Income inequality has not dominated Canadian politics in recent years but has polarized Americans to the point where it has entered the Republican race for the presidential nomination.  “Republicans are attacking someone for being rich,” Chrystia Freeland, global editor-at-large for Thomson Reuters, told a packed audience.

“It has been a pretty taboo subject,” she said, but now the disparity is front page news and dominating political debates.

Ms. Freeland, who is based in New York, was one of the speakers at the Canada 2020 event on Reducing Income Disparities and Polarization, which drew a crowd of more than 300.  She said there is a great deal of anger in the United States and a “tremendous lack of faith” in the government.

She spoke of the new super elite, who make the divide between rich and poor more complex: unlike  wealthy leaders of other generations, today’s top 1% are highly educated and work extremely hard but are also ambivalent about their communities and those they leave behind.

Ms. Freeland, who is writing a book on the super rich, has discovered a movement to create a modern day Galt’s Gulch. (Galt is the hero of Ayn Rand’s 1950s novel, Atlas Shrugged. Galt and other like-minded capitalists retreat to a refuge in the Rocky Mountains to avoid being pulled down by the less talented and lazier lower classes and live out their days in splendour as the rest of society collapses.)

She has found people who are talking about building islands in international waters where they could live with all of their wealth, disconnected from the rest of the world, she said. “I have discovered people who are actually trying to build Galt’s Gulch.”

Alessandro Goglio, of  the Organization for Economic Co-operation and Development, came from Paris to address the Canada 2020 event at Ottawa’s Château Laurier and talked about a new report showing income inequality is at a record high level among OECD countries.

In Canada, the average income of the top 10% of earners in 2008 was 10 times higher than that of the bottom 10%, he said. The report, which included data up until 2008, showed Canada was close to the middle for income inequality and came in third place in the OECD, after America and Britain, in terms of concentration of pre-tax income in the top 1%.

The OECD report, Divided We Stand: Why Inequality Keeps Rising, detailed how income equality increased during both recessions and boom times and suggested “developments in labour earnings and labour markets are a main driver.”

Mr. Goglio said the key to change was more and better jobs, what he called “smart taxes,” better training at an early age and access to employment for underrepresented groups.

Keith Neuman, Executive Director of the Environics Institute, spoke about recent data from a survey of 1,500 Canadians. Among the findings: 74% thought income inequality was a result of things such as tax breaks and government policies and 11% thought it was linked to the economy. A strong majority, 82%, agreed the government should find ways to reduce the gap between rich and poor, though this was also influenced by their political views (Conservative voters were less likely to think the government should act, compared to Liberal supporters.)

The survey did not find the same level of dissatisfaction suggested by front page headlines in the United States – 58% were happy with the direction of the country and most Canadians were fine with large company profits and optimistic about their personal finances in 2012.

The event also heard from three authors who contributed to the book The Canada We Want in 2020: Mark Cameron, a former policy advisor in the PMO, Andrew Sharpe, founder of the Ottawa-based Centre for the Study of Living Standards, and Sherri Torjman, vice-president of the Caledon Institute of Social Policy.

A panel moderated by Don Newman, chair of the Canada 2020 Advisory Board, debated the causes of income inequality and ways to reduce the gap. Among the topics: the effect on inequality of globalization and the technology revolution. Ms. Freeland said some experts she has spoken to point to technology, others to globalization and some admit they do not understand fully what is driving the widening gap.

Mr. Cameron said taxing that top 1% will not generate sufficient income to rebalance the situation and suggested that raising consumption taxes would be one way, though unpopular.

Mr. Sharpe  and Ms. Torjman spoke about the broader issues of poverty in Canada, including amongst aboriginal Canadians. Ms. Torjman said there is a need for a stronger redistribution system, greater attention to the effectiveness of social programs, such as child care benefits, and more community-based activity to build up people’s assets.

Thursday’s event was the first in a series of discussions centred on The Canada We Want in 2020.

“We want to have a national discussion,” said Mr. Newman, who encouraged the  audience and all Canadians watching the event online from home, to join the debate.

View/Download the PDF: Event summary – Income disparities.

