Not two years ago, income inequality was a pretty obscure topic. Not so today.
Earlier this year the World Economic Forum identified income inequality as a top global risk and in late 2011 President Obama called growing inequality “the defining issue of our time”.
In March, polling by Ekos found that 57% of Canadians felt that they would be worse off in 25 years’ time than they are today. In April, a Broadbent Institute poll found that three quarters of Canadians felt that the growing income gap in our country was a significant problem, a finding that was confirmed by a Forum poll for the National Post in May. Perhaps it should not have come as a surprise, then, that at the end of April, Liberal Finance critic, Scott Brison succeeded in securing cross-party support in the Canadian Parliament for his motion to form a committee to review income inequality in Canada.
Fast forward to June and the theme continues…..with the economists in the vanguard. The Presidential address at the annual Canadian Economics Association Conference was about trends in top income shares (and why these might matter) and just last week Nobel Prize winning economist, Joe Stiglitz published his latest book, The Price of Inequality: How Today’s Divided Society Endangers our Future.
The debate is over, we all fall in with the President: this is a serious issue that policy-makers ignore at their own peril.
The difficulty lies in knowing what to do about the problem. Addressing inequality is not the same as addressing poverty, something that we have done with varying success for many decades now. It is likely to take action at all levels of the income spectrum (dampening growth at the top, shoring up the middle and actively transferring at the bottom). It also requires a whole new dimension of thought when designing health policy, education and training policy, labour policy, youth policy and policy on corporate governance.
It is action in these areas that will help create a world in which equality of opportunity becomes more meaningful and growth becomes more inclusive. Without such changes, the already substantial degree of public alienation from the institutions of state is only likely to grow, possibly with highly disruptive consequences.
Let us hope, then, that when our Parliament’s Standing Committee on Finance reports in one year from now, it has some firm and inspiring recommendations on how best to improve the equality of opportunity and prosperity for all Canadians. In the meantime, we at Canada 2020 will also be working away on the topic. So, if you have any views, please do share them with us. Left unattended, this is a problem that will certainly not go away.
Month: June 2012
Searching for a new progressive narrative
In the last few years, commentators have remarked upon the narrative of Canada developed by the Harper Conservatives, emphasizing patriotism that supports the military, Tim Horton’s and the North. More recently we have heard calls for a new progressive narrative as an alternative to this Harper version.
What could form part of this narrative, and how could it gain a broader appeal with Canadians?
Much of the current conservative narrative concerns “freedom”, especially the freedom of markets that contrasts with the control that progressives supposedly want to exercise on Canadians through taxation and government programs. The truth is, though, that government services have in many instances increased the freedoms enjoyed by Canadians. Unemployment insurance allows them to feed their families when they are out of work, public education enables people fully to exercise their talents, safety regulations mean that people can work longer and be more productive, minimum wage laws have increased the purchasing power of the poor and socialized medicine allows Canadians to spend more of their money on items of their choosing. Canada’s social safety net has freed many Canadians to pursue their goals and exercise their talents.
A new progressive narrative must, though, make it clear that government action is not the only solution. Private action and enterprise are just as worthwhile. Indeed, society functions best through a combination of individual effort and collective action. Private donations and government programmes complement each other in helping the poor, while governments and markets compensate for one another’s weaknesses. The approach should be more nuanced than the “market-first” consensus of the current narrative.
There are real questions about the way in which the Harper Conservatives have managed the economy. A progressive narrative could point to the fact that the government did not foresee the recession in 2008, that the Conservatives have run up large deficits and that it was the Opposition that forced the Government to develop its Economic Action Plan to stimulate the economy. In addition, it is noteworthy that the regulations that prevented Canadian banks from suffering the same fate as their American counterparts were put in place not by Harper, but by previous governments.
A new progressive narrative could, therefore, challenge many of the stereotypes of progressive ideas and the people who advocate them, while also pointing out the weaknesses of many current conservative ideas and policies. In doing so, however, it should avoid blanket condemnations and insults, whether of conservatives, private business or any other group of people.
In the early 1990s, the Reform Party was often ridiculed for its policies, the implication being that its supporters were somehow un-Canadian. Many Western Canadians were offended by this: the attacks reaffirmed their support for the Reform Party as it became the Canadian Alliance and now the modern Conservative Party. At the same time, the stereotype developed that many progressives were hostile and insulting to anyone who disagreed with their agenda.
