THE FRASER INSTITUTE IS AN INDEPENDENT CANADIAN ECONOMIC AND SOCIAL RESEARCH AND
EDUCATIONAL ORGANIZATION. IT HAS AS ITS OBJECTIVE THE REDIRECTION OF PUBLIC ATTENTION
TO THE ROLE OF COMPETITIVE MARKETS IN PROVIDING FOR THE WELL-BEING OF CANADIANS.
WHERE MARKETS WORK, THE INSTITUTE’S INTEREST LIES IN TRYING TO DISCOVER PROSPECTS FOR
IMPROVEMENT. WHERE MARKETS DO NOT WORK, ITS INTEREST LIES IN FINDING THE REASONS.
WHERE COMPETITIVE MARKETS HAVE BEEN REPLACED BY GOVERNMENT CONTROL, THE INTEREST OF
THE INSTITUTE LIES IN DOCUMENTING OBJECTIVELY THE NATURE OF THE IMPROVEMENT OR
DETERIORATION RESULTING FROM GOVERNMENT INTERVENTION. THE WORK OF THE INSTITUTE IS
ASSISTED BY AN EDITORIAL ADVISORY BOARD OF INTERNATIONALLY RENOWNED ECONOMISTS. THE
FRASER INSTITUTE IS A NATIONAL, FEDERALLY CHARTERED NON-PROFIT ORGANIZATION FINANCED
BY THE SALE OF ITS PUBLICATIONS AND THE TAX-DEDUCTIBLE CONTRIBUTIONS OF ITS MEMBERS,
FOUNDATIONS, AND OTHER SUPPORTERS.
Head Office
4th Floor, 1770 Burrard Street, Vancouver, British Columbia, Canada V6J 3G7
Telephone: (604) 688-0221, Fax: (604) 688-8539
E-mail: info@fraserinstitute.ca, Web site: www.fraserinstitute.ca
Membership: 1-800-665-3558, ext. 586
Book Orders: 1-800-665-3558, ext. 580
To ro n t o O f f i c e
Telephone: (416) 363-6575, Fax: (416) 601-7322
Calgar y Office
Telephone: (403) 216-7175, Fax: (403) 234-9010
Chairman’s Report
IT IS A GREAT PLEASURE TO REPORT ON THE ACTIVITIES OF THE FRASER
extent to which the considerable effort expended in the education system actually
INSTITUTE DURING ITS 26TH YEAR OF OPERATION. EVEN MORE THAN USUAL,
produces an increase in the knowledge output from the system. One of the difficulties
THE EXTENT OF THOSE ACTIVITIES IS SUCH THAT I CAN DO LITTLE MORE, IN MY
in this regard was the lack of a focus on performance measurement and the
MESSAGE, THAN WHET YOUR APPETITE FOR THE FULL CONTENTS OF THE ANNUAL
comparative assessment of how schools were actually succeeding in adding value to
REPORT. AS IT HAS DONE IN PREVIOUS YEARS, MY REPORT WILL FOCUS ON ONE
the student intake.
ACTIVITY WHICH ROSE TO PROMINENCE DURING THE YEAR.
Developing the Department of School
When he spoke to The Fraser Institute’s Annual Meeting in 1994, Nobel Laureate
Per formance Studies
Professor Milton Friedman noted that we were in the grip of a second industrial
In 1997, The Fraser Institute determined to remedy this perceived deficiency. We
revolution, a revolution based on the intensive use of knowledge. Those nations that
set as our first objective the measurement of the performance of all of Canada’s high
best used their intellectual capacities would dominate the future industrial landscape.
schools. In this endeavour we were very fortunate to attract the interests of two
Thus, Professor Friedman noted, the crucial industry for every country in the world
researchers who have proved to be crucial in the project’s overall success. Professor
is its education industry. Those countries that had an effective education industry
Stephen Easton had written our 1988 book, Education in Canada, which articulated
infrastructure would sooner or later come to dominate those that did not.
some of the difficulties with the primary and secondary education system. It was
Of course, educational capacity is not the only determinant of industrial success.
natural for him to have an interest in the project.
