COVER

The third option

THE BOTTOM LINE

DEIRDRE McMURDY January 23 1995
COVER

The third option

THE BOTTOM LINE

DEIRDRE McMURDY January 23 1995

The third option

THE BOTTOM LINE

DEIRDRE McMURDY

The $700-billion question, it seems, is this: Is Canada really “an honorary Third World country?” This is what The Wall Street Journal piously pronounced last week in a controversial editorial that also blared: “Mexico isn’t the only U.S. neighbor flirting with the financial abyss.” While that scoop isn’t going to knock talking cats and killer gerbils off the front page of any supermarket tabloid, it is pretty zany commentary coming from a newspaper so hidebound that it still uses etchings instead of photographs to illustrate its news pages.

COVER

Yet, if the widely respected Journal has suddenly twigged to Canada’s economic inadequacy and sounded the alarm, there must be something to it. If it is really true, maybe Canadians should resign themselves to becoming lovable fiscal slobs. After all, global capital markets are pretty grim places, populated by extravagantly unstable traders who seem prone to endless bouts of manicdepressive behavior. So who cares what they think about us? And why beat ourselves up over a $35.8-billion federal government deficit? About 40 per cent of Canada’s debt is held by foreigners. And they don’t live here anyway.

Maybe if they’d asked Elvis for his analysis of Canada’s aggregate debt burden and the long-term socioeconomic implications, the Journal’s editorial board might actually have had hot news.

Canadians should learn to enjoy the benefits of being a Third World nation

Of course, if our creditors get really huffy about it and send in some policy goons from the International Monetary Fund—as the Journal solemnly warns they could do—we can always stall. For one thing, it’s winter, and that means that the IMF’s hit squad will have trouble sailing its fleet of nuclear-powered submarines up the St. Lawrence River. Second, when it comes to deferring unpleasant actions, Canadians are truly world-class. We would just explain to the IMF that as soon as we resolve the Quebec problem we will hold a referendum on coping with our appalling debt-load.

Certainly, official Third World status would bring some definite benefits to Canada. As a rule, Third World countries have balmy climates and interesting birds. The cuisine of those nations is often delicious and nicely spiced. And then there are all those vibrant, bustling markets crammed with everything from glistening fruit to bright carpets. Instead of brooding about the fact that Canada has the secondhighest ratio of debt to GDP of any industrialized economy in the solar system, we could hire a benevolent despot to run that end of things while the rest of us go to the beach.

Still, we all have a lot of work ahead of us before we can officially boast that we are among the ranks of the Third World. We have to dismantle large chunks of our comprehensive social welfare program and destroy vast parts of our national infrastructure—including railways, airports, telecommunications networks and the Trans-Canada Highway. We will also have to make a few lifestyle adjustments. Currently, Canada has 1.3 people per telephone, compared with 1,212 people per telephone in Cambodia. We’ve also got to ditch some televisions. Canada has 1.6 viewers per set compared with 500 viewers per set in Papua New Guinea, Myanmar, Nepal and the Maldives. A large number of Canadian doctors will have to contemplate retraining. There is currently one doctor for every 446 people in this country. Clearly, we should be shooting for something a little closer to Kenya’s standard— 10,130 people per doctor. While we’re at it, we should take a run at curtailing our average daily food intake of 3,482 calories. In Bhutan, it’s a much more modest 2,058 calories a day. Inevitably, that leads to a revision of Canada’s average life expectancy. At present, it is 78 years in Canada, contrasted with 43 years in Afghanistan and 52 years in Nigeria.

This strategy, of course, would be a particular relief for Canada’s finance minister, Paul Martin, who is struggling valiantly to wrestle the federal deficit down to a level that is more palatable for consumption by international investors. The poor fellow is trying to cut spending, while not increasing taxes or upsetting the dollar or domestic interest rates. But since The Wall Street Journal has already declared Canada to be a Third World country, let’s just scrap the whole painful process. In fact, on closer analysis, it suddenly appears that Canada’s greatest debt may actually be to the Journal and its insightful commentary.