Category: Opinion
How to Innovate FinTech in Canada
This is an excerpt from Canada 2020’s upcoming report ‘Being Innovative: Canada’s Next Big Challenge.’ The report will be released in early November, 2016.
By Mike Moffatt
Assistant Professor, Western University
Financial Technology (known as fintech) investments are growing rapidly in Canada, with OMERS Ventures reporting that 100 fintech start-ups in Canada have collectively raised more than $1 billion in funding since 2010.
As part of our research for the Canada 2020 innovation project, we held a roundtable discussion in Toronto with representatives from big banks, non-governmental organizations, fintech startups, venture capital companies and government.
We wanted to talk about how Canada can be more innovative in a sector which is so important to our country’s economy. Here’s some of what we heard:
Market structure and incentives:
When asked, “What is the biggest barrier to innovation in Canada’s financial sector?” a common answer was the structure of the industry and the incentives that it creates. Canada’s financial sector is dominated by six big banks. Due to the oligopolistic nature of the industry (caused, in part, by high barriers to entry), Canada’s Big Six are more profitable than similarly sized banks in other countries. Combined, Canada’s six largest banks earned $35 billion in profit last year.
In the view of some start-ups, this creates an incentive for the banks to fight disruptive innovations, as those disruptions put oligopolistic profits at risk. However, the counter-argument was given that the banks recognize that these innovations are inevitable, so the banks have an incentive to be active participants, rather than facing challenges from outside, such as from global players like Google and Apple.
Stability versus innovation:
Innovation is a tricky concept in the financial services industry since innovations are seen as playing a role in the Financial Crisis. The roundtable unanimously recognized that regulators have an important role in protecting consumers as well as in protecting the integrity of the financial system from systemic risks. It was recognized that regulators have the near-impossible task of finding a way to protect the system while not stifling useful innovations and keeping abreast of rapidly changing technologies.
A concern was raised that regulators are judged solely on their ability to prevent “bad things from happening,” which comes at a cost of innovation. One participant gave an analogy of judging road-safety regulatory bodies solely on the number of crashes, saying their response would be to “[make] all roads five miles per hour.” A suggestion was made that financial industry regulators be given a dual mandate of consumer protection and innovation development.
Cultural barriers to innovation:
A concern was raised that Canadian investors and managers may be too risk averse to be full participants in a highly innovative industry. As one participant put it, “[In Canadian MBA programs] there’s not a lot on how to take risk … . In [New York], the mentality of grads out of the U.S. is to take risks. There’s an acceptance that if you do that and fail that’s OK. In Canada, there’s stigma around failure.” A suggestion was made that foreign investors from countries with higher appetites for risk, such as China, may be able to fill some of the financial (but not necessarily managerial) gaps.
Immigration issues:
If there are talent (or cultural) gaps in the system, immigration might offer an answer. However, one roundtable participant noted that it takes so long to bring executive-level talent into Canada under the Temporary Foreign Worker Program that a candidate will have typically moved on to other opportunities by the time their application is approved.
Access-to-capital gaps:
Members of the roundtable stressed the importance of looking at the entire life-cycle of a fintech company when discussing possible gaps in access to capital. The consensus was that seed funding for good ideas was available through angel investors and family members; as one participant put it, “There’s no shortage of people willing to write $50,000 cheques.” The bigger challenge appears to be finding enough money to reach scale, with our fintech roundtable reporting that it is more difficult to find second-round funding than it is first. Canadian venture capitalists were seen as requiring higher rates of return or lower risk than their U.S. and Chinese counterparts, and there was a perceived talent gap between the quality of Canadian and American venture capitalists. Fintech companies partnering with banks was seen as an option, though there were concerns that accessing capital this way would come with too many restrictions.
Collaboration:
Members of our roundtable saw increased collaboration as a way to increase innovation in the sector. One participant felt that there were tighter ties between the investment and fintech start-up communities in the United States, which allowed for information sharing and the building of trust and stated, “Interaction, sharing ideas among startups, isn’t something you get a sense of in Canada. We need a safe spot for founder-to-founder, investor-to-investor interactions.”
