Eugene Lang navigates the system well in describing the likely dynamics (party platforms, public service imperatives, political pressures, etc.) pressing up against the three possible prime ministers after October 19.Another avenue is to imagine some key strategic issues confronting the post-election prime minister and the public expectations that may infuse these. Of course, the way ahead would be influenced by the configuration of the House of Commons. Nonetheless…
Three broad and interconnected categories jump out: growth, redistribution, and energy and the environment.
The fostering of opportunity through economic growth has long fixated Canadian governments, even in an era in which markets trump politics as instruments of growth. Although governments don’t, as Stephen Harper has declared, build pipelines, pipelines don’t get built without good public policy. The private sector is often stranded without an implicit or explicit public sector partnership. Without public policy there would be no Internet. Poor public policy began damaging Canada’s oil and gas sector long before the Saudis took aim at shale and hit the oil sands.
The contestants for office have been falling over themselves to identify with the middle class, which suggests party pollsters believe that however you define it and whatever the analytical debate, the middle class is feeling anxious and aggrieved. The nature of its pain is twofold. Boomers in their 50s and beyond are concerned about whether they will make it to the finish line in an era of fewer and fewer defined benefit pensions, high personal debt and low investment returns. They can’t be sure they will continue to earn and save money as long as necessary nor that their savings (including capital in their homes) will grow adequately to see them into their 90s. Meanwhile they worry, as do young Canadians themselves, whether their kids will make it to the starting line. Millennials are experiencing an unreasonably bumpy road gaining secure attachment to the labour market in a slow-growth, continuously disrupted economy.
The next government, especially if composed of progressives, is going to feel internal and external pressure to reconsider the role of policy in addressing these gaps. All parties have proposed some form of redistribution, generally favouring families with children. The danger, as always, is putting redistribution, relatively easy to execute, ahead of growth, with its elusive policy levers.
While much has changed economically over the decades, one truism stands intact: more and better jobs remain the best form of wealth distribution. Here is where a new government and its advisers are going to have to get creative. Ever since the ascendancy of the Thatcher-Reagan consensus that growth would flow from lower taxes, fewer regulations and freer trade and investment, a belief system under which most Canadian decision-makers and influencers came of age, the political class has been at a loss to figure out a role for government in stoking growth. There are some signs in the post-Great-Recession world that the public is growing impatient with governments seemingly detached from their real world concerns.
Canadians might well be asking their policy elites what will take the place of the classic drivers of growth now that the commodity supercycle has ended, auto investment is migrating south and yet another national technology champion is hobbled. More daycare jobs can’t shoulder such a burden, and returns on nearly two decades of innovation policies are mixed at best as Canada languishes well down international research and development league tables and has not leveraged great economic advantage.
The pursuit of growth policies tied to national strategic objectives, such as becoming competitive in clean energy in general and creating cleaner oil sands in particular, should be one serious line of consideration. Just as Canada’s innovation performance lags, Alberta underperforms the country as a whole despite the exigency of using technology to make the oil sands more socially acceptable.
It is getting late in the game. The best hope for monetizing these gooey deposits of potential wealth lies in a concerted public undertaking to bring down their unsustainably high costs and high carbon outputs and reinstill public trust, particularly among Aboriginal peoples, so as to move them to market.There was a time when an Alberta research institution, a kind of National Research Council for the oil sands, housed scientific experts under a single roof to focus on this single cause. Similar public efforts to supercharge technological prowess again are called for, as are fresh initiatives on environmental assessment, carbon pricing and competitiveness in the fast-rising new energy economy.
The country needs growth. Our young people need growth. The redistributors need growth. The next prime minister, or perhaps the one after that, may well feel rising pressure to find ways back into the growth game.
Edward Greenspon is global managing editor of energy, environment and commodities at Bloomberg News.