Introduction

On January 19, 2012, Canada 2020: Canada’s Progressive Centre hosted a panel discussion on income inequality. This panel was the first in a five part series of discussions based on The Canada We Want in 2020: Towards a Strategic Policy Roadmap for the Federal Government, a collection of policy essays Canada 2020 published in the fall of 2011, which focuses on five core areas that require strategic federal public policy action.

The income inequality discussion featured six speakers:

Mark Cameron, Director, Global Public Policy, Research in Motion
Chrystia Freeland, Global Digital Editor-at-large, Reuters
Alessandro Goglio, Economic Counselor, OECD, Employment Labour and Social Affairs
Keith Neuman, Executive Director, The Environics Institute
Andrew Sharpe, Executive Director, Centre for the Study of Living Standards
Sherri Torjman, Vice President, Caledon Institute of Social Policy

The OECD Picture

We began the discussion with an overview presentation of the OECD’s recently released report on income inequality across OECD countries, Divided We Stand: Why Inequality Keeps Rising, as presented by one of the report’s authors, Alessandro Goglio.

Dr. Goglio pointed out that income inequality, as measured by the gini coefficient, is at a record high in the OECD area. The trend toward rising income inequality first started in the late 1970s and early 1980s in some English-speaking countries, but spread throughout the OECD beginning in the 1990s, and since the 2000s has even afflicted traditionally low income inequality countries. Income inequality in the OECD area increased during both economic booms and recessions.

In Canada, the OECD found that the ratio of lowest to richest population quintiles is 10:1 today, which is higher than the OECD average of 9:1. The rise of income inequality in Canada occurred mostly in the 1990s.

The OECD has identified changes in wages and salaries as the main cause of income inequality. There are a number of drivers for this:

• Changes in working conditions, with more part-time work, self-employed and non-standard labour contracts, and an increasing divide in hours worked between high and low-wage workers;
• Changes in technology with the benefits of technical progress going largely to the high-skilled;
• Regulatory reforms aimed at promoting growth and productivity, which increased both employment and income inequality.

Contrary to conventional wisdom, the OECD found that economic globalization had little impact on wage inequality trends. The effect of family formation was also not particularly important, with the increase in men’s earnings disparities being the main driver of inequality.

Not surprisingly, the OECD found that re-distribution through taxes and benefits play an important role in mitigating income inequality within all OECD countries. However, the OECD claims that tax and benefits systems have become less effective over the past twenty years in mitigating market income inequality. Canada stands out in this respect. According to the OECD, in Canada transfers became less progressive since the 1990s, and government spending shifted to inactive benefits, leading to reduced labour market activity rates and higher market-income inequality. This period corresponds with the fiscal consolidation and austerity agenda that both the federal and provincial governments embarked on at that time.

The OECD identified a number of basic policy lessons countries need to consider to respond to rising income inequality. While social transfers can play a big role in offsetting inequality, they need to be targeted. Tax provisions should be reviewed on top-income households to ensure the tax system is progressive and fair. Governments need to work harder to facilitate the employment of under-represented groups. An emphasis on the up-skilling of the workforce is required. In the final analysis, the OECD concludes that governments must have an appropriate mix of both redistributive and inclusive employment policies.

The U.S. Picture

Chrystia Freeland provided a snap-shot of the politics of income inequality, and the increasing salience of the issue, in the United States today. According to Ms. Freeland, the American public has woken up to income inequality as an issue in the last two years, and this represents a big change in American society. A recent Pew Institute poll identifies income inequality as the most divisive social issue in the United States today. This has manifested in the Republican race for the presidential nomination—the personal wealth of one candidate, Mitt Romney, has become a central issue in the campaign. What was once a taboo subject in the U.S. is now front page news and centre stage even on the right wing of American politics.

In Ms. Freeland’s view income inequality has jumped to the fore because, even though it has been a creeping problem for decades, it was masked by the credit explosion over the past decade, which facilitated mass consumption, and created the illusion of people feeling richer than they were because most Americans had access to cheap credit. With the credit collapse three years ago, the middle class has reached a tipping point, and is now feeling the brunt of three decades of rising income inequality and stagnant wages, in Ms. Freeland’s view. The top 1% of earners is not reacting well to this political and social shift.

