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Policies to Stem the Brain Drain: Without Americanizing Canada

Policies to Stem the Brain Drain: Without Americanizing Canada . By: Caitlin Wagner, David Norman, Wilson Man, Sylvest Zara, Tyler Martin. . Brain Drain Definition:. According to Statistics Canada Brain drain for Canada exists when: There is a migration of knowledge workers from Canada.

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Policies to Stem the Brain Drain: Without Americanizing Canada

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  1. Policies to Stem the Brain Drain: Without Americanizing Canada By: Caitlin Wagner, David Norman, Wilson Man, Sylvest Zara, Tyler Martin.

  2. Brain Drain Definition: • 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 better-educated, higher-income earners and individuals of prime working age.

  3. Introduction • How many of you plan to emigrate to the United States and what is your reasoning for leaving Canada?

  4. Goal of the Study • 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.

  5. Background for Research • 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.

  6. Key Results • 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

  7. Relevance of Results • 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.

  8. Factors that have Changed • Canadian Dollar • The Canadian dollar has increased from $0.84 to $0.9776. • American salaries no longer appear larger when converted into Canadian dollars. • 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. • 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 wouldescape the tax burden, but this is no longer applicable due to the decrease.

  9. Solution • 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 .

  10. Class Discussion • 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?

  11. Responses • 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.

  12. Work Cited • http://www.fin.gc.ca/tax-impot/2010/html-eng.asp • http://hdrstats.undp.org/en/countries/profiles/CAN.html • http://hdrstats.undp.org/en/countries/profiles/USA.html • http://www.bankofcanada.ca/rates/exchange/us-can-summary/ • http://www.statcan.gc.ca/studies-etudes/81-003/feature-caracteristique/5001808-eng.htm

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