Chretien calls brain drain a myth

PM blames 'businesspeople' for spreading fears to force tax cuts

Taking aim at the business class for pushing the U.S. economic model on Canada through such myths as the brain drain, Prime Minister Jean Chretien says further integration with the United States is unnecessary.

In an interview, Mr. Chretien made it clear that any follow-ups to former prime minister Brian Mulroney's free-trade accord, such as a customs union or modelling North America on European integration, are not in the cards.

Mr. Mulroney stated in interviews last week while celebrating the 10th anniversary of the FTA that extended forms of integration could be seen as a natural sequence.

Mr. Chretien criticized the Canadian business class for pushing to remake the Canadian social and economic structure in the U.S. mould. He said the so-called Canadian brain drain is just talk orchestrated by "businesspeople who wanted to have tax cuts. The reality is that we have less Canadians now moving to the United States than 20 years ago."

The prime minister said that unlike Ontario Premier Mike Harris, who favours a low, U.S.-style tax system, his federal Liberals balanced the books and are still strong on social programs. "They have not balanced their books. We have balanced the books first."

He said Mr. Harris should have listened to Alberta Premier Ralph Klein, who said balance the books first, then reduce taxes.

Mr. Chretien said his government is "not just oriented to please the business community. It's not my goal." Referring to Southam proprietor Conrad Black, the prime minister said, "Obviously your owner does not pretend (to hide the fact) that he would like to have another party other than mine in the government."

Asked why Canadian living standards have declined in relation to those in the U.S., he said: "I think we are living pretty well. We have a different system than the United States. We have more rich people and less poor people." He said when you factor in the higher costs for American education and health care, a different picture might emerge.

When it was mentioned that the comparative decline for Canadians had taken place in recent years, Mr. Chretien said that perhaps the problem lay "in relation to the level of the Canadian dollar." The currency's drop in recent years has not bothered the prime minister to the degree it has others.

Despite economic and cultural indications of a closer blending of the two societies, Mr. Chretien said "there is no integration" with the U.S. It's only a "free-trade zone. " He is "very keen" to expand the trading system to include all countries of the Americas, decreasing Canada's reliance on the U.S., which had become more embracing with the signing of the FTA in 1988.

While originally against the FTA, Mr. Chretien supported the idea of opening it up to include a North American free-trade accord with Mexico and others because of greater diversification.

Mr. Black, who also wants Canadian trade diversified, has proposed that Canada push for Britain's inclusion in NAFTA, again to decrease the trade reliance on the U.S.

Last week, Saskatchewan's NDP Premier, Roy Romanow, said he would like to see a retooling at least to some degree of former prime minister John Diefenbaker's idea of diverting 15 per cent of Canada's trade from the United States to Britain.

Mr. Chretien rejected a European model for this continent because "there they are looking at a political integration, too, and we're not talking about it. It's strictly an economic association for a movement of trade. There is no discussion of political integration, having common policy on this and that. We maintain our freedom to make all the policies that we want in the context of globalization.

"I'm satisfied with, you know, to have the freedom of movement of people and services as we have in the NAFTA agreement (which) works really well."

That movement, he said, resulted in a greater brain gain for Canada than a brain drain. "We're importing something like 40,000 engineers from everywhere."