Ms. Freeland identifies two big issues that are colliding with one another in the U.S.—the newfound awareness of income inequality and the expression of discontent with it among the middle class, coming into contact with a lack of faith in the ability of government to do anything well in America. The remedies to rising inequality that the OECD identifies might, therefore, be beyond the reach of US politics today.

The Canadian Picture: Public Opinion

Keith Neuman presented recent Environics Institute public opinion research on the salience of the income inequality issue in Canada. According to these findings, Canadians have recognized the gap between rich and poor has been getting bigger for years. Today 64% of Canadians feel the gap between the wealthy and the rest is historically large. Most people attribute the gap to tax breaks for the rich, other government policies, and the dynamics of capitalism itself.

Environics concludes that Canadians believe the inequality gap is greater in the US than in Canada (which is correct), but that the gap in Canada is about the same as in Europe (which is not correct). Fully 82% of Canadians think governments should actively try to reduce the income inequality gap in Canada. That said, Environics concludes that income inequality is not the burning issue in Canada it seems to be in the U.S.(1) Fifty eight percent of Canadians are satisfied with the direction of the country, Canadians are generally accepting of large corporate profits, satisfaction with standards of living are holding steady among most Canadians and 47% of Canadians think their personal finances will improve in 2012, according to Environics.

(1): Recent research by Ekos suggests income inequality is in fact rapidly rising to the top tier of issue concerns among Canadians.

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Following these three context setting presentations, we hosted a panel discussion with the three previous presenters and three of the authors who contributed to The Canada We Want in 2020: A Strategic Policy Roadmap for the Federal Government. The panel was moderated by Don Newman, Chairman of Canada 2020’s Advisory Council.

The Canadian Picture: Public Policy

Mark Cameron began the panel discussion by arguing that income polarization between the “super rich” and the middle class is the emerging problem in Canada. In his view, however, this is the result of global trends and there is little that governments can do about it. The one area where governments can intervene effectively, in Mr. Cameron’s view, is CEO compensation.

Andrew Sharpe responded by claiming that Canada is at record levels of wealth and income inequality and that this is linked to declining bargaining power of workers as a result of the de-unionization of the work-force.

Sherri Torjman argued that rising poverty and income polarization are serious problems in Canada and that we need “linked strategies” to deal with them, not just conventional income redistribution methods. These strategies should include investments in social infrastructure like public schools. For Ms. Torjman, certain groups, notably First Nations, are a particularly acute problem. She also suggested many employers are not providing their employees with living wages.

Chrystia Freeland cited Nobel Prize winning economist Michael Spence, who argues, contrary to the OECD conclusions, that globalization is a central cause of income polarization. Mr. Spence claims that alleged technology causes of income polarization might in fact really be globalization effects. In any event, policy might not matter much in Ms. Freeland’s view because technology and globalization are working in tandem on the middle class and are relatively unresponsive to public policy.

Alessandro Goglio conceded that globalization and technical change do go hand in hand and it can be difficult to distinguish between the two forces, which are in many respects derivative of one another.

Keith Neuman claimed that from a public opinion standpoint, Canadians do not see globalization as a key driver of income inequality.

Andrew Sharpe argued that education is increasingly important in dealing with the income inequality challenge. The relative and absolute lack of education among certain groups in Canada, notably Aboriginals, is a serious concern requiring more concerted policy action. Sherri Torjman echoed some of the OECD findings, by stating that Canadian governments have let programs languish that served to mitigate income inequality. In her view, governments have been investing scarce resources in non-targeted, non-progressive programs that benefit higher income Canadians.

Mark Cameron pointed out that while conservative-minded people like him see a more limited government re-distributive role in dealing with income inequality, governments nonetheless need to pay attention to the issue because it can undermine social cohesion.

Finally, Dr. Goglio claimed that across the OECD millions of people perceive that they are falling behind. This is an extremely difficult challenge to meet in today’s environment of fiscal consolidation and austerity in most advanced countries. In Dr. Goglio’s view, this large and growing group of people need to be reassured by governments that they are doing something to alleviate the trend toward greater income inequality. In particular, Dr. Goglio argued that youth and gender policies are needed, as well as an inclusion agenda. There is, in his view, a huge scope for enlightened public policy in the area of income inequality.

