MLI Newsletter
Vol. IV, No. 3






May 9, 2013 
Resolved: Wealth has too much power in Canada
June 20, 2013
Resolved: The Government of Quebec can decide  unilaterally to secede from Canada







Northern Light: Lessons for America from Canada's Fiscal Fix


The Canadian Century 



Fearful Symmetry   






  Sven Otto Littorin



Former Swedish Minister of Employment, Sven Otto Littorin on the "Swedish Model" for reform of the modern welfare state and what lessons Canada can learn about employment and healthcare





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In this edition...
UPCOMING MLI EVENT in MONTREAL: Bjorn Lomborg, The Sceptical Environmentalist: Global Problems, Smart Solutions
Cross-border smuggling epidemic exposes Canada, U.S. to security threats, new MLI study warns
Equalization in Canada provides "perverse incentives" to Provinces, and suffers from widespread misconceptions
MLI Commentary: The Blue Revolution; Why Canada needs to do better at farming the Seas
Strong acceleration for Canadian economy: Latest MLI Leading Indicator
Great Canadian Debates Recap. "The Liberal Party Has no Future in Canadian Politics"
More news from MLI
The Sceptical Environmentalist
Global Problems, Smart Solutions 

Conversation with Bjorn Lomborg

Bjorn Lomborg caught the world's attention with his controversial book The Skeptical Environmentalist - focusing on why we should use our scarce resources to actually do some good, instead of simply trying to make ourselves feel better.


He is one of  TIME Magazine's 100 most influential people in the world, one of the  75 most influential people of the 21st century according to Esquire magazine, and one of the  50 people who could save the planet  according to the UK Guardian. 


 Register for Tickets


MLI is proud to partner with the Bon Mot Book Club in bringing Bjorn Lomborg to Montreal for this exciting and thought-provoking evening.


Cross-border smuggling epidemic exposes Canada, U.S. to security threats, new MLI study warns

Far from a victimless crime or a local police problem, cross-border smuggling is an epidemic that renders both Canada and the United States vulnerable to external security threats, a study released by the Macdonald-Laurier Institute 
(MLI) warned.

Smugglers threaten the safety and integrity of local populations, as well as the viability of future Canada-U.S. economic and security co-operation along the border, the study's authors warn.

The Ottawa-Montreal corridor bordering the states of New York and Vermont is one of the worst regions for cross-border contraband and human smuggling on the Canada-U.S. border. Although the contraband trade is active in many border regions, including in the Pacific Northwest and along the East Coast, it is endemic in the Cornwall, Ontario, region between Montreal and Kingston and upstate New York.

A solution is possible, but will require a co-ordinated, comprehensive approach at the federal, state, provincial, municipal and First Nations level. Any roadmap for change must take into account the framework for tobacco control and taxation, the relationship between Aboriginal and non-Aboriginal communities and the security and commercial relationship between Canada and the United States. The goal would be to reduce the incentives for illegal trade, increase the effectiveness of seizure and prosecution efforts, and help generate viable and legitimate economic options for the Mohawk community.


For the full study, click here.


Equalization in Canada Provides "perverse incentives" to Provinces, and Suffers From Widespread Misconceptions

Thumbnail-Reforming Equalization

Canada's equalization program suffers from widespread misunderstanding about the shared benefits of resource wealth, and encourages provinces to spend foolishly, says a new study by the Macdonald-Laurier Institute.


The first misconception is the mistaken belief that only a province, such as Alberta, reaps all the revenues generated by natural resource extraction.


The second is that royalties paid to the provincial government from non-renewable natural resources are a source of government income analogous to sales tax or income tax receipts.


Both views are incorrect, and contribute to the "perverse incentives" provincial governments have to recklessly spend the windfall as quickly as possible, argue the authors, Brian Lee Crowley and Bob Murphy in their report titled "Equalization Reform: Promoting Equity and Wise Stewardship", which calls for changes to the treatment of non-renewable natural resource royalty revenues in the equalization program.


The authors suggest an ideal equalization formula would completely exempt provincial non-renewable resource royalties from the equalization formula if provincial governments use the money for a sustainable, long-term flow of income for their residents rather than spending on current services. 


For the full study, click here. 


