Canada needs to rethink its industrial strategy
Across Canada, as provinces begin to take tentative steps toward reopening, the first stage of this extraordinary social and economic crisis is ending. Policy-makers can now start to focus on thoughtful long-term strategic thinking and plan for the world we must now (re)build.
It is widely accepted that this moment presents a rare opportunity to reassess many of our assumptions of the last few decades. Is Canada too dependent on a service-based economy that has become reliant on complex global supply chains?
Should we strengthen our manufacturing capability of critical goods? Is it time for us to undergo what economist Joseph Schumpeter called the “gale of creative destruction?”
In short, is it time to (re)develop a strong industrial strategy for Canada?
This country, like all leading western economies, was built on industrial strategies, but in the rush to globalization, it’s a tool that has fallen from fashion. Now COVID-19 has exposed weaknesses in economic security, environmental sustainability and our political stability. Without the status quo as an option, policy-makers are beginning to articulate alternatives needed to restore resilience and regional capacity. So now is the time to take another look at our industrial strategy.
Quebec has been ahead of the curve on this since the 1960s. Having long shunned the laissez-faire economic doctrines, Quebecois leaders of all political stripes have understood that, when properly calibrated, government leadership strengthens the economy.
Mistakes are unavoidable, but their success in addressing conditions for capital investment, talent recruitment and access to markets needed to establish globally competitive industrial clusters for gaming, life sciences and AI cannot be ignored. We need to apply these lessons on a national scale to support our companies and help them transform into globally competitive enterprises.
An industrial strategy doesn’t necessarily require bigger government, but if we are to build a more resilient and sustainable economy, we need to have better public procurement. This is necessary to provide the scale our businesses need to be globally competitive.
Smarter procurement strategies will in turn increase private investment, productivity, innovation, environmental sustainability and development of both domestic and international markets.
In the absence of these policies our historic systematic buying from the lowest bidder has left us in an untenable spot.
Support for industrial strategy isn’t languishing on the fringes of the political spectrum. As a leftleaning West Coaster and a centre right-leaning Quebecer, we’re in good company. Robert Asselin, a federal Liberal and Sean Speer, a Conservative adviser, have also recently advocated for the development of better industrial policy.
As our political leaders start to convene to discuss and debate recovery strategies, industrial policy needs to be a priority. This isn’t your garden style variety of downturn. We will need to think differently and, if we as Canadians want to recover stronger, we need to better support our domestic strengths. Glen Lougheed is a West Coast-based tech entrepreneur who advises the BCNDP on innovation policy. Jean
François Béland is a Quebec-based cleantech executive with a public policy and public finance background.