Unemployment rates remain high and the latest data shows an uptick. Why is this, when so many businesses and companies are desperate for trained workers?
The key to addressing this disconnect is to bring balance to the supply and demand for postsecondary graduates. In many sectors, this equation has lost its equilibrium. The proof is found across numerous communities and in many market segments where people’s skills just don’t match the available jobs.
Postsecondary education has been producing a steady supply of graduates, without enough attention to the demand side of the equation. In fact, our success in turning out graduates is in many ways adding to the supply-demand imbalance. The mantra of ‘build it and they will come’ does not serve colleges or their communities well in the short or long term.
The move towards the knowledge-based economy has been underway for decades, gaining momentum and fuelled by capitalism taking flight around the globe with China, India, Brazil and Russia garnering much of the attention. With traditionally weaker economies expanding and driving the emerging economic powers up the value chain the trend for specific-skilled jobs and workers will only accelerate.
How did we get to this point of imbalance? The knowledge-based economy shift has moved many low-skilled, high-paying jobs offshore and left low-paying, high-skilled and professional jobs requiring specific technical skills within our borders. We are faced with the need to raise the education attainment level of our population to ensure we have the skilled labour force needed for continued prosperity.
The framework for responding to this need has created a rush to increase student enrolment without the necessary focus and has yielded undesirable results –an undersupply of graduates in key disciplines, infrastructure that will become increasingly difficult to sustain, and most notably, a lack of innovative solutions and initiatives leading to a slow re-tooling of postsecondary programs.
Our habitual response has failed to recognize two key factors. First, the pool of skilled labour continues to shrink, which creates an urgent need to match graduates to marketplace needs. Second, the conventional way of supplying graduates is unfocused and does not ensure opportunities are met. This is evidenced by the gap between the individual skill sets, high unemployment rates and the unsatisfied needs of the knowledge-based economy.
Today, the economy does not have the capacity to absorb this historical level of waste nor should these historical shortcomings be accepted.
In the past, the unfocused supply could be absorbed within the fabric of the economy, masking inefficiency both in terms of financial and human costs. Today, the economy does not have the capacity to absorb this historical level of waste nor should these historical shortcomings be accepted. The continuance of the old system, primarily focused on supply, is irrational and does not address the challenge before us.
What is required is a new focused framework that is relative to today; that has direct links between the postsecondary student and the employer, with higher education acting as the conduit of knowledge and skill… a new deal that formalizes the link between the employer and future employee – the current student. And most importantly, a strong resolve by the private sector to work with colleges to close the skills shortage gap before it becomes lethal to the health of our economy.
The private sector has been too complacent in redefining and articulating its needs as well as expressing these needs to government, students, and parents – the public at large. Their demands on the education sector to provide specific training has been, for the most part, absent in the public forum.
An action-based approach that flips the current supply-demand approach to a demand-supply model is the most effective and efficient means to close the gap between individuals and the required skill sets, thereby returning balance to the education equation. The need for human capital is unmitigated for industries from finance to manufacturing and construction, according to forecasts from Human Resources and Skills Development Canada. Projected shortfalls of workers range from 200,000 to 1.8 million by 2031 according Dr. Rick Miner’s study Jobs Without People and People Without Jobs.
We need a resolute and focused plan that moves us to address the imbalance of our labour supply, where skill sets do not meet opportunity. This demand-driven approach requires a framework that includes proactive human resource planning in the province, a revenue and tax model that accelerates capital investment by the private sector and a learning and skill development incentive program shared by the public and private sector. While targeted investment directed at individual sectors may not be popular or palatable in some jurisdictions, the need to address the skills shortfall requires quick and decisive action. We must do things differently and not be bound by standard conventions to meet our commitments and obligations.
As a college, we will continually evolve our programs and services to fulfill our mandate. This translates into constantly innovating and investing in new programs and services with the support and foresight of industry partners, individuals, alumni and government while divesting from others. A vibrant college always continues to evolve and renew.
A healthy economy, excellent healthcare, high quality education, positive business conditions and secure retirement are dependent upon us reestablishing balance to the education equation by eliminating the gap between the skills shortage and those required by the marketplace.