MLI Commentary:
The Blue Revolution; Why Canada Needs to do Better at Farming the Seas

Canada needs a "Blue Revolution" of its own so it can start wringing from its waters the same bounty of food and prosperity that its land has yielded for generations, says a study by the Macdonald-Laurier Institute released today.


Aquaculture should be every bit as synonymous with Canada as wheat or beef, given the enormous length of this country's coastline and the world-class expertise in fish farming that exists here, said the author, Brian Lee Crowley, managing director of the Macdonald-Laurier Institute.

"Instead, we are literally treading water,"  "Aquaculture is one of those places where we have got it wrong."

Canada's aquaculture industry has stagnated in recent years, the victim of a cumbersome and inefficient regulatory system, restrictive tariff and non-tariff barriers, special interest groups, and an antiquated system of property rights that makes little distinction between wild fish gathered in the open ocean and those that are farmed.

"Only one factor explains our lack of progress: the rules and institutions under which we operate," Mr. Crowley said.  "We have not created the conditions in which it is worthwhile to invest capital in aquaculture."

In Canada, aquaculture production has varied only slightly between 155,000 and 175,000 tonnes over the past decade. If anything, total production was slightly lower in 2010-2011 than in 2000-2001. While average annual rates of growth in the industry for the rest of the world are 6 percent or more, Canada's output has fallen outright.

Yet, the so-called Blue Revolution - taking food production off the land and into the waters of the globe - is already well advanced, Mr. Crowley said.


Click here to read the full Commentary on the potential for Canada to be a world leader in aquaculture.


Strong Acceleration for Canadian Economy: Latest MLI Leading Indicator

Leading Economic Indicator Feb 13

The Macdonald-Laurier composite leading index accelerated noticeably in February, rising 0.4%, its largest increase in 12 months.


The advance reflects the transitory nature of some of the forces that restrained growth at the turn of the year, and an improving tone in the US economy, said Philip CrossMacdonald-Laurier Institute (MLI) Research Co-ordinator and former chief economic analyst at Statistics Canada.

"This leaves growth in Canada positioned to strengthen as the year unfolds," he said.The leading indicator for the United States continued to strengthen markedly early in 2013, rising 0.4% in February. As recently as late last summer, the US index was declining.

Mr. Cross said the turnaround in the United States was led by further gains in housing and improved credit conditions, as US households easily absorbed the impact of fiscal tightening by the federal government.

For the latest LEI, click here.


Great Canadian Debates Recap. "The Liberal Party Has no Future in Canadian Politics"

GCD: Liberal Party The Macdonald-Laurier Institute was proud to host the third of its signature Great Canadian Debates series - pitting Canadian political historian Michael Bliss against Liberal strategist John Duffy to determine what the future of the Liberal party looks like.


The event was sold out, and the audience participated in a lively Q&A session afterwards putting our two debaters on the spot to answer tough and thoughtful questions.


In case you missed it, go to to see it from beginning to end and then be sure to register for tickets for our next Great Canadian Debate - "Wealth Has Too Much Power in Canada".


We would like to thank our sponsors,the Ottawa Citizen,Certified General Accountants, and iPolitics.  Coverage provided by CPAC, the Great Waterway of Southeastern Ontario, the City of Brockville, the St. Lawrence Alliance, the Free Thinking Film Society,and the Dorchester Review.

More news from MLI

Here are a few highlights:

In a recent Globe & Mail column, MLI's Brian Lee Crowley writes that preoccupation with unemployment rate as a barometer of economic health is both outdated and blinding Canadians to a greater economic threat - rising job vacancies.  


With the passing of Lady Thatcher, Brian Lee Crowley also contributed two columns in Postmedia newspapers across Canada, reflecting on the true legacy of Margaret Thatcher, the meaning of "Thatcherism", and why the Liberals need their own Margaret Thatcher now.  As well as this Globe & Mail piece articulating Margaret Thatcher's impact, not only in Britain, but across the western world.


MLI fellow Linda Nazareth recently contributed two interesting articles to the G&M's Economy Lab, the first highlighting the ups-and-downs of self-employment and what it will mean for the future of the economy; and a second on the growing size (literally) of the middle class around the world.

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The Macdonald-Laurier Institute is the only non-partisan, independent national public policy think tank in Ottawa focusing on the full range of issues that fall under the jurisdiction of the federal government. It initiates and conducts research identifying current and emerging economic and public policy issues facing Canadians.

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