Indeed, Professor Friedman has been at the forefront of advancing the importance of
The other person who would prove to be key to the development of this project was
property rights and an infrastructure of rule by law in setting the stage for economic
Mr. Peter Cowley. Peter was first attracted to the issue of high school performance
development. But there can be no doubt that the effectiveness of a nation’s educational
assessment by observing his own child’s experience with the system. He also had a
infrastructure must be a key determinant of its future success in an information-
curiosity about performance measurement stemming from his involvement in
dominated world. In respecting the importance of education, The Fraser Institute
industrial sales and marketing.
has long had a focus on the educational sector. More than 15 years ago, the Institute
undertook a comprehensive overview of Canada’s elementary, secondary, and
post-secondary educational apparatus to examine the incentives that its participants
The technology for the project came from the international Economic Freedom of
the World project, which had, over many years, researched and devised a method for
measuring and comparing the performance of national governments.
faced, and how these incentives would impel the education system forward.
The most important obstacle which the project would have to overcome was the
One of the things that those studies noted, particularly in the primary and secondary
schools, was the lack of systematic attention to the issue of value adding. That is, the
attitude of the participants in the educational process. The most prevalent attitude
is that a child’s performance in high school is predominantly and overwhelmingly
determined by socio-economics, not by the school’s performance as a value-adding
enterprise. The typical story goes something like this: “A child’s performance is
determined almost entirely by the luck of their socio-economic draw in life. People of
a particular socio-economic type tend to cluster in the catchment area for particular
schools, and there is no point in drawing attention to the fact that these schools
under-perform because they are drawing from under-performing populations.”
I had a personal experience early last year which demonstrated to me very clearly
that this attitude is entirely incorrect. On the contrary, a school and the teachers who
run it can have a profound impact on the achievement of children. During a trip to
England, I chanced upon a newspaper account of the spectacular impact which one
woman, Sharon Hollows (now Dame Sharon Hollows), had on the success of a school
that draws its children from one of the least advantaged areas in Britain.
Five years previously, as the recently-appointed principal of Calverton Primary School
Gary Wildman
Fraser Institute Chairman of the Board of Trustees, Mr. Raymond Addington, O.B.E.,
prepares to address members at The Fraser Institute Annual General Meeting on
April 3, 2000.
in London’s East End, Sharon Hollows found that her school had just been ranked as
one of the lowest-performing elementary schools in Britain. She was embarrassed
and humiliated by the poor showing, but was determined to change it. And what a
magnificent job she did! Currently, Calverton School is a “Beacon School” in Britain,
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which means that the government encourages teachers from across the country to
performance. Early editions of the Report Card also provided an opportunity to
go there to see how a truly successful school is organized. From the bottom of
perfect both the research methodology and the dissemination of the results.
the heap to the top in four short years—and all the while working with children
The distribution has been a critical factor, since we want to ensure that every educator,
from broken homes, racial minorities, other languages, hostile parents, 50 percent
parent, and child in the province has access to the results. Accordingly, in each
unemployment, etcetera.
province we have chosen to partner with a widely-distributed newspaper or magazine.
As Dame Hollows herself has said, the measurement of school performance and the
In British Columbia, we chose the Province, the newspaper with the largest circulation
resulting rankings that showed how poorly her school was doing was an essential
in BC, and readership demographics appropriate to our goal.
ingredient in her ultimate success since it motivated her to implement the changes
The Province devoted some seventeen pages over four days to presenting the first
which have produced the dramatic turn around.
edition of A Secondary Schools Report Card for British Columbia, including results for
The intent of The Fraser Institute Department of School Performance Studies is to
almost every school in the province. Community newspapers were quick to respond
improve the educational outcomes of our schools by providing to every educator,
with their own coverage. The impact could not have been more dramatic as principals,
every parent, and every child in the country, documentation of how well they are
teachers, politicians, students, radio talk show hosts, journalists, and especially
doing relative to their peers. While much remains to be done to achieve that goal,
parents, reacted strongly to the ranking of their schools.
a surprisingly large amount has already been accomplished.
