Research

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Specific Claims and the Well-Being of First Nations

In the vocabulary of Canadian Indigenous issues, “specific claims” are made by First Nations who have already adhered to treaties but believe that the Canadian government has not properly implemented their treaty or, even if they have not signed a treaty, believe that the government has violated the Indian Act in the administration of their reserve lands or trust funds. Canada has been accepting specific claims since 1974. Against a background of frequent complaints from First Nations, Canada has reorganized the claims process three times to make it faster and more remunerative to complainants, and the federal government is currently discussing further changes with the Assembly of First Nations.

There were 450 settlements up to November 15, 2017, totalling $5.7 billion (2017 dollars) in payments from the federal government. This figure does not include payments from provincial governments or the value of Crown lands transferred to First Nations as part of settlements. Approximately 400 claims are still being investigated or negotiated, and about 130 others are in some stage of litigation.

There is little statistical evidence that obtaining settlement of a specific claim makes a First Nation better off. The average Community Well-Being (CWB) index of First Nations that have received settlements is exactly the same as those who have not—59.2. The CWB of those First Nations who received earlier settlements has not grown more rapidly than the CWB of those whose settlements came later. The size of the settlement in 2017 dollars is not correlated with CWB. There is a small positive association between size of a settlement per capita and CWB, but the statistical relationship hinges on a few very large settlements and disappears when settlement size is logarithmically transformed. These results are consistent with two earlier studies that also found little or no association between specific claims settlements and improvement in CWB.

The specific claims process was originally adopted as a means for dealing with past injustices, but specific claims have turned out to be more like a flow than a stock. The process has repeatedly been made more accommodating, and legal doctrines such as fiduciary responsibility and the honour of the Crown have evolved to make success more likely. The federal government also subsidizes the preparation and negotiation of claims. These factors help explain the apparent paradox that the settlement of more and more claims has been accompanied by continual growth in the backlog of unsettled claims.

When the United States established a somewhat similar process in 1946, tribes faced a legal deadline of five years to file claims. Now in our 44th year of receiving claims, Canada should consider setting its own deadline for filing. Otherwise, the settlement of specific claims will continue to make increasing demands on the federal budget, diverting resources from programs for First Nations that would do more to enhance their future prosperity and well-being. Preoccupation with claims about past injustices does not improve future prospects, and may actually hinder progress.

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Increasing the Minimum Wage in Ontario: A Flawed Anti-Poverty Policy

Main Conclusions

  • As part of its Poverty Reduction Strategy, former Premier Kathleen Wynne’s government was planning to raise the minimum wage from $11.60 in 2017 to $15 per hour by 2019. But, raising the minimum wage is not an effective way to alleviate poverty, primarily because the policy fails to provide help targeted to families living in poverty.
  • In 2015, the latest year of available data, 90.8% of workers earning minimum wage in Ontario did not live in low income families. Though counterintuitive, it makes sense once we explore their age and family situation. In fact, most of those earning minimum wage are not the primary or sole income-earner in their family.
  • In 2017, the year before Ontario was to increase the minimum wage, 59.2% of all minimum wage earners were under the age of 25 and the vast majority of them (86.3%) lived with a parent or other relative.
  • Moreover, 17.8% of all minimum wage earners had an employed spouse. Of these, 95.7% had spouses that were either self-employed or earning more than the minimum wage. Just 2.1% of Ontario minimum wage earners were single parents with young children.
  • In addition to ineffectively targeting the working poor, raising the minimum wage also produces several unintended economic consequences to the detriment of young and inexperienced workers. These include fewer job opportunities, decreases in hours available for work, reductions in non-wage benefits, more automation, and higher consumer prices, which disproportionately hurt the working poor.
  • A work-based subsidy is a more effective policy since it better targets the benefits to those in need without these negative economic consequences.
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Report Card on British Columbia's Secondary Schools 2018

The Report Card on British Columbia’s Secondary Schools collects a variety of relevant, objective indicators of school performance into one easily accessible, public document so that all interested parties—parents, school administrators, teachers, students, and taxpayers—can analyze and compare the performance of individual schools. Parents use the Report Card’s indicator values, ratings, and rankings to compare schools when they choose an education provider for their children. Parents and school administrators use the results to identify areas of academic performance in which improvement can be made.

