centre for the Study of Living Standards says that Canada's lagging productivity growth is the biggest challenge facing the country's economy and Canadians' future standard of living.
"We've had a good economic record overall, but the gains are unsustainable if we don't do something to improve our productivity," said Andrew Sharpe, executive director of the Ottawa-based think-tank and author of the report.
"We're running out of workers and I doubt commodity prices can keep rising. The only way we can sustain growth and improve living standards is by improving productivity."
The report released Tuesday points out that from 1973 to 2006, Canada has experienced the third lowest growth in output per hour among the 23 countries of the Organization for Economic Co-operation and Development, beating out only New Zealand and Switzerland. This has resulted in Canada going from the country with the third-best productivity in 1950 and 1973 to 16th in the group today.
The record for the most recent years has hardly been better. Between 2000 and 2006, Canada's business output increased by a mere 1.1 per cent annually, one-third as much as the United States.
In the troubled manufacturing sector, productivity performance has been even worse, with output per hour advancing by only 0.6 per cent annually in the five-year period, compared to 5.5 per cent for the U.S.
To reverse the downward spiral, Sharpe says Canadian governments have to invest more on education and training, noting that the key to U.S. productivity gains is the country's world class system of research universities.
Removing some of the Canada's "institutional rigidities," such as agricultural marketing boards, and inter-provincial trade and labour movement barriers would also help, the report states.
As well, "the employment insurance program, which provides income support for the unemployed in seasonal occupations, discourages to some degree mobility to regions where permanent employment prospects are more promising," the report says.
Other recommendations include for the private sector to better assimilate new technological innovations from other countries in their practices, for the government to improve the competitive environment through deregulation, and to speed up the assimilation of new immigrants into the Canadian workforce.
The report notes that Canada badly lags behind the U.S. in investment per worker in the key information and communications technologies sector.
It says governments can increase investment in the sector by implementing a tax credit recently proposed by the Telecommunications Policy Review Panel, as well as through the harmonization of provincial tax systems with the GST.
In the agriculture sector, the report says that winding down marketing boards "would spur the entry of producers with innovative ideas and the exit of low productivity firms."
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http://money.canoe.ca/News/Economy/2007/04/10/3972467-cp.html |
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endo
Joined: 14 Mar 2004
Location: Seoul...my home
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| Posted: Mon Aug 13, 2007 4:12 am Post subject: |
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First off, my bad on the Fraser Institute thing. But I was correct in my assertions that the think tank was one of those insitutes which in general would like to see the elimination of all state financed organizations.
BJWD, the reason why South Korea has so many large and global corporations is that the Park government back in the 1960s and 70s basically took over the economy by directing capital and political favors to specific industries aimed at increasing the nations exports.
Samsung, Daewoo, and Hyundai were able to grow because the state basically created the conditions so that all the economic power would be controlled by a few chaebols.
If you weren't a part of this elite group as a buisness man you were literally fu#ked. You see these large corporations in South Korea don't just make cars, ships, and steel; but they also make chewing gum, hotels, amusement parks, appartment buildings, ect......
Basically what I'm saying is that individual entrepreneurship in South Korea is a very difficult thing to do. The higher and more money you get, the greater the chance you will have to face the mighty chaebols, and if you piss them off enough you're screwed as they have much more money to influence the politicians and tax creditors.
In conclusion, South Koreas succes is primarily founded upon tight state control in that a handful of elites were afforded the ability to export in predetermined areas while the rest were shut out.
So South Korea is a bad example.
But I think one of the reasons why Canada hasn't been as successful in the global corporation market is because of its proximity to the U.S. Basically if you want to live a good secure middle class life stay in Canada. If you want to become filthy rich move south. |
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sundubuman
Joined: 04 Feb 2003
Location: seoul
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| Posted: Mon Aug 13, 2007 5:37 am Post subject: |
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BJWD,
Interesting interview with that author. I think she nails it right on the head when she mentions 2 things- anti-entrepreneurialism and anti-americanism.
Combine the 2 (entrepreneurial is American. America is bad. Being entrepreneurial is bad) and throw in a big dollop of socialism and it's no wonder so few famous corporations hail from Canada.
I mean take a small Midwestern American city like Milwaukee (less than 2 million people). It is home to world-famous brands like Miller Beer, Harley-Davidson, and Manpower. Heck, I wouldn't be surprised one bit if Wisconsin-based companies had more Korean-based employees than all of Canada combined. |
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ddeubel
Joined: 20 Jul 2005
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| Posted: Mon Aug 13, 2007 6:37 am Post subject: |
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BJWD,
When will you begin stammering about the end of the world? As always, you overstate your case. Yes, apparent problems in Canada as elsewhere but nowhere do I see your prognosis being actualized.
Keep crying wolf. I'd state the medical term but don't want you bonding....
DD |
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khyber
Joined: 16 Jan 2003
Location: Compunction Junction
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| Posted: Mon Aug 13, 2007 9:27 am Post subject: |
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Just to point out to the readers where you highlight this:
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And the median total income for Canadians with an income was�$24,400. If you made more than $24,400 in 2004, congratulations, you were in the top half of income earners.
