Canadians Without Borders joins Twitter

Canadians without borders is a group of concerned Canadians who have come together to promote the bold and visionary national leadership needed to meet the challenges of the 21^st century. We are committed to building a strong Canada that can be a model for the world, creating an open, progressive society committed to justice, equality and diversity, and sustainable development.

We are united in our desire to strengthen the capacity of our national government to act clearly in the national interest and govern coherently for all Canadians in those areas requiring decisive national and international responses.

Our goal is to facilitate constructive practical debate, starting with the over-the-horizon issues that matter to us all as Canadians and as global citizens. We want to challenge all Canadians to discuss what we share, what we want to accomplish together, and what it means to be Canadian when we come from everywhere.

We will begin by following current issues that engage the national interest such as the proposed New Brunswick-Quebec hydro deal.

Please visit us at: http://twitter.com/cdnwithoutbrdrs

National Purpose: Lost in Collaboration

Every day we meet Canadians who are embarrassed by the hyper-partisanship and mediocrity of our national politics. Our leaders rarely discuss common goals and aspirations that transcend our provincial and territorial identities. Yet it is through these undertakings that we discharge our collective and reciprocal responsibilities as citizens and build a better country.

No one at the national level has the courage to challenge Canadians to answer the fundamental question: do we still acknowledge our collective responsibility to Canadians outside our own province/territory to undertake important national initiatives with common standards and objectives?

This failure to address such a critical issue is exacerbating our serious loss of confidence in the capacity of our national government to act in the national interest, for all Canadians. We are not clear on what the federal government is engaged in or responsible for anymore.

Let’s take a concrete example. We are confronting a flu pandemic in which Canada’s chief public health officer is depending on inadequate intergovernmental agreements to provide life-saving public health information, and lacks the autonomy and clout to relocate respirators and health-care personnel from one part of the country to another.

How has this happened? Much of the answer lies in a quarter century of national politicians convincing themselves that the accommodation of provincial governments, particularly Quebec, was an essential precondition to effective national governance. As this culture of accommodation took root, references to national initiatives and standards became politically incorrect, despite their widespread support among the public. More provinces soon joined Quebec in protesting that any hint of independent national action, by definition, was an unacceptable curtailment of their freedom to act.

National policy now evolves at a glacial pace, only “in concert with the provinces” and is too often buried in a maze of federal/provincial/territorial meetings and negotiations that produce little of any lasting value. Establishing regional and provincial needs and aspirations always proves easy, but national objectives get lost in collaboration.

And what is the record of this quarter century of directionless accommodation?

The undemocratic contract-style of national governance characterized by ad hoc deals between the federal government and individual provinces and territories has simply exacerbated inequalities and inequities across the country. This dysfunctional approach has given us First Ministers Health Care Accords that are problem-plagued and light on accountability, no coherent post-secondary education strategy, utterly incomprehensible and divisive equalization formulas, and little progress creating a meaningful Canadian economic union.

No amount of wishful thinking can change the reality that premiers will rarely of their own accord act in the interest of those beyond their provincial/territorial boundaries. Nor should they. That is the job of our national representatives.

Yet our national government is missing in action. Our leaders ask little of us, and for many of the over 40% of Canadians who did not vote in the last federal election, it may be that they simply hear little from Ottawa to inspire them and revive their spirit of engagement.

But what if they were presented with bold national leadership that would speak with clarity and conviction about what we should do together, starting with issues on which consensus can be achieved with relative ease?

Just take a few examples:

Surely we can agree on the importance of effective national initiatives to guarantee food safety, and to control and eliminate toxic chemicals in the air we breathe and the water we drink.
Surely we can also work together to bring Medicare into the 21st century and assure comparable health care services and standards across Canada. We now face a patchwork of services, from physiotherapy, to autism treatment, to MRIs, along with the tragic consequences of inadequate national standards in cancer pathology.

As the United Nations’ Copenhagen Summit fast approaches, surely we can agree on the need for national direction on the environment. Without even a national cap-and-trade system, let alone intelligent discussion about a national carbon pricing scheme, our internal incoherence threatens to leave Canada on the sidelines at what may be the most significant international meeting of the decade.

