6 Special reportCanada The EconomistJuly 27th 2019
2 initially to circumvent tariffs, but headquarters and intellectual
property stayed south. Today, just 11% of enterprises in Canada that
use sophisticated technology (not counting telecoms firms) are
Canadian, according to a study by the Brookings Institution. Buzzy
startups fall into the hands of foreign acquirers, often American
ones. That is partly because small companies which float shares
on the stockmarket lose tax benefits. Even in mining, domestic
firms are being gobbled up by foreign giants such as Rio Tinto and
Newmont. “We’re not the dominant country we were 15 years ago,”
laments Pierre Gratton of the Mining Association of Canada.
All of this has made the economy less productive and innova-
tive than America’s. Labour productivity is about 75-80% of Ameri-
can levels, says Andrew Sharpe of the Centre for the Study of Living
Standards in Ottawa. It was growing more slowly than in America
until 2010 but then sped up. Canadians are also poorer on average.Income per person in 2018, adjusted for purchasing-power parity,
was $49,900, nearly $13,000 lower than in America.
This gap has not so far been a big problem. Mr Sharpe points out
that Canadians at the bottom half of the income scale are better off
than Americans in their position, thanks to lower levels of in-
equality. Growth in income per person has kept pace with Ameri-
ca’s for 150 years despite all the upheavals of that period.
But Canada will find it harder to keep up from now on. Since
1995 it has avoided falling further behind America because its em-
ployment as a share of the population has grown faster, writes Pe-
ter Nicholson in a paper for the Institute for Research on Public
Policy in Montreal (see chart on next page). Canada’s labour force
is now ageing and its employment ratio is unlikely to continue ris-
ing. That leaves productivity growth, which comes mainly from
innovation, as the only source of economic growth.^1Culture wars, Canadian-style
The government’s liberalism can sometimes stray into illiberalismT
his yearBritish Columbia’s human-
rights tribunal ordered Bill Whatcott,
a conservative agitator, to pay Morgane
Oger C$55,000 for inflicting on her and
other trans people “detestation and vil-
ification based on their gender identity”.
In 2017 Mr Whatcott had distributed a
flyer calling Ms Oger, who was then run-
ning for the provincial legislature as a
member of the left-leaning New Demo-
cratic Party, a “biological male who has
renamed himself”. That and other as-
sertions, the tribunal ruled, constituted
“hate speech” and “discrimination”.
Mr Whatcott is not the only Canadian
to have been punished recently for an act
of conscience. Last year the federal gov-
ernment denied subsidies for summer
jobs to groups that did not tick a box
endorsing a woman’s right to have an
abortion. In March, Vancouver said it
would cut funding to the city’s Rape
Relief and Women’s Shelter because the
group said it would offer some services
only to “women who are born female”.
These decisions are an outgrowth of
Canada’s precocity in recognising rights
and protecting minorities. It was the
fourth country in the world to legalise
same-sex marriage, in 2005. Under Mr
Trudeau the pace of liberal legislation has
picked up. His government legalised
doctor-assisted suicide in 2016. The
following year Billc-16 outlawed dis-
crimination on grounds of gender identi-
ty and made it a crime to promote hatred
against transgender people. Last year
Canada became the first big country to
legalise cannabis for recreational use.
The adoption of Canada’s charter of
rights and freedoms in 1982 was the “mostimportant galvanising force” behind its
pioneering role in recognising rights,
says Beverley McLachlin, a former chief
justice of the Supreme Court. Often, the
process starts in the courts. But charter
rights are not absolute. Tribunals can
limit some rights, such as freedom of
speech and religion, to enforce others,
like protecting transgender people from
discrimination.
Some Canadians have revelled in the
new freedoms. In 2017 a baby born in
British Columbia became the first in the
world to be issued a health card that
records its sex as neither male nor fe-
male. The non-binary transgender parent
wants the child to work out later which
sex it is. Since last year, Canadians have
been able to record their sex as “x” on
their passports.
But when new rights collide with oldones, the consequences can be conten-
tious. Ontario’s highest court has said
that doctors who object to abortion and
euthanasia must, against their con-
science, refer patients to doctors willing
to perform them. This will force many
such doctors out of the profession,
warned Ryan Wilson, president of Cana-
dian Physicians for Life. British Colum-
bia’s human rights tribunal is consid-
ering several complaints by someone
who identifies as a woman against female
beauticians who refused to wax her scro-
tum. She claims they are discriminating
on the basis of gender identity.
In 2016, as parliament was debating
Bill c-16, Jordan Peterson (pictured), then
a little-known psychology professor at
the University of Toronto, warned that it
could make criminals of people who use a
pronoun that a transgender person does
not like. Authoritarianism, he said, is
“started by people’s attempts to control
the ideological and linguistic territory”.
The fining of Mr Whatcott, who went
beyond using an unwanted pronoun but
was not deemed a criminal, does not
vindicate Mr Peterson, but it suggests he
has a point.
Meghan Murphy, who founded Femi-
nist Current, a website, argues that Bill
c-16 was “rushed through with no dis-
cussion...about how it would affect wom-
en and girls”. It probably encouraged
Vancouver to cut off funding for the rape
centre. “Canada likes to consider itself
very liberal and accepting,” she says. But
“we can’t just accept and include when
it’s harming other groups”. Having dis-
covered lots of new rights, Canada is
grappling with how to honour them all.Canadian liberal?