North needs new vision
Economist says new talks on federal policy a starting point
NNSL (Sep 25/98) - If the Northwest Territories is going to improve economically, it has to change the way it deals with the federal government, a top economist said.
"In the NWT, most things that are offensive and irresponsible are federal policies," Michael Walker, executive director of the Walker Institute said Wednesday.
Walker was the closing speaker at Prospects North, the NWT's top business and investment conference held every three years. Some 320 delegates registered for the conference.
The NWT has to "change its discussion with Ottawa on what Ottawa should be doing," he said.
If there is to be economic development in the North, the NWT needs its tax level cut dramatically.
The tax rate must be lowered to a level where the North becomes attractive.
In determining tax attractiveness, the North must factor impediments like cold climate and high transportation costs. Comparing Yellowknife to Vancouver is inappropriate because Vancouver has many more social amenities.
"You've got to get the tax level down to where it is attractive -- with the impediments," he said.
"If you're objective is to keep people captive and beholden, keep doing what you're doing," he said.
Part of that "captive" approach is the dependency on government.
Remove all the government sourced revenue and look what happens to the North's per capita income, he said.
Walker suggests if Northerners want an example of what not to do, they should consider Newfoundland where two generations have been tied to subsidization.
"Who thinks we should replicate that policy in the NWT," he asked.
"You won't get people to come here by (having) higher taxes. (You've) got to give people the freedom to create economic development."
And if the North thinks it need to balance economic development with human development, it's wrong, Walker added. He said economic freedom is a prerequisite for human development.
This is a global reality, he said.
Walker, often called right wing -- said the Fraser Institute has been called a right wing think-tank for 25 years but is prepared to stand on its record -- defines economic freedom as the right to voluntary acts of trade and the right of citizens to keep the vast majority of the money they earn.
Walker suggests cutting the subsidy flow is a good thing and "compassionate" way to go.
There needs to be a new vision for the North "that doesn't involve subsidizing everybody," he said.
"You don't bridge the gap, you jump it."