Mr. Chairman and honourable members of the committee, good afternoon. I am grateful for the chance to appear before you on behalf of the Atlantic Institute for Market Studies this afternoon.
Alarm bells have been sounding about the declining population of Atlantic Canada. The region is aging rapidly, adding to the pressures of economic decay, and without higher productivity, fewer people means a shrinking economy, greater fiscal burden, rising costs of certain economic scales. There is no significant population growth, but health care and education costs, for example, keep rising and rising.
Atlantic Canadians are proud of their cultural achievements and place a premium on them, but the economy is often placed behind cultural concerns and that will have to change for the sake of the economy and culture alike. Theatres, parks, schools, hospitals and festivals may all be important, and more important than money, but we need wealth to sustain them, and we need wealth to maintain them. The same can be said for immigration.
The Atlantic Institute for Market Studies favours and supports greater immigration. We need more people, but we are concerned that without correcting public policies that have set the region on this current path, and without removing obstacles to a more vibrant economy, retaining immigrants will continue to be difficult. The question needs closer scrutiny and it is currently under study at our institute.
We know that the population challenge in the region is caused by a decline in natural growth and the outmigration of the native, largely young, resident population. This young segment flees in search of economic opportunity that they do not find here. Hoping that the immigrant population will stay and solve our population challenges while the native residents continue to leave is no strategy for demographic renewal. The hemorrhage must be contained. People emigrate in search of prosperity for themselves and for their children. They often are willing to endure immediate sacrifice for the sake of future prosperity for their children, but unfortunately, future prosperity in Atlantic Canada is in question and a significant portion of the demographic challenge is tied to economic stagnation.
The region's economies are the most taxed jurisdictions in the country. We have labour laws that are often hostile to businesses and to investment. Energy is unnecessarily expensive. We prohibit economic activities, such as hydraulic fracturing, that are lawful elsewhere, while our children leave for employment in the very economic activities that we seem to want to ban here.
Governments, with the exception of New Brunswick, have bloated public services that act as economic ballast and impede effective economic change. We have, in addition, a paternalistic economic populism from political leaders that keep spending money we do not have and will not have, adding to the greater fiscal uncertainties.
Someone told me not very long ago that Nova Scotians may be friendly but not welcoming. Maybe it is in this realization we have sought to make immigrants feel more welcome, and this is as it should be. These are good developments. This alone will not increase immigrant retention. The point is the economy. The region needs to right its economic ship, a feat onto itself when we have a federal government determined to continue to spend more money than we have.
Atlantic Canada needs a policy regime that encourages private economic growth, reduces government and its spending, eliminates the ample diet of subsidies we have here, is more competitive, reduces barriers to trade and commerce across provincial borders, and becomes the most desirable place to invest in the country. Tinkering at the edges, such as we are, to attract more people and investment will not do in an age in which we have to compete with the rest of the world.
With immigration in mind, our recommendations are that the federal government encourage entrepreneurship and productivity in the region through the following policies:
It should slowly reduce equalization payments, while gradually letting provinces keep all of the intake of the HST. This is achievable.
It should set a legislative framework to allow Atlantic provinces to create a small number of free economic zones within the region's boundaries.
The federal government should also try to encourage Atlantic regional governments to join the new west partnership. This is an idea that we have been trying to advance for quite a while.
We would like the federal government to encourage the Atlantic regional governments to abandon most forms of business subsidies in the region.
If we need to attract more immigrants, and we do, we should also try to attract more American immigrants to Atlantic Canada. The situation is nearly perfect at the moment. With much economic and political uncertainty south of the border at present, it is time to explore the opportunity that highly skilled Americans want to move north under the right conditions. The federal government should assist by making the process of immigration as simple as possible.
I would conclude by rearticulating the original point. Without a solid economic ground onto which we can welcome more of the badly needed immigrants to Atlantic Canada, current immigration policy will not be as successful. Without it, Atlantic Canada may continue to be simply an additional training ground for new Canadians and their revolving door entry into the country.
Thank you very much. Merci.