Those calling for tax cuts for upper-income earners have found a new cause. For the past year, media reports, newspaper columnists and "think tank" studies have all been sounding the alarm. The latest catch-phrase of the neo-conservative project: the Brain Drain.
It's the perfect campaign, really. Rather than appearing self-serving, the brain drain scare allows tax cut crusaders to cast themselves as defenders of the national interest, desperately trying to convince politicians to lower taxes for the well-to-do, or watch as the "best and brightest" minds head south. But is the so-called brain drain a reality? And for those who are leaving, are taxes the reason?
Here's what we know. There is at the moment a small net outflow of university-educated people moving from Canada to the United States. However, according to an October 1998 Statistics Canada study, international immigration of university-educated people into Canada -- a "brain gain" -- is at least four times larger than the "brain drain" to the U.S.
The StatsCan study found that, between 1990 and 1996, approximately 8,500 university-educated people per year moved from Canada to the U.S. During the same period, approximately 32,800 university-educated people per year moved to Canada.
According to Scott Murray, a researcher with StatsCan, Canada continues to attract many times more engineers from abroad than it is losing to the U.S. The same holds true for computer scientists and natural scientists.
The StatsCan study concludes: "There is little statistical evidence in support of a large scale exodus of knowledge workers from Canada to the United States. On balance, Canada does lose a small number of skilled workers in key occupations to the United States, but the numbers involved are: small in a historical sense, [and] small relative to the stock of workers in these occupations."
Nevertheless, why are some university-educated people moving to the U.S.? Even if this brain drain is only a trickle and not, as many perceive, a flood, the question remains important.
Most are leaving either because they cannot find work in their chosen fields, or because they can earn more money in the U.S. In the latter case, higher remuneration in the U.S. is generally more significant than lower personal taxes. The reality is the private sector and universities in the U.S. are prepared to pay, for some professionals, much more than their counterparts in Canada. The debate about taxes is, for the most part, irrelevant.
Look at the professions of those who are leaving. A sizable share are nurses (as many as 40 per cent of recent graduating classes from nursing schools), doctors, and scientists. Indeed, according to StatsCan, the health care sector represents the only area where international immigration does not currently outstrip emigration to the U.S. Many are leaving because health care and education spending cuts across the country have granted them no place to stay and work in Canada. Many would like to stay and teach at Canadian universities, but positions have been hard to come by, and research funds have dried up due to cuts at federal and provincial research councils. In large measure, it has been public sector cutbacks, not high taxes, that have forced these young university-educated people to leave. Indeed, large tax cuts requiring further public sector downsizing could well exaccerbate the brain drain to the U.S.
My parents were part of a reverse brain drain in the 1960s and '70s. They were among thousands of U.S., university-educated people who moved to Canada, and who have made an invaluable contribution to Canadian life. Actually, my parents immigrated to Canada twice: once in 1967 as Vietnam War resisters; then again in 1975. The second time was by choice, not under duress. My father, a physician, was attracted by the more egalitarian nature of Canada's public health care system. My mother, a documentary film-maker, was lured by the National Film Board. Both have added considerable value to Canadian society. In both cases, their brains were drawn to Canada by the very public institutions that have since been severely eroded. Perhaps the real risk of a brain drain lies there.
My parents decided to remain in Canada even though they could earn more money in the U.S., and even though Canada had higher taxes. Their choice demonstrates that we are, much as neo-conservative pundits would have us believe otherwise, complex social beings -- not simple economic self-maximizers.