Conclusion

Nearly a year ago, Canada 2020 identified rising levels of income inequality as an unsustainable phenomenon that required strategic federal public policy action. As a result, we commissioned three prescriptive papers on this subject for our publication The Canada We Want in 2020: A Strategic Policy Roadmap for the Federal Government. Since then, new research in Canada and abroad has confirmed that the decade’s long trend toward greater income inequality not only persists, but is getting worse in most developed countries, including Canada. The recent recession and financial crisis have merely served to highlight a problem that has been growing for many years. The Occupy movement was a new and important public expression of dissatisfaction with the status quo.

Both our publication and this panel discussion also confirmed that income inequality is one of the major structural issues facing Canada, requiring federal public policy action. In fact, income inequality in Canada is significantly higher than in most OECD countries and some studies suggest it is growing faster in Canada today than in the US. While our authors and panelists differed on the sources of and responses to income inequality, all basically agree on the scope and scale of the issue.

Over the next year Canada 2020 will continue to focus on income inequality as one of our core areas of policy research and dialogue. We encourage Canadians to contribute thoughts and policy ideas to this discussion on our website, canada2020.ca. Later this year we will publish a second volume, informed by public events like this and the input of Canadians, containing policy recommendations on income inequality and the other four issue areas we have identified in The Canada We Want in 2020.

It comes as no surprise that the World Economic Forum has just named severe income inequality as a top global risk, alongside such things as severe water shortages and cyber attacks.

As in other OECD countries, inequality in Canada has increased substantially since the mid 1980s, though we remain near the middle of the pack in terms of overall measures of inequality. Our youth unemployment rate compares favorably with the OECD average at 14.1%, though this is still nearly double the overall unemployment rate. We do, though stand out when it comes to income concentration amongst the very highest earners: we are number three in the OECD (after US and UK) in terms of pre-tax income concentration of the top 1% of earners.

Although the Occupy movement was evident throughout Canada, public concern about inequality does not run as high here as in some other countries. In particular there is not such public vitriol here about `bankers’ bonuses’, probably because of the very limited bailout of banks during the crisis.

Rather than resting on our laurels, it would seem both prudent and socially responsible to use this breathing space to our advantage. How can we better address inequality and head off looming problems that might otherwise result (for example increased social unrest and economic impacts such as poor health outcomes, reduced productivity, withdrawal of support for free-market economies and trade, etc.)?

This is unlikely to be a question of simply beefing up taxes and transfers (though that might be part of the approach). In its recent report, the OECD investigates the impact of the various possible causes of inequality (globalization, the technology revolution, changes in household structure, changes in employment patterns, etc.). It finds that inequality is not inevitable, that it is amenable to policy solutions, and proposes a three-pronged policy response:

• More intensive human capital investment
• Inclusive employment promotion
• Well-designed tax/transfer policies

Our aim at Canada 2020 is to strengthen and deepen the discussion about income inequality and polarization in Canada. What are the causes and effects? Are these common to other countries or unique to Canada? And which policy responses are likely to bear the most fruit in this country, taking account of the current economic climate?

Our focus is on the role of the federal government, though action in this area is likely to take place in tandem with the provinces.

Our panel debate on Thursday 19th January will tackle these issues and continue the debate that begun with the publication of our book: The Canada We Want in 2020. We hope you can join us in person or on line (click here for livestream). Your input is always welcome.

• The proposed emissions trading regime, which has been rejected in the Senate.  Prime Minister Gillard has re-committed her government to pushing ahead with action to address climate change including putting a price on carbon.
• The proposed resources rent tax. Prime Minister Gillard said that she wants to enter into a dialogue with the mining industry to find a way forward.

Prime Minister Gillard indicated that she plans to call a general election between now and the end of the year.

Based in Beijing, he is the Director of the National Economic Research Institute (NERI) and Chairman of the China Reform Foundation, China’s first economic think-tank. Trained at the Chinese Academy of Social Science (CASS) and Harvard University, he is also a professor at several top universities in China.