The Chairman of a newly-formed private school threatened legal action because of
An annual report card on secondary schools was introduced in British Columbia,
the effect the low ranking would have on his school’s ability to retain the students
where some 280 high schools have now been ranked four times. Using data reaching
whose fees were necessary to fund their outstanding debt. Subsequently he extolled
back eight years, the Report Cards give a comprehensive view of the academic
the virtues of the ranking program since it caused his school to assess and change
performance of schools relative to each other, and relative to their own past
some of the school’s key personnel.
Gary Wildman
1999 Nobel Laureate in Economics Dr. Robert Mundell (centre) joins some members of The Fraser Institute Board of Trustees at the Institute’s Annual General Meeting on April 3, 2000 in Vancouver.
In photo from left: Mr. Bob Lee, Dr. Michael Walker, Mr. Brandt Louie, Mr. Herb Pinder, Jr., Dr. Robert Mundell, Mr. Michael Hopkins, Mr. Raymond Addington, O.B.E., Mr. T. Patrick Boyle,
Mr. John R. Graham (staff), Mr. Ev Berg, Mr. Paul Hill, Mr. Bill Korol, and Mr. Arthur Grunder.
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The “educational establishment” in government schools was generally less receptive to
the idea of performance assessment than those in independent schools. In fact, there
was a determined effort in the former to denigrate the report, deny its importance,
or simply ignore it—that is, until the reaction of parents and students had become
fully evident. Once it became clear that there was widespread public interest, that
parents wanted answers for poor performance, and that we were intent on doing
this sort of measurement every year, the attitude changed. After publication of the
second Report Card on British Columbia’s Secondary Schools, the principal of the
lowest-ranked school in the province thanked us,“in the way a patient thanks a
dentist for a root canal” and went on to note that the Report Card “was the greatest
leadership experience of my life.”
The performance measurement project has come a long way since that first report
card was released in BC in 1998. To date, Alberta, Quebec, and BC secondary schools
are now annually assessed and ranked. In 2001, Ontario will be added. In Alberta
Magelle’s Photographers
we partnered with the Calgary Herald and the Edmonton Sun. In Quebec, L’Actualité
Principal Sharon Hollows from
Calverton, one of London’s
tougher primary schools, gave a
stirring keynote address at the
W. Garfield Weston Outstanding
Principals Awards ceremony
held in both Calgary and
Vancouver in October 2000.
magazine worked with us and our Quebec-based sister organization, L’Institut
Économique de Montréal along with Le Journal de Montréal and the Montréal Gazette,
to blanket that province. In 2001 in Ontario, the National Post will run a special
section in each of their four separate regional editions with the results of the schools
in those regions.
The most direct evidence that the Report Cards are making a difference, however, is
in the changing attitude of the principals themselves. In conjunction with the recent
release of the 2001 Report Card on British Columbia’s Secondary Schools, the Province
newspaper made a point of talking with the principals of some of the province’s
schools. In particular, reporters interviewed the principals of two schools, David
In all, almost 1,000 high schools have been rated and ranked. Our major media
partners alone have devoted over 200 pages to the reports—coverage which would
have cost almost $2,500,000 had we to purchase it as advertising copy. And, there
is an increased interest in doing more with the reports.
Thompson Secondary and John Oliver School, which draw their students from the
same city centre population, but which have radically different performances. On
average, over the past five years, David Thompson ranked 51st while John Oliver
ranked very poorly at 229th. Ian McKay, the principal of John Oliver, told the reporter
In Quebec, for example, L’Actualité plans, in the Fall of 2001, to print and distribute
that the school “treated its poor performance ratings as a wake-up call: ‘It was a call
with its magazine a separate publication containing the detailed Quebec results. It is
to us to look at the kinds of kids we were serving and what we need to do for them.’”
easy to understand their interest in doing so since parental response in that province
has been profound. One indicator of the interest is the extent to which the Report Card
has caused parents to seek alternatives to the public schools their children now attend.