The Report Card helps parents choose
Where parents can choose among several schools for their children, the Report Card provides a valuable tool for making a decision. Because it makes comparisons easy, the Report Card alerts parents to those nearby schools that appear to have more effective academic programs. Parents can also determine whether schools of interest are improving over time. By first studying the Report Card, parents will be better prepared to ask relevant questions when they interview the principal and teachers at the schools under consideration.

Of course, the choice of a school should not be made solely on the basis of any one source of information. Families choosing a school for their students should seek to confirm the Report Card’s findings by visiting the school and interviewing teachers and school administrators. Parents who already have a child enrolled at the school can provide another point of view. Useful information may also be found on the web sites of the ministry of education, local school boards, and individual schools. In addition, a sound academic program should be complemented by effective programs in areas of school activity not measured by the Report Card. Nevertheless, the Report Card provides a detailed picture of each school that is not easily available elsewhere.

The Report Card facilitates school improvement
Certainly, the act of publicly rating and ranking schools attracts attention; attention can provide motivation. Schools that perform well or show consistent improvement are applauded. Poorly performing schools generate concern, as do those whose performance is deteriorating. This inevitable attention provides an incentive for all those connected with a school to focus on student results.

However, the Report Card offers more than motivation; it also offers opportunity. The Report Card includes a variety of indicators, each of which reports results for an aspect of school performance that might be improved. School administrators who are dedicated to improvement accept the Report Card as another source of opportunities for improvement.

Some schools do better than others
To improve a school, one must believe that improvement is achievable. This Report Card provides evidence about what can be accomplished. It demonstrates clearly that, even when we take into account students’ characteristics, which some believe dictate the degree of academic success that students will have in school, some schools do better than others. This finding confirms the results of research carried out in other countries. Indeed, it will come as no great surprise to experienced parents and educators that the data consistently suggest that what goes on in the schools makes a difference to academic results and that some schools make more of a difference than others.

Comparisons are at the heart of the improvement process
Comparative and historical data enable parents and school administrators to gauge their school’s effectiveness more accurately. By comparing a school’s latest results with those of earlier years, they can see if the school is improving. By comparing a school’s results with those of neighbouring schools and of schools with similar student characteristics, they can identify more successful schools and learn from them. Reference to overall provincial results places an individual school’s level of achievement in a broader context.

There is great benefit in identifying schools that are particularly effective. By studying the techniques used in schools where students are successful, less effective schools may find ways to improve. Comparisons are at the heart of improvement: making comparisons among schools is made simpler and more meaningful by the Report Card’s indicators, ratings, and rankings.

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Report Card on Alberta’s High Schools 2018

The Report Card on Alberta’s High Schools 2018 collects a variety of relevant, objective indicators of school performance into one, easily accessible public document so that anyone can analyze and compare the performance of individual schools. By doing so, the Report Card assists parents when they choose a school for their children and encourages and assists all those seeking to improve their schools.

The Report Card helps parents choose
Where parents can choose among several schools for their children, the Report Card provides a valuable tool for making a decision. Because it makescomparisons easy, the Report Card alerts parents to those nearby schools that appear to have more effective academic programs. Parents can also determine whether schools of interest are improving over time. By first studying the Report Card, parents are better prepared to ask relevant questions when they interview the principal and teachers at the schools under consideration.

Of course, the choice of a school should not be made solely on the basis of any one source of information. Families choosing a school for their students should seek more information by visiting the school and interviewing teachers and school administrators. The web sites of Alberta Education, local school districts, and individual schools can also be sources of useful information. And, a sound academic program should be complemented by effective programs in areas of school activity not measured by the Report Card. Nevertheless, the Report Card provides a detailed picture of each school that is not easily available elsewhere.

The Report Card aids school improvement
Certainly, the act of publicly rating and ranking schools attracts attention. Schools that perform well or show consistent improvement are applauded. The results of poorly performing schools and those whose performance is deteriorating generate concern. This attention, in itself, provides an incentive for all those connected with a school to redouble their efforts to improve student results. However, the Report Card offers more than just incentive: it includes a variety of indicators, each of which reports results for an aspect of school performance that might be improved. School administrators who are dedicated to improvement accept the Report Card as another source of evidence that their schools can do a better job.

