When we think of Canada, we conjure up images of Pierre Trudeau, Michael Moore, socialized medicine…pretty much socialism everywhere.
Think again. Canada has shifted from these bygone days of big government to the most free market spot in the first world, according to economist Niels Veldhuis from Canada’s Fraser Institute during a talk at the Association for Private Enterprise Education (APEE).
In his talk “Canada’s Incredible Turnaround: Teaching Students What the United States Can Learn From Its Northern Neighbor,” Veldhuis documented how the financial crisis of 1993 had the country’s dollar labeled “the Northern Peso,” by the press. Deficits and debts were spirally out of control as government spending as a percentage of GDP increased. “The Wall Street Journal said Canada was an honorary member of the Third World,” Veldhuis wryly noted.
Now the country is balancing budgets, reducing government spending as a share of GDP. The number of government employees has also dwindled. Now the economy has bounced back, even improved, Veldhuis claimed. It’s leading the G7 countries, and topping the Americans in job creation.
Canada’s also wealthy in ideas for innovation in reducing the size of government. The country figured out a form of Federalism that allowed provinces to come up with their own solutions. From welfare reform to education innovation, these localities provide more benefits for fewer costs, or so the Fraser Institute claims.
What led to such a revolution in Canadian economics? Was it some “Tea Party of the North” getting elected to office? Actually it was nothing like that. “All the parties in the provinces did it,” Veldhuis contended. He cited actions not just by the Conservative Party, but also reforms by Paul Martin of the Liberal Party, the Reform Party, and even a socialist party in Saskatchewan.
All used different methods to get change. On the subject of education reform, some provinces tried vouchers while others boosted charter schools and home school options. Others allowed public schools to compete with each other for students. But the country doesn’t have a national Department of Education that write exams, creating national standards, and telling locals what to do.
The country still has a long way to go. Health care has been spared much of the changes. Ontario, the largest province, has resisted change and just trends. But Veldhuis seemed optimistic. Given how far the country has come since the 1990s, one can see why.