Final thoughts:
Overall, the roundtable saw fantastic innovation potential in Toronto’s financial services industry thanks to banks that compete on the international stage and a critical mass of skilled graduates between Waterloo and Toronto. Increased innovation would benefit consumers, by giving them additional choices, more convenience, greater access to capital and lower costs when choosing financial products. A failure to innovate would see the profitable parts of the industry swallowed up by large U.S. players, with Canadian banks largely becoming commodity producers.
Mike Moffatt is an Assistant Professor at Western University’s Ivey School of Business.
This is an excerpt from Canada 2020’s upcoming report ‘Being Innovative: Canada’s Next Big Challenge.’ The report will be released in early November, 2016.
Chile, Canada and the New Global Scenario
The following is an excerpt of a speech given by Chilean Foreign Minister Heraldo Muñoz, at a recent Canada 2020 event in Ottawa. Read the full text of the speech here, on Medium.
“The challenge for foreign policymakers is how to skillfully combine principles and national interests in the best way possible for addressing the complex challenges of this turbulent world.
How should we deal with today´s economic, social and cultural global challenges so different from those of past decades, when no one had a PC or even dreamed of an iPad, but when the Soviet Union still existed?
- First, we have to deepen our openness to the world and add value to our exports.
- Second, we must contribute to global governance, particularly in the most sensitive issues for Chile.
- And third, continue to prioritize Latin America and the Caribbean, promoting convergence in diversity; in other words, a pragmatic regionalism.
The ability to innovate and to create added value is fundamental for national economic growth.
For Chile, the transition from an economic model based on the production and export of natural resources to one based on creativity and innovation is a must. Of course, we can also innovate by adding value to our natural resources.
Chile is an open economy with a wide network of trade agreements: 25 free trade agreements (FTAs) with 64 countries, accounting for 94% of Chile’s exports. Our main challenge is to add value to our products as well as integrate ourselves to global and regional value chains.
We are negotiating new free trade agreements with Indonesia, for example, while pursuing talks with the Philippines and continue working on the updating of our agreements, including the Canada-Chile FTA, in order to increase cooperation in key areas, such as innovation, science and technology, and education.
The FTA Chile-Canada has proven to be a great success. Since its entry into force, bilateral trade has grown at annual average of 7%. Canada is one of the top ten trade partners of Chile, reaching in 2015 almost US$ 2 billion. In the last two years, our bilateral Agreement was modernized, incorporating chapters on Sanitary and Phytosanitary Measures and Technical Barriers to Trade, as well as several improvements to the Rules of Origin and to the Government Procurement chapters. We expect that the Canadian authorities will complete their domestic procedures soon, bringing these modifications into force.
Let me add that Chile is Canada’s third largest investment destination in Latin America and the 8th worldwide; actually, Canada is Chile’s main investor in mining.
China has become the main trading partner for Chile and other Latin American countries. We are advancing in the implementation of the Plan of Action signed during the bilateral visit of Prime Minister Li Keqiang last year. Moreover, we are negotiating with China an update of our bilateral trade agreement.
Another important step is the Trans-Pacific Partnership Agreement (TPP), which brings together 12 countries on the Pacific Rim, accounting for 485 million people and close to one third of world trade, including Chile and Canada. This agreement sets and raises the global standard in the trade of goods, services, and investment, as well as other trade disciplines…”
Read the full text of Chilean Foreign Minister Heraldo Muñoz’s speech here, on Medium.
Open Dialogue: A Q&A
Next week, Canada 2020 is co-hosting the Canadian Open Dialogue Forum in Ottawa – a conference that will see hundreds of policy, business and thought leaders come together to talk about how to make our policy process more open, accessible and transparent.
In advance of next week’s Forum, I sat down with Don Lenihan, our resident-expert on open dialogue to ask some basic questions about the concept of open dialogue, open government and what it means for the future of policymaking in Canada.
Hi Don. I guess the best place to begin is with the basics – what is Open Dialogue, and what does it have to do with government?
