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Part One: Equalisation programmes can be destroyed by politics and design flaws

This was the message delivered in a dramatic presentation by Professor James Buchanan, 1986 Nobel Laureate in Economics at a conference in Montreal on October 25, 2001. The conference was co-hosted by the Atlantic Institute for Market Studies, the Montreal Economic Institute  and the Frontier Centre for Public Policy  and explored the realities of equalisation in the modern context.

Known as one of the “fathers of equalisation” because his early writings were highly influential in the design of equalisation programmes such as Canada’s, Buchanan took this opportunity to revisit his arguments of 50 years before. He said that he didn’t take enough account of how poor design and political interference with the operations of such programmes can outweigh the good intentions behind them.

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Part Two: East Coast must pull its weight: Buchanan ’86 Nobel Prize laureate says


James Buchanan, 1986 Nobel Prize laureate and pioneer of the “public choice” school of economics believes that the East Coast energy boom has given Canada a golden opportunity to reduce the distortions caused by equalisation payments. Buchanan, of Virginia’s George Mason University, was speaking after addressing a seminar “Equalisation: Welfare Trap or Helping Hand?” sponsored by the Montreal Economic Institute, the Atlantic Institute for Market Studies, the Frontier Centre for Public Policy and the Conseil des relations internationales de Montreal. Buchanan’s remarks were reported in this article from the Financial Post. The government’s equalisation system may have brought benefits over the past 40 years, he said, but “it’s time to wean the Atlantic area off transfer payments and make the receiving provinces and their taxpayers face their full responsibilities and spend less of the richer provinces’ money.”

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Part Three: Health care and the purchaser provider split

In this, AIMS third commentary on Swedish Health Care in Transition, author Johan Hjertqvist explores the shift from public monopolies to market services. The success in Sweden of public policy experiments that have embraced the principles of competition and choice are driving a fundamental shift in opinion towards free choice, competition and diversity. Citing examples like competitive contracting of ambulance services that saw improved service across the board and a cost savings of 15%, Hjertqvist demonstrates how success breeds continued innovation and further experimentation.

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 Four: The future of work in our coastal communities

On 27 September 2001 the Fisheries Council of Canada held its Annual Convention in Halifax. AIMS President, Brian Lee Crowley, was invited to address the convention on the topic of the future of work in our coastal communities. In his address, Crowley explores the ramifications of population change in Atlantic Canada, the need to reform social programmes like welfare and EI, and the need to escape a common property model for fishery resource management. Drawing these three streams of AIMS research together, Crowley argues that coastal communities will be able to secure a sufficient workforce for the future, even in the face of out-migration to the cities, by increasing the rewards to work and releasing the productive power of capital now imprisoned by the disincentives of a common property
regime.

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Part Five: AIMS author addresses Senate on equalisation

On 24 October 2001, Kenneth J. Boessenkool, author of the AIMS report, “Taking off the Shackles: Equalization and the Development of Nonrenewable Resources in Atlantic Canada”, delivered a presentation to the Senate National Finance Committee. In it he outlined ten reasons to remove nonrenewable resources from equalization. In summary, he argued that such a change would mean little to the federal government’s bottom line; it would continue to protect the federal balance sheet from the vagaries of the price of nonrenewable resources, particularly oil and gas; and it means a substantial simplification of the programme – an intergovernmental hat trick not often seen in the arcane world of Canada’s intergovernmental relations.

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Part Six: Demographics point to looming labour shortage

In 20 years there will be 32,000 fewer workers in Newfoundland, 11,000 fewer in Nova Scotia, 35,000 fewer in New Brunswick and virtually no change in Prince Edward Island. So, will this translate into a significant labour shortage in the coming decades? Not necessarily, says AIMS President Brian Lee Crowley.

In his regular newspaper column, Crowley suggests that much of the potential shortage can be made up simply by increasing the percentage of people actually involved in the labour force. Higher wages, flexible working conditions, innovative technologies, and worker aids will all have their place in increasing productivity and drawing more people into the workforce. Equally crucial is social program redesign to eliminate current disincentives for people to get involved in the workforce. By encouraging self-sufficiency and rewarding a desire to work rather than penalising it, welfare reform can meet the demographic changes head on and deliver benefits for the individual workers as well as the economy as a whole.

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Part Seven: Two Keys to Excellent Health Care for Canadians

Dr. David Zitner, AIMS Fellow in Health Care Policy, and Brian Lee Crowley, AIMS President, have made a submission to the Commission on the Future of Health Care chaired by the Honourable Roy Romanow.

The submission outlines the conflict of interest arising from government acting as health services insurer, as health care provider and as evaluator of health care delivery and suggests that these functions need to be separated. The authors also recommend that regulators require health organisations to collect and publicise valid and reliable information linking health outcomes to their activities, and also provide reliable information about access to care. They close with a discussion of the need to assess proposals to change health care by tying them to a testable estimate of how the new structures and processes will influence access to care or patient and/or population health.

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Part Eight: In Memoriam – Professor E.G. (Eddy) West

The Board and staff of AIMS were saddened to learn of the recent death of one of the members of the Institute’s Board of Research Advisors and AIMS author, E.G. West, Professor Emeritus in the Economics Department, Carleton University. We asked another member of our Research Advisory Board, Professor Robin Neill of UPEI, a long-time colleague of Professor West’s, to write an overview of the life and work of this remarkable and distinguished man. Professor West was one of the world’s leading experts on the economics of education and a widely admired biographer of Adam Smith.

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