Re-engaging Canadians in national politics will require bold leadership and a vigorous national debate. But re-engaging Canadians also requires that we revive Parliament as a centre for creative, constructive debate, where MPs and Senators can serve as truly national representatives and not simply as instruments of the prime minister and his extraordinarily powerful office.

To this end, we must urgently bring the Senate into the 21st century, by creating an elected body that will be an accountable and democratic forum for bringing regional interests to bear in Ottawa, especially when crafting national frameworks and standards. An effective Senate can contribute to minimizing the federal-provincial confrontations that too often preoccupy many unaccountable intergovernmental forums.

With an election looming in the not-too-distant future, we need election platforms that speak to our collective obligations to our fellow citizens, regardless of province or territory.

Canadians know that we are not as divided about the fundamentals of our great country as our politicians seem to think. We know that we are stronger when we work together.

We must come together to promote constructive practical debate.

But how do we convince our recalcitrant national leaders to first step up to the plate?

The answer lies in the irrevocably changed face of politics. Thanks to platforms such as Facebook, YouTube, Twitter, text-messaging and blogging, Canadians can gather, mobilize, plan and share information in a virtual structure open to all. President Obama’s groundbreaking embrace of digital democracy, including his interactive national website, demonstrates clearly that if you provide immediate access to meaningful information, citizens will respond and become engaged.

Any Canadian political party with serious aspirations to form the next national government should sit up and take notice. The political party that directly engages Canadians in open, transparent debate, using these innovative and democratic technologies to transcend the geographic barriers and regional silos that stifle policy creativity and national initiative, will be the one that gains the support of the many “Canadians without borders” seeking inspiration and coherent leadership to confront the unpredictable national and global challenges ahead.

Op-Ed - full version with chart

Does anyone in the federal government believe in Canada anymore – in the intrinsic value of the greater entity “Canada” and the Canadian national interest? Is anyone genuinely concerned with what it means to be Canadian – those things we all, regardless of province or territory, recognize instinctively and instantaneously?

The federal government’s ability to act in the national interest is dangerously diminishing. National survival as a viable entity now appears to be in the hands of provincial politicians like Dalton McGuinty and Dwight Duncan of Ontario, and Gordon Campbell of British Columbia, who thankfully are prepared to argue the case for national action on preserving Nortel’s strategic assets in Canadian hands, reforming EI, child-care, pension reform, the economic union.

Canadians must be alerted to the seriousness of the situation. Like T.S. Eliot’s J. Alfred Prufrock, we are being “etherized upon a table” and prepared for yet another general election. Debates are dumbed down. Everything is turned into accounting problems, too easily ignored. Taxes? Too high. Debt and deficit? Too big. Transfers to provinces? Too low … or perhaps too high. Equalization? Too little … or maybe too much.

Cast as grateful automatons in government TV advertisements, we enthusiastically grab this or that tax credit or deduction from a confusing array that does not address today’s problems and that undermines the neutrality of the income tax system. Meanwhile, little or no thought is given to effective long-term strategic thinking. Stimulus spending – from massive bailouts to tiny band-aids on big gaps in our social security net – is unprincipled, inefficient and divisive, and will adversely impact federal finances and fiscal health for years, just as the GST cuts have already done.

Inadequate and falling federal revenues mean weaker national government. That means no serious pension reforms to the CPP and OAS/GIS that would benefit the majority of Canadians with inadequate pensions. (Ironically, our taxes now fund pensioners fortunate who have been part of private companies like GM—badly run but deemed too big or too scary to fail.) Weaker national government means increasingly under-funded national programs and initiatives in Ottawa – unable to prevent a food safety or healthcare crisis, let alone address serious environmental challenges. It means no secure supply of medical isotopes. Is that our collective vision?

Canada is the most decentralized federation in the world. For some time, Ottawa’s share of total revenues has been the smallest of any central government in the developed world. More seriously, however, is the incontrovertible evidence that federal spending as a share of GDP continues its steady decline to its current level below 2/3rds the provincial level (from a high of 19.2% before 1991, to a low of 11.2% in 2007). If present trends continue, federal spending could dip below even the municipal government share of GDP within twelve years (see chart at bottom).

