Canada was in a slow-moving crisis of underperformance and dysfunction before the pandemic health crisis and consequent economic collapse. It is imperative that Canadians see this clearly. Only then will we have a better chance to reset our priorities and place our country on a different trajectory.
In recent years, we have been particularly focused on environmental priorities, most notably, our commitment to reduce emissions in accordance with the United Nations Paris Accord. It must be emphasized that this is not the problem. The problem has been the rigidity of focus on this priority at the expense of other essential priorities which has impaired the future for all Canadians.
There has been a relative neglect of critical economic, social, and governance priorities in Canada with cumulative negative impacts that are staggering We entered the pandemic and economic collapse in a position of serious vulnerability.
There is ample evidence that portrays a grim picture of Canada’s investment performance, competitiveness, and productivity in recent years.
Since 2014, growth in GDP per capita was the worst of all G7 countries and less than half that of the US (4% versus 8.7%).
2019 per-worker investment ranks Canada 15th among the 17 OECD countries. In Switzerland, businesses invest twice as much per worker as Canadian businesses. This is critical to competitiveness and higher productivity.
Canada’s productivity has significantly lagged that of the United States, our main customer and competitor. In 2018, Canada generated US$55.00 GDP per hour of labour compared to US$76.50 in the United States.
A 2017 survey of 60 of Canada’s largest businesses foreshadowed our declining performance; “a third said the investment climate had deteriorated over the past five years, [and] only 2 per cent said it had improved.”
We were in a slow-moving crisis of investment, competitiveness, and economic underperformance before the pandemic, and now we’ve gone right over the edge. There have been sharp regional disparities in economic conditions but ultimately, over time, there is no person and no sector that is unaffected by a country that underperforms.
Our national priorities also include the quality of life for all people in all regions of our country. The fact that social distress may be concentrated in one region, specifically in Alberta at this time, does not detract from the point that this is a national issue.
The distress in Alberta since 2014 is serious.
The number of unemployed not covered by employment insurance has risen 53 per cent, from 75,000 to 115,000;
Unemployment among young men is up 156%;
Food bank usage is up 80 per cent;
Suicide hotline calls have increased by 85 per cent;
The number of individuals seeking counselling support in Calgary has increased 46 per cent;
Incidents of domestic violence in Calgary have increased by 150 per cent;
Non-violent crime is up 34 per cent;
Business insolvencies have increased by 58 per cent; and
Consumer bankruptcies are up 101 per cent.
This data is before the horrendous impact of the pandemic and oil price collapse. It is frightening to contemplate the hardship that is now occurring.
Underlying our economic underperformance and the social distress in Western Canada is cumulative regulatory and governance dysfunction.
According to the 2020 World Bank Ease of Doing Business Index, Canada ranks 30th out of 34 OECD countries in the time to get a permit for a construction project.
There has been over $200 billion worth of major energy and resource development projects cancelled or withdrawn since 2014. Some because of market conditions, but most because of regulatory delay, changing and inconsistent rules and guidelines, decision making arbitrariness, cumulative undue expense, and intensely politicized in-fighting. The Teck Frontier mine decision and Warren Buffett’s withdrawal from the Quebec-based Saguenay LNG project are the two latest examples of this.
Governance excellence is about effectiveness. During the recent rail blockades led by a small group of eco-activists, a DART & Maru/Blue poll found that two thirds of Canadians agreed with the statement, “Canada is broken.”
Governance integrity is about fairness and creating trust. This points to what is arguably the most serious red flag of governance failure in Canada. This is the emergence of extreme alienation in Western Canada. A large proportion of the 7.5 million people in the energy producing region of the West no longer trust that their interests are fully considered as part of the national interest of Canada.
Our longer-term national priorities need a reset, which arguably in the post-pandemic recovery, will be forced by a set of new realities. The direction is a renewed focus on economic priorities and on the social conditions for all Canadian citizens, and on rebuilding trust in the full functioning of our nation.
The most important renewed priority is governance excellence and integrity and the functioning of our nation. Otherwise the polarization and infighting will continue to message to investors that Canada is a poor destination for new capital, our economic performance will continue to erode, and social distress and alienation will become even more extreme and dysfunctional.
Author
Mac Van Wielingen