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GUNTER: Daft brain-drain tax proposal no answer to Liberal ineptitude

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At last weekend’s Liberal Party national convention in Montreal, Partrick Pichette, a Canadian who worked for several years as chief financial officer of Google in Silicon Valley, suggested that a good way to keep talented people in the country so they benefit Canada is to charge them a tax of up to $500,000 for the privilege of emigrating.

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Pichette got it absolutely backwards. If a government wants its citizens to stay and improve the home economy, it has to improve the conditions that encourage people to stay, not attempt to trap them within its borders.

GUNTER: Daft brain-drain tax proposal no answer to Liberal ineptitude Back to video

Making it hard for more citizens to leave because somewhere around 25 per cent of the most highly trained people in Canada have already left would be the action of a desperate, small-minded country.

It’s similar to imposing currency restrictions. Many countries overburdened by government, with few opportunities to improve their economies, limit the amount of money their citizens may move to other countries. The theory is this will make citizens invest in their own country.

It doesn’t work, just as Pichette’s “brain drain” tax is unlikely to work.

Pichette’s idea is likely unconstitutional. Section 6 of the Charter of Rights and Freedoms plainly states, “Every citizen of Canada has the right to enter, remain in and leave Canada.”

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Then there is also the little problem of how to impose his tax. Canadians aren’t required to register their movements — even moving out of the country — with the federal government.

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Pichette suggested ending the TN visa program, but TN is a program of the U.S. government. It allows Canadian and Mexican citizens to work temporarily in the U.S. in designated professions. It’s part of the CUMSA trade agreement, which means the Canadian government can’t just order it cancelled. It could be negotiated away in the upcoming round of CUSMA talks, but it’s hard to imagine any Canadian government actually asking the U.S to help keep our own citizens economic hostages.

Pichette’s chief rationale for imposing such a heavy burden on out-going doctors, engineers, MBAs and others is that as a holder of an advanced degree, they owe the country for the education they received. But would they owe that? What’s the value of lost opportunity here for well-trained young Canadians?

Our economy has the slowest growth rate in the OECD — the 40 wealthiest nations in the world. Little growth is a result of poor productivity, excessive regulation, massive government spending, stifling taxes and obsessions with environmentalism and reconciliation that prevent major projects from being built.

Moreover, per capita income is now more than 40 per cent higher in the U.S., while taxes are lower. Not only do Canadian emigrants to the U.S. make more money, they get to keep more, too.

Since 2015, the disparity between Canada and the U.S. on income and taxes has grown dramatically. By some academics’ calculations, over the same period, Canada also suffered about a $1-trillion loss in direct investment. Imagine how much that much opportunity would have encouraged talented people to stay here.

Not by coincidence, 2015 was also the start of 10 1/2 years of Liberal rule.

The final consideration that unravels Pichette’s recommendation is that he himself moved to Silicon Valley in 2008 to become CFO of Google without paying such a tax. And according to money.ca, while in the U.S., Pichette amassed a personal fortune estimated at US$270 million.

Why doesn’t Pichette cough up his half-a-mil now if its such a noble idea?

What’s more, Pichette is now reportedly a partner at Inovia Capital, based in London, U.K. Still not back in Canada, using his skills to benefit this country.

That makes him not only a poor policy-maker, but a hypocrite, too.

The sad fact is that while most of the talent flight was the result of the Trudeau government’s complete economic ineptitude, other than looking more like a government of grown-ups, the Carney Liberals are showing no more skill at growing the economy.

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