Eyes glaze over when such facts are laid out, but Canadians must resist and recognize this trend to fiscal weakness means our national government will be unable to fulfill its duties across the broad spectrum: national standards for social, educational and environmental programs; comparable national public services and infrastructure; strategic investments in innovation and leading-edge industries; adequate support for our troops; equity and justice for aboriginal Canadians.

Almost every aspect of our daily lives, every serious challenge, has a global dimension necessitating global cooperation and solutions. Yet Canada’s influence and effectiveness on the international stage is being undermined by our internal incoherence and diminished national strength.

It is all too easy to play to the constituency who supports lower taxes, reduced public investment, erosion of national standards, and offloading costly national responsibilities to provincial and municipal governments—already crushed under the recent recession. But this is not bold national leadership.

Bold leadership reaches out to the broader constituency who understands the value of public services and public investment and the need for strong national initiatives to provide services to the people in such a diverse and young country as Canada. Bold leadership reassures Canadians that our national government is more than a giant ATM machine, and that it has all the tools necessary to ensure a secure future for our children in a turbulent, fast-moving world.

Canadians know all too well that building a fair, compassionate and innovative society is not a destination, but a journey. Nothing can be taken for granted. Bold, visionary national leadership is vital to strengthen the bonds of solidarity among Canadians, as Canadians, and guarantee Canada significant influence in all global forums.

We are Canadians without borders, with bridges and bonds to many countries, looking forward to an exciting future. We are more than “taxpayers” of this great nation. We are “citizens” – a far nobler role. We wish to embrace our national responsibilities. We must have the opportunity in the next election to vote for a strong national government that can inspire us to look over the horizon and leave a better world for our children and grandchildren.

Op-Ed in the Star

I have an op-ed in the Toronto Star today.

Susan Delacourt also offers her reaction.

Part 6: more issues needing bold national leadership

(This is Part 6 of "The descent of national politics into irrelevance and insignificance: Can it be reversed?" The previous parts are found below.)

Open, Transparent and Accountable Government

The election of Barack Obama demonstrates how the face of politics has irrevocably changed. Thanks to technologies like Facebook, YouTube, Twitter, Flickr, text-messaging and blogging, the traditional political party is now obsolete as supporters gather, mobilize, plan and share information in a virtual structure open to all.

But President Obama has not stopped there – his groundbreaking national interactive website, http://www.whitehouse.gov/, continues to build on the momentum gathered during his election and transition period. Among other things, http://www.whitehouse.gov/ offers immediate access to meaningful information on all current and planned legislative, regulatory and executive initiatives of the President, and facilitates connections via Facebook, YouTube, Twitter, Flickr, Vimeo, iTunes, and MySpace. The openness this fosters is invaluable, despite the challenging constraint to limit comments to 500 characters or less.

Any Canadian political party with serious aspirations to form the next national government should sit up and take notice. The political party that adopts the national website approach to open transparent government will be more successful in transcending the geographic barriers and regional silos that constrain policy creativity and national initiative, and has the best chance of establishing a broad base of support among Canadians.

Employment Insurance reform

The next Parliament must undertake a complete reform of all aspects of Employment Insurance which is not operating as a useful safety net for the unemployed. Too many people have paid in and find that they are not eligible. The increasing numbers of part-time workers and the self-employed cannot participate. The complex patchwork of entry requirements across the country makes no sense with today’s rising unemployment. Job training provisions do not work well. And even for those who are eligible, benefits are exhausted quickly. Soon, we will witness an increase in Canadians on income assistance/welfare, straining already stretched provincial and municipal budgets.

In sum, the national EI program does not fulfill its basic national objectives – that of providing adequate income protection, economic stabilization and the preservation of the dignity of the unemployed. There needs to be national standards, where appropriate, as well as more effective training. We should implement innovative steps like wage insurance for those who suffer a drop in income, particularly while retraining, and increasing premium rates during times of low unemployment to tide us over when joblessness does rise.