Dr. Fan Gang is a respected advisor to China’s leadership on economic reform and strategic development. He is an expert in the macroeconomics of long-term development, international trade and currency, foreign relations and China’s regional integration within Asia. He speaks on China’s financial risk and financial systems reform, foreign exchange regimes and revaluation and on China’s economic reform and globalisation.

He provides advice to various departments of the Chinese central government, provincial governments as well as Chinese and international organisations. Among the long list of advisory positions he holds, he is a member of the Advisory Committee of the Ministry of Labor and Social Security of China, a member of the Advisory Committee of the Hong Kong Center for Monetary Policy, sits as a member of the International Advisory Board of the Center of International Development, Harvard University, is a member of the Monetary Policy Committee of the People’s Bank of China, is an advisor to the State Foreign Exchange Administration of China and International Advisor to the Center for International Development at Harvard University.

Dr. Fan Gang is a Fellow of the World Economic Forum (since 1994), a Fellow of the Chinese Economist Society (USA) (since 1993) and is a consultant to the World Bank, UNDP, ESCAP and to the OECD.

As a respected authority on China’s economic development, he features regularly as a guest writer in various journals and publications. Indeed he has written over 100 academic papers published in Chinese and English journals and more than 200 articles in newspapers and magazines published around the world. He the author of eight books so far.

Dr. Fan Gang was awarded the accolade of a ‘Global Leader for Tomorrow’ by the World Economic Forum in Davos (1995) and has been ranked number 33rd in the “world’s top 100 public intellectuals” by Foreign Policy and Prospect (2008).

Dr. Fan Gang is a regular speaker at international events and also provides strategic advice to international corporations or makes guest presentations to small business meetings, focusing on the direction of China’s economic policy and its implications for Chinese and foreign businesses. He presents fluently in English.

Canada is still more economically mobile than the US: if you are rich and want to stay rich, it is better to be born in the US. If you are poor and want to move up, Canada is a better bet.

The New York Times posed this question to a group of experts, Richard Florida, Isabel Sawhill, Timothy Smeeding, and five others, including me.

More specifically, they asked:

There is a growing consensus that it is harder to move up the economic ladder in the United States than in many other places, like Canada. Should more Americans consider leaving the U.S. to get ahead? Or can the U.S. make changes to be more of a “land of opportunity”?

You can review all the contributions, and the resulting commentary from readers on the Room for Debate section of the Times website.

My response was based in part on a paper I co-wrote with Shelley Phipps and Lori Curtis, “Economic mobility, family background, and the well-being of children in the United States and Canada”, that was recently published by the Russell Sage Foundation.

I’d be interested in your comments, particularly from Americans in Canada and from Canadians in America, on my take:

Most American and Canadian children of middle class parents don’t have their life chances noticeably determined by their family background.

But averages conceal as much as they reveal.

If I were a young American born to top earning parents I would want them to stay put: these high-achievers are not only rich but also well-connected and informed. They can give me the education, health care, housing, and other investments that would set me on a path to attend some of best colleges in the world. I would enter a labour market that rewards my education to a much greater degree than in Canada, and a tax system that lets me keep more of my earnings.

My odds of staying in the top 10% as an adult if I were a child born in the top 10% are better than 1 in 4. I’d have a better than 50% chance of staying in the top third. In Canada only 1 in 7 kids born to top earning parents become top earning adults, and almost 10% fall to the very bottom, something that happens to only 3% of rich American children.
A rich kid does well in the US; but not a poor kid.

If I were born to parents in the bottom 10% I would rather they were raising me in Canada. Being in the bottom 10% would mean less hardship: my family income would be greater; I would be more likely to be living with both of my biological parents; I would be visiting a doctor regularly; and I would spend more time with my parents, particularly my mother during my infancy as she would have almost one year of paid parental leave.

My physical and mental well-being, general happiness, and cognitive development would be noticeably superior even at a very young age.

My early education would be of higher quality because it is funded through progressive income taxes, not local property taxes. I would have access to a good quality college or technical training at relatively affordable tuition fees of $5,000 to $10,000 a year.

