How can a country overcome a crisis? How can it reinvent itself, change, transform? These are two of the questions you asked us
in the comments section, here on VisualPolitik. Well, my friends, I think we can say that
the economy usually evolves through cycles. That is, a growth phase is sooner or later
always followed by a crisis, and then this crisis is followed by a new growth phase. And so on…. For example, since World War II, the US has
undergone 11 complete economic cycles, that is, both growth and crisis years. However, my friends… Things aren’t always that simple… sometimes… leaving a crisis is very, very
hard. So much so that decades could go by; so much so, that even a rich and prosperous
country can… stop being one. Because don’t think that this only affects
emerging countries, not at all. Even the richest countries can suffer this
type of deep crisis… usually due to political reasons, or rather, bad policies. But, yes, my friends, a country can even escape
these deepest of crises. We saw it here on VISUALPOLITIK with, for
example, the case of New Zealand, which after undergoing a very harsh crisis managed to
completely overturn their situation. Well… in this video we’ll show another
example… that of Canada! Yes, you heard me right. Did you know that Canada almost went bankrupt? Well, listen up. Canada is one of the richest, freest, most
prosperous countries with the highest quality of life on the planet. It doesn’t even matter what ranking we use: It can be the United Nations HDI, the Corruption
Perception Index of Transparency International, the Fraser Institute’s Human Freedom Index
or the Legatum Prosperity Index. In all of them, Canada is always among the
highest on the list… But this video isn’t about rankings… so…
just one more. See, in the latest ranking of the best countries
prepared by US News magazine and the Wharton School, Canada appears as the second best
country to live in the world. So, it’s pretty clear, as we already saw
on this channel, Canada, dear viewers, is very popular right now. However, things in Canada weren’t always
this happy. There was a time, in the 60s and especially
in the 70s, where everything was about to collapse. (THE DISASTER) For years, Canada was very similar to the
United States, it was practically its twin brother: It had a very small government, the country
was very decentralized and taxes were very similar… of course, the idea then was to
compete to attract investment and thus, also, people from abroad, immigrants. However, this all changed at the end of the
60s. At that time Canada sought to distance itself
from the United States and to try a new political and economic model. The great architect of this “revolution” was,
Pierre Trudeau, yes, the father of the current Prime Minister, Justin Trudeau. Of course… father and son’s politics are
by no means the same. It looks like Justin Trudeau did his homework. But… let’s not stray from the subject too
much. The fact is that Trudeau’s father governed
Canada virtually uninterrupted, between 1968 and 1984… And the fact is that throughout these 16 years
in power the country changed a lot. See, Trudeau wanted to implement a new political
model in Canada, which was a bit different from Washington’s capitalism and somewhat
closer to Soviet Moscow’s collectivism. (“As against the “invisible hand” of Adam
Smith, there has to be a visible hand of politicians whose objective is to have the kind of society
that is caring and humane”. Pierre Trudeau.) In fact, in international politics, one of
the things the prime minister was best-known for was his close friendship with Fidel Castro. In any case, the truth is that we could say
that Trudeau’s father went a bit far: he raised taxes a lot, increased public spending,
nationalized companies and because he thought that all international trade and investment
was bad, due to competition… he decided to set up barriers UMMM… barriers? Who does that sound like? If that weren’t enough, he also made the
Central Bank print banknotes to spare, to expand credit and finance the government. Does this recipe sound familiar? Well, the result of all this, my friends,
is that within a few years, the deficit, unemployment and inflation rates put the whole country
up against the ropes. So, of course, when in 1984 Pierre Trudeau
left office, he did so with the lowest popularity level for a Canadian prime minister in decades. Only 2 out of 10 Canadians still supported
him And it was then that Canadian citizens had
to make a very important decision. (THE CHANGE) In the September 1984 elections, the Conservatives
won an overwhelming victory. It was clear that the country could not continue
along Trudeau’s path. The new Prime Minister, Brian Mulroney, decided
to reverse the situation and began to strengthen ties with President Ronald Reagan. A new era had begun… Over the next 10 years the Conservative government
did many things to improve Canada’s economy: For example, it lowered taxes, negotiated
NAFTA, the North American Free Trade Agreement that unites Canada, the US and Mexico, And following in Margaret Thatcher’s steps,
launched an ambitious plan to privatize large public companies, such as Air Canada and Petro-Canada. However, dear viewers, he didn’t do one
