United Canada needed for recovery

Achieving consensus is the best way forward for our economy, writes David Macnaughton.

For the past 75 years, Canada has benefited from the multilateral institutions that were put in place, largely with the active involvement of the United States, following the Second World War.

But after the wars in Iraq and Afghanistan, the Great Recession and the subsequent middle-class wage stagnation, the prevailing orthodoxy in America of acting as the world’s policeman combined with ever-expanding trade deals came under attack.

Meanwhile, Canada was exuding confidence due to the fact that it had greater access to the American market than any other G7 country. The challenges of balancing resource development with aggressive policies to limit carbon emissions, dealing with ongoing American protectionism and finding a way to reconcile historic grievances on the part of Canada’s Indigenous peoples was viewed as possible.

For some, the COVID -19 pandemic is seen as little more than a blip on the road to achieving these objectives. I beg to differ. The forces that helped propel U.S. President Donald Trump into the presidency have not subsided; they have accelerated. And Canada is more vulnerable than ever before.

While Canadian governments have done a good job of enlisting Canadians in the fight against the virus, and financial support for individuals has largely prevented a crash in consumer demand, it has come at an enormous cost to the treasuries and there appears to be no overall strategy to help Canada emerge from this pandemic with a strong economy.

This is not surprising.

There is no easy path back and many in government are exhausted from the non-stop stress of trying to deal with the effects of the pandemic.

While commentators on the left and the right will quibble about how much money should be spent to support the recovery, as someone who has worked in both the private and public sectors, I would say that the issue is less about how much is spent, and more about how effective that spending is.

Our bureaucracies are consumed with process rather than outcomes and our politicians measure their commitments to various groups in society by how much they spend, rather than what the spending achieves.

The pandemic has exposed some areas where government needs to be more active and more effective. Yet funds to invest in infrastructure, innovation and competitiveness need not come from deficit spending or increased taxes.

All governments in this country own assets that are not core to their most important mandates. The ownership of the distribution of alcohol, the generation and distribution of electricity and the operation of intercity bus transportation is done effectively around the world by the private sector.

These assets should be sold, with the proceeds being reinvested in higher-priority functions. Government must become more transparent in establishing clear goals and objectives for its spending and streamline processes to help achieve desired outcomes.

Canada was successful in facing a monumental threat in 2017, when the Trump administration threatened to rip up our free-trade agreement, because we developed a clear plan that was shaped by the federal government, the provinces and the private sector, including organized labour and representatives of Canada’s First Nations. Once it was developed, everyone played a part in advancing the cause of Team Canada.

We need the same approach to the economic recovery.

We are a country of 37 million people in a world that is becoming more fractured, more selfish and less likely to work in concert than in the recent past. The status quo is an unacceptable approach. Politicians who exacerbate differences in views for political gain should be punished by voters. Working hard to achieve consensus should be rewarded.

We have a chance to emerge from this with a path forward that will create a more inclusive and prosperous country. To fall back on old approaches, old ideologies and old politics will not serve Canada well.