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The
Economic Freedom
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Critical Issues Bulletins Logo


The Harris Government: A Mid-term Review

CRITICAL ISSUES BULLETIN ....1997

by Marc T. Law, Howard I. Markowitz, and Fazil Mihlar


CONTENTS

About the authors
Acknowledgments
Summary: Main Policy Recommendations
Introduction
Spending Policy
Taxation Policy
Social Policy
Labour Policy
Health Policy
Education Policy
Regulatory Policy
Privatization Policy
Municipal Affairs
Final Thoughts
References


About the authors

Marc T. Law is a student intern with The Fraser Institute. He has a B.A. in Honours Economics from the University of British Columbia and an M.A. in Economics from Queen's University. His fields of interest include applied macroeconomics and public policy. In 1996, he co-authored with Fazil Mihlar an extensive review of the economic and social policies of the federal Liberal government entitled The Federal Liberal Government in Action: A Report Card Issued to the Chretien Government.

Howard I. Markowitz is a third-year law student at Osgoode Hall, York University. He has a B.Comm. in Strategic Planning from McGill University. He has won a number of awards and honours for his skills as a debater, is a regular legal panelist on CBC Newsworld, and has written legal commentary for Fraser Forum and the Canadian Student Review.

Fazil Mihlar joined the Fraser Institute in 1994 and is now a senior policy analyst. He is the author of several reports on the economic performance of provincial governments, and has written reports and articles on subjects ranging from labour-market policy to regulation policy. His latest publications include, Regulatory Overkill: The Cost of Regulation in Canada (1996) and Unions and Right-to Work Laws: The Global Evidence of their Impact on Employment (1997). He is also the coordinator of the Survey of Senior Investment Managers and the Centre for Economy in Government. His articles have appeared in several newspapers, including The Globe and Mail, The Financial Post, The Calgary Herald and The Vancouver Sun. Before joining the Institute, Mr. Mihlar worked at The Small Business Consulting Group at Simon Fraser University as a Business Consultant. He holds a B.A. in Economics from Simon Fraser University, an M.A. in Public Administration from Carleton University, and a Marketing Diploma from the Chartered Institute of Marketing, London, England.

Acknowledgments

The Fraser Institute wishes to thank the Donner Canadian Foundation for providing the funding for 1997 summer internships for Marc Law and Howard Markowitz. The authors also wish to thank Michael Walker and Filip Palda for detailed comments and suggestions. The authors, of course, take full responsibility for any errors and omissions and as they have worked independently, their views do not necessarily represent the views of The Fraser Institute or of its trustees and members.

Summary: Main Policy Recommendations

For more detailed explanations of the following policy proposals, please see the relevant sections in the main text.

Spending policy

  • Legislate provincial government spending limits. We recommend an indefinite freeze on provincial government spending at the 1997/98 level of $54.3 billion.
  • Develop a debt elimination strategy.

Taxation policy

  • Continue to reduce the tax burden in tandem with the spending freeze.
  • Reduce marginal income tax rates and, in particular, eliminate income tax surcharges.
  • Reduce payroll taxes.

Social policy

  • Continue to trim welfare benefit rates.
  • Adopt the Sarlo poverty line as the benchmark for welfare benefit rates.
  • Replace the current welfare system with a Negative Income Tax (NIT).

Labour policy

  • Eliminate the minimum wage.
  • Repeal the Labour Relations Act; enact Right-to-Work (RTW) legislation.
  • Reform the Workers Compensation Board (WCB) to put it on a firmer financial footing.

Health policy

  • Ignore the Canada Health Act and allow more private market forces to operate in the delivery of health care services.
  • Allot government funds for health care directly to consumers through a system of Medical Premium Accounts (MPA).

Education policy

  • Redirect all education spending directly to parents through a system of school vouchers (educational opportunity scholarships); or
  • Pass charter-school legislation to allow for more choice in schools.
  • End closed-shop union privileges currently enjoyed by the Ontario Teachers Federation (OTF).

Regulatory policy

  • Impose a three-year moratorium on all new regulations (with exemptions for natural disasters and national emergencies).
  • Introduce more market-driven responses and non-regulatory alternatives into current regulations.
  • Prioritize all regulations using modern risk-assessment techniques.
  • Provide "sunset review" of all regulations.

Privatization policy

  • Privatize major public companies and crown corporations including Ontario Hydro, the Liquor Control Board of Ontario, the Ontario Film Development Corporation, the Ontario Loan Corporation, Ontario Place Corporation, and the Ontario Waste Management Corporation.
  • Contract-out public sector services wherever possible through a process of competitive bids.

Municipal affairs

  • Replace the current system of two-tiered local government in Toronto and elsewhere with a single-tier of competing local governments.
  • Encourage municipalities to charge for consumption of municipal services on a user-fee basis.
  • Use Unit Assessment (UA) techniques for all property tax assessments.






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