thing… the most difficult and unpopular action: control public spending. In 1990, the state held more than half of
the economy, taxes were still very high, there was a huge public deficit, and public debt
rose like foam. Conservatives had taken the easiest measures…
but at the moment of truth they hadn’t really shown much commitment. Therefore, in the following 1993 elections,
Pierre Trudeau’s leftist Liberal party won the elections again… this time, promising
a true revolution. Could Pierre Trudeau’s party save Canada? Given his background, you can’t deny this
would’ve have been very difficult to imagine. But… my friends, everything was different
this time. The new government wanted to completely change
the country’s model once and for all, and no, they no longer wanted to know anything
about Moscow or the Soviet model. The main idea was that quality of life wasn’t
only related to the economy, it depended on it. If they wanted to achieve a high quality of
life they needed to strengthen Canada’s economy. And that’s what they did, especially under
the Minister of Finance, Paul Martin, the true change promoter. Well, the fact is that within the first years,
this leftist government launched a sharp public spending cut, elimited many unnecessary programs
and adjusted spending. For example, they strongly reduced military
spending and many companies’ subsidies. In just two years, in real terms, spending
dropped by 15%. Under the principle which states that the
State shouldn’t do things that companies can do better, the government decided to continue
with the privatization plan… in which they went as far as privatizing the railways and
even the aviation management system. And, no, planes in Canada haven’t fallen
nor have there been more accidents than in other countries. On the contrary, Canada’s aviation management
system is considered one of the best in the world. The fact is that in just 4 years, the situation
was under control. The government had gone from having a huge
deficit to a surplus. Check out this graphic. Of course, as you can imagine, these measures
weren’t easy, but one thing seemed to be very clear to Canadians, so much so that in
the 1997 elections, the liberal, leftist party, won again, by promising still more careful
government spending and, on this occasion, fewer taxes. As they said, my friends, their role was to
protect and give opportunities to the most disenfranchised, not to waste everyone’s money. It seems… sensible. Don’t you think? Listen to Paul Martin’s words in 2003, as
he reviewed their 10 years in power: (“We have to build a 21st century economy
in Canada for Canadians. We succeeded in the last 10 years because
we did not deviate from our course – balanced budgets, a continually dropping debt ratio,
lower taxes. We must stay on that course. […] We must be a government committed to
accountability. A government that treats taxpayers’ money
like it is your money”. Paul Martin) My friends, this revolution was a real turning
point in Canada’s history. The change that the country experienced in
the 80s and especially in the 90s… allowed for this country’s situation to change completely. Canada went from being considered an honorary
member of the “third world” by the Wall Street Journal, due to its public debt problems…
to becoming the most fashionable country. The liberal party hadn’t only solved the
country’s problems, they had changed its model. In the following years, up until today, all
political options opt for the Canadian model. Mind you, Canada isn’t a tax haven, far
from it, but they have understood that companies need to be cared for and not punished. Check this out: You heard that right. If we take all taxes that companies actually
pay into account, this country’s situation is very advantageous. In fact, Canada is one of the few developed
countries that has been decreasing its taxes from time to time, for almost 20 years, to
make the country more competitive… And look at how, for example, company taxes
have evolved: And this policy has mostly favored the weakest. Salaries have grown a lot, this is one of
the countries that receives the most immigrants, and employment rates are very high. In addition, if all this weren’t enough,
in recent years Canada has also become a world civil liberties champion, as we saw here at
VISUALPOLITIK in a previousvideo. And this, dear viewers, is how Canada managed
to escape its greatest crisis. And by the way, just as it happened in New
Zealand and Australia, these reforms were carried out by leftist parties. But this isn’t about left or right, it’s
about understanding that a strong, competitive and globally open economy is the best formula
to improve everyone’s quality of life. But, having said that, now it’s your turn. Do you think Canada is a good role model? Leave your answer in the comments as well
as in this survey. I really hope you enjoyed this video, please
hit like if you did and don’t forget to subscribe to our channel for brand new videos
every Monday and Thursday. Also, don’t forget to check out our friends
at the Reconsider Media Podcast – they provided the vocals in this episode that were not mine! And as always, thanks for watching!