Issue in the News
Whenever a problem arises in the way we administer shared services such as health care or policing or education, the easy answer is always to add some more money to the system as if this were a magic elixir that could fix anything.
But it is not. Money is only useful in very specific circumstances – for example, in procuring new equipment or building more structures, etc., none of which actually deal with productivity.
Recently the World Bank announced that Canada is 18th on the list of OECD countries in productivity. We are 30% less productive than the United States, close they say to the performance of the low-income state of Alabama. Shocking!
Despite the excessive spending of current governments, according to RBC our economy is smaller now than it was in 2019!
Why? There are a few reasons, among them deindustrialization, a shrinking mining industry due to regulation and Leap Manifesto attempts to reduce resource production, and the climate change attack on the oil and gas sector.
“Administrative burdens across multiple levels of government have created inefficiencies and increased internal trade barriers. Infrastructure chokepoints and red tape make international trade more difficult than it should be. Even the mobility of skilled workers – hard enough given our geographic expanse – can be limited by the way provinces, industries, and professional groups try to control labour supplies,” says RBC.
Back in the 1950s, productivity growth in this country was about 5% a year. Today it is .8%, barely growth at all.
What RBC does not mention is the growth of the public sector. One in five Canadians work for government. That is 20.4% of all Canadians, a number which jumps to 28% when factoring in public agencies. This compares to just 14.5% of Americans who serve all three levels of government. The U.S. federal public service represents just 1.9% of the labour force! In Canada, the feds employ 6% of the labour force!
I will stop with statistics now, but you get the point. Working for the government does not add to productivity. It does nothing to increase the wealth of individual Canadians. What it does is drain wealth from the system and, as the public administration grows, efficiency and the ability of the private sector to prosper is diminished for the above reasons.
Eight years ago, you could not get a prospecting permit in Manitoba in under two years. Nothing has changed despite direct ministerial orders to reduce the pointless waiting time. This is not political. I suspect that Wab Kinew is having the same problems as did Brian Pallister and Heather Stefanson in shaking lose the bureaucracy from its predetermined outcomes.
So how does throwing more money at government administered problems such as the mess in health care come into this? Usually that money is directed at either hiring more people in the public sector or increasing salaries or both, neither of which does a thing to solve the problem. Indeed, hiring more people exacerbates the issue by creating more bureaucracy to deal with the added numbers.
And there is no evidence to support the idea that paying the public service more does anything to affect their efficiency. No matter how much a public service employee may want to contribute more, the system puts roadblocks in the way or increasing his production. Indeed, here in Manitoba, one public sector worker I know was warned against working “too hard” because it discomfited his colleagues and made them look bad. No wonder you can’t get a mining permit!
What is needed is a clear analysis of each issue as it arises. In the health sector for instance, we know that doctors are burnt out from paper burden. This one factor could be alleviated by careful pinpointing of the trigger points, such as a lack of consolidation of information to avoid privacy issues. There is a way to solve this. It is not necessary to reinvent the wheel. Other jurisdictions such as Lithuania have already solved this problem. Follow their lead.
Money can be helpful in solving problems but first the problem must be defined, and a reasonable solution identified before the expenditure is made. We all need to think harder and stop looking for the easy way out.
And come to think of it, that is also the first step in resolving our productivity issue.
