Eco­nomic re­port a mixed mes­sage on fu­ture course

Min­is­ter ad­vised to push in­no­va­tion and tra­di­tion

The Hamilton Spectator - - COMMENT - Thomas Walkom ap­pears in Torstar news­pa­pers.

The lat­est re­port from Ottawa’s Ad­vi­sory Coun­cil on Eco­nomic Growth is an odd doc­u­ment.

It fore­sees a world in which al­most half of Cana­di­ans will have lost their jobs to au­to­ma­tion. Yet it spends much ef­fort try­ing to fig­ure out how to en­cour­age more work­ers to com­pete for this di­min­ish­ing num­ber of jobs.

Like the coun­cil’s first re­port in Oc­to­ber, this one walks a fine line be­tween mar­ket eco­nomics and ac­tivist gov­ern­ment.

It wants pri­vate cap­i­tal­ists to lead the way but it also wants gov­ern­ment to both guide and back­stop their ef­forts.

In that sense it hear­kens back to the Asian suc­cesses in state cap­i­tal­ism — like Ja­pan in the 1980s or China to­day.

The re­port, re­leased Mon­day, makes a bow to in­clu­sive­ness, re­peat­ing the Lib­eral gov­ern­ment’s mantra that the wealth from glob­al­iza­tion must be more eq­ui­tably shared.

But it doesn’t ex­actly say how this can be achieved.

Like Fi­nance Min­is­ter Bill Morneau, who set up the coun­cil to ad­vise him, the re­port takes as given that pre­car­i­ous work — or what it calls the “gig econ­omy” — is the new re­al­ity.

It as­sumes that noth­ing can be done to re­verse the trend to pre­car­i­ous work, although it does note that some of the ill ef­fects may be coun­tered through reg­u­la­tion.

The only real hope, the re­port says, is to en­cour­age in­no­va­tion in the econ­omy writ large while at the same time con­stantly re­train­ing work­ers to adapt to the dizzy­ing ef­fects of change.

In­deed, at heart, the coun­cil’s pre­scrip­tion is a fa­mil­iar one: se­lec­tive dereg­u­la­tion, gov­ern­ment sub­si­dies to busi­ness and pub­licly funded re­train­ing for work­ers caught in the cross­fire.

The sub­si­dies would come in many ways. Right now, for in­stance, gov­ern­ments buy goods and ser­vices based on which sup­pli­ers can give them the best qual­ity at the low­est price.

The re­port would change the rules of pro­cure­ment to have gov­ern­ments use their buy­ing power in a “strate­gic” man­ner to “test and val­i­date Cana­dian in­no­va­tive so­lu­tions” — even if the prod­ucts or ser­vices in­volved were more ex­pen­sive.

And it would have gov­ern­ment sub­si­dize so­called in­no­va­tion mar­ket­places where busi­nesses could try to sell new ideas to one an­other

Upon which ar­eas of the econ­omy should the gov­ern­ment fo­cus?

The re­port iden­ti­fies eight, run­ning the ga­mut from agri­cul­ture to tourism, from fi­nance to en­ergy, from min­ing to ad­vanced man­u­fac­tur­ing.

For rea­sons that are never en­tirely made clear, the re­port fo­cuses on agri­cul­ture.

It con­cludes that Canada could sell more “pro­tein” to the world if the trans­porta­tion sys­tem were bet­ter, if more food pro­cess­ing were done do­mes­ti­cally and if sup­ply man­age­ment in the dairy sec­tor were scaled back or elim­i­nated.

How­ever, the 14 busi­ness peo­ple and academics who make up the coun­cil saved most of their en­thu­si­asm for in­no­va­tion. It’s a vague con­cept that is easy to laud. And laud they did.

But along the way, they ca­su­ally laid a few po­lit­i­cal land­mines, at one point call­ing on gov­ern­ment to look se­ri­ously at set­ting up a Que­bec-style na­tional child care pro­gram that would al­low more moth­ers to en­ter the work­force.

Since Justin Trudeau’s Lib­er­als spent much of the last elec­tion cam­paign ar­gu­ing against ex­actly that, this was rather a cheeky rec­om­men­da­tion.

Sim­i­larly, the re­port called on Ottawa to raise from 65 the age at which Cana­di­ans are el­i­gi­ble for full Old Age Se­cu­rity and Canada Pen­sion Plan pay­ments. The coun­cil ap­par­ently felt that these no­to­ri­ously pal­try stipends are en­tic­ing the el­derly to avoid gain­ful em­ploy­ment.

Given that the Trudeau Lib­er­als just fin­ished low­er­ing the of­fi­cial re­tire­ment age from 67 to 65, that rec­om­men­da­tion too is likely go­ing nowhere. Which is per­haps just as well.

While con­tra­dic­tory at times (it says at one point that Canada can no longer rely on com­mod­ity pro­duc­tion and then at an­other that it should) the re­port is not fool­ish.

It will prob­a­bly in­form Morneau’s think­ing as he pre­pares his next bud­get.


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