Maternity and parental leave benefits, currently part of EI, need expanding and updating as well. Although some suggest that these benefits should not logically be part of EI (Don Drummond), they cannot be removed from the EI national program unless there is an agreed alternative national program in place. We must not forget that these benefits ended up under the EI umbrella in the first place because provinces were unwilling to collaborate sufficiently on a separate national program.

As the federal Conservatives and Liberals work on EI reform this summer, the premiers are yet again taking the initiative and putting forward proposals that must be considered. The premier of British Columbia has suggested the possibility of returning to a variation of the cost-shared approach to welfare as a way of easing what is expected to be an intolerable burden on provincial budgets as the unemployed exhaust benefits. He has also joined with western premiers to ask that eligibility for EI be reduced to three categories – urban, rural and remote.

Pension reform

The next Parliament must address the looming pension crisis. Currently 6 out of 10 Canadians have no private pension and only inadequate Canada Pension Plan benefits. Yet, as taxpayers, we are all picking up the tab for badly run private pension plans (e.g. GM).

Several models could be considered:
- expand the CPP – our largest and most efficient pension arrangement in the country – on a voluntary or mandatory basis so that it can gradually replace the underperforming RRSP industry,

- provide for voluntary employer and employee payments into supplemental CPP administered by the CPP Investment Board, like the regional plan now being developed by Alberta, British Columbia and Saskatchewan for private sector workers.

A range of related issues must also be considered. One example would be to include provisions to allow women, who stay home to raise children, to continue to contribute to CPP during those years. A second example would be a national disability insurance benefit modeled on the Old Age Security and the Guaranteed Income Supplement, and fully integrated with the CPP disability payments, the provincial Workplace Safety and Insurance Board and any other disability income programs.

Post-Secondary Education

Canada has no national coherence in post-secondary education (PSE): the annual education report released by the Organization for Economic Cooperation and Development in October 2007 noted that Canada was unable to report figures for two-thirds of the information gathered by the other 39 countries covered in the survey. Dr. Paul Cappon, president of the Canadian Council of Learning, a non-governmental organization on lifelong learning, decries the fact that we do not know where the substantial amount of money transferred for PSE purposes is going. In contrast, the EU, Australia, Germany, Britain, and New Zealand, all establish nation-wide goals and objectives for their PSE institutions and align funding with national priorities.
Canada also lacks an effective national strategy to assure the full-range of PSE options to all qualified students. Twenty years ago, Canadian universities received $2000 more per student than their U.S. counterparts, but now receive $2000 less. Since 1993, Canada has won only 3 Nobel prizes, compared to California’s 18 since 1995.

Bold national leadership is required to implement a national strategy for PSE to ensure that our colleges and universities are up to the challenge and measure up to our competition, as well as implement an integrated system of grants, loans and credits to ensure talented students of families with financial difficulties are assured access to PSE institutions.

Public funding for two years of community college
Serious consideration must be given to whether the federal government should publicly fund two years of community college since so many twenty-first century jobs will require at least a couple of years of community college. Easy availability of ongoing community college training for employees in some U.S. states has proven an attractive incentive to location and expansion of leading edge technology companies.

Research and development
We must also find ways once and for all to increase the abysmally low levels of research and development by Canadian businesses, and provide enough committed long-term public finance for basic scientific research that will foster free-ranging scientific innovation. This will spur everything from medical breakthroughs on cancer and the environmental causes of ill-health, to discoveries of greater energy efficiency and waste reduction (like the process of separating oil from water, discovered by the 2009 Polanyi research grant recipient), to new batteries that store electricity for transportation, wind and solar generation, safer cell phone technology, and the elimination of toxins in our food, our water, and our air.

Other Questions

The foregoing eclectic discussion is designed to sketch out the great scope of possibilities available to a reinvigorated national Parliament under new leadership. And there are countless topics equally in need of national attention and serious debate:

Taxes: As we face a growing deficit and debt, can we have intelligent national debate on the need for adequate new revenues to pay for investment and public services, not the least of which is our obligation to ensure the needs and concerns of aboriginal Canadians? Besides GST adjustments (including harmonization with the remaining provincial sales taxes) and a possible carbon levy, we need to consider possibilities as varied as a financial transactions tax – even a minimal 0.25% levy on the sale or transfer of stocks, bonds and financial assets, would be progressive and relatively lucrative – as well as a tax on soft drinks promoted by a few American states.

