Economy


Notes for Remarks to Carleton University 2017 Convocation – June 15, 2017

Mr. Chancellor, Chair of the Board, Madam President, Graduates, Honoured Guests and Proud Parents …. This is an honour…. but also a little sad for me because I can’t help but think of my father, on his deathbed, asking me … “So, when are you going to finish your Phd?”

He had good reason to ask because he knew that ever since I was 13, all I wanted to be was a University professor. At 22, I arrived at Carleton with that goal firmly in mind, but for a variety of reasons, I got sucked into the vortex of Parliament Hill, and, to my great regret, never finished my Phd.

So today, I can finally say, ‘Dad, I got my Doctorate.’ I’m sure if he’s looking down this morning, he’s feeling pretty happy right now. So, thank you for that, Carleton.

The larger reason my Dad hectored me about finishing my PhD, is that he, like most parents of his generation, believed in education – something most did not have the luxury of pursuing themselves.
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In 1905, from his small cubicle in a patent office in Zurich, Albert Einstein issues four papers that forever change our understanding of theoretical physics and the functioning of the cosmos. In the same year, Henri Matisse launches an exhibition of garish colours that shocks Paris and spurs Pablo Picasso to move into cubism. Meanwhile, sent by the Royal Geographic Society, Robert Falcon Scott sets off to explore the most remote and formidable corner of the planet – Antarctica.

It was called a “miracle year;” but in many ways, these world-altering feats did not happen miraculously, but as part of a pattern that has been repeated throughout modern history.
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There is a general consensus that Canada has a productivity gap. Yet the issue refuses to capture the public’s imagination or to take a higher priority on the nation’s political agenda. Claims that the sky is falling run contrary to public confidence that the economy is buoyant and resilient. At the same time, there is a widespread view that while prosperity is abundant, it is shared unequally and that in the face of unprecedented growth, the same advocates of productivity stand idly by and allow our social safety net – our health care, education and quality of life in our cities – to unravel.

For most people, increasing productivity involves little more than working harder or personal sacrifice. The perceived beneficiary to increased productivity is business, and therefore it hardly seems like a fair bargain or worthy of pursuit. Even those in government who might recognize that dealing with productivity is good policy are loath to advance the topic with any vigour.

I have moderated Microsoft Canada’s CAN>WIN conference on this topic four times since 2001 and watched some of Canada’s and the world’s brightest minds work their way through this dilemma. The consensus solutions to Canada’s prosperity problem are at once simple and deceptively complex.
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Appeared in Sept 2006 issue of The Walrus Magazine

If the British North America Act were being
written today…natural resource ownership
would most likely remain with the federal
government.

– “Policy Options,” October 2005.

It should have been a love fest.

Leading up to the March 30, 2006 Alberta Progressive Conservative Annual General Meeting polls declared Premier Ralph Klein the most popular man in the province, and for good reason. As an expert panel appointed by the former Liberal government, provincial governments, and even the Governor General, all recommended that Alberta share its bountiful riches with the rest of Canada, the tough-talking premier said, essentially, ‘over my dead body.’ It was classic Klein. For years, the premier had been Alberta’s chief defender and his record was impressive. He led the PC Party to four consecutive majority governments, enjoyed over 90 percent approval ratings each time he faced a leadership review, and could boast of a series of accomplishments envied by all other provinces. In 1993, Klein inherited a government bleeding $3.4 billion a year and with an accumulated debt of $23 billion. Thirteen years later, Alberta is Canada’s only debt-free province, the operating surplus for 2006 hovers around $10 billion, and the populist premier can justifiably lay claim to creating “the Alberta Advantage.”
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Even Albertans and Quebeckers are showing a profound commitment to the nation, say politicos Peter Donolo and Allan Gregg

From the Manitoba schools question in the 1890s to the 1995 Quebec referendum, Canada’s peaceable history has been punctuated by regional conflicts that threatened to tear the country apart. Such tensions are evident to this day and often dominate the national agenda. Whether it is Newfoundland’s Premier, Danny Williams, banishing the Canadian flag to protest Ottawa’s “betrayal” over offshore resources or Alberta Premier Ralph Klein telling the rest of Canada to “keep your hands off” his province’s oil, regional grievances have come to be accepted as a permanent part of the Canadian condition.

It’s high time Canadians see past the clichés and recognize that when these grievances surface, they are often a function of self-serving sabre-rattling rather than a lack of commitment to the nation; a misconstrued stereotype rather than any deep animosity by citizens in one region toward those in another.

A good example is the most recent survey we conducted for The Globe and Mail and CTV, released last week. It reveals a reality — particularly regarding Alberta and Quebec — that is much more nuanced than the rhetoric we often hear from politicians and political commentators. The results show a level of commitment to Canada by those provinces that belies the long-held view of Quebec and Alberta as the “crybabies” of Confederation.
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When Gross Domestic Product goes up, the media and citizenry have been conditioned to shout hosannas. Yet in the backrooms somewhere, decision-makers could be looking at these same robust growth figures with concern, fearing the economy may be overheating and creating the conditions for higher inflation. At some point, if these signals become too alarming, central bankers will raise their interest rates and — presto! — your mortgage payment just went up. In this way, we use indicators of economic growth to generate a series of non-economic policies and outcomes.

Whether this is good economic policy or not has been debated for decades. What is rarely discussed outside academics circles, however, is whether these indicators of progress actually give us the right guidance to create the society we collectively want. The implications go far beyond mere economics or the arcana of economic measurement. Competing views of the world — each justified by how we measure progress — play a part in the real world of public policy and public choice.
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