Year: 2012
What Canada should take from the WEF Competitiveness Report
This year, Canada slipped from 12 to 14 in the World Economic Forum’s Global Competitiveness Rankings, having dropped two places the previous year and one in 2009-10. So in three years we have gone down five places, from 9 to 14. The countries that have pulled ahead of us are: Taiwan, Qatar, the United Kingdom, Hong Kong and the Netherlands (which now stands at number 5, up from number 10). Over the same period, the US has also dropped five spots, from 2 to 7.
In analyzing Canada’s decline, the report highlights: a less favorable assessment of the quality of our research institutions and weaknesses in the contribution of government procurement practices to promoting innovation (a key concern of the Jenkins panel review of Federal Support to Research and Development). While we remain strong on human capital factors and, somewhat surprisingly, on labour market efficiency, the report also points to lower enrollment in higher education and some relative weakness in workplace training. It is not news to us that we have a skills problem in Canada: what is a little surprising is that it has not pulled us down further.
It is interesting to look in greater detail at Canada’s profile and see where we stand out, both positively and negatively. The index is a composite ranking of weighted factors in three broad areas: basic requirements, efficiency enhancers and innovation and sophistication factors. Within these three areas, there are 12 `pillars of competitiveness’ which, in turn, are comprised of between two (for market size) and twenty one (for institutions) separate indicators. So there are a lot of data and a lot of rankings to muse upon.
The good news is that we come top of the pile (no. 1 ranking) in 4 areas: malaria cases/1,000 population and business impact of malaria (phew…obviously none of our top business execs are vacationing in the Dominican Republic) as well as annual change in inflation rate and, again somewhat surprisingly, the number of procedures required to start a business. Less surprising is that we are top-ranked in soundness of banks. This really is an advantage on which we should be able to capitalize as we reach out to increase economic links between Canada and Asian countries, in particular.
Our really bad scores (where we rank below 100 out of 144 nations) are in mobile telephone subscriptions (111: could that be the cost?), government budget balance as a % of GDP (104), general government debt (129) and imports as a % of GDP (112). In none of these areas have we improved our rankings since 2011-2.
Another interesting outlier is in ‘business costs of terrorism’ where we came in at number 82, happily an improvement of our 93rd place the previous year. I assume this ranking still has to do with restrictions placed on US border crossings in the aftermath of 9/11.
A fascinating, but less well-reported, section of the report deals with ‘the most problematic factors for doing business’. These are derived from the WEF’s executive opinion survey. Respondents are asked to select from a list of 16 factors those five that they deem to be the most problematic for doing business, and then to rank them. Given that this is a ranking process, it does not pay to attribute too much import to the actual scores for each factor, but it is interesting to see what Canadian executives are worried about and how their concerns stack up relative to their counterparts in other countries.
The good news first. Once again, ‘crime and theft’ was not selected by any Canadian respondent as a major constraint to business (good to know that we have all those prisons in waiting, though…). We were not so lucky on corruption this year, no perfect zero. At least one executive must have had a bad experience, pushing us up to a score of 0.3.
But what about the top ranked concerns? The top five worries of Canada’s executives are, in order: (i) inefficient government bureaucracy; (ii) insufficient capacity to innovate; (iii) access to financing; (iv) inadequately educated workforce and (v) tax rates.
It seems a bit of a stretch that tax rates are still in the top five, given that corporate tax rates are at an all time low, though not, of course, nearly at the level of our low-tax competitors such as Qatar (10%), Singapore (17%) and Taiwan (17%). Tax rates are the top-ranked concern in four of the countries that are above us in the overall global competitiveness rankings (Sweden, Finland, the UK and Japan). They come a close second in the US. The actual rates are, according to KPMG figures, similar in Canada, Sweden, Finland and the UK, so I guess we are complaining relatively less than our peers about tax.