Child Poverty: On the social safety net front, could we take at least a first step to remove children from social assistance benefit structures as part of reducing poverty in Canada? This goal would require streamlining and enhancing the four federal-provincial income assistance programs – the Child Tax Benefit, the National Child Benefit Supplement, the Universal Child Care Benefit and the various provincial child benefits.

Senate reform: Could we examine serious reform to the Senate of Canada with vigorous public debate and input, not Mr. Harper’s reform by stealth? A reformed Senate could be designed to give provinces a stronger voice in the development of national standards and objectives in the parliamentary centre, rather than shouting too often confrontationally from the fringes through the Council of the Federation.

Canada’s global influence: Can we have intelligent national debate over bolstering Canada’s global influence within the G-20 and other global forums? We should pay close attention to the observations of former diplomat Gordon Smith, that Canada is fortunate to be part of the G-20, scraping in with barely 2% of global GDP or population (our land mass does not count). At the recent G-20 summit in London, Britain consigned Canada to the second tier in terms of communications strategy (which perhaps explains why our Prime Minister was ‘in the loo’ during the official photo of the leaders). And Canada should really not be part of the G-8 today – by some measures, Canada and Italy should logically be replaced by China and India, except that China and India are now holding separate BRIC summits with Russia and Brazil as of June 2009. Among other things, as host of the G-8 summit in 2010, Smith suggests that Canada take vigorous steps to transform it into a G-20 Summit in order to be able to play a central role in reshaping global rules and institutions.

Conclusion

The critical issue, even if any of the suggestions for national leadership and initiative set out in this series of blog entries are pursued, is: will Canadians’ interest in the governance of our country actually be revived? Quebecers are particularly disinterested after years of Bloc Québécois dominance and what La Presse editor André Pratt calls ‘separating without separation’. Polls show that 60% of Quebecers still believe provincial demandeurs, both federalist and separatist, that Quebec needs more provincial autonomy in fields like culture, health, higher education and language despite the fact that Quebec has near complete provincial control of these fields. It will take exceptional effort to persuade Quebecers to consider the Canadian national interest again.

The future of Canada depends more than ever on new bold and visionary national leadership that understands both the poetry and practice of politics. We need inspiration to revive our collective imagination once again, and pursue national initiatives for the benefit of all Canadians.

Part 5: Climate Change Policy

(This is Part 5 of "The descent of national politics into irrelevance and insignificance: Can it be reversed?" The previous parts can be found below.)

Canada has had four different climate change plans in the last decade but no progress. And Mr. Harper’s leadership on the issue is anything but bold, transparent or even remotely constructive in bringing Canadians together.

Mr. Harper silenced any intelligent discussion during the last election, producing an anemic plan for intensity targets applicable only to large industrial emitters that allows carbon dioxide emissions to rise with production levels. His recent budget lacked any serious environmental focus, especially with respect to renewable energy and energy efficiency.

Mr. Harper has sat on the sidelines with respect to a carbon tax, lending no support to forward-thinking proposals like those adopted in British Columbia last year – and successfully defended through the recent BC provincial election. In the absence of national leadership, regional tensions, real or imagined, are allowed to simmer – those Canadians who express legitimate concern over the environmental impact of the oil sands development are subtly cast as whiners merely opposed to Alberta’s success in oil and gas. And while Quebec forges ahead with locking in huge exports of hydro-electric power to the United States, there is no national discussion on the feasibility of an east-west smart electricity grid.

The federal government is so missing in action that Ontario and Quebec have now joined Manitoba and British Columbia to extend caps on CO2 emissions beyond large industrial emitters as part of the California-led Western Climate Initiative.

Harper has recently taken minimal steps toward convergence with the Americans – proposing a weak cap-and-trade system that kicks in only in 2011, and comparable fuel economy standards for vehicles. Talk about fiddling while Rome burns. Canada has lost all credibility on climate change not just in North America, but also on the global stage. We simply have nothing convincing to say, even for the vitally important Copenhagen Summit in November.

