January 2, 2012
CALGARY, AB, Jan. 2, 2012/ Troy Media/ – In a column last New Year’s, I set out my three-item ‘wish list’ for Canada in 2011.
Wish number one was that decisive action be taken to transform Canada’s inefficient health care system which is devouring an ever-increasing proportion of government spending while leaving large numbers of patients to suffer on waiting lists. Unfortunately, 2011 was another year of re-arranging the proverbial deck chairs on this deteriorating, bureaucratic monopoly system. My wish for 2012 is that we finally join every other OECD country in giving patients and health-care providers the freedom of choice between government run mega-hospitals and patient friendly independent clinics.
Wish number two was that Canadian universities re-focus limited taxpayer funds to fields critical to our country’s economic future. But unfortunately, universities continue to turn away a large proportion of qualified students applying for in-demand fields such as engineering, applied mathematics, systems analysis, medicine and other health care specialties; while graduating huge numbers of arts, education and so-called social science students who face high unemployment rates and low paying, unfulfilling careers. My wish for 2012 is that provincial education ministers will finally force long overdue change in the archaic self-serving ‘academic independence’ culture that’s doing both the students and our country such a disservice.
Ontario and Quebec at the front of the debt parade
My third wish was that Canadian provinces take concrete steps to get their finances under control. Unfortunately, every province but Saskatchewan continues to incur substantial deficits, with Ontario and Quebec leading the perilous parade. Ontario’s debt grew to a staggering $238 billion, prompting Moody’s Investor Services to place the province on credit watch and downgrade its credit rating from ‘stable’ to ‘negative’. Quebec’s $3.8 billion deficit over the past fiscal year added 11 per cent to the provinces debt, which now stands at over 50 per cent of GDP, by far the highest of any province.
Yet rather than spending reductions, these and other provinces continue to depend upon rosy economic growth forecasts to save them. The euro-zone debt crisis and U.S. economic doldrums pose very serious risks to Canada’s economy, making those rosy growth forecasts akin to fairy tales. My wish for 2012 is that provinces and face the stark truth that, if anything, tax revenues will decline rather than grow.
Such a discouraging lack of progress on last year’s wishes might have deterred me from adding new ones, but hope springs eternal as we enter each New Year. My hopes for 2012 concern two issues beyond our borders.
First, I hope euro-zone leaders finally recognize that, as former British Prime Minister Maggie Thatcher wrote her 2002 book Statecraft, ‘the European single currency is bound to fail, economically, politically and indeed, socially’. The prescient ‘Iron Lady’ undoubtedly spotted the two fundamental flaws that doomed the euro concept from the very outset.
First, it’s inconceivable that an arrangement requiring the citizens of hard working and financially-prudent nations to support the debts of the languid and irresponsible could endure. Second, adopting the euro removed the crucial shock absorber that allows free markets to automatically adjust the value of each nation’s currency to its financial position and productivity.
A falling currency makes a country more competitive by lowering the cost of both exports and tourism, driving the employment and growth needed for economic recovery. By contrast, the euro locks debt burdened countries such as Portugal, Spain and Italy into an indeterminate period of economic stagnation, austerity, and high unemployment.
After wasting hundreds of billions of borrowed euros trying to save the euro-zone in 2011, the dawn of the New Year finds the crisis dramatically worse. Attempting to sustain any fundamentally flawed arrangement makes its inevitable failure an even more catastrophic event.
The dangers of the ‘Arab Spring’
My second hope for 2012 is that the tumultuous process of implementing ‘Arab Spring’ democratic aspirations doesn’t unleash a ‘tyranny of the majority’ wherein the rights of ethnic and religious minorities are undefended. Such an outcome would not only encourage tragic internal conflicts and human rights abuses, but further destabilize a region of crucial importance to global energy supply.
The world economy enters 2012 facing issues far more intractable than those present after the 2008 financial meltdown. Navigating the many dangerous global shoals facing Europe and the U.S. will require political wisdom notably absent in 2011. And yes, here at home there are important issues that also demand attention. But compared to almost anywhere else on the planet, we are indeed blessed to live in this wonderful nation.
Happy New Year Canada!
Gwyn Morgan is a Canadian business leader and director of two global corporations.
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