The terms “public engagement” and “open dialogue” can be used interchangeably. They refer to formal processes by which governments involve individuals, communities and/or organizations in government planning, policymaking or the delivery of public services.
While governments have always had such processes, over the last few decades new forms have been proposed and tested, which aim at involving the public more deeply in issues of concern. Digital tools are taking this to a new level. Knowing which processes and tools to use where and when, or how to design an effective engagement process, can be difficult and confusing. A key challenge going forward will be to develop the knowledge and skills to match the right process with the right issues and to design and deliver processes that are effective.
So there are some governments already using public engagement to create policies collaboratively. I presume this is met with varying levels of success. Who is doing Open Dialogue well?
Internationally, the UK is a leader in Open Dialogue through its Open Policy Making initiative. Open policy making is about using collaborative approaches to ensure policy is informed by a wide range of input and expertise and leads to better outcome. Open policy making also involves applying new analytical techniques and digital tools to ensure that policy is data-driven and evidence-based.
Here in Canada, Ontario has been an innovator in Open Dialogue. Ontario’s condominium sector provides a timely example. Over the last decade, it has undergone remarkable growth and change. As the sector expanded, so did the range and complexity of the issues around condo ownership and management.
In response, Ontario recently carried out an 18-month public-engagement process to renew the Condominium Act. Over two thousand people were involved. At first, the discussion was fraught with disagreement, but once people saw that the process was open, inclusive and fair, and that their government had entrusted them with an important mission, they got down to work.
They listened carefully to one another and worked to accommodate their differences. Everyone made compromises. No one got everything they wanted. In the end, there was very significant agreement on some 40 pages of recommendations, which were then incorporated into a bill that was passed into law last spring.
The Government of BC provides an example of a leader in the use of online tools. Its recent Liquor Policy Review attracted over 75 thousand British Columbians to its website. Thousands more provided comments through an online blog, email and social media.
Collaborative policymaking is a new concept. What’s the biggest challenge Open Dialogue faces? What stands in the way of Open Dialogue growing in popularity?
Perhaps this biggest barrier to progress on Open Dialogue is fear and misunderstanding. Some people inside and outside government worry that Open Dialogue means losing control of the discourse – that they are handing over control of their agenda over to interest groups. There is sometimes a fear that the “dialogue” will quickly degenerate into a free-for-all that paralyzes decision-making or saddles the government with bad policies. They still need to be convinced of the value of public engagement.
In fact, a growing body of evidence shows how and why well-designed dialogue processes can make a significant contribution to policymaking and the delivery of public services. They can help ensure legitimacy by increasing transparency, responsiveness and inclusiveness. They can also increase effectiveness by bringing the right mix of people, skills and resources into the policy process to ensure the best decisions are made, validated and implemented.
A lot of people think ‘Open Data’ when they hear ‘Open Dialogue.’ I know Open Data is part of this process, how does it fit into it?
Open Data uses digital tools to make a government’s data holdings available to the public to support evidence-based decision-making. Open Dialogue involves citizens and stakeholders more directly in planning and decision-making, especially through the use of digital tools.
When it comes to evidence-based decision-making, these two processes are two sides of the same coin. On one hand, data can guide and inform discussion, debate and decision-making. Without evidence, decision-making is thrown back on anecdotes and speculation.
At the same time, dialogue is essential to the interpretation of data and to making the best choice of which datasets will shed light on an issue. Open Dialogue thus brings a mix of voices to these tasks to ensure that the interpretation and choice of datasets is balanced.
Canada 2020 and Publivate are co-hosting the Open Dialogue Forum on March 31 to April 1. What do you think will be their biggest takeaway from this event?
I think people will see great ways to make open dialogue work and how it can create policies that are good for multiple stakeholders. Open 2016 draws on examples and experiences from Canada and abroad to show how and why well-designed dialogue processes can make a significant contribution to policymaking and the delivery of public services.
7 Ways #Budget2016 Takes the Long-View for Canada
Prime Minister Justin Trudeau released his new budget on Tuesday, and with it made his first official mark on the Canadian economy.