Ironically, just as we get closer to a cap-and-trade system, both Canadian and international business leaders are realizing how complex the system is, especially when compared to a carbon tax or levy that is efficient and fair – applies to all emitters – and yields substantial revenues to reduce other taxes or fund technologies.

The reality is that a national carbon pricing system is essential if we want to get anywhere near acceptable targets for the reduction of greenhouse gases by mid-century. Leaders in the oil, gas, pipeline, energy, and retail and electricity industries have, from time to time, called on Ottawa to implement a national energy policy – not to be confused with the controversial NEP policy of a quarter-century ago. A national energy policy to meet the climate change challenge means: an unambiguous statement of Canada’s national interests and objectives with respect to energy, clear national regulations, infrastructure investments, and a national strategy to help corporations to map out an energy development agenda and be able to prioritize initiatives including research, development and training.

Business leaders understand the need for strong national initiative in this critical area – not to create new intrusions into provincial jurisdiction, but to ameliorate the incoherence of the patchwork of provincial and federal laws, and ease the costs faced by the companies and the uncertainties faced by their shareholders.

If we finally succeed in having an intelligent debate over a carbon pricing system initiated by the federal government, lessons will be learned. Any system must be fully coordinated with provincial programs like those in B.C. and Quebec, and the revenue raised should be remitted back to the province in which it is generated for other green initiatives and technology investments. (A serious problem with the carbon pricing proposal in the Liberal Party Green Shift of 2008 was its entanglement with an anti-poverty initiative.)

Vigorous national leadership is also needed to assist our cities – which use at least 50% of all energy in Canada – to improve energy efficiency and energy conservation, and to develop integrated energy systems involving on-site renewable energy, district energy and combined heat and power. Related initiatives include massive investments in expanding public transit, rebuilding municipal infrastructure, and finally moving forward on high speed rail links.

To be continued. Part Six will wind up this series with an eclectic discussion of a few more issues in need of bold national leadership.

Part 4: The Canadian Economic Union

(This is Part 4 of "The descent of national politics into irrelevance and insignificance: Can it be reversed?" The previous parts can be found below.)

Reviving the national government’s ability to take the lead in critical areas will take patience. For one thing, most of the provinces need persuading that the national interest is more than the sum of their activities. Whoever is the next prime minister will have to convincingly articulate the need for specific national action as part of the election platform. Since all Canadians vote for both levels of government, a prime minister who can obtain a clear mandate from the voters will have more power to negotiate a satisfactory federal role with provincial governments.

The Canadian economic union is one area that requires urgent national attention and action. The 1995 inter-provincial Agreement on Internal Trade – intended to reduce barriers to goods, services, and people – is so weak that we are now more disconnected and dysfunctional than the European Union. In fact, the European Union refuses to conclude a free trade agreement with Canada unless provinces and municipalities agree to sign on and not to discriminate against the EU in their procurement policies.

Our internal barriers to trade, especially local procurement preferences, mean that our opposition to the Buy American policies in the U.S. rings hollow to Americans who face what they interpret as Buy Canadian policies. In 1994 the provinces refused to agree to liberalize procurement under NAFTA Article 1024, or to sign the WTO Agreement on Government Procurement, with the result that Canadians have been excluded from government procurement with 40 American states including New York, Michigan and Pennsylvania, for some time. Mr. Harper’s recent proposal to reopen NAFTA and include local procurement as a way to prevent Buy American policies, is simply a diversion to avoid a clear national initiative on the economic union and serious discussions with the provinces.

The Council of the Federation, composed of provincial premiers and territorial leaders, recently acknowledged the need to break down all barriers to the free flow of people, goods, services and capital across Canada. Indeed British Columbia and Alberta have implemented a successful bilateral economic union. But the federal government must take its own legislative action to implement the Canadian economic union and guarantee compliance across Canada. The need for unambiguous national action must be an integral part of the campaign platform of the next prime minister, and on the agenda of the first post-election First Ministers Conference (the group that includes the federal government).