Some schools do better than others
In order to improve a school, one must believe that improvement is achievable. The Report Card on Alberta’s High Schools, like all the other editions, provides evidence about what can be accomplished. It demonstrates clearly that even when we take into account factors such as the students’ family background, which some believe dictates the degree of academic success that students will have in school, some schools do better than others. This finding confirms research results from other countries. Indeed, it will come as no great surprise to experienced parents and educators that the data consistently suggest that what goes on in the schools makes a difference to student success and that some schools make more of a difference than others.

Comparisons are at the heart of the improvement process
By comparing a school’s latest results with those of earlier years, we can see if the school is improving. By comparing a school’s results with those of neighbouring schools, or of schools with similar school and student characteristics, we can identify more successful schools and learn from them. Reference to overall provincial results places an individual school’s level of achievement in a broader context.

There is great benefit in identifying schools that are particularly effective. By studying the proven techniques used in schools where students are successful, less effective schools may find ways to improve. Comparisons are at the heart of improvement and making comparisons among schools is made simpler and more meaningful by the Report Card’s indicators, ratings, and rankings.

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Summary

  • In 2018, the average Canadian family will earn $115,724 in income and pay a total of $50,464 in taxes (43.6%).
  • If the average Canadian family had to pay its total tax bill of $50,464 up front, it would have worked until June 9 to pay the total tax bill imposed on it by all three levels of government (federal, provincial, and local).
  • This means that in 2018, the average Canadian family will celebrate Tax Freedom Day on June 10.
  • Tax Freedom Day in 2018 is the same as in 2017, because the average Canadian family’s total tax bill is expected to increase at a similar rate this year (3.1%) as its income (3.3%).
  • Tax Freedom Day for each province varies according to the extent of the provincially levied tax burden. The earliest provincial Tax Freedom Day falls on May 22 in Alberta, while the latest falls on June 26 in Newfoundland & Labrador.
  • The Balanced Budget Tax Freedom Day for Canada arrives on June 17. Put differently, if governments had to increase taxes to balance their budgets instead of financing expenditures with deficits (which are deferred taxes), Tax Freedom Day would arrive 7 days later.
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Understanding the Regulatory Framework Governing Private and Public Pensions

A common argument made to expand the Canada Pension Plan (CPP) is that it is cheap to administer. While many studies have cast doubt on this claim, why would a public pension plan be cheaper to administer than a private one? Many factors affect the cost of running a pension plan, but a crucial yet overlooked factor is the regulatory landscape that private pension plan.

This paper examines the regulatory requirements among various types of public and private pension plans to determine whether private pension plans are at a cost disadvantage with respect to public ones, with a specific focus on the CPP. In short, the paper finds that the CPP—due to its characteristics and legal obligations—enjoys a marked cost advantage over other pension plans.

First, consider the legal responsibilities of the various plan administrators. Broadly speaking, private pension plans are subject to a variety of statutory and common law regulations. These require the pension plan administrators to act as fiduciaries. While the administrators of the CPP are also under these requirements, as a practical matter, the CPP is seldom entangled in any lawsuits regarding the administration and management of its assets. On the other hand, private and some public pension plans (mostly provincial) are always under threat of litigation, whether by an individual pensioner or through a class action. Although public pension plans do face litigation rarely, and usually prevail in court, the CPP is almost never sued at all. There are almost no laws allowing for private enforcement of governance laws against the administrators of the CPP, so the CPP enjoys substantial cost savings from not having to anticipate or defend against any liabilities that may arise from bad governance, something private pension plans must account for.

Private pension plans are also subject to far more disclosure and customer-related regulations; the CPP faces no such requirements. For example, anti-money laundering laws—sometimes known as “Know Your Customer” laws— affect individual pension plans, such as RRSPs and TFSAs, and any other private pension plans that engage the use of a bank or brokerage services. While a public pension plan could be engaged by such laws, there does not seem to be any focus on such plans by enforcers of these laws. A search of the CPP Investment Board’s website showed no noticeable compliance with anti-money laundering laws.

Moreover, because the CPP is a federally constituted entity (legally speaking), it is not subject to any provincial regulations. Nor is it subject to the jurisdiction of any regulations by industry organizations. As a practical matter, the CPP and its administrators carry on their business without any real consciousness of legal or regulatory sanction. Private pension plans, as well as RRSPs and TFSAs, all have to pay filing and administrative fees. The CPP pays no such fees. Private plans, depending on the province, have to constantly file reports with their provincial pension superintendent. Again, the CPP does not.

