- The Washington Times - Wednesday, May 31, 2000

At least twice a month and sometimes more, my dinner companion told me, her 24-year-old daughter, a registered nurse, gets phone calls from U.S. hospitals or nurse recruiting agencies inviting her to come and work at a hospital pretty much of her own choice as far as geography is concerned.
The wages and working conditions, of course, are far better than in Canada; at least according to reports of other Canadian nurses who have gone south. And, of course, taxes are much lower. The daughter hasn't made up her mind yet but her mother is certain that it's only a matter of time before she heads off for greener pastures.
At another dinner, one of the guests, Dr. Y, who runs a group medical practice in a small British Columbia town, seemed particularly glum all through the meal. When I asked him why so downcast, he said:
"We've just lost our only oncologist to a hospital in California. And it'll be a long time before we can find another one as good if we ever do. We just couldn't compete with the money and the research facilities in the States."
Then he added bitterly:
"And if I were 20 years younger and no family, I would be doing the very same thing."
The Canadian press is full of stories about Canadian professionals "the best and the brightest," an observer called them going south. But the high-tax Liberal Party Canadian government, welded to a welfaristic safety net program and a "soak-the-middle-class" tax policy, consoles itself with statistics showing the Canadian emigrant professionals are being replaced by immigrants with similar skills and equally professional training. Nobody except Prime Minister Jean Chretien accepts that equation.
The Toronto National Post under a Page One banner headline "Canada Bleeding MDs, Nurses to U.S." quoted Dr. Hugh Scully, Canadian Medical Association president, as saying:
"The prime minister keeps making the statement that while we lose some [people to the U.S.], we gain some. We've been insisting in health that is just not the case, that we've got a serious net deficit [of professionals] which is continuing."
Mr. Chretien has been supported by Statistics Canada, a government agency, which has argued that Canada's brain drain is really a brain gain. For every university graduate Canada loses to the U.S., Canada gains four through immigration. In a scornful response, Dave Patterson, executive director of the Canadian Advanced Technology Alliance, said:
"It's one thing to subtract one number from the other and conclude that it's a victory, but when you are losing your best quality talent it's not a victory."
Everybody knows that unless wages go up and taxes go down significantly, the immigrant at the first chance will seek a green card so he and his family can emigrate south of the border. And with present U.S. shortages of skilled professionals, the green card will be easily forthcoming.
"The brain drain is a national disaster," says Walter Robinson, director of the Canadian Taxpayers Federation, "that could largely be averted by changing our tax laws."
Last year a Gallup survey in the Canadian edition of Reader's Digest revealed the depth of bitterness which Canadians feel about taxes: federal, provincial, local, sales and property taxes consume well more than 50 percent of their income. The tax bill for the average Canadian family, said Michael Walker of the prestigious Fraser Institute, increased by an incredible 139 percent (after inflation) between 1961 and 1998. The Fraser Institute has estimated that Canada's underground economy may be as large as one-fifth of the country's GDP. (Illicit trafficking in drugs is not included in this estimate.)
The London Economist recently reported that a Canadian family's after-tax income is about one-third lower than in the United States. The Canadian Tax Foundation has pointed out that a salary of $100,000 in U.S. dollars (in Canadian dollars, $168,000) places the U.S. taxpayer in the 25 percent tax bracket vs. 50 percent for the same salary in Canada.
The difference in after-tax income between the U.S. and Canada has had an important effect on the Canadian population. In 1987 the State Department announced a lottery for 10,000 permanent resident visas open to citizens of 36 countries. Nearly 80,000 Canadians applied in the first week.
What happens north of the border may seem uninteresting to an American reader but few Americans realize our two countries enjoy a mutually lucrative trade of $1 billion U.S. dollars a day. This represents the biggest trading relationship between two countries anywhere in the world.
While events in Eritrea and Ethiopia, Sierra Leone and Kosovo may be more dramatic than the politics north of the border, Canada's well-being is directly related to that of the U.S. economy. Canada's brain-drain, which is weakening national technological advance in a competitive world, may be a harbinger of stormy waters ahead.


Arnold Beichman, a Hoover Institution Research Fellow, is a columnist for The Washington Times.

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