Strengthening the Canadian economic union by eliminating all barriers to the mobility of goods, services, capital and people among provinces logically includes the establishment of a single national securities regulator in the capital markets. The global financial crisis and turbulent capital markets have made this step all the more urgent.

Recent commentary has noted the strength of Canada’s banking system – thanks to coherent national regulation by the Office of the Superintendent of Financial Institutions, the Bank of Canada and the Department of Finance. That same positive outlook does not extend to Canada’s capital markets, which have been adversely affected by the failures in the U.S. and international markets. With 13 different securities regulators, Canada lacks coherence in international forums and discussions, and is unnecessarily exposed to market risks and instability.

As early as August 2007, inadequate securities oversight resulted in freezing $32 billion in toxic asset-backed commercial paper (ABCP), something that has seriously impacted the legitimate commercial paper market, in spite of completing – in late 2008 – a tortuously negotiated agreement to unfreeze the ABCP. Although the Bank of Canada was vigorously involved in this final agreement – and has stepped up its capital market expertise and surveillance role in monitoring systemic risks in the financial system, there is no substitute for effective national regulation and oversight.

The stability of the financial system in Canada has never been more important. There are huge advantages to the establishment of a Canadian securities regulator. For example, the cost of raising capital will be lowered by eliminating the current multiple filing requirements. Investors will have greater protection through a more effective enforcement process and a single independent adjudicative tribunal. Canada’s competitive advantage will be increased and we will be able to play an important global leadership role in coordinating international action to end the global credit crunch and financial instability in the capital markets

Mr. Harper has taken steps toward the establishment of a National Securities Commission in Budget 2009. He has proposed a Council of Ministers consisting of the federal Minister of Finance and a Minister designated by each participating jurisdiction, to act as a forum to discuss the development of securities policy and the ongoing administration of the system. This is clearly an area where provinces are reluctant to cede their dominance, and compromises will be necessary on all sides. But the Harper proposal to give provincial ministers (representing a majority of the provinces and the population of Canada) the power to veto amendments to the federal legislation may be going too far in compromising the national interest.

To be continued. Part Five will deal with climate change and clean energy policy.

Part 3: Policy areas that should be arms-length from politicians and parliament

(This is Part 3 of "The descent of national politics into irrelevance and insignificance: Can it be reversed?" The previous parts can be found below.)

At the same time as we rebuild the capacity of the public service and our elected representatives to better serve the national interest, certain policy areas will require some institutional distance from politicians. These are (1) amendments to the Criminal Code; (2) Equalization and federal-provincial financial transfers; (3) national standards in Medicare, (4) Bank for Infrastructure Development.

Criminal Code amendments – a Criminal Justice Council

The law and order agenda of the Harper conservatives – designed to serve partisan advantage and not national interest – has resulted in capricious changes to the Criminal Code of Canada. All the informed evidence-based literature clearly indicates that more rigid sentencing – including mandatory minimums for an increasing array of crimes introduced by the Harper conservatives – does not produce a safer society. In fact, it just diverts valuable resources better spent on proactive strategies that are proven to reduce and prevent crime. In both Britain and the United States, where incarceration rates have spiked in the past 10 years, there has been no gain in public safety and justice. And in the U.S., which incarcerates about 700 persons out of 100,000 compared to 130 in Canada, over 70% of parolees re-offend compared to 12% in Canada.

Mandatory minimum sentences take away from the essential flexibility in the justice system that makes the court system in Canada work. With greater numbers in jail, valuable community resources are siphoned off into building more prisons rather than into building an efficient, equitable and effective justice system. The racial disparities in the inmate population increase significantly, incentives for guilty pleas are removed, and the number of charges going to trial increase, causing significant dissatisfaction among judges, defence counsel, prosecutors and police.

We need to create a permanent independent Criminal Justice Council to advise the government on Criminal Code changes regarding new crimes, penalties or sentencing. This would ensure that Criminal Code amendments are not simply knee-jerk reactions to short-term political pressures.

Commission on Equalization and Federal-Provincial Financial Transfers

Equalization and transfers of money between Ottawa and the provinces are yet another area in which partisan advantage has obscured the pursuit of the national interest.