Now consider differences concerning pension plan characteristics. Private and public pension plans have multiple characteristics and options for their members. For example, there are different rules governing contribution rates for each plan, and early withdrawal triggers various consequences depending on the specific pension plan. Payouts also vary depending on whether the member retires early or waits till 65. If a member leaves their employment early, they have several choices regarding whether to take the accumulated funds or not, known as the lock-in rules. Generally speaking, even if they cannot access the pension funds accumulated, they can still transfer the funds to another plan. These possibilities create more uncertainty for the pension plan administrator. It requires more planning and safeguards, and thus costs.

In contrast, the CPP has very simple rules. Every income earner between the age of 18 and 65 contributes to the CPP at one rate per income up to an annual maximum. There is a maximum payout at retirement with some limited flexibility on which age the pensioner chooses to receive their CPP. Other than these two basic variables, the CPP rules are quite rigid, thereby simplifying the administrative costs of running the plan. There is no ability to take the accumulated funds and transfer them to another pension plan. In contrast, RRSPs and TFSAs allow for individuals to withdraw their contributions at any time (although there may be consequences for doing so). All contributions are invested by the CPP administrator in whatever funds they choose, and, unlike an RRSP, TFSA, or even some defined contribution pension plans, individual CPP contributors have no flexibility to dictate where their funds are invested. Any actuarial surplus in the CPP fund, i.e., any excesses not needed to fund current payouts, remain with the CPP and must be invested by the CPP Investment Board.

Additionally, the number of CPP contributors is large and diverse, giving the CPP a diversified set of contributors and payees. A private pension plan may have a skewed demographic in terms of its employee age profiles, which can pose its own unique challenges which the CPP does not face.

Finally, contribution rates that employees and their employers pay are set by CPP administrators and enforced by the federal government without much choice or input from employees. Private and public pension payouts are usually set by a bargaining between employers and employees, whether it is done formally in a unionized setting or whether it is done informally in a competitive marketplace. This means there is no accountability to the employees or even employers for the management of the CPP funds.

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Federal Reforms and the Empty Shell of Environmental Assessment

In February 2018, Catherine McKenna, the federal Minister of Environment and Climate Change, introduced Bill C-69, the Trudeau government’s proposal for reform to federal environmental assessment law. Bill C-69 will, among other things, replace the Canadian Environmental Assessment Act, 2012 (CEAA 2012) with the new Impact Assessment Act. McKenna claimed the new Act will restore public trust by increasing public participation in project reviews; create more comprehensive impact assessments by evaluating environmental, health, social and economic factors and requiring climate change and gender-based analysis; reduce duplication and red tape by creating a system of one project, one review with reduced timelines and clearer requirements; and make decisions based on science, evidence and Indigenous traditional knowledge.

Critics of Bill C-69 say it will create regulatory uncertainties and delays, leading to decreased investment in energy projects and infrastructure. Under the Bill, environmental assessment (EA) processes will indeed be uncertain, complicated, and potentially lengthy. Decisions will be discretionary and political. However, these are not new features created in C-69 proposals. The battle over the form EA legislation should take obscures a basic truth: all EA regimes are discretionary and political. EA embodies the idea of law as process—of discretionary, participatory decision-making without substantive rules or standards. EA statutes establish a series of procedural steps to study project proposals and their expected impacts, solicit public input, and conduct reviews before the projects are allowed to proceed. None of those steps are subject to substantive criteria. There are no environmental rules, standards, or rights against which to compare the anticipated impacts of a project. EA provides government with the ability to seek the public interest—which, like beauty, depends on the eye of the beholder.

EA procedures are complicated. A formalized, intricate, expensive, and time-consuming EA process obscures the reality of the function that EA actually serves, which is to legitimize contentious decisions. An anthropologist might say that EA is political ritual. It blesses the outcome, whatever it happens to be. Although the process does not determine the content of the decision, it nevertheless gives legitimacy to the result. The purpose of EA is to be able to say that EA has been carried out. The government decides whether to approve major projects on a case-by-case basis, in the absence of legal goalposts, in accordance with the political winds of the day. Environmentalists favour extensive EA procedures because they create hurdles for proponents of resource development and provide a platform for those opposed to such development to state their objections. The result is a figurative shouting match over whose values should prevail. EA empowers officials to listen to the voices that they prefer to hear.

