Canada: Take it or leave it, PM says

'Let-them-eat-cake' attitude to tax critics enrages opposition

Jacques Boissinot, The Canadian Press / Parliament may be on vacation, but Prime Minister Jean Chretien is still in the driver's seat. Above, he urges on a team of horses as he drives a wagon during a western festival in Tring-Jonction, in the Beauce region south of Quebec City.

Prime Minister Jean Chretien displayed an "insulting" and "let-them-eat-cake" attitude in suggesting that Canadians who don't like high taxes can move to the United States, opposition politicians charged yesterday.

"It's a kind of let-them-eat-cake attitude typical of Jean Chretien that if people want to leave, go ahead. We don't really care," said Reform party revenue critic Jason Kenney. "Well, frankly, I think most Canadians do care. I think we want to keep our young people here. And we're saddened to see many people feel that they have to make an economic choice to work elsewhere."

Speaking to a crowd of Liberal supporters in the Beauce region of Quebec on Wednesday, Mr. Chretien said people who want lower taxes might prefer living elsewhere.

"There's nothing forcing you to stay here. And there's nothing forcing someone to stay in the United States," Mr. Chretien said. "That's globalization."

Mr. Kenney yesterday replied that while globalization does mean a more mobile labour force, Canada should be benefitting it, not losing out.

"The whole idea is for Canada to become a more attractive and more competitive market amongst our trading partners," he said. "As opposed to making ourselves less and less competitive and losing more and more skilled labour, we should be trying to benefit from the global marketplace by keeping our own best people here and attracting more talent and capital and investment."

Mr. Chretien also said Wednesday that the federal government must increase its spending -- especially on programs that benefit the poor and on research and development -- to keep people in Canada.

That comment was something of a turnabout for Mr. Chretien who has, in the past, denied that the brain drain to the United States exists.

He has called the brain drain a myth concocted by business interests to back up their arguments for lower taxes. Business and taxpayer lobby groups, on the other hand, have argued that high taxes are driving Canadians out of the country -- and low taxes could help keep them here.

But instead of promising lower taxes, Mr. Chretien said Wednesday that the federal government must spend money to stem the brain drain.

"To keep people, we also have to invest in Canada," he said. "We have to invest in innovation, we have to invest in research and development."

Mr. Chretien justified Canada's higher taxes by arguing that they are necessary to preserve government-subsidized medicare and education and to keep down crime rates.

"In the United States, the middle class is forced to pay medical insurance, which costs about $7,000 annually," he said. "In the United States, it costs $10,000, $15,000, or $20,000 to send your kids to university. Here, tuition fees are relatively low. If you go live in the United States, you can't go out in the park at night, because crime is higher than in Canada."

But those arguments are misleading, said Reform finance critic Monte Solberg. If the government spent tax dollars more wisely, he argued, Canadians could have both subsidized medicare and lower taxes.

"Surely if he's going to oppose cutting taxes, he can come up with a better argument than: if we cut taxes, we'll get stabbed in the park at night," Mr. Solberg said. "He's saying if we cut taxes, we won't have medicare. Well, we used to have much lower taxes and we had medicare, so how can he say that?"

Mr. Solberg argued that, besides directly benefitting individual taxpayers, lower taxes will encourage more businesses to open in Canada, creating more jobs, and decreasing the brain drain.

Recent figures compiled by the Bank of Montreal show that during the past decade, an average of about 10,000 Canadians a year emigrated to the United States. In 1997, 11,600 Canadians moved south of the border.

Many of those people would prefer to stay in Canada and are forced to leave to find work, Conservative MP Peter MacKay said.

"The attitude that Mr. Chretien displays with these flippant remarks is insulting and insensitive to people who have to leave their communities and provinces and in some cases their country to find work," Mr. MacKay said.

He added that telling people to go someplace else if they don't like the Canadian government's policies is not exactly a tactful comment to make in Quebec, where another referendum may be impending.

"It's absolutely inflammatory," Mr. MacKay said. "This sort of though talk doesn't bode well in Quebec. It doesn't help Canadian unity in any way, shape or form."

Mr. Chretien's remedy of spending money to stem the brain drain is in line with the government's recent promise of $147 million in health research funding.

Keeping scientific talent in Canada is a big concern, said Liberal Senator Anne Cools. She added that not enough is known about the magnitude and causes of Canada's brain drain, but the problem exists and cannot be ignored.

"This is something that must be taken seriously," she said. "We need these individuals to live in this country, to bring forth their ideas and do their work in the country for the wider benefit of all the people."