In short, the Canadian playing field is more level than the American, and my chances of moving into the middle class would be higher. If my parents lived in the US I would have more than a 1 in 5 chance of being stuck in the bottom 10% of the earnings distribution and a 50% of staying in the bottom third. In Canada I’d be less likely to remain in the bottom, and would have a 50% chance of reaching the top half.

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Miles Corak is a professor at the University of Ottawa trained in labour economics, and working on child rights, poverty, immigration, social and economic mobility, unemployment, and social policy. For more on this topic see his blog (http://milescorak.com/).

What makes Canada a less entrepreneurial country than the US? Why are Canadian university graduates less focused on bringing their ideas to market than their counterparts in the US? And can we change that or, at the very least, encourage Canadian entrepreneurs to stay here, rather than setting up shop south of the border?

Our organization’s discussions around this topic indicate that good ideas have no boundaries and that, as Canadians, the last thing we should do is fear the US. Instead we should actively seek to link with US companies and clusters (e.g. around medical innovation in the Minneapolis/Winnipeg corridor), and draw on those resources.

In particular, there has been much hand wringing in the past about the lack of adequate venture capital financing in Canada. But why waste time and energy in trying to nurture such an industry and bring it to scale, when pools of capital already exist in the US? Canadian innovators need to become more skilled at accessing those resources.

Federal and provincial governments also need to think cross-border (which raises all sorts of security and other issues) and make sure that both the hard and the soft infrastructure for cross-border innovation – such as attorneys and accountants – are in place. What is required from governments – as enablers of innovation – is constancy of purpose, which should be reflected in the way they use their own purchasing power to support innovation. Being the launch customer is important; governments are better able to bear that risk than private clients.

Making government support to innovation more transparent (and accountable) would also help. At present, as the Jenkins Panel noted, the Government of Canada delivers a far higher proportion of its support to innovation through indirect tax credits than other countries. This results in long-term but opaque funding. Grants and loans would be far easier to track – and cancel if they were not working – and more likely to have a stimulating effect.

A further option for government is to become more strategic in supporting those sectors in which Canada has clear advantages (not just natural resources, but agriculture, aerospace, infrastructure and education, for example). This would require a change in culture: regional sensibilities have militated against such support in the past. It would also require more attention to stimulating trade.

All mature economies wish to increase their trade with the dynamic Asian countries: what can take Canada to the front of the queue? Our natural resources clearly provide us with leverage, but we cannot take that for granted. If we want to ship gas and oil to Asia, we must make sure we have the domestic infrastructure (think pipelines and shipping terminals) in place. But we have to bring more to the table. We have to collaborate and cross-invest in the development of innovative energy products and services. We have to strengthen ties and mutual understanding through educational links between our countries. We have to find ways to help Asian countries respond to their own pressing challenges, including resource issues but also social and environmental concerns.

Government’s role in all this is to support, to stand behind, to commit and, above all, to curate complex networks of relations that influence our overall place in the global economic order. But we have to rely on the entrepreneurs themselves to take the first steps.

BY: Diana Carney and Eugene Lang, Canada 2020.
Globe and Mail, Friday November 25, 2011.

Ottawa – Today, Canada faces challenges and opportunities that are quite unprecedented in our recent history. Our ability to overcome these challenges – and seize the opportunities – will determine the future trajectory of Canada’s economy and society.

At this unique time we need federal leadership. We believe that the federal government can be a force for significant and positive change. It has a vitally important role to play in developing and implementing strategic policies, focussing governments and other institutions on the big challenges, and mobilizing consensus for action. This does not mean big government. It means intelligent, innovative, analytical and strategic government.

Canada 2020 contends that there are five fundamental, inter-related challenges confronting the country that require strategic political leadership and policy action from the federal government. In all these areas it is time for a more aggressive, focussed and creative federal policy response.

1. Increasing innovation and productivity: Productivity growth and innovation are the sine qua non for economic prosperity. Canada’s lack of productivity growth has been a worrying feature of the economy for decades. Since 1984, relative productivity in Canada’s business sector has fallen from more than 90% of the U.S. level to 76% in 2007. There are no signs of things improving: quite the opposite in fact.

