The Daily Commercial News writes about Mark Carney's remarks from the May 3rd Cardus lecture and lunch. "Banking, Trust and the Culture of Capitalism" was part of the Hill Family Lecture Series. To read the full article, click here.

Paul Boothe is optimistic about the future of manufacturing in Canada for a very specific reason. In his role as director of the Lawrence National Centre for Policy and Management at the Richard Ivey School of Business he has been talking to world-class, Canadian manufacturing firms. They are world-class, he says, precisely because they are competing internationally, which has forced them to up their game. “The fact is standards of living and wages in Mexico, China and India are rising and rising fast, which means that competition is moving well beyond labour costs, and Canada’s leading manufacturers are doing what it takes to be as competitive as possible,” says Mr. Boothe. That need — to do all it takes — is what drives competition and ultimately innovation, according to the 2008 federal report, Compete to Win. The report listed 65 recommendations to the Minister of Industry to help Canada improve its global competitiveness. The review panel assessed legislation that in effect limits foreign competition in Canada largely by restricting foreign ownership. The overarching message of the report was that opening up competition would help put Canada on the right track. Five years later, few of those recommendations have been acted on and Canada’s global competitiveness ranking has worsened.  According to the World Economic Forum, Canada has slipped from 12th spot in 2011 to 14th in 2012. Of course, legislation with respect to foreign competition is just one type of protectionist policy. The ability to transport wine from Alberta to Ontario has restrictions, as well.  “I can buy a bottle of nice scotch in Alberta for $60 but the same bottle costs double that in Ontario,” says Brian Dijkema, senior researcher at think tank Cardus. “In some cases, the legislation is intended to protect the regions, in other cases, it’s the result of having disparate governments with different agendas and so laws don’t always match up across the country. And, of course, some of it is political.” In some cases, the legislation is intended to protect the regions, in other cases, it’s the result of having disparate governments with different agendas This raises the question: Is there enough competition to ensure maximum shareholder value? “Competition is one of the key drivers of innovation and innovation is one of the key drivers of increased value. So limiting competition limits the ability of a company to create value,” says Mr. Dijkema. “I grew up on the St. Lawrence and I used to see big lakers sail by carrying iron ore from Thunder Bay to Montreal. In Canada, there is a 25% tariff on any imported ship, which means that it’s cheaper to buy one here in Canada. This does not encourage Canadian shipbuilders to be as innovative or competitively priced because they have protection through the tariffs.” Still, the world is too complicated and complex to apply dogma to how best to compete. The underlying reasons for restrictions vary with each industry and so each piece of legislation needs to be assessed individually, says Shuli Rodal, a partner in Osler, Hoskin & Harcourt LLP’s Competition and Anti-Trust practice. “In some cases, increased restriction to foreign ownership is a desire to keep the market more open. For example, the recent changes to the Investment Canada Act regime are applicable to state-owned investors specifically. The Prime Minister said the government is going to take a more restrictive view of controlling investments by foreign state-owned entities because over a number of years the Canadian government has denationalized a number of sectors to make them more competitive. We didn’t do that to have a foreign government come in and in effect nationalize them for another company. The goal is to keep the companies private. That’s the view of the government. The state-owned companies are saying they are market minded and will act like private sector companies.” The new guidelines were prompted by acquisitions of Progress Energy Resources Corp. and Nexen in Alberta’s oilsands by Malaysian and Chinese state owned corporations respectively. In both these cases, the acquisitions were deemed to provide a net benefit for Canada. Going forward, the Prime Minister stated that only in an “exceptional circumstance” will an acquisition of a Canadian oilsands business by a foreign state owned enterprise be of net benefit.  What an exceptional circumstance might be was not defined. The bigger question is will this create a chilling effect on investment? Stay tuned. When the government relaxed foreign ownership restrictions in the area of book retailing, the result was the entry of Amazon and iBook stores into Canada, which led to job creation here. “It was one of those cases where the way of doing business and technology overtook the policy rationale for the restriction,” says Ms. Rodal. Rules that protect industries have always been a bad idea because all they do is protect an individual company or industry from competition, from consumers who may want to have a choice For his part, Mark Milke, a senior fellow at The Fraser Institute, says governments have to make up their minds about whether they are going to be on the side of a sector or if they prefer to serve the general good of consumers. “Why some industries are protected and not others is quite simply politics. There is a great deal of money to be made if you are in a protected industry with a deep moat and a high wall. Warren Buffett has famously advised to buy companies that have barriers to entry. There is a reason for that. The higher the barrier to entry, the more likely you are to turn a great profit but who does that harm? It harms consumers. The dairy and poultry industries are protected by marketing boards. The automotive industry is protected by a tariff against non-NAFTA assembled vehicles. These have broken down on the retail side of things but not everywhere and not for everything. And that’s unfortunate.” He points to a recent Senate finance committee finding that part of the reason retail prices are higher in Canada than the U.S. is due to the $3.6 billion in tariffs on everyday items. “This harms the poorest Canadians the most because these are basic necessities for getting along in life.  Rules that protect industries have always been a bad idea because all they do is protect an individual company or industry from competition, from consumers who may want to have a choice. The reason the Harper government so far isn’t willing to do anything in terms of scuttling the dairy and poultry cartels and the marketing boards associated with them is because they don’t want to offend a portion of Quebec, which provides a large portion of the dairy and poultry products in the country.” But what is the consequence of removing these barriers to competition? It will be a mix of wins and losses, consumers will have more buying power and productivity will increase, says Mr. Milke. He points to Canada’s energy sector as an example. “Talk to anyone in downtown Calgary and you will find they have had to up their game because they are in a world market and they cannot afford to be slack. They don’t have a protected product. They have to sell on the world market and that means they have to find efficiencies.  If you can make a good living courtesy of government protection, where’s the incentive to up your game?”