A new progressive narrative can not only debunk the negative stereotypes about progressives and counter the narrative of the Harper Conservatives, it can also help build a more positive dialogue in our country. Canadians frequently defy political stereotypes: Conservative voters show compassion for the poor and care for the environment, while Liberal, NDP and Green voters put in long hours of hard work and show entrepreneurial spirit. Indeed, many entrepreneurs have run as Liberal or NDP candidates over the years.
A new political narrative that recognizes this and helps to bring us together as a country, rather than worsening the tensions that currently exist, would provide an extremely valuable service to Canada and to all Canadians.
Jared Milne is a policy researcher and analyst from Alberta with a strong interest in Canadian history, Canadian politics and Canadian public policy.
Canada must adjust to the Asian century
Over the coming decades, Asia will become the global centre of aspiration, innovation and technology. Canada’s long-term prosperity and security will increasingly depend on its ability to understand and seize economic opportunities in the region – particularly in the twin giants of China and India – as well as in countries such as Vietnam and Indonesia.
What’s more, Asia’s influence is spreading globally. New, non-Western webs of power are emerging, exemplified by the growing Brazil-China relationship, meaning that Canada’s success in other regional markets will depend on how much we matter in Asia.
Despite – or, perhaps, because of – their manifest success, Asian countries are at the forefront of the biggest collective action challenges of our time. These range from critical shortages of water, energy and food, to a need to fill education, health care and infrastructure gaps and to address climate and other environmental concerns. Outsiders who offer practical, targeted assistance to Asian countries to overcome these problems will be well-placed to reap the economic and political benefits.
To succeed in this environment, Canada needs to be visible, useful and creative. Competition for Asia’s attention is intense and Canada has fallen behind. Our reputation as a gateway to natural resources may open the door to Asia, but we need to be resourceful and identify additional roles to keep that door open – be it in education, health care, environmental stewardship or elsewhere.
We must also recognize that Canada’s businesses, academic institutions, non-governmental organizations, provincial governments and citizens are already active in Asia and are important faces for Canada. These new diplomats need to be empowered to work on Canada’s behalf.
What does this mean in practice?
To start, the federal government should double-down on its bilateral and regional engagement. Any strategy for Asia must be led, and seen to be led, from the top – especially in countries such as China, South Korea and Singapore, where the state plays a major role in the economy.
There has been rapid progress in the past year. Stephen Harper’s high-profile visit to China yielded many new initiatives, among them a joint study to examine potential for a trade agreement. Negotiations are moving swiftly to conclude a Comprehensive Economic Partnership Agreement with India by 2013, and Canada is lobbying hard for member status in the nine-country Trans-Pacific Partnership. The challenge will be to sustain our attention and follow-through. We must not allow our fiscal woes to distract us from this.
Secondly, Ottawa should identify and deploy smart investments to develop Canada’s brand image. Among these should be a Canada Brand Equity Foundation, in partnership with the provinces and private sector, to manage and measure perceptions of Canada in key hubs, cities and regions in Asia. For example, expanding the CBC’s presence in Asia with content targeted at local markets would be a low-cost way to enhance Canada’s “mind-share” in Asia.
Canada’s brand could also be enhanced by associating with iconic, highly visible projects in Asian countries. For example, Ottawa should push to achieve partner-country status for the Delhi-Mumbai Industrial Corridor, Asia’s largest building project (Japan is already there). It’s also time to revisit the argument to build a Sovereign Wealth Fund by pooling our resource rents. Such a fund would enable us to invest at scale in Asia and put us at the top table of global capital partners for Asia’s leading companies and governments.
Third, the federal government needs to find better ways to source and co-ordinate leadership from below. This could include a “wiki events” calendar that would share itineraries and allow groups to “self-organize” events and partner in real time.
Competitions and contests are another tool to engage this sector. For example, for a small sum, we could offer a “Canadian X-Prize” and motivate smart crowds to work on Canada’s behalf. This would involve picking a country and specific problem in Asia (for example, rural electrification in a given Indian region) and offering a prize in conjunction with Canadian universities and leading Canadian companies.
Finally, an overarching part of Canada’s Asia (and global) strategy should be serial experimentation. Not all the ideas outlined here will work, but we need to experiment to see what gains traction. We should follow the lead of the smartest companies that rely on “fast failure” to find their way in a fast-changing world.
Canada is behind in Asia, but we’re catching up. We should build on current efforts by using new, cost-effective tools of diplomacy to show Asia that Canada is an indispensible partner.