The immediate headline is the massive string of deficits that the Liberal government will run as they seek to deliver on their election promise of “strengthening the middle class.”
But despite the red ink, reviews`are (mostly) positive for Growing the Middle Class. It recognizes there are no quick fixes to the Canadian economy, and that investing now means we will see economic growth in the future.
There are lots of budget reaction pieces you can read, but we wanted to point out the ways Growing the Middle Class will affect Canada not just tomorrow — but 5, 10, even 20 years from now.
Here’s 7 ways the new budget takes the long-view for Canada
1. The Canada Child Benefit means we’ll have healthier, more educated kids
The future of Canada’s economy rests in the health of its children.
Growing the Middle Class puts families — and specifically children from lower and middle income families — first.
It includes $10 billion more over two years for a new Canada child benefit, absorbing and replacing both the Canada child tax benefit and the universal child care benefit.
The government bills this new benefit as “a plan to help families more than any other social program since universal health care.”
The amount of the benefit will depend on size of family and income but the government says nine out of 10 families will get more help than they do under existing programs, and that 300,000 young Canadian children will move out of poverty.
There is strong evidence that investing in children pays off significantly. In 10 years time, those children will be entering post-secondary institutions, and starting careers.
However, the fact that tax credits for children’s fitness and arts expenses are being phased out over two years, with maximum eligible expenses cut in half for 2016 and eliminated entirely in 2017 is a real shame. With childhood obesity levels on the rise, and the number of physical education hours for children in school dropping, it seems counter-intuitive to stop helping parents with the cost of extra-curricular activities.
2. We are about to fundamentally change how we move around our cities
During the last campaign, one of the major platform points for the Liberal Party was infrastructure. More specifically, Justin Trudeau promised to make the single biggest investment in infrastructure in Canadian history.
Today, they’ve done that — and it has massive implications for the way we move to, from and around our cities.
By investing $120 billion in infrastructure spending over the next decade, we can expect to see major upgrades to our roads and highways, electricity and waterway systems, as well as the way our cities are connected . That’s not to mention the nearly $12 billion upgrades we’re about to make to our public transit systems, affordable housing and more.
After the economic collapse in 2008, the Harper government’s response was the Action Plan — a half-measure of infrastructure spending mostly targeted at Conservative ridings. If handled correctly, this investment has the opportunity to make Canada’s cities world class examples of smart, modern infrastructure.
3. More young Canadians than ever before will have a post-secondary education
A good education should be accessible to all Canadians, and Growing the Middle Class
attempts to level the playing field a bit.
The government will increase the Canada Student Grant amount by 50 per cent, from $2,000 to $3,000 for students in low-income families, and from $800 to $1,200 per year for students from middle-income families. There are approximately 250,000 students across Canada who come from low-income families. The government says “this can mean the difference between getting a degree and dropping out.”
4. Our scientists, researchers, universities and start-ups are about to get a lot more collaborative
The government’s Innovation Agenda is major part of Growing the Middle Class, with an investment of $800M over four years to support innovation networks and clusters to increase collaboration.
Recognizing the value of post-secondary institutions in and their role in innovation, Budget 2016 include a $2-billion investment over three years for a new Post-Secondary Institutions Strategic Investment Fund.
“This initiative is aimed at enhancing and modernizing research and commercialization facilities on Canadian campuses, as well as industry-relevant training facilities at college and polytechnic institutions, and projects that reduce greenhouse gas emissions and improve the environmental sustainability of these types of facilities.”
Algonquin College was quick to applaud this move, stating ‘colleges will be better equipped to create world-class programs and conduct the research our entrepreneurial start-ups need to grow and prosper.’
5. By 2021, Canada’s economy will be less reliant on fossil fuels — andhopefully a leader in clean energy
We say hopefully because Canada has had the opportunity to lead on renewables for years now and continually deferred investing in clean technologies.
That appears to be about to change. Building on the $2-billion Low Carbon Economy Fund that Prime Minister announced at the First Ministers’ meeting in early March, the government will be accelerating clean technology development with a $130-million investment over five years for clean technology research.
