Suchergebnisse

Abstract.  Canadian policy makers operate in the fog of myth, a myth that has been repeated so often it is mistaken for truth. According to this myth there is only one path to prosperity, and if we are to successfully travel this path, first charted by Americans, then we must abandon our most disadvantaged. We must sacrifice our core Canadian values of community and caring on the altar of competitiveness. Yet the facts of the last three decades scream out against this myth. Over that time Canada's per capita GDP fell by almost 20% relative to the United States. And this sacrifice of prosperity did not make us a more caring society. Instead, it depleted our fiscal resources by a staggering $68 billion per year and left us without the wherewithal to take care of our most disadvantaged. In this paper I debunk the myth that there is a trade‐off between a prosperous society and a caring society. In place of the myth I offer up a cohesive picture of what ails Canada and how we can cure it.

The Canada-U.S. Free Trade Agreement provides a unique window onto the effects of a reciprocal trade agreement on an industrialized economy (Canada). For industries that experienced the deepest Canadian tariff cuts, the contraction of low-productivity plants reduced employment by 12 percent while raising industry-level labor productivity by 15 percent. For industries that experienced the largest U.S. tariff cuts, plant-level labor productivity soared by 14 percent. These results highlight the conflict between those who bore the short-run adjustment costs (displaced workers and struggling plants) and those who are garnering the long-run gains (consumers and efficient plants).