Canada- A Capitalist Secular Democratic State

Canada’s culture is defined by its shared concepts of what is “FAIR” in the minds of all citizens. The CFP is founded upon centrist principles of FEDS: Free-Enterprise Democratic Socialism. By linking together our mass mindset of “Fairness” in each of these three areas, we go a long way to defining and illuminating our Canadian Culture.

In this essay, I will look at our common mindsets regarding Free-Enterprise.
Canada must be considered to possess a Capitalist component to our cultural self-identity. The free-enterprise concept means that we expect to be able to invest or accumulate capital within a free-enterprise environment. This means that all enterprise to produce capital must be within a free and open market. This principle is a fundamental right that must be imbedded in our constitutional framework.

A constitutional upgrading,  from our 150 year old constitution, is felt needed by most Canadians as the evolution of capitalism within Canada has evolved into mostly foreign oligopolistic, monopolistic and institutional infrastructure has produced an environment where  Canadians feel there are few, if any, free markets within our nation. The government share of GDP is so high that capital sourcing is highly slewed to government bodies. The private sector is so encumbered by regulatory paradigms that only the largest enterprises, with their buttresses of lawyers, can survive and dominate formerly free market segments.

About 60% of our country’s capital development came from the USA with equity strings attached. The generations of connected family enterprises that built the Canadian-owned portion of our capital base have been wiped out by multi-nationals or have become effectively self-interested non-nationals of Canada.

In fact, the capital wealth of Canada was mostly invested in real estate development of one kind or another. Capital produced from our national resources has mainly gone to government agencies and foreigners.

This has delivered us into a current situation where free-enterprise competitive family business development has all but ceased entirely across Canada.  Our middle class has shifted from self-employed to salary wage slaves as mega stores and mega chains swept away all competition. It appears that few Canadians have recognized these conditions and connected how they are affecting our Canadian Culture.

There is no doubt that the majority of Canadians fear that our capital acquisition and investment environment is totally stacked against family wealth accumulation. There is perceived an unspoken “Capital Wealth Autocracy” dominating Canadian family wealth development.

Family wealth development evolved via Canadian families hiring members of each other’s families to run businesses. Ironically, in the corporate world, where I played out most of my careers, hiring family members of existing employees was considered unprogressive or even disallowed. In practice, senior owners and executives often brought family members aboard while middle management and the rest were denied such privileges. This certainly kept down the possibility of there being an internal challenge to senior management. It furthered the autocratic structure most corporations acquire around the world.

But what must Canada do to impregnate the country with the vitality and prosperity of free-market capitalism?  What can Canada do to reinvigorate middle class entrepreneurism?

Every year there are $billions spent by government departments and agencies. These funds must all be contracted according to mazes of regulations and minimal business standards. Unfortunately, only a tiny few companies are equipped to obtain these contracts. In fact, there is an oligopoly on a large majority of contracts given by our government agencies. This whole process needs to be revised to streamline bidding and contracts to not only increase competition, but also improve the productivity of these capital investments by government.

The price fixing within most industries in Canada is an abomination against our culture of “fairness”. Agencies don’t have the legal flexibility to actually enforce the intent of the Competition Act against muliti-nationals. Our laws must allow new forms of evidence so that every case depends upon an insider blowing the whistle”. It is absolute naiveté and stupidity that Canada can not prosecute the gas companies for their daily price fixing. The law must be amended.

Government loans and subsidies to automobile and other companies are routinely extorted in exchange for jobs. The global vehicle cartel needs to be broken up, not consolidated. Canada needs its own vehicle industry with its own supplier networks. Bankrupting a division of a foreign enterprise in Canada should not be allowed without generous severances and asset confiscation.

Middle class capital accumulation begins with the income tax laws for family members. Today’s senior generation worked through the transfer of capital wealth from family to government bureaucracies via excess taxation. Less than 15% of seniors have been able to accumulate $600k net worth on which to retire after they turn 65. Most are technically bankrupt within 5 years. This is another abomination to our Canadian Culture.

Every family individual should have access to a tax free income Capital Accumulation fund to save towards a future investment. Spreading Canada’s wealth into the most industrious and productive mass of society should be common sense in Canada. Canadians must set themselves free from the global conglomerates and foreign government Sovereign Wealth Funds intent upon imprisoning global and our national markets. We can best achieve this goal by stimulating the creation and use of innovative new enterprise in all markets.

The absence of such enterprise is mostly due to capital accumulation impairments by governments, corporate price gouging of consumer services, products and their components, and interest rate usury. All of these contemporary traits are anathema to our Canadian Culture.

The empowered Left side of the House of Commons declares the moral high ground for all citizen’s interests. It will be interesting to see if they will actually embark upon the battle of the middle classes against the foreign government and corporate capitalists.

By the way, did you read the essay on Canadian Quantitative Easing?

Jim Reid Founder CFP