Budget 2016 also provides $62.5 million over two years to Natural Resources Canada to support the deployment of infrastructure alternative transportation fuels, including charging infrastructure for electric vehicles and electricity storage.
6. The goal of opening government and promoting electoral reform
Compared to other budget items, one could argue that these two are minimal investments. But to us, open government and electoral reform are a giant philosophical leap in good governance. Budget 2016 includes $17.8 million investment over five years to make government more accessible to Canadians.
Included in the plan is a pledge to create a single, central website for Canadians so they can request information from any institution. Cynics and those who know the tangled web of IT infrastructure in federal departments will say this is an insurmountable task — but the goal is a worthwhile one if it means Canadians can access all of their personal information. Under the government’s plan, requests for information will be filled in 30 days or less — if they take longer, there will be a written explanation.
Electoral Reform is also part of the budget, providing $10.7-million over four years to encourage consultations on voting reform and how to engage more Canadians in the electoral process.
7. A long overdue improvement in Canada’s Indigenous communities
The living conditions of Canada’s indigenous people have been a global embarrassment and our country’s shame.
We are happy to see that budget 2016 includes $8.4 billion in spending over the next five years to ensure “Indigenous peoples share in Canada’s prosperity.”
The government’s budget outlines that half of that is earmarked for education, improving schools on reserves and hiring teachers.
In addition, nearly $2 billion will be invested in water and wastewater infrastructure and drinking water monitoring over five years “so every Canadian child has access to clean drinking water, no matter where they live.” In our view, this is an improvement that is long overdue for a country as rich as Canada.
Rethinking the scope of health care in Canada: a renewed federal role
How Canada ensures it provides a universal, affordable, and high quality health care system that accommodates technological innovation and changes in delivery over the next few decades is a particularly important challenge. The increasing concerns about adequate financing, demographic shifts, and inequality both within and across generations only add to the complexity of the discussion. With a new federal government with an ambitious policy agenda, this summit is not just well-timed, it is a critical part of the conversation.
The recently elected federal liberal government campaigned on strengthening Canada’s publicly funded health care system. It rightly pointed out that while Canada’s healthcare system remains a point of pride for Canadians, there are a number of areas, including financing prescription medications, home care and mental health, where Canadian Medicare lags behind many countries in the OECD.
The Comprehensive Care Canadians Need
The current conception of medically necessary care in Canada excludes many services necessary for especially vulnerable Canadians. A number of health policy advocates and scholars (including me at times) have called for the federal government to consider providing pharmacare, additional services for the elderly, and support for disadvantaged Canadians. Elements of all of these are critical to providing comprehensive care.
Canada has failed to keep up with the changing nature of health care delivery. This failure can perhaps be explained by the way our system is organized around methods and places of delivery. Disruptions to traditional ideas of delivery have taken many forms: prescription drugs now treat many conditions, technologies take care out of the hospital or doctor’s office, and people wish to communicate with health care providers and the health care system in a variety of new ways. As health care has evolved, Canada’s health care system has passively privatized, as new forms of delivery are predominantly paid for privately (through private insurance or out of pocket). A consequence of this passive privatization is that the system is not as equitable or universal as we might like it to be. Indeed, it has left many residents of Canada behind.
Maintain the Integrity of the Public System
Now is the time for the federal government to play a leadership role in updating the design of Canada’s healthcare system: to modernize it to meet its goals of both improving the health of Canadians and protecting Canadians from the economic consequences of poor health and medical costs. And to do so in a way that promotes equality and universality. The federal government should protect the boundaries of the public system by providing the legislative (and perhaps financial) foundation for a more comprehensive and equal health care system. A reconceived and comprehensive publicly financed system would have the benefit of helping define the ongoing role of the private sector at the same time, and so potentially avoiding future challenges to the integrity of our public system.
This would be a huge advance in the role of the federal government. Rather than simply transferring money, the federal government could encourage healthcare innovation that improves the way in which we treat the healthcare needs of the Canadians.
