Status Quo, you know, is Latin for “the mess we’re in.” – Ronald Reagan

This is an update of a piece originally published in The MacDonald Notebook in November of 2017. I wanted to re-publish as I believe it as relevant today as 14 months ago.

Charlene Brophy is a force of nature. She’s the CEO of Fonemed, Newfoundland and Labrador’s wildly successful telemedicine company and the best sales agent the company could have. Passionate, energetic, smart and visionary.

Fonemed is changing the way healthcare is being delivered in the United States, Haiti, Jamaica, the Dominican Republic, Venezuela, Peru, Greece, and Bangladesh. The question here is why our provincial governments won’t get on board. Her theory is our propensity for status quo thinking.

If you want to read more about her company, check out Stephen Kimber’s article in Atlantic Business Magazine from April 2017, listen to our conversation on my podcast below or visit the website.

“The mess we’re in”, as Reagan phrased it, is unsustainable spending from our provincial governments. Healthcare is taking up the lions share and our demographic black hole is poised to suck even more from the provincial treasury.   

It’s clear we need to change our thinking and Brophy offers up real, tangible solutions. It’s time for politicians to start listening. In a forthcoming CFIB report on the issue, we will provide evidence to suggest governments jettison their four-year planning horizons and embrace stronger long-term fiscal planning. Control that which they can control and constrain spending by innovating with bold efficiencies in service delivery.

Our findings are also being reflected in a number of other studies and reports examining how governments begin looking further down the road when developing their budgets. Constraint on spending is no longer up for ideological debate, it’s being mandated by powerful economic forces knocking at the door.

CD Howe offered up additional evidence in its report The Fiscal Implications of Canadians’ Working Longer. It says with the aging population is forcing governments to start making policy moves to keep people in the workforce beyond age sixty-five.

As author William Robson points out, “In the next few decades, Canadian governments will face a fiscal squeeze: rising demand for public services on one side and slower growth of government revenues on the other—and the provinces get squeezed hardest.”

For Atlantic Canadian provinces, the problem is more serious than anywhere else in the country. With our overall population flat-lining and growing older, the working age population will shrink dramatically. This means fewer working people available to provide revenue for governments. The problem becomes more pronounced when you look at the cost of providing health care to an older population.

On immigration, while increasing the population is desirable, even with the current increased flow of newcomers to the region, and the attention being paid to retention, it should be clear to policy-makers there’s no magic immigration unicorn coming to save the day. The numbers of newcomers to the region would have to be increased by a magnitude of thousands to meet the human capital requirements and sustain our current spending patterns into the future.

With heavy debt loads already in place and fewer people to provide tax revenue, the threat of escalating interest rates comes into focus. Out of the confluence of these factors emerges an almost perfect storm of unsustainability.

There are lots of clichés and axioms about doing the same thing and expecting different results, but we are quickly running out of time to take their lessons.  If nothing else, we should be taking these lessons from Atlantic Canadian entrepreneurs like Brophy, a game-changer on the international stage, and using these tools here at home.

Fall Back Up with Charlene Brophy
CFIB’s 3rd report on the future of Atlantic Canada

Fall Back Up is supported by the Canadian Federation of Independent Business. CFIB provides political advocacy, business support, and savings to 110,000 small- and medium-size independent businesses across Canada. To find out how CFIB can improve the odds of your business success, visit CFIB, In business for your business…

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