The other four factors that are important here in Canada are also important in most of our immediate competitor countries. Ten of the 14 most competitive countries rank government bureaucracy amongst their top five problems (along with us, only the US gives it top billing: is it a worse problem in north America or are we less tolerant of bureaucracy than the Europeans and Asians?). Eight countries see problems with capacity to innovate (Germany, the US, Japan, Qatar, Denmark and Taiwan are fortunate in that they do not rate this as a top five problem) and 11 of the top 14 countries’ executives experience problems with financing, again, unsurprising in the current climate. In four countries (the Netherlands, the UK, Qatar and Denmark) this is seen as the top problem.
So what does all this tell us? For me, it points to the need for effective policy and well-targeted government action. Innovation in the public service is, as Canada 2020 author Peter Nicholson suggested, a key concern. That should help businesses, as would the related issue of doing better on promoting innovation through government procurement.
Skills of different types are also a key factor in our competitiveness. There has been a good deal of commentary, of late, on the relative value of university education versus technical training. Both are critical, as is the need to ensure that we are matching skills training and our university enrollment with workplace needs. Employers also need to take responsibility here for on-the-job training.
I suspect we have much to learn here from the Swiss. In the indicator rankings they score top marks overall (no 1 ranking out of 144 countries) for both the quality of their educational system and the extent of staff training. But Swiss executives still rank an inadequately educated workforce as the most problematic factor for doing business. They know this is the key issue for the future. We still have a lot to learn.
Nexen-CNOOC – Searching for Canada’s “Net Benefit”
Next month shareholders of Nexen vote on a lucrative offer from a company owned and controlled by the Chinese government for all of the shares in the Calgary-based, Canadian oil and gas company. If they do not say “yes” it will be a miracle. After all, The Chinese National Overseas Oil Company, or CNOOC as the buyer in known, is paying a sixty-six per cent premium on the price the shares were trading at when the offer was made on July 23, 2012.
CNOOC is so confident of the shareholders’ agreement that it has already asked for federal government approval of the deal, even though the formal vote has yet to be held. Because this would be a foreign takeover of a large Canadian company, the purchase requires the approval of the federal government agency, Investment Canada, before it can go through. The fact that the buyer is a company controlled by the Chinese government means that the pending decision by Ottawa has already attracted a lot of attention and comment.
The Nexen deal falls neatly into two of the five areas on which Canada 2020 is focusing in our ongoing project, “The Canada We Want in 2020.” Launched in the fall of 2011 and followed up with five public sessions in the spring of this year, the project looks at Productivity and Innovation, Income Inequality, Health, Carbon and Energy and the rising importance of the Asia-Pacific region. The Nexen deal clearly falls into the ambit of both of the last two categories and is also of relevance in the productivity and innovation area.
When it reviews the deal, Industry Canada, on behalf of the federal government, will have to decide if there is a “net benefit” to Canada should the sale of Nexen to CNOOC go ahead. Clearly Nexen shareholders benefit, as does the Chinese government. That is why the deal has been tabled. Shareholders get a large premium for their shares and China gets all of the company’s energy resources, not just in the Alberta oil sands but also in the Gulf of Mexico, the North Sea, Latin America and West Africa.
Those supporters of the deal who do not directly benefit from the sale believe it is good for Canada because it attracts much-needed foreign investment to develop the oil sands. This is crucial not just for Canada’s energy needs, but also for the revenues and both direct and indirect jobs the oil sands will create. And, they point out, saying “no” would represent a big setback to warming economic and political relations between Canada and China, which stand to yield other, larger benefits over time.
But opponents of the deal have a number of arguments as to why the sale should not go ahead.
The opposition of environmentalists who oppose any further development of the oil sands is easy to understand. But others have raised objections on a number of grounds, including that:
- Nexen operates in one of Canada’s core strategic industries.
- because CNOOC is owned by the Chinese government, this is not really a business and economic question but one of politics and foreign policy. Even if, as promised, the American head office of CNOOC is in Calgary and a class of shares in the company is traded on the TSE, the company will be an instrument of the Chinese government’s political, economic and foreign policy and the deal must therefore be regarded in that way.
- there is no Canadian-Chinese reciprocity on such transactions. If a Canadian oil company wanted to buy a Chinese-owned one it could not.
- the Chinese record on repressing human rights is reason enough to block the sale (opponents cite the Chinese government’s dealings with its smaller neighbours in disputes in the South China Sea, its manipulation of exports of rare earth minerals and its support of both Iran and the current regime in Syria).