We need to clarify the role and scope of the publicly financed portion of the health care system. That is, we must clearly define what the public benefit will cover and for whom. In the absence of such streamlining, the healthcare system cannot be expected to achieve its goals, and the private system cannot step into an optimally helpful supplementary role. Knowing what healthcare was used to be easier. Care performed in hospitals or by doctors was considered to be a core benefit available for all. If a doctor didn’t do it, it wasn’t medicine. The task is considerably more difficult now.
For Canada’s system to keep pace we must put in place a systematic way of evaluating what is appropriate for public funding. Going beyond the questions of how, by whom or where the care is delivered seems to me to be our best chance of having our publicly financed institutions evolve along with the technology of health care delivery and system management. Any framework that tackles this project of evaluating what we want to fund will also have to consider what we do for people who want more, better or faster service. How do we tackle the private side of health care financing? In part, I’d suggest, by getting the public side right.
Moving into the Future of Healthcare
Whether through medications or “disruptive” technology, or other as-yet unforeseen avenues, new ways of treating people, preventing disease and of interacting with the health care system will continue to multiply in the years to come. How, therefore, do we design a public benefit that recognizes this fluidity and unpredictability?
First, we should note that while health care technologies change rapidly, the underlying health needs of the population change much more slowly and in more predictable ways. We have many of the same diseases and health problems that we had fifty years ago, even if the way we treat them has changed several times over those decades. Therefore, we should design the public benefit around these health needs, not around providers, or treatments. The question shouldn’t be: should insulin be covered or should services by psychologists be covered (at present neither are universally covered in Canada). Rather, the system should be framed so that funding is targeted at diabetes and mental health disorders, and the most effective treatments for those conditions. If we agree that chronic conditions such as diabetes and mental health are among our health care needs (and I think most of us would agree they are), then the most effective way of treating them should be publicly financed.
Healthcare Needs Should Define Treatment
Of course, it is not the case that our health care needs do not change at all. They do, although much more predictably and more slowly than health care interventions. We can predict, for example, that our long term care needs will increase as the population ages. What is more difficult to plan for is what exactly long-term care delivery will look like in 20 years.
We are then left with dealing with the concept of “most effective.” Ongoing advances in both technology assessment and “best practices” development among physicians offer reasons to be optimistic (examples would include NICE in the UK and the Israeli Medical Basket committee as far as technology assessment is concerned, and places like Intermountain Health and the Mayo Clinic as far as best practices implementation among physicians is concerned). There are models out there for effectiveness assessment that we can look to for ways to improve , in other words. Most effective does not mean newest or more expensive. Sometimes more effective treatments will even cost less. What’s most important, however, is that by focusing on effectiveness we need not be restricted to those methods of treatment that we currently envision as part of the health care system.
A Plan for Moving Forward
So what does all of this mean? In my view, the federal government should re-conceive the requirement for federal funding and for compliance with the Canada Health Act so that all eligible residents are provided with a benefit that covers a comprehensive set of health care needs, not specific services. Advisory panels (these could be national and would reflect the required expertise) would determine the most effective way of treating these needs on an ongoing basis and provinces would then be expected to cover these forms of treatment as part of their commitment to Medicare. In this way the federal government would take on a leadership role in defining what universal health care coverage ought to mean in Canada. And while the federal government would not deliver most care, it would continue to assist in providing the funds to finance it.
It would no longer be the case that entire areas of essential health care like prescription medications would be left to the private sector. Private financing that alters the incentives in the public system (for example, by covering services like essential medications or treatments that complement doctors and hospital services) should be discouraged. Because the standards of care provided in the public system are established based on the latest expertise and evidence, they should lead to a relatively high level of quality. Therefore, the private domain would be defined by treatment for which there are more (cost-) effective options or for items that we do not consider part of the broad essential needs of a population. This sounds limited, but the scope for non-essential health care is in fact broad and so it is likely that the market would continue to thrive. The public domain, however, would be defined by the best evidence on how to meet a broad set of communally agreed-upon population health needs.
