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Part One: Paul Martin endorses AIMS’ approach to equalization

On December 20, 2001, Federal Finance Minister Paul Martin said that he was supportive of a major policy initiative recently advanced by AIMS in collaboration with two other public policy institutes. Martin spoke at a luncheon in Halifax where he indicated that he is exploring the idea of replacing at least some of the billions of dollars in annual federal spending on job creation and economic development in “have-not” regions with lower federal corporate taxes.

In November, AIMS President Brian Lee Crowley, together with the heads of two other think tanks representing all the equalization receiving provinces in Canada, proposed just such an idea. Drawing on the work of Prof. James Buchanan, Nobel Laureate in Economics, Crowley, together with Michel Kelly-Gagnon of the Montreal Economic Institute and Peter Holle of the Frontier Centre in Winnipeg, proposed replacing Ottawa’s major transfer to the less-developed provinces — equalization — with a reduction in the federal tax rate in those provinces. (See “Part Two: Pay the people, not governments” below, for a synopsis of this piece).

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Part Two: Pay the people, not governments

In this op-ed piece from the National Post, AIMS President, Brian Lee Crowley partners with Peter Holle, the President of the Frontier Centre for Public Policy, and Michel Kelly-Gagnon, the Executive Director of the Montreal Economic Institute, to discuss the potential benefits of targeting equalization at individuals rather than provinces. This idea arises from the concerns of one of the world’s most prominent economists that equalization systems can be captured and perverted by politics and bad design. Nobel Laureate James Buchanan, who spoke recently at a conference hosted by the three think tanks, argued that equalizing grants paid to individuals would serve to avoid the economic inefficiency of a mass migration to wealthy regions. By using differential national tax rates in less-developed jurisdictions, such a system could avoid the added economic inefficiency of transfers between governments.

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Part Three: The bucks should stop here, AIMS Senior Fellow in the Globe

In this piece from the Globe and Mail, AIMS Senior Fellow Michael MacDonald, analyses the state of Canada’s cities in a primarily rural-dominated, bureaucratic environment and emphasizes the current lack of effective national urban strategy. Dr. MacDonald stresses that cities and city governments are not synonymous, and that therefore many urban problems are susceptible to non-governmental solutions. An important avenue in revitalizing our cities will be the successful creation of strategic alliances and partnerships between cities, other levels of government, and the private sector. “Sharing the risk, sharing the rewards in a well-managed strategy” will empower people, organizations and businesses to take the lead in our cities and flourish together. The creation of a non-government League of Canadian Cities, acting as an independent voice ensuring value for all participants in this innovative approach to growth and prosperity, is one management model which is briefly explored.

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Part Four: Competition in emergency health care

The AIMS Commentary series on Swedish Health Care in Transition continues as author Johan Hjertqvist explores the rapid transition in the style and format of health care being experienced in the Stockholm metropolitan area. The new, competition-based model of public health care is about to hit the emergency rooms and operating theatres in that city. Seven emergency hospitals in the Stockholm region serve close to two million people. Since 1999, one of them has been privately owned. Last year, two hospitals turned themselves into publicly owned companies with formal business structures, financial statements, and a board of directors. At least two of the remaining ones plan to do the same in 2002.

This series of newsletters on Swedish Health Care in Transition is a joint project of AIMS, Atlantic Canada’s public policy think tank, and the Frontier Centre for Public Policy.
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Part Five: Why business and politics don’t mix

Five years ago the four provincial governments, plus Ottawa and some private-sector outfits such as the chartered banks, clubbed together and put $30 million into their new creation: ACF Equity Atlantic Inc. Now, at the five-year mark in its planned 10-year lifespan, questions are being asked about its performance. Predictable questions. Questions that the fund’s critics foretold even as it was being created. As AIMS President Brian Lee Crowley notes in his regular column, this controversy would be quite unnecessary if politicians could get it into their heads that government is hopelessly ill-equipped to finance individual businesses, and stick instead to their knitting.

One of the first studies done by AIMS discussed how publicly subsidizing venture capital in competition with private-sector investors only makes a thin market thinner, making it less likely that real venture capitalists, with deep pockets and even deeper pools of expertise, will ever establish themselves here. Governments can help businesses get established and grow, by cutting debt and taxes. But they don’t belong, even as partners, in financing individual businesses.

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Part Six: AIMS e-mail security and anti-virus policy

We at AIMS again sincerely apologize for any technical difficulties or inconvenience to our AIMS On-line readers, which may have resulted from our unfortunate victimization by the “Goner” virus. Rest assured that the problem has since been rectified. AIMS has installed further defence mechanisms against such cyber-vandalism, including increased firewall and antivirus protection, to ensure that we have the highest standards of safety minimizing the chances that this would ever happen again. We want people to have every confidence that messages from the Institute are as free from viruses as technically possible. If you have any questions about our policy in this regard, please feel free to contact us at aims@aims.ca
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