The “net benefits” test in the Investment Canada Act was not conceived to deal with such non-economic questions. Yet the rise of state owned enterprises and sovereign wealth funds that are created and operated by governments, has made these questions at least as – or even more – important than the pure economic questions that were originally envisioned by the test.
A further problem is that the definition of “net benefits” is so vague that it can mean almost anything on any given deal.
Whatever answer is given will set a precedent for how future, similar deals will be judged. This is why there is so much interest in how the Nexen – CNOOC deal plays out and why, at Canada 2020, we are following the developments very closely.
Venus and Mars Align – Income Inequality Agendas in France and America
When the President of the most anti-government country on earth and the President of the country that invented dirigisme are converging upon a political narrative, if not a shared policy agenda, something is going on that Canadians better pay close attention to.
Francois Hollande, the newly elected socialist president of France, is defining the early days of his presidency on the issue of income inequality. Barack Obama, who faces a jaded American electorate in a few months, has decided to make income inequality the central issue of his re-election campaign. This amounts to the political equivalent of the alignment of Venus and Mars.
Canada lies, both culturally and politically, in the mid- point of these two planets. And yet oddly enough politicians in this country are saying almost nothing about income inequality.
Hollande has exhibited the most extreme rhetoric and pointed policies on the subject, echoing the language of the Occupy Movement. He has called “the world of finance” his main enemy. The government Hollande leads plans to introduce a variety of tax increases to level things out on what he has termed “the grasping and arrogant rich”. These include wealth, financial transactions and inheritance tax rises. An extra 3% dividend tax on business has been mooted. Planned increases in value added tax by Nicolas Sarkozy, Hollande’s predecessor—which would have hit hardest on low and average earners—are being cancelled, even though the French government desperately needs the revenue (not having balanced its budget in thirty eight years and with a debt GDP ratio of 86%). A new 75% top rate tax on incomes over 1 million euros is expected. Salaries at majority state owned companies, of which there are dozens, will be capped at 20 times the lowest paid worker’s wage, meaning some chief executives could take as much as a 70% pay cut.
All in the name of reducing income inequality. And all quite popular in the land of liberty, equality, fraternity.
But how can an income inequality agenda be popular in America, the land of the free and the home of the brave, a country that likes to present itself as the world’s beacon of unbridled free market capitalism. President Obama certainly thinks it can be. He sees income inequality as the “defining issue of our time”. While Obama’s points are subtler and less overtly “soak the rich” than Hollande’s, the message is pretty clear.
In his State of the Union Address in January the subject of income inequality featured prominently. The president said– “No challenge is more urgent. No debate is more important… We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.” Building on this theme in April, the president said–“What drags down our entire economy is when (sic) there is an ultra-wide chasm between the ultra-wealthy and everyone else.”
So for Obama, income inequality is bad for the economy, which fits well with America’s basic narrative. And for Hollande and the French socialists, income inequality is an affront to the core French values of egalite and fraternite. Different strokes for different folks.
President Obama has been shorter on solutions to the defining issue of our time than has Hollande, but he has put a couple things on the table. Notable among these are extending tax breaks for America’s struggling “middle class”, by which he means everyone but the top 2% of earners, who drive the income inequality gap so wide in America. And he has expanded tax credits for low income people and put more money into education.
While income inequality has emerged over the past few months as a dominant issue in France and America, the silence among Canada’s politicians on this subject is truly deafening. This is especially puzzling given that measures of income inequality are much worse in Canada than in France. And income inequality in this country is rising faster than it is south of the border.
This week the Premiers gather for their annual confab to discuss the major issues they think confront Canada. Energy, a perennial favourite, is at the top of their agenda. The Premiers would be well advised to spend a little more of their energies on the defining issue of our time.
International education the missing piece of Canada’s innovation agenda
When asked why they would want to study abroad, most Canadian university or college students give a variation on the following answer:
“It will broaden my horizons, I will make new friends, and I will have fun becoming a global citizen.”
All great things, all true in their own way – but all miss the bigger picture.
