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Here's what happens:

Higher taxes,

Aye, but as a Canuck living in the US, it all evens out, not having to pay for stuff like health insurance after taxes.

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Government arrogance

Hah! That's rich. I'd rather deal with Canadian government arrogance than the current US government arrogance. At least the arrogance would have been toned down.

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and malaise

Most governments have this, so I'd consider this a no-op.

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a military that might be able to fend off an assault from Luxembourg,

Canadians are polite. We don't piss people off, and they don't attack us. Works out quite well, really. No need to spend vast amounts of money on a military, when simple diplomacy is sufficient to achieve the same end. In the mean time, we get to use that money for other things, like, say, education and health care.

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and one nice two-lane highway from coast to coast...

Heh. Actually much of it is four lanes, though the bits through the mountains in BC/Alberta are still two lanes, I believe.

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however, it is safer to live here, what with that billion-dollar gun registry thingy...

I'm not impressed with the registry, but then, I grew up in Alberta, and learned to shoot at church camp. It's not the registry that makes things safe, so much as the lack of hand guns. But again, see above about politeness.