Investment Managers Cite Productivity and the Brain Drain As Urgent Problems
Contact:
Jason Clemens, Policy Analyst
The Fraser Institute, (604) 714-4544 Email: jasonc@fraserinstitute.caRelease Date: 12 October 1999
Vancouver, BC >>>Senior Canadian investment managers believe that productivity and the brain drain are serious issues currently facing the Canadian economy. The results of The 1999 Fall Survey of Senior Investment Managers, released today by The Fraser Institute, indicate that a reduction in personal income taxes and capital gains taxes offer an immediate solution to the problem. The investment managers surveyed are responsible for over $175 billion in assets under administration.
Productivity & the Brain Drain
A whopping 94 percent of senior investment managers surveyed agreed that the issue of skilled, educated Canadians emigrating to other countries is a pressing problem in Canada. Seventy-seven percent of survey respondents indicate that productivity is also a significant issue.
In terms of importance and urgency, survey respondents indicated a relative urgency for both issues. On a scale of 1 to 10, where 1 was low priority and 10 was high priority, the issue of productivity received a rating of 7.4 while the brain drain received a slightly higher response of 7.7.
The survey indicates a great deal of common ground on the policy solutions indicated for both problems. Personal income taxes and capital gains taxation were indicated as top priorities for addressing both issues. On a scale of 1 to 10, where 1 was low influence and 10 was high influence, personal income taxes received a score of 8.3 for the issue of productivity, and 9.1 for the brain drain.
Capital gains taxation received scores of 7.9 and 7.7, respectively. Corporate income taxes and general capital taxes are also cited as priority areas for both issues, as is the amount of business regulation.
Taxes Identified as the Most Important Issue for the Eighth Straight Survey
Ninety-one percent of respondents indicated taxation, specifically the high level of taxes in Canada, is the most important issue facing the federal government. The remaining 9 percent of respondents indicated debt reduction as a high priority.
Common Currency: No Common Agreement
There is no agreement among survey respondents on whether the adoption of a common currency-either the U.S. dollar or the creation of a North American currency-would be in the long-term interests of Canadians. Forty-five percent of senior investment managers surveyed stated that they strongly agreed, agreed, or somewhat agreed that adopting a common currency would be in the long-term interests of Canadians. A slight majority of respondents, 51 percent stated that they strongly disagreed, disagreed, or somewhat disagreed with the efficacy of a common currency.
When questioned on the type of common currency to be adopted, 23 percent of respondents opted for the adoption of the U.S. dollar, 20 percent preferred the creation of a new North American currency, and only 3 percent chose a currency board backed with the U.S. dollar. Forty-nine percent of respondents reiterated their disagreement with the concept of a common currency.
Minister of Finance Rebounds
The approval ratings for the Minister of Finance, Paul Martin dipped slightly from the previous Summer Investment Managers Survey. Sixty-nine percent of survey respondents, down from 77 percent in the previous survey, indicated that the Minister of Finance is doing a very good, or good job. None indicated he is doing an excellent job. This is still above the all-time low of 57 percent recorded in the 1999 Spring Survey but well below the 100 percent approval ratings received by the Minister of Finance between the Summer and Winter Surveys of 1997.
Continued Improvement for the Bank of Canada
The approval ratings for the Bank of Canada continued their upward trajectory. The Bank of Canada's approval rating increased to 97 percent, a minor increase from the 92 percent approval garnered in the 1999 Spring Survey.
Quebec Sovereignty: A Non Issue
The percent of respondents indicating Quebec separation was likely has continued to decline, dropping to 20 percent from its previous level of 24 percent in the 1999 Summer Survey.
About the Survey
Surveys were mailed to senior investment officers at 131 investment management firms across Canada. Thirty-five responses were received between August 13, 1999 and September 20, 1999. The respondents manage in excess of $175 billion worth of pension assets.
Established in 1974, The Fraser Institute is an independent public policy organization based in Vancouver.
For further information, or for a copy of The 1999 Fall Survey of Senior Investment Managers contact:
Suzanne Walters, Director of Communications,
The Fraser Institute, (604) 714-4582,
Email suzannew@fraserinstitute.ca
info@fraserinstitute.ca
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