A growing body of literature, much originating in Australia (a country with a very significant international education component to its economy), has made the link between study abroad and national innovation performance. The proposition is simple: when students travel abroad during their post-secondary education years, they participate in an economic process that fuses countries, markets, sectors and people together in a productive exchange of ideas and practices, yielding tangible economic benefits.
In short: they do a lot more than make friends.
The key is social capital – the process of cultivating and deriving economic benefit from new environments, experiences and networks. Literature on the concept directly links it to innovation performance. Societies that are innovative place a high premium on social capital building experiences. Right now, the ability to develop social capital is not a skill that Canadian educators and policymakers seem to prioritize and as a result we are suffering from low innovation scores across the board.
Historically, the flow of the international students has been predominantly uni-directional.
Developing economies – think China, India, Brazil and some African nations – happily send their bumper-crops of young students overseas with the hope that higher standards in education, language proficiency and increased market opportunity will yield long-run, national economic prosperity.
Developed economies compete to attract these incoming students. Canada and the US have excelled at this, and it’s no mystery as to why: international students typically contribute anywhere between $6 and $10 billion annually to our economy. The recent South American tour by Canadian university presidents – accompanied by Governor General David Johnson and AUCC President Paul Davidson – underscores how seriously we take this business (though this has not stopped us losing ground to newcomers in the business, such as Australia).
But, given the benefits of study abroad, isn’t it time we placed greater emphasis on sending our own young people out to increase their own understanding and help them develop global ties? Developed economies need the innovation benefits of study abroad too. Were we to do so, we would be far from the front of the pack. Around 33% of German students study abroad. The figure for France is in the mid-20s – heck, even the United States sends 11% of its students overseas, so language cannot be the barrier.
The figure for Canada? An anemic 3%. Each year, only 50,000 Canadian university, college or polytechnique students travel overseas – a mobility rate that has shown no signs of growth over the past 10 years.
Yes, Canada is one of the top destinations for international students choosing to spend time abroad during their studies. Among all OECD countries, Canada has a stay-rate of 33%, which is 8% higher than the OECD average and means that more students who come to study in Canada, stay in Canada afterwards. But when it comes to Canadian students packing their bags and spending time abroad? We’re missing out – big time.
And what’s incredibly frustrating for Canadian policymakers, NGOs and academics interested in turning these low-mobility rates around is that countless surveys reveal a near unanimous level of support for study abroad. When asked if international education would be something they would pursue, Canadian students respond with a decisive ‘Yes’. Even their parents, university administrators and other members of a student’s sphere of influence sing its praises.
So there’s a disconnect. This tells us two things:
First, something – whether cost, safety, time commitment, quality of education, logistics, or other external or internal factors – is stopping students from fulfilling their study abroad goals.
Second, Canada is failing to leverage the partnerships it has developed as a recipient country for international students. Being among the top study destinations among OECD partners implies an extensive network of partnerships with international institutions and programs. Why are Canada’s educators not better at turning inbound student flows into better, easier-accessed opportunities for their own outbound students?
Both must be addressed.
The federal government has a unique role to play in incentivizing study abroad, whether it be through dedicated funds distributed through existing granting councils, or a simple show of leadership by publicly making international study a national priority.
The good news is that in supporting international education, the government can also stand behind its own stated priorities. Programs and subsidies can be geared towards specific countries and needs. Certainly as Canada pivots to meet Asia’s rise, a cornerstone of our engagement strategy should include exposing more Canadian students to the rapidly developing markets in China, India and South Korea.
Canada must act fast to fit in this missing piece of our innovation puzzle. Without it, we will continue to miss out on the global economies of the 21st century.
Green vs. Growth: the false dichotomy
Earlier this month the UK’s Confederation of British Industry (CBI: the UK’s top business lobbying organization) released a report entitled The Colour of Growth: Maximising the Potential of Green Business.
In Canada we are used to hearing about the conflicts between `green’ and `growth’. This report – authored not by an environmental NGO but by the powerhouses of British industry – argues forcefully that this is a false dichotomy. Indeed, its underlying premise is that green is not just complementary to growth but a vital driver of growth in the UK.