ChristianWeek.org cover Cardus' involvement in the Calgary Centre City Plan. Frank Stirk reports on the Calgary City Soul project. To read the full article, click here.

The CD Howe Institute's study titled "Access Denied: The Effect of Apprenticeship Restrictions in Skilled Trades" references two Cardus publications ; "College of Trades: An Impossible Institution", and "Where is the Research?: An Uneasy Case for Moving Trades from Voluntary to Compulsory Certification." To read the study, click here.

The Canadian Press covers Cardus event; The Hill Family Lecture Series: Mark Carney on Banking, Trust, and the Culture of Capitalism, which took place Friday May 3rd at the Toronto Region Board of Trade. To read the article, click here.

Fox Business covers Cardus event; The Hill Family Lecture Series: Mark Carney on Banking, Trust, and the Culture of Capitalism, which took place Friday May 3rd at the Toronto Region Board of Trade. To read the article, click here.

With the media frenzy around the recent papal election pushed aside by more violent events, we seemed set to return to our wearily familiar tale of woe about organized religious life in Canada. Our churches are almost empty. The few who remain in the pews are so old, they’ve either fallen asleep or are just committed to keeping the nostalgia society alive. No compos mentis Canadian under 30 believes in anything beyond the evidence-based verities of a wholly secular culture, and would not be caught dead in a house of worship unless dragged there by parents for Great-Aunt Theodora’s funeral. Or so it is said. Curiously, though, a countermanding voice to this embedded narrative comes from no less a figure than our own Governor General, who warns against accepting as gospel the claim that young Canadians want no part of religious faith, and that Canada as a country has turned its back on God. In an interview for the new issue of Convivium magazine, David Johnston identifies himself as a man of deep and long-standing religious faith. “The role of religion has been important in my life and in my family’s life,” Johnston says. “In my search for truth in life, a faith-based answer has been very important to me. I am a person of faith.” The GG’s affirmation came as he represented Canada at the inaugural mass of Pope Francis. He is candid in his conversation with Convivium editor-in-chief Father Raymond J. de Souza that Canada should not deny its historic connection to religious faith. We would be weakened, he says, if we ceased making religious freedom central to our identity among the nations of the world. Historically, Johnston says, the Catholic Church of New France seeded a long Canadian tradition that has shaped us as a pluralistic nation. “Thank heaven that when a European war was fought on Canadian soil midway through the 18th century, in our unique Canadian way, we could find a pluralistic, tolerant solution and permit different traditions to continue in some degree of harmony. That’s the great promise we offer to the 21st century.” The new office of religious freedom within the department of foreign affairs is, he says, a harnessing of spiritual power to the pragmatic, diplomatic good of helping resolve fundamental problems across the globe. But it’s from within his own academic history — a student at Harvard, Cambridge and Queens; a dean, principal and president at Western, McGill and Waterloo respectively — that the Governor General most eloquently dismantles myths of faithless campus life. “I think the essential search for meaning in life is at least as present on university campuses today as when I was a student. That presents both a challenge and an opportunity as to how one relates to a younger generation who are looking for a compass for their lives,” he says. His answer to that challenge facing students is: “Be very careful about overthrowing what has made you the person you are, and as you examine new interpretations of truth, recognize that the values that have brought you here and that have made you the person you are, are very precious.” Johnston points out that the search for truth at the heart of religious faith is also “the very essence of the university,” noting the place of “veritas” in the motto of his alma mater, Harvard. “That was the question Pontius Pilate put to Jesus — what is truth? — and certainly Jesus had his own interpretation of truth,” he says. As the research director for a think-tank committed to renewing North American institutions by drawing on 2,000 years of Christian social teaching, I obviously have a bias toward that particular interpretation. Yet research we have done over the years at Cardus shows the inescapable social good that comes from having people of all religious traditions contributing to our common life. In truth, it also reveals with statistical starkness the pressures on organized religious faith in Canada. It’s encouraging to see that the Governor General agrees on the need to keep religious faith alive as a matter of public good in this country, and that he is willing to add his august voice to setting the story straight about its much-exaggerated demise across this land.

The OACS News Service covers an upcoming Cardus event with outgoing Bank of Canada Governor Mark Carney. Quoted in the article is Executive Vice-President, Ray Pennings. To read the full article, click here.