The comparative performance of these two schools in Vancouver echoes the Sharon
Hollows story, and indeed the results of our research on the performance of schools
across Canada. That is, school performance is not pre-determined by the population
In a front page story, Le Devoir newspaper reported that the requests for admission
from which the students are drawn. A school and its educators can make a very
to private schools were increasing dramatically. The reason given for the surge in
significant difference in pupils’ lives—the difference between being on the bottom
applications was the recently-released Fraser Institute Report Card on the performance
of the pile, or on the top.
of Quebec’s high schools. Parents were seeking private schools for their children
because they had discovered that the government schools their children had been
attending were under-performing.
Of course, all of the people who work at a successful school contribute to its success.
But the CEO is in a position to make the difference, and for that reason it is often the
school’s principal who deserves the recognition when a school does well. In recognition
From the point of view of what the Department of School Performance Studies is
of that fact, and as a natural complement to the performance-rating program, the
trying to accomplish, increased enrolment in private schools is only one possible
Institute has also launched, in conjunction with the W. Garfield Weston Foundation,
outcome. The most widely felt outcome will undoubtedly be an improvement in the
the W. Garfield Weston Outstanding Principals Awards Program.
conduct of government-controlled schools. Certainly there are already indications of
that effect in the form of invitations from school districts to make presentations to
superintendents and principals about the performance measurement system.
Initially, this program has rewarded outstanding principals in British Columbia
and Alberta, but it is hoped eventually to extend the program to include the other
provinces in which we are able to measure the performance of schools. It gave me
enormous pleasure to be able, at the inaugural award ceremony in Calgary, to
introduce Dame Sharon Hollows, who gave the keynote address at the event.
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The Garfield Weston Outstanding Principals Awards recognize three sorts of
Health Care
accomplishment by principals: the top scoring school, the most improved school,
One subject that has surged to public attention during the last year is the decay of
and perhaps most importantly, the school which does best relative to its expected
the health care system. A centrepiece of the discussions has been the Institute’s
performance given the socio-economic characteristics of the students who attend.
annual survey of hospital waiting lists. Since this 12-year long project provides the
The characterization of the schools is possible because, with the assistance of Statistics
only nationally comparable source of information on waiting in the provinces, it is
Canada’s census data, we have been able to create a micro socio-economic context
understandable that it has been much mused about and abused during the year.
for each school. We have the postal code for every student who attends school;
a cross-match between these postal codes and the census information produces the
data we need, from family income to the language spoken in the home, to establish
the schools’ socio-economic composition.
In 2000, for the first time, it was possible for the Institute to relate these measurements
of waiting to the amount of money spent in the provinces. The results were quite
astounding since they showed that there is no connection between the amount of
money a province spends on health care and the length of time a province’s resident
On the wall of the Institute’s boardroom there is a plaque given to the Institute by
has to wait for that care. In fact, there isn’t even a connection between the money
long-time Trustee Mr. Fred Mannix. The plaque says,“If it matters, measure it.”
spent and the quantity of health care services produced.
In some sense, this sentence conveys the spirit of the work of The Fraser Institute,
which is to change the climate of opinion by disseminating research results based
on a careful measurement of things that matter. The School Performance Studies
Department is a particularly good example of how the Institute uses measurement
to change the world.
The results of this study have been seized upon across Canada and there is now
widespread acknowledgement that the problems of our health care system do not
emerge primarily from a lack of money. In fact, Michael Decter, Chairman of the
Board of the Canadian Institute for Health Information, a long time advocate of the
Canadian health care system, noted upon the release of Dr. Martin Zelder’s study
Of course, the School Performance Studies Department is not the only department
that everyone knew that more money would not produce solutions to the health care
at the Institute, and I want to mention a few other areas where the Institute has been
problems. Rather, the structure of incentives would have to change. We can only
making effective use of measurements to pursue its goals.
wonder were he might have got such a sensible idea.
Gary Wildman
Giving the fifteenth annual Dr. Harold Walter Siebens Lecture: Nobel Laureate Dr. Robert Mundell tells a packed house about “Exchange Rates & Monetary Unions and their Relevance to Canada” at
The Fraser Institute’s Annual General Meeting in April 2000.