There will, of course, be some who perceive any private financing as inequitable. There will likely always be treatments that, while not cost-effective or evidence based, appeal to people who have the resources to purchase them. Allowing for avenues for individual choice in pursuing these options (we already allow for executive health care services in Canada where individuals or corporations pay for a much more exhaustive set of preventative health services) seems to me a reasonable compromise in a free society with a strong commitment to public benefits. But if we get the public system right, privately financed care will only mean the kinds of differences in access that we tolerate in a market society; it will not add to inequalities in health and quality of life. And safeguarding equality in these essential areas should be our primary goal.
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#Can2020 Preview: A new era of progressive politics in Canada
The election of a new government in Canada provides us the opportunity to engage in a new discussion about the future of our country and policy challenges facing our country and the world.
A progressive think tank, Canada 2020 has been a convenor of choice and a central actor for building the blocks of a new progressive era in Canada. Last June, we released a book “Setting the New Progressive Agenda” that aimed at framing and tackling some of the most important policy issues our country is facing.
On climate change, foreign policy, democratic reform, economic growth and inclusiveness and many other topics, the book challenged us to look at a new horizon of progressive ideas and public policy. As we engage on this new path, the opportunity to engage in a different type of politics and policymaking is also there for us to seize. In other words, it’s not just about the what, it’s also about the how.
Our democratic institutions and processes need to be revitalized, they need to adapt to our time. Not because they have not been resilient but because the time has come to raise the bar on democratic standards as well as what it means to be open and transparent governments. Sound democratic Governance also matters for inclusiveness. Inclusive institutions ensure that markets are functional and open to competition, and allow for broad citizen participation, pluralism and an effective system of checks and balances, leading to better access to services and opportunity.
There are many global challenges facing us. Our capacity and ability to tackle some of these challenges will be fundamental to our continued success as a nation.
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Governance and Diversity
The pillars of governance of contemporary democracies such as the rule of law and constitutionalism have endured and provided us stability and resilience. But citizens expectations vis-à-vis elected officials, disruptive technologies and globalization have changed the game. Stable institutions and polities are not enough to guarantee good governance in the 21st century. A rethink on the relationship between citizens and governments is long overdue. Democratic standards have evolved and will require a new era of open and transparent government. Institutions such as Parliament and the public service will be at the forefront of rebuilding the trust and democratic legitimacy required.
Countries who will succeed will be the ones which can deal effectively with diversity. Canada is surely one of the most successful multicultural societies in the world. But the challenges ahead will be overwhelming. Security concerns, terrorism, the magnitude of the refugee crisis around the globe and the interconnected nature of the new world order are forces we can’t ignore. They will force us to make informed choices about how we can continue to best integrate those who we welcome in our country.
There is a broad consensus, supported by evidence, that good governance is vital for a number of key outcomes at the national and subnational levels, including social cohesion, public expenditure efficiency and control of corruption. In addition, governance matters for achieving sustainable, inclusive economic growth.
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Sustainable growth
One of the biggest and most important public policy challenge of our time will be able to reconcile economic growth and environmental sustainability. The world is slowly but surely moving to a low-carbon economy. The path is clear. What Canada does next to show the world we’re serious about climate change will have a great impact on our capacity to export natural resources, and on our future economic success. Countries like ours have considerable economic incentives to move in that direction. The world biggest emitters, China and the United States, have started moving in that direction.
According to the Intergovernmental Panel on Climate Change, each of the last three decades has been successively warmer at the Earth’s surface than any preceding decade since 1850. The period from 1983 to 2012 was likely the warmest 30-year period of the last 1400 years in the Northern Hemisphere, where such assessment is possible.
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Equality of opportunity and economic inclusiveness
With income inequality at its worst in the US since the 1920s and President Barack Obama calling widening income inequality the « defining challenge of our time” there has been an expansive push to address the issue. In report released in June entitled Causes and Consequences of Income Inequality: A Global Perspective, the IMF aimed to show why policymakers need to focus more on the poor and the middle class. When the rich get richer, a country’s economic health can suffer. But if the poorest members of a society start climbing the wealth ladder, then national growth can receive a boost. In a 2014 paper, the Organization for Economic Cooperation and Development came up with similar results for OECD countries: It found that lowering inequality would translate into an increase in growth over the medium term.