2. Rising to meet the Asia challenge: The global centre of economic power is inexorably shifting from the West to the East. Yet Canada appears to be on a slow boat to China – and Asia more generally. We must leverage our unique strengths and advantages so that our businesses can take advantage of unprecedented market opportunities and that we become an indispensible part of the new Asian century.

3. Squaring the carbon circle: Canada has among the highest levels of greenhouse gas (GHG) emissions per capita in the world. This is due in part to our unique geography and harsh climate, but also to a weak culture of conservation and inadequate policy and regulatory regimes. Not only do we have a moral responsibility to make progress on limiting GHG emissions (if for no other reason than to set an example for the big emitting countries), but we are also at serious risk of missing opportunities in the low-carbon economy of the future and of becoming increasingly marginalized, economically, if we fail to act (witness the recent problems with Keystone XL).

4. Reducing income disparities and polarization: Income inequality has been a creeping problem in Canada and other advanced economies for many years. Now we are witnessing income polarization, which threatens social cohesion. The Occupy Wall Street protests, and their analogue here, are one early sign of the social discontent that can arise from income polarization and a growing perception that the economy is not working for most people.

5. Securing our health system for the future: Universal, high-quality healthcare has been a defining feature of Canada and Canadian citizenship for 40 years. Yet the consensus among experts is that if we stick with the current funding/administrative models, Medicare, as we know it, is not financially sustainable. As we approach the end of the Health Accord in three years’ time, innovative, strategic policy approaches on healthcare financing are urgently required. We also need the federal government to provide leadership on the organizational and accountability issues that underpin our health system.

All these areas have received attention in the past, but seldom in a truly strategic way. Perhaps the tipping point has not yet been reached in any given area. Perhaps governments and politicians lack the ideas to address these issues. Perhaps there is too much scepticism that the federal government can really make a difference. Perhaps we have reached the limits of innovative public policy and governance. Or perhaps we are just avoiding the issues in the hopes that they will resolve themselves in an acceptable way through incremental policy action.

Whatever the cause, it is time for Canada to break out of this mindset. Many elements of Canadian society – the business community, NGOs, governments at all levels, educational institutions, and Canadian citizens generally – must work to address the challenges, though our contention is that federal leadership is critical.

Ottawa Citizen, Thursday November 24, 2011

Stephen Harper’s pledge to allow families to split their incomes in calculating federal incomes tax is expensive – three times the cost of the NDP’s notion of boosting the seniors’ tax exemption, regressive – allowing wealthy families to reduce their tax burden – and fiscally questionable – even though the change would only come into effect once the federal books was balanced, the move would immediately send the budget back into the red.

Promises as theme music

Those criticisms, however, miss the point.

The tax pledge, indeed every promise in the current campaign, Liberal, NDP or Conservative, will not be a watertight provision with all contingencies examined and designed to boost economic growth, improve societal equity or fulfill some other social goal.

Instead, Harper’s tax provision is similar the hue of the sky in an old black-and-white movie thriller. It is designed to set the tone.

In an era where governments are constrained by the size of their budgetary deficits and the reaction of international capital markets to the shortfall, where voters are increasingly skeptical of the ability of elected officials to solve outstanding national issues, where the spectrum of acceptable options is increasingly narrow, a party’s policies are analogies for its governing style.

What a party promises or what a government does is usually designed to give voters the main theme of a potential government, not to be a menu of how an administration expects to get to a particular goal.

Finding the needle in a stack of needles

Often the main parties in a campaign see the same problems and have somewhat similar solutions. It is usually that minor policy or peripheral issue that provides the voting key.

The policy does not have to all-encompassing or even particular important to a new government.

But, the trick for a government or a party seeking election is to find that policy which serves to show how that group would, in broad strokes, run the country, province or city.

David Peterson’s promise to put beer and wine in corner stores in Ontario during the provincial campaign of 1985, George Bush Senior’s Willie Horton anti-crime ads and, more recently, Toronto Mayor Rob Ford’s promise to end the City Hall gravy train are all examples of policies that show more style than substance.

