A Canadian slant on the sensitive issues.

• Author: Walker, Michael A.
• Position: Views on issues affecting Canadian business

Dr. Walker has strong opinions on some of the most talked-about issues in business today, both in the United States and in Canada Here, he shares his views.

ON NAFTA

The North American Free Trade Agreement (NAFTA) is the second best alternative from Canada's point of view. We've had a Canada American Free Trade Agreement (CAFTA) that gave us better protection over our access to the U.S. market. But because the United States and Mexico were bent on coming to a free trade agreement between themselves, Canada had no option but to seek to be a trilateral member.

NAFTA will lead to diversion of Canadian products, since some of the items we now export to the U.S. will be exported from Mexico. We'll also see investment diversion, as foreign firms wanting to take advantage of the U.S. market and of somewhat lower costs in the Mexican market may opt to invest there rather than in Canada. We're going to lose something, but there's a huge potential in the Mexican market that may offset our losses. In the long term, all of North America will be better off with a trilateral arrangement rather than the "hub and spoke" arrangements that would otherwise result.

ON HEALTH CARE

Health care in Canada is a monopoly run by the public sector, which is the single supplier of resources. It's a health care system in trouble. The trouble, however, is not yet obvious to Canadians.

In Canada, you don't pay anything to get access to the health care system. And therefore 95 percent of the population, who really don't have anything seriously wrong with them, feel we have the best health care system in the world. But those who are waiting, for example, 40 weeks for bypass surgery (in the province of Newfoundland), or waiting more than a year for hip replacements, or elderly people who are waiting six months for cataract surgery recognize that our health care system is in dire trouble.

One symptom of trouble is the capping of physicians' incomes. The general practitioner in British Columbia now may bill the provincial health plan for only $300,000 in total costs. That includes salary and all the costs of running a general practitioner's office. A specialist may bill for $360,000. As soon as you begin to put income controls of that kind into a system, it's not long before you...