Date: Wed, 21 Jul 1999 12:12:27 -0400
From: Jim Peers <[EMAIL PROTECTED]>
Reply-To: [EMAIL PROTECTED]
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Subject: Cdn brain drain confirmed - in National Article - Jul 21
Skilled talent leaving Canada,
Swiss study finds
High taxes blamed: Canada ranks 36th for ability to
retain well-educated people
Robert Fife Ottawa Bureau Chief
National Post
OTTAWA - A severe brain drain caused by high income
taxes is affecting Canada's
ability to compete with rival economies, says the
latest entrant to the debate about
whether the country's most talented people are
flooding south to the United States.
The World Competitiveness Yearbook, compiled by
Swiss business school IMD,
says that Canada is ranked 10th in the world for
competitiveness but is facing an
exodus of talent.
Among rich countries, Canada and Sweden, which have
high income taxes, are
facing the biggest problem with skilled
professionals leaving, says the widely
respected competitiveness report.
Of 47 countries featured in the 1999 yearbook,
Canada ranks 36th and Sweden 43rd
in their ability to retain well-educated people.
The report calls into question the rhetoric of Jean
Chretien, the Prime Minister, and
claims by the Canadian Association of University
Teachers that the brain drain is a
myth perpetuated by business interests. Even some
Liberal cabinet ministers are
conceding that Canada is h*morrhaging talent south
of the border.
In Toronto yesterday, Allan Rock, the Health
Minister, unveiled a $147-million
program to discourage top Canadian medical
researchers from moving to the U.S.,
where American researchers receive an average of
$260,000 for their projects
compared to $70,000 in Canada.
The Swiss report, based on a survey of 4,160
leading business executives, tries to
rank countries competitiveness according to 288
criteria, including taxes, education,
gross domestic product, science and technology and
overall productivity.
The United States is the leader in world
competitiveness, which the report attributes
to American breakthroughs in new technologies,
deregulation policies and low
corporate and personal income taxes.
The report supports a recent study by Standard &
Poor DRI, which warned that
rising income levels in the U.S. could tempt more
Canadians south of the border.
The income gap between the U.S. and Canada is now
an average of $7,000 and
growing.
Nonetheless, Jean Chretien, the prime minister, has
insisted that reports of skilled
professionals emigrating to the U.S. are
exaggerated by right-wingers lobbying for
tax cuts.
However, the IMD report gives Canada a poor score
for high personal income taxes
that it suggests discourages individual work
initiative. Out of 47 countries, Canada is
35th for low tax rates, while the U.S. is ranked at
seven. Hong Kong is the star
performer in keeping taxes low.
Scott Brison, the Conservative Party finance
critic, said the Swiss report should
serve as a wake-up call for the prime minister to
take seriously demands from
groups, such as the Canadian Chamber of Commerce,
to slash personal and
corporate income taxes. Last week, the chamber
urged the government to cut taxes
by $9-billion over two years or $1,700 per family
annually.
"Jean Chretien says there is no brain drain but he
is ignoring the high quality people
that we are losing to the United States. We are
losing our best and brightest after
spending enormous amounts of money to educate
them," Mr. Brison said. "We are
going to keep losing these people unless the
Liberal government makes significant
tax reductions."
Walter Robinson, executive director of the Canadian
Taxpayers Federation, said Mr.
Chretien is making a huge mistake by ignoring the
various reports that warn of the
perils of the brain drain. Unless taxes are
lowered, the exodus of talent will
continue, he predicted, pointing to a study by the
C.D. Howe Institute that found for
every one U.S. manager that comes to Canada, six
Canadians professionals move
south. "The IMD yearbook is yet another
demonstrable statistical indicator that we
can't keep our talent here," Mr. Robinson said.
Despite Canada's poor score card on keeping
well-educated people, the IMD
yearbook gives Canada a high ranking for
competitiveness. When overall
competitiveness is factored, Canada ranks 10th,
behind Germany, Denmark, Hong
Kong, Switzerland, Netherlands, Luxembourg,
Finland, Singapore and the U.S.
The IMD report said the strengths contributing to
Canada's competitiveness were
buoyant exports, strong direct investment inflows,
the absence of inflation, solid
agricultural productivity, new information
technology, long life expectancy, good
quality of life and higher education enrollment.
When it comes to quality of life, the yearbook
placed Canada at three behind
Switzerland and Austria, while the U.S. was ranked
at 16. The United Nations
recently ranked Canada as the best place in the
world to live for the sixth straight
year.
The income gap between the U.S. and Canada is now
an average of $7,000 and
growing.
Nonetheless, Mr. Chretien has insisted that reports
of skilled professionals
emigrating to the U.S. are exaggerated by
right-wingers lobbying for tax cuts.
However, the IMD report gives Canada a poor score
for high personal income taxes
it suggests discourages individual work initiative.
Canada ranked 35th for low tax
rates, while the U.S. ranked 7th. Hong Kong was the
star performer in keeping
taxes low.
Scott Brison, the Conservative finance critic, said
the Swiss report should serve as a
wake-up call for the prime minister to take
seriously demands from groups, such as
the Canadian Chamber of Commerce, to slash personal
and corporate income taxes.
Last week, the chamber urged the government to cut
taxes by $9-billion over two
years or $1,700 per family annually.
"Jean Chretien says there is no brain drain but he
is ignoring the high quality people
that we are losing to the United States. We are
losing our best and brightest after
spending enormous amounts of money to educate
them," Mr. Brison said. "We are
going to keep losing these people unless the
Liberal government makes significant
tax reductions."
Walter Robinson, executive director of the Canadian
Taxpayers Federation, said the
IMD yearbook "is yet another demonstrable
statistical indicator that we can't keep
our talent here."