Information overload

In a world where the river of available information has overwhelmed voters’ ability to process data, however, style – or analogy – might be the only way the electorate has to decide which party and which leader would govern to their liking.

Obviously, Harper wants to show his government as a low-tax administration, one with the concerns of middle-class families at its core.

A middle class tax break, even one that is realistically four years in the future, shows the electorate that a Conservative government is working hard to put money back in your wallet.

The Liberals and the NDP are in the same race, trying to carve out some psychic space in voters’ minds as to what kind of government they would run.

Michael Ignatiefff appears to be trying out a theme of honesty and integrity while Jack Layton is test-driving a ‘concern for the common man’ motif.

The key is not to provide a menu of policies for voters to choose. After all, they are picking a government, not a smorgasbord of initiatives for an administration.

The important factor for the three leaders is whether they recognize the sentiment closest to the electorate and whether they have a policy – big or small – that tells that story.

Egypt, Tunisia, Libya, Bahrain and other middle eastern nations – many countries barely on the radar screens of the western public – are all caught up in a wave of widespread unrest and euphoria as groups finally grasp the political truth that mass movements pushing towards a well-defined goal often get at least some portion of what they want.

And, here, free elections are the goal.

In many cases, popular unrest wins out because soldiers cannot stomach the idea of killing large numbers of their fellow countrymen, often to back up some aging dictator who has outlived his effectiveness and who enjoys very little national support.

You might be able to draw some parallels between the African of 50 years ago and the modern Middle East.

Back in the late 1950s and early 1960s, European countries, led mainly by Britain and France, relaxed their stranglehold on their African colonies and gave them independence.

For years, most of these countries had been subjected to popular uprisings and attacks by long-standing indigenous guerrilla movements, all designed to increase the cost of European rule.

In addition, people in many western countries began to believe that holding colonies were no longer appropriate in the post-World War 2 era and that the emancipation of Africa and Asia was in order.

As a result, places like Kenya, Niger and Nigeria, would be able to elect their own governments and not be ruled from London or Paris.

For many countries, especially in so-called ‘black Africa’, the relief was palatable. Now, these peoples were no longer subjected to the institutional racism of having whites a continent away decide their futures.

Instead, men, such as Kwame Nkrumah, Julius Nyerere and Nnamdi Azikiwe, took center stage as great men leading their nations into the dawning of a new era.

But, it didn’t work out that way.

One problem is the difference in opposing the existing authoritarian government versus actually ruling the country.

In independence struggles, many opposition groups operate as shadowy, romantic organizations, waging a seemingly doomed fight against the oppressive machinery of a non-representative government.

Once it becomes clear the old regime is on its way out, however, the ‘all-for-one’ agenda of these groups turns from clear – dump the existing regime – to opaque – securing a place for their own pet causes.

As a result, these fledgling democracies experienced widespread internecine fighting. Groups that once banded together to fight the common woe now found their differences overwhelming in the face of the necessity of forming a working government.

In Africa, the ensuing unrest in the 1960s had a tendency to incite military leaders, who pined for the days of a strong leader in the face of all these political weaklings.

By 1966, Nigeria’s three-year old presidency was replaced in a military coup setting the stage for the next 14 years of army rule.

Kenya, which gained independence in 1963, evolved into a one-party state with Jomo Kenyatta holding office for 15 years.

Time after time, legitimate – but ineffective – African governments were tossed out by the military or were squeezed out by one organized political party, which then grabbed the reins of power in a death gripe.

The newly emancipated countries of the Middle East face the same possibility, which once uniform agendas will splinter into unworkable governing platforms.

Worse still, in the Middle East, the groups most likely to remain united in the wake of further unrest would be those political parties and organizations representing stricter Muslim sects within these societies.

After all, their goal in many cases is not democratic elections but the installation of a more religiously based society.

Of course, such an analysis does not mean the fight for a democratic society is a lost cause.

Unlike Africa, however, the Middle Eastern states that are moving towards free elections need to tread carefully with well-considered rules to protect political parties and voting outcomes.

Otherwise, those protestors in places like Libya and Egypt might find themselves merely trading one form or dictatorship in for another.