Middle-class economics has proven to be popular in the ballot box both in the United States and in Canada. Expanding opportunity and restoring middle-class progress is now at the top of the political agenda for progressives.
The Canada 2020 Second Annual Conference
Given the timing of this year’s gathering we want the conference to be about big, disruptive ideas and what they mean for a modern Canadian federal government. Our central question for this year is: What are the 5 Burning Platforms for Canada’s Future?
We are convening around five main platforms that a new federal government needs to address:
1 Supporting Innovators & Entrepreneurs
2 Reclaiming Climate Leadership
3 Embracing Disruptive Technologies
4 Building Smarter Cities
5 Re-energizing Our Foreign Policy
To follow the conference, please go to the event homepage for photos, video and a livestream of all the speakers.
Blog: Obama’s diplomatic achievements
Originally posted on National Newswatch here
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Not long ago, the pundits and chattering class were turning off the lights on the Obama presidency. They said he had failed to live up to the promise of the hopes he had created as a presidential candidate. After the 2014 midterm election, the President looked isolated politically and the prospects of success on the policy front seemed very limited.
Those days seem like ancient history now. Consider foreign policy. After long and unsuccessful wars in Iraq and Afghanistan, Obama came to office with a paramount task: to end the wars and restore America’s credibility and reputation in the world. His approach contrasted starkly with that of his predecessor, George W. Bush, who believed threats and belligerence would increase the security of the United States. Obama understood that strength lay in effective diplomacy and the judicious use of military force against threats.
In 2007, in a primary debate, he established himself as diplomat-in-chief. It was a risky proposition. Asked by the debate moderator if he would be willing to meet with the leaders of Iran, Syria, Venezuela, Cuba, and North Korea in order to bridge the gap that divides our countries, Obama replied: “I would.” The conventional wisdom at the time was that he had displayed extreme naiveté. It led many to believe he was not ready to be commander-in-chief.
But of course, history always rewrites itself. When it comes to foreign policy, the last eight months have been the most productive period of Obama’s presidency. In November 2014, he concluded a significant climate agreement with China. In December, he announced the normalization of the US-Cuba relationship, leading to the reopening of embassies this week. Last month, he also secured fast-track authority from a dominantly Republican Congress to proceed with TPP, a potential historic multilateral trade deal. And then, last week, he announced a historic agreement agreement on curtailing Iran’s nuclear capacity.
None of these are small potatoes. Each of these policies has required a president’s willing to play the long game, and to deal with many setbacks that came along the way. One of those setbacks was his attempt to improve relations with Russia, which Vladimir Putin rebuffed. In that case, Obama responded firmly by leading the international sanctions campaign against Russia and reinforcing the NATO alliance.
The debate will be open for some time amongst political observers and historians on the importance and the meaning of his recent foreign-policy achievements. There are still two years left to Obama presidency and the last act is still to come. But here is an irrefutable fact: Obama’s relentless use of diplomacy, backed by the economic and military power of the United States, has proven to be very effective tool of his foreign policy. People can and will disagree on the outcomes of his policies, but few can dispute that his diplomacy has paid huge dividends for his administration. It will definitely be part of his legacy.
As we’ve seen in his recent eulogy in Charleston, and in his progressive positions on social issues such as gay marriage, Obama will have proven again and again that bridging people differences might seem impossible to achieve, but it is almost always worth a try. It is not for nothing that in progressive circles, Obama has regained much of his credibility as an agent of change. After all, he promised he would do things differently. It will become increasingly difficult for reasonable people to argue that he hasn’t.
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Robert Asselin is Vice-President, Policy and Research at Canada 2020. In 2014, he was a Visiting Public Policy Scholar at the Woodrow Wilson International Center for Scholars in Washington, DC.