The Fraser Institute

The Fraser Institute

December 04, 2014 06:15 ET

The Fraser Institute: Popular Myths Prevent Reform by Clouding Public Perception in Canada

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec. 4, 2014) - Popular myths surround many critical issues in Canada and discourage reforms that would benefit Canadians, finds a new book released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

"Because myths and misunderstandings prevent real workable reforms in Canada, it's important to correct these myths with facts," said Jason Clemens, Fraser Institute executive vice-president and co-author of Economic Principles for Prosperity.

Popular Canadian myths include:

Myth #1: Reforming Canadian health care means a U.S.-style system

Contrary to conventional wisdom, Canada has one of the most expensive universal health care systems in the world. At the same time, Canada performs poorly compared to other OECD countries in key areas such as wait times, doctor availability and access to medical technology.

Yet many Canadians remain wary of health care reform due to fears of a U.S.-style system that threatens universality. This fear, note the authors, is groundless.

"The quality of Canadian health care can be improved, and the costs reduced, while retaining universal coverage," Clemens said.

Need proof? Simply look at countries such as the Netherlands, Germany, Sweden, Australia and Switzerland that, in addition to universal coverage, generally achieve better results at less cost.

Myth #2: The minimum wage helps underpaid, low-skilled workers

Whenever there's a push to raise the minimum wage, proponents say it's impossible for any Canadian, especially a working parent, to support a household while making the minimum wage. The image of a typical minimum wage earner, as a middle-aged person with few job skills, crystalizes in the public conscience.

In reality, note the authors, 59 per cent of minimum wage earners in Canada are between 15 and 24 years old, and nearly 90 per cent of them live at home with family.

Moreover, raising the minimum wage will cause employers to want fewer workers at a time when more workers, drawn by the higher minimum wage, enter the job market. That's a recipe for increased unemployment, particularly among the low-skilled.

So contrary to misleading claims, minimum wage laws actually prevent low-skilled workers from landing entry-level jobs, which represent the first rung on the economic ladder.

Myth #3: Canada spends more on public education than the United States

We spend more on schools and our education system is more centralized. Right? Wrong. Unlike the United States, Canada has no federal department of education-the provinces have exclusive control (except in circumstances involving the military and Aboriginals). And in 2010, government (at all levels) in the U.S. spent 3.7 per cent of GDP on public education versus 3.4 per cent in Canada.

In dollar terms, the United States in 2010 spent $11,826 per student on K-12 education (public and private) compared to $9,774 in Canada. (Dollar figures are adjusted to account for currency differences.)

So the conventional wisdom is totally wrong. American taxpayers spend far more on public education than Canadians. At the same time, on most international tests, Canada performs at least as well as-and often much better-than the United States. Once again, more government money doesn't necessarily mean better results.

In addition to economic myths, Economic Principles for Prosperity examines 10 basic economic principles that lead to prosperity and the institutions needed for societies to prosper.

The book is available as a free PDF download at www.fraserinstitute.org

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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of think-tanks in 87 countries. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org

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