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Chairman’s Report
Alberta Initiative
The Fraser Institute’s Alberta Initiative took shape during 2000 as we greatly expanded
the scope and function of the Institute’s Calgary office. Dr. Lydia Miljan has spearheaded
this expansion which has amplified the ability of the Institute to deal with issues of
particular relevance to Albertans. It has also expanded our capacity to deal with issues
of political economy as we have been able to encourage the members of the
“Calgary School” of Political Science to join with our efforts.We are delighted to have
Senior Fellows Professor Barry Cooper, Professor Tom Flanagan, Professor Ted Morton,
Professor Rainer Knopff, Professor Ken Mackenzie, Professor Ron Kneebone,
Professor Herb Emery and Professor Eugene Beaulieu working on a variety of projects.
Gary Wildman
Nobel Laureate Dr. Robert Mundell (right) listens to Fraser Institute Trustee Mr. Ev Berg (centre)
and Mr. Bill Korol prior to The Fraser Institute’s Annual General Meeting in April, 2000.
C a p i t a l G a i n s Ta x a t i o n
We have already seen the impact of this involvement in the area of environmentalism
and the Alberta Advantage Surveys.
Fraser Forum
This year also saw some important changes in our flagship monthly publication,
Another measurement activity during the year proved quite influential. The annual
Fraser Forum. Under the direction of Ms. Kristin McCahon, our Director of
Dobson Foundation Conference on Taxation under the leadership of Sommerville
Publication Production, Fraser Forum has been transformed, and is now poised to
Chair Dr. Herbert Grubel focused this year on the topic of capital gains taxation. The
become a broad circulation periodical replete with advertising, glossy stock,
representatives of 10 countries in which there are no, or very modest, capital gains
and superlative content. We have every reason to be extremely proud of this widely-
taxes participated. The upshot of the private conference, which was well attended by
read magazine.
senior government officials, was that there do not appear to be any adverse side
Head Office
effects from eliminating capital gains taxes altogether. We were pleased to see that
the message was not lost on the federal Finance Department as it formulated the
content of the mini-budget in October.
Sur vey of Senior Investment Managers
One of the influential products under the direction of Mr. Jason Clemens, which the
Centre for Fiscal Studies has been producing for the past 7 years, received an interesting
endorsement during the year. The quarterly Survey of Senior Investment Managers
collects the opinions of money managers managing nearly $200 billion in assets. The
opinions of these managers about the policies of provincial and federal governments
are quite influential; these people are the most important purchasers of government
bonds and have the power to reward and punish governments—particularly
sub-national governments—when they approve or disapprove of those governments’
actions. In 2000, the Investment Dealers Association joined with the Institute to sponsor
the survey and to work with us to increase the number of managers responding to
the survey.
One of the most pleasant developments during the year has been the expanded use
of our new head office building for a variety of meetings, special guest speakers, and
training sessions. During the year we hosted some 20 events in our meeting room
which would otherwise have been held in hotels. The meeting room has also been
used for our weekly Policy Lunch.
The overall experience with our new premises has been very positive and staff
productivity has increased appreciably. In addition, a recent real estate appraisal
indicates that market rents have increased 38 percent since October 1998 when
we purchased the building. This implies a 30 percent increase in the value of the
building as leases expire over the next few years.
All in all, 2000 was a wonderful year for the Institute as an increasing number of our
ideas came to dominate the policy agendas of government.We have been able to use the
resources you, the members, have provided to great effect in changing the country—
and changing the world. I hope you will join with us during the forthcoming year to
make the Institute even more productive and effective in achieving our mutual goals.
Centre for the Study of Risk and Regulation
One of the most important foundational developments during the year was the
establishment of the Centre for the Study of Risk and Regulation. This new centre
combines some of the work which was done in the Social Affairs Centre with that
done in the Environment Department, and adds a specific focus on the issue of how
society handles risk. Included in the ambit of this new activity will be topics ranging
from global warming to genetically-modified food. Under the direction of Ms. Laura
Jones, this new centre will become one of the Institute’s core programs as the topics
R.J. Addington, O.B.E.
Chairman of the Board of Trustees
it deals with come to dominate the policy agenda.
