Transcript Policies to Stem the Brain Drain: Without Americanizing Canada

By: Caitlin Wagner, David Norman, Wilson
Man, Sylvest Zara, Tyler Martin.
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According to Statistics Canada Brain drain for
Canada exists when:
There is a migration of knowledge workers
from Canada.
Canada suffers a net loss of skilled workers
to the United States in several economically
important occupations including the bettereducated, higher-income earners and
individuals of prime working age.
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How many of you plan to emigrate to the
United States and what is your reasoning
for leaving Canada?
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Kesselman’s goal is to invite debate on the
issue of brain drain and develop a policy to
stem the number of educated and talented
Canadian workers that emigrate to the United
States for their jobs, wages, productivity and
taxes.
Kesselman argues that the long-run
economic growth should enhance socio-civic
goals which are measured by equity efficiency
and growth.
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Tiebout Hypothesis: municipalities offer a variety
of government services at a variety of prices
(taxes). Individuals will relocate until their utility
is maximized.
Extend Tiebout Hypothesis (ETH); workers search
for best mix of wages, jobs, taxes, public
services and social conditions. Canada has a
competitive advantage in access to health care
and education.
Canada can compete with the United States for
the top workers through civility, equality, security
and social cohesion.
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Canadian policies should be driven by domestic
objectives of equity, efficiency and growth rather
than stemming emigration
Tax or other policies that facilitate capital
accumulation will promote growth, productivity
and equality
Canadians who emigrate to the US receive more
returns to public services per dollar of taxes paid
and also pay an overall smaller amount of tax
Workers in the high-tech sector earn better
compensation in the US than Canada
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Brain drain consequences are largely
economic, fiscal and civic.
Economic: loss of growth opportunities,
potential innovation and consumption.
Fiscal: huge gap between tax revenue
generated and public services consumed.
Civic: these workers generally highly active as
volunteers and are large charitable
contributors.
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Canadian Dollar
◦ The Canadian dollar has increased from $0.84 to $0.9776.
◦ American salaries no longer appear larger when converted
into Canadian dollars.
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Quality of Life
◦ Canada is no longer ranked number one according to the
Human Developmental Index but instead ranked sixth and
the United States is forth. Canada has a lower quality of life.
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Interest Payments on Public Debt
◦ Canadian interest payments on public debt decreased from
$0.27 to $0.11 of every dollar
◦ Kesselman stated by emigrating to the United States
Canadians would escape the tax burden, but this is no
longer applicable due to the decrease.
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Canadian wages need to become competitive
to those in the United States.
Canada should not satisfy short run tradeoffs
or a decrease in the number of policies and
initiatives offered.
Canada should not try and alter their policies
and characteristics in order to become similar
to the American economy.
◦ This will result in Canada consistently trying to
replicate the American economy .
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Question One: Do you think that brain drain
has increased or decreased since 2000 when
the paper was written?
Question Two: How do you think brain drain
affects society when Canadians migrate to
different provinces as opposed to emigrating
to the United States?
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Based on the factors we have looked at some
have changed since 2000 the Canadian dollar
and interest payments have increased, but
the quality of life has decreased.
Inter Canadian Migration can still benefit
Canada whereas when there is emigration to
the United States we lose the benefits
associated to the high wage workers. Tax
contributions have decreased as well.
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http://www.fin.gc.ca/tax-impot/2010/htmleng.asp
http://hdrstats.undp.org/en/countries/profil
es/CAN.html
http://hdrstats.undp.org/en/countries/profil
es/USA.html
http://www.bankofcanada.ca/rates/exchange
/us-can-summary/
http://www.statcan.gc.ca/studiesetudes/81-003/featurecaracteristique/5001808-eng.htm