Discretionary outcomes are not the product of a flawed EA process but a feature of the concept. The EA process provides a veneer of adjudication by making it appear as though decisions are rigorous and based upon evidence and criteria, but the outcome of each EA is actually a policy decision based upon a government’s calculation of political pros and cons. Under C-69, EAs will consider a wider variety of objections to project approval. It signals government receptiveness to constituencies hostile to project approvals. According to the Trudeau government, the Bill establishes principles and markers that will guide decisions, but in reality it will instead simply make EA more like itself—a process to provide legitimacy for discretionary decisions divorced from substantive legal criteria.

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Increasing the Minimum Wage in British Columbia: A Flawed Anti-Poverty Policy

Main Conclusions

  • As part of its effort to alleviate poverty, Premier John Horgan’s government plans on raising the minimum wage from $11.35 in 2018 to $15.20 per hour by 2021, a 34% increase over three years. But, raising the minimum wage is not an effective way to alleviate poverty primarily because the policy fails to provide help targeted to families living in poverty.
  • In 2015, the latest year of available data, 84.3% of workers earning minimum wage in British Columbia did not live in a low-income family. Though counterintuitive, it makes sense once we explore their age and family situation. In fact, most of those earning minimum wage are not the primary or sole income-earner in their family.
  • In 2017, 55.7% of all minimum wage earners in BC were under the age of 25 and the vast majority of them (77.9%) lived with a parent or other relatives. Moreover, 22.2% of all minimum wage earners in BC had an employed spouse. Of these, 93.1% had spouses that were either self-employed or earning more than the minimum wage. Just 2.0% of workers earning minimum wage in Canada were single parents with young children.
  • In addition to ineffectively targeting the working poor, raising the minimum wage produces several unintended economic consequences to the detriment of young and inexperienced workers. These include fewer job opportunities, decreases in hours available for work, reductions in non-wage benefits, a shift towards automation, and higher consumer prices, which disproportionately hurt the working poor.
  • A work-based subsidy is a more effective policy since it better targets the benefits to those in need without these negative economic consequences.
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The Decline of the Other Alberta Advantage: Debt Service Costs in Alberta Are Rising

Summary

  • Throughout recent history, Albertans have enjoyed a substantial fiscal advantage other Canadian taxpayers, resulting from the fact that government debt interest payments in Alberta have been far lower than in any other province.
  • For example, in 2007/08, Alberta’s provincial government spent just $61 per person on debt interest payments. The other nine provinces had to spend between $521 and $1,476 per person servicing debt.
  • This fiscal advantage has saved Alberta’s taxpayers billions of dollars each year in the recent past.
  • Alberta’s debt interest payments were so low because the province carried very little debt. Until 2016/17, Alberta was “net debt free,” meaning that its financial assets were greater than its liabilities.
  • In the most recent fiscal years, however, Alberta’s net asset position has flipped from positive to negative and the province is quickly racking up debt.
  • As a result of rapid debt accumulation, the cost of servicing Alberta’s debt is quickly catching up with other provinces. Current projections suggest that by 2020/21, Alberta’s debt service payments per person will exceed British Columbia’s and will be approximately 70 percent as large as Ontario’s.
  • If Alberta’s pace of debt accumulation continues at a similar rate in subsequent years, Alberta will join Newfoundland & Labrador and Quebec (and possibly Ontario) as the only provinces paying more than $1,000 per year in per-capita debt interest payments.
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The Private Cost of Public Queues for Medically Necessary Care, 2018

Summary

  • One measure of the privately borne cost of wait times is the value of time that is lost while waiting for treatment.
  • Valuing only hours lost during the average work week, the estimated cost of waiting for care in Canada for patients who were in the queue in 2017 was about $1.9 billion. This works out to an average of about $1,822 for each of the estimated 1,040,791 Canadians waiting for treatment in 2017.
  • This is a conservative estimate that places no intrinsic value on the time individuals spend waiting in a reduced capacity outside of the work week. Valuing all hours of the week, in-cluding evenings and weekends but excluding eight hours of sleep per night, would increase the estimated cost of waiting to $5.8 billion, or about $5,559 per person.
  • This estimate only counts costs that are borne by the individual waiting for treatment. The costs of care provided by family members (the time spent caring for the individual waiting for treatment) and their lost productivity due to difficulty or mental anguish are not valued in this estimate. Moreover, non-monetary medical costs, such as increased risk of mortality or ad-verse events that result directly from long delays for treatment, are not included in this estimate.