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Introducing The Fraser Institute
THE FRASER INSTITUTE WAS FOUNDED IN 1974 TO REDIRECT THE ATTENTION
OF CANADIANS TO THE ROLE OF MARKETS IN PROVIDING FOR THEIR WELL
BEING. OVER THE LONG TERM, IDEAS ARE THE MOST POWERFUL INFLUENCE
ON PUBLIC POLICY. THE INSTITUTE, THEREFORE, STIMULATES DEMAND FOR
ECONOMICALLY SOUND PUBLIC POLICY BY CONDUCTING RESEARCH AND
DISSEMINATING ITS FINDINGS TO THE GENERAL PUBLIC AND TO POLICY MAKERS.
Funding and Independence
Throughout the year, funding is sought both for specific projects and for the Institute’s
overall activities. The majority of the Institute’s revenues are derived from the
donations of its members, and from research foundations. Revenue also is generated
from the sale of publications, from Institute events, and from interest on invested
endowment funds. The Institute avoids government funding, and strives to minimize
The Institute is headquartered in Vancouver, but also has satellite offices in Calgary,
its dependence on any single source of funding or group of supporters. The Institute
Toronto, and Ottawa. The Institute has active research ties with similar independent
is non-political, and does not undertake lobbying activities.
organizations in 54 countries from around the world.
Organization
Publications and Outreach
The Institute’s products–its ideas–are packaged in a number of different formats to
The Fraser Institute is a federally chartered, non-profit research and educational
reach different audiences. The Institute’s monthly magazine, Fraser Forum, its periodic
organization, with tax-exempt status in both Canada and the United States.
Critical Issues Bulletins and Public Policy Sources, and its books are distributed to
Membership is open to anyone making a donation in support of the Institute’s activities.
Institute members, the media, students, academics, policy makers, and politicians from
A Board of Trustees is responsible to the members of the
all parties, across Canada and abroad.
Institute for the conduct of the Institute’s affairs. The
Institute publications have been sold in over 50 countries
Institute’s programs are administered by the Executive
and translated into 20 languages. Many titles are required
Director, and the Institute’s performance is monitored
reading in North American and European universities. The
monthly by an Executive Advisory Board drawn primarily
Institute makes a particular effort to reach students through
from the Board of Trustees.
seminars, The Canadian Student Review newsletter, and
Research
internships. Institute publications since 1996 are also
The objective of Institute research programs is to provide
available on our web site.
alternatives to well-intentioned but misguided views
The Institute reaches a wide audience through the mass
about the appropriate roles of government. Research is
media. Institute staff write news releases, editorials, and
carried out by Institute staff and by associated scholars
articles, and conduct print, radio, and television interviews.
from nearly 200 universities and other academic institutions around the world.
The Institute also offers a fax broadcasting service to over 200 radio talk show hosts
Over 300 people have contributed to the Institute’s work, including Nobel Laureates
nationwide. Further, the Institute’s National Media Archive monitors the media for
Gary Becker, James Buchanan, Milton Friedman, and Douglass North. Research is
balance in news and public affairs reporting.
reviewed internally by an editorial committee, and, where appropriate, by associated
policy experts or an Editorial Advisory Board of leading international economists.
The Institute’s research agenda is decided by Institute staff at an annual planning
session, and at a mid-year review. Ongoing projects are reviewed for continuing
Finally, the Institute holds conferences, luncheons, and seminars in major Canadian
cities, and Institute staff speak and participate in public forums on a regular basis.
Institute staff also make submissions to parliamentary committees.
Results
relevance, and potential new projects assessed on the basis of importance and
timeliness. The aim of the policy planning process is to produce a research and
education plan that will maximize the Institute’s contribution to improving public
policy. Donors are not involved in this planning process.
The Fraser Institute’s efforts over the years have contributed to changing the
conventional wisdom about many areas of public policy across Canada. The increasing
scepticism Canadians feel about the efficacy of government solutions to economic
problems is being reflected in the policy platforms of leaders across the political
spectrum. The Institute has a well-deserved reputation for the quality of its work,
which earns its research and recommendations the attention of policy makers
around the globe.
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