The main messages of the report are that:
- Green means opportunity.
- In order to stay ahead and fully exploit green growth opportunities the UK needs a coherent, consistent and strategic policy framework from government.
- The UK should project an overarching brand in the green economy: government action is critical to this.
- Consumers will only play their role in the green economy if they receive the right facts and consistent government messaging.
- Long-term strategies for energy-intensive industries must be developed. These should be sector-specific decarbonization roadmaps that enable such industries to play a role in the low-carbon transition.
As one commentator put it: `In essence, the CBI is calling for a policy framework that is both simpler and more ambitious – a system of regulation that is streamlined, stable, and sharply focused on giving businesses the confidence they need to invest.’ (James Murray http://www.businessgreen.com).
UK business (or at least a significant section of it) has clearly bought into the economy of the future and is pushing the government to provide the right incentives and enabling environment for innovation and success. What stands out in the report is the need for consistency and predictability in the policy environment.
Would that were all we needed in Canada. Consistency here is sorely lacking (witness the flip-flopping on home energy retrofits and feed in tariffs, battles over electricity prices as well as the far bigger problem of a government that is committed to facilitating ever-increasing fossil fuel extraction while still paying lip service to a 17% reduction in carbon emissions over 2005 levels by 2020). But our problems run deeper. We also lack a meaningful overall commitment to decarbonization, a sensible debate about the facts and opportunities of the green economy, and any shreds of the international credibility that might enable us to develop a green Canada brand (one of the key proposals in the paper written for Canada 2020 by Stewart Elgie and Alex Wood in The Canada we Want in 2020).
Indeed, while the CBI bemoans a lack of green brand in the UK, a report by the American Council for an Energy-Efficient Economy, also released this month, ranked the UK as no.1 overall in energy efficiency (which must enhance the brand somewhat). Canada came a dismal 11 out of the 12 largest economies, beating out only our old foe, Russia. And while the UK is home to over 75% of all carbon market trading desks, our current federal government has firmly rejected the idea of carbon markets in favour of a slower, far less efficient, regulatory approach. (This, in response to the fact that the public apparently has no appetite for carbon taxes: unsurprising if there is neither leadership nor good information on these topics issuing from government.) It comes as no shock, then, that we pick up all those fossil awards and are currently battling for the future of what the European Union would like to designate as `dirty oil’.
The CBI report states that `In trying economic times, the UK’s green business has continued to grow in real terms, carving out a £122 billion share of a global market worth £3.3 trillion and employing close to a million people. ‘ This is real growth in a dynamic market, something that should motivate all politicians in the current environment. Furthermore, a high concentration of UK green exports go to Asia (around 20%, including 12% to China and Hong Kong), a priority area for Canadian trade.
So where do we start? We do have green business in Canada and we are not doing badly in renewables, despite the pro-fossil fuel stance of our federal government. Ernst and Young recent rated Canada as coming 8th (out of 40 surveyed countries) in terms of `renewable energy country attractiveness’ (the UK ranked 5th, China came out top). It cited the Ontario election result and our relative strength in wind, as well as ambitious plans for harnessing wave power in BC, as key factors in this ranking.
When it comes to green investment, we are well behind European countries and the US. Not only have we been at it for a far shorter time, but we also have far less money invested in the green economy. Investeco, Canada’s first environmental investment company currently manages just $35million for over 100 Canadian Investors. Compare with the UK where just this year a government-sponsored Green Investment Bank that aims to release 3bn (sterling) to fund green infrastructure was incorporated.
So now is the time to cash in on the hidden advantage of playing catch-up: we do not need to reinvent the wheel. Let’s start by heeding the CBI’s advice ….just substitute Canada for UK below:
`If we are to capture the full value of the low-carbon transition …. we need to think about what a smarter approach looks like within the context of a broader industrial strategy. We should look to build up and promote UK strengths, identify strategic opportunities and ensure that we have the right institutions and intellectual infrastructure to underpin these activities. In doing so, we can make sure that the UK is best placed to supply – and export – the solutions.’
(The Colour of Growth: Maximising the Potential of Green Business, p.6).
Inequality at the top of everyone’s agenda
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.
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.