Now, before you calculate that fully half of Canadians work for less than $12.20 an hour |
| Quote: |
| bear in mind that �total income� will capture part-time employees, after-school student jobs, etc. |
While I appreciate this article, one can't say that Canada is falling behind it's peers if there is no similar data given regarding other countries performance. Show me how this compares to everyone else and then I'll admit that we're cavemen.
"And just to note (to put the above numbers into perspective):
http://www.theglobeandmail.com/servlet/story/RTGAM.20070803.doug04/BNStory/International/home |
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Tony_Balony
Joined: 12 Apr 2007
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| Posted: Mon Aug 13, 2007 9:40 am Post subject: |
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Canada is hitting that myth that education = $$$. It doesn't. I see news stories in the NYTIMES about highly educated Indians in Canada driving taxis. Intrisic in this outlook is that the educated class are spoiled crybabies that are so passive and uncreative that they dedicate themselves to a life career of multiple guess and true and false questions.
I had a discussion with a retard I worked with and he made a bunch od sense. Its the Ph'd's job to make jobs, not get them. |
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stevemcgarrett
Joined: 24 Mar 2006
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| Posted: Wed Aug 15, 2007 2:24 am Post subject: |
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BJWD wrote:
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| We have an oversupply of professionals due to government-driven immigration and this is depressing wages. Also, Canadian productivity and productivity growth is lagging most of the G7. The Canadian economy involves digging up the country and throwing it across the border. There is little value-added in this. |
You've hit the nail on the head. Canada is being slowly choked to death economically by overzealous socialists. A former Canadian co-worker and his wife are incensed at the government in Ottawa. They have a small business in Ontario in addition to being professional educators. They were so glad when the last PM left office but they hold out little hope for this administration. Politics and economics don't mix--just ask Alan Greenspan.
Harley-Davidson almost went belly up in the 1970s under AMF/AMC ownership (remember the Gremlin car?). The unions and the socialist political climate of Milwaukee were also partly to blame. Now HD is thriving because of (gasp) a renewed emphasis on the entrepeneurial spirit. Before they regained it, Honda and Suzuki almost buried them.
I can tell you for certain from personal experience that the professorial ranks in Canadian universities and colleges are glutted. |
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Adventurer
Joined: 28 Jan 2006
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| Posted: Wed Aug 15, 2007 8:26 am Post subject: |
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Well, I am all for a nationalist Canadian prime minister who involves the state more and puts billions into building the technologies you mentioned to compete with what Europe and the U.S. have. The Europeans did so and the US did it for Japan. Korea was pushed to its status by a dictator.
In the U.S., the government did intervene in its own way by saving some of its industries like Chrysler. I agre that Canada could do and should do more, but there is no real national leadership in Ottawa. That is a big part of the problem... I would like some of that surplus invested in the military, technology, health care, and building Canadian industries, but only the military will be built up, I am guessing. Do you think your average Canadian doesn't want these things you are talking about?
Canadians have the brains to do it. |
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Gopher
Joined: 04 Jun 2005
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| Posted: Wed Aug 15, 2007 9:43 am Post subject: |
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| BJWD wrote: |
| Is that bad...? |
Unless it is someone like Michael Moore talking about America...they ain't listening. And if it, whatever it is, criticizes Canada, they will move to vigorous defense faster than a Korean when it comes to criticism about Korea.
Have you not picked up on these dynamics here, yet? |
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crusher_of_heads
Joined: 23 Feb 2007
Location: kimbop and kimchi for kimberly!!!!
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| Posted: Wed Aug 15, 2007 12:46 pm Post subject: |
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| endo wrote: |
hmmm......what's the name if this "institute"?
If it's so "well respected" you'd think the article would mention it's actual name.
Could it be the Fraser Institute by any chance? |
Looking sharp!
There is a building in Ottawa named after this institute-it�s called the CD Howe building! |
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Kuros
Joined: 27 Apr 2004
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| Posted: Wed Aug 15, 2007 2:27 pm Post subject: |
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True Representative Democracies, and I would say this holds for Representative Republics as well, tend to have poor economic and fiscal policies in general. There is too much incentive towards placating voters by sending money their way.
| Adventurer wrote: |
| In the U.S., the government did intervene in its own way by saving some of its industries like Chrysler. |
Yes, but corporate welfare is not an aspect of American economic policy Canada should emulate. Instead, look to Bill Clinton's expansion of international trade accompanied by fiscal conservatism.
Again, if you want a good example of what I've said above, look at the candidates for election in the US. On the Democratic side, you have men like Obama and Edwards playing to Big Labor and advocating protectionism and increased statism in terms of social welfare. And on the Republican side, you have mindless adherence the doctrine of supply-siderism, which states that massive public debt drives the US economy (and gets votes). In a Republic like America, both rich and poor are driven to vote for economic policies of different dimensions which are each equivalent in their potential to hamper the economy. |
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thepeel
Joined: 08 Aug 2004
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| Posted: Fri Aug 17, 2007 6:03 am Post subject: |
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| ddeubel wrote: |
BJWD,
When will you begin stammering about the end of the world? As always, you overstate your case. Yes, apparent problems in Canada as elsewhere but nowhere do I see your prognosis being actualized.
Keep crying wolf. I'd state the medical term but don't want you bonding....
DD |
Nobody is crying wolf douch. What I am saying is that low productivity over a number of years will decrease wages. The sky isn't falling, but the Canadian standard of living will. |
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