What will it take for the Harper government to abandon its hyper-partisan approach to serious matters of national interest like equalization? Equalization, together with federal-provincial transfers for health, education and social services, plays a critical role in promoting equality of opportunity and comparable levels of services across Canada. Great nations are defined by such commitments.

Regrettably we can no longer measure how well the myriad of federal contributions to the provinces, including equalization, helps to ensure comparable public services across Canada. No amount of tinkering with the “formula” will fix this fundamental problem, especially since so many other federal programs incorporate confusing equalizing elements that actually exacerbate inequities among Canadians. The best example is Employment Insurance which is currently structured to benefit the unemployed who live in weaker areas of the country.

There is urgent need to bring coherence, consistency and accountability to the jumble of federal contributions to provinces, especially with Ontario qualifying for equalization. Unfortunately the Harper government has no interest in promoting comparable public services – the recent manifestation of this being the elimination of all federal funds for childcare. Harper’s real long-term agenda is to downsize the national government, download responsibilities and fiscal room, permanently eliminating Ottawa’s ability to pursue national standards and objectives in most public services and programs.

We need new national leadership to challenge the Harper agenda. We need to establish a permanent non-partisan advisory commission (similar to Australia) to make the system of federal contributions to provinces more transparent and subject to public scrutiny. We must ensure that, through the commission, decisions relating to federal-provincial fiscal relations are based on intelligent debate and reflect longer-term national objectives to build stronger ties among Canadians rather than attenuate them.

Medicare for the 21st century – a National Health Commission

Medicare has become less and less a national program and national symbol that draws us together, and more and more an uneven patchwork of medically-required services across provinces, with tragic consequences as in the case of cancer pathology in Newfoundland and elsewhere. The time is long overdue to establish, at the national level, the services and medical treatments, as well as the associated national standards, which should be available to all Canadians under Medicare. Canadians in all provinces must have equal access to, for example, adequate cancer testing and treatment, extensive services for autistic children, physiotherapy, or MRIs.

Yet the Harper government refuses to address the issue, claiming that Ottawa is only obligated to fulfill Paul Martin’s 10-year deal to transfer $41 billion dollars unconditionally to the provinces, and nothing else.

At the very least, Medicare funding decisions must be made in a coherent fashion in a national framework given that we invest no less than $160 billion annually – of which $113 billion is from the public purse. More importantly, there is a clear national interest and concern in preserving and updating our national health care system – an essential pillar of a strong 21st century nation, and a significant Canadian achievement to which the Americans now aspire.

Vigorous national leadership is required to bring Medicare into the 21st century. We should establish a permanent independent national health commission (building on the existing National Health Council), with a clear mandate to develop a consensus and advise both federal and provincial governments on a whole range of issues such as:

• national standards in terms of coverage,
• how to ensure that Canadians do not have to leave the country for essential medical treatments or take governments to court to pay for essential medications or treatments,
• the acceptable degree of private delivery of publicly insured health services,
• the portability of Medicare across the country,
• the level of efficiency and effectiveness in healthcare expenditures so that provincial healthcare budgets do not overwhelm equally important expenditures on education, child care, social services etc.

Bank for Infrastructure Development

As we finally focus on the need to upgrade our decaying physical infrastructure, we must devise a mechanism to assure Canadians that the massive investment will further our long-term interest in building a sustainable, dynamic social economy. We need some sort of national monitoring program that is open, accessible and accountable, and a national registry of projects receiving funds. During the U.S. election, Barack Obama endorsed the idea of a National Infrastructure Bank (or Bank for Infrastructure Development) proposed by respected investment banker Felix Rohatyn. The Bank would determine the value of each project, its environmental impact, and streamline the process of reviewing and signing off on major projects. The Bank might even raise money itself, or in connection with a regionally operated network of local investment banks that would invest in the best local organizations. A Bill proposing the creation of the bank is currently working its way through the U.S. Senate, and mandates a bipartisan board of directors, and a CEO to be appointed by the President and confirmed by the Senate. President Obama remains supportive although concerned that elected representatives will be unable to curb their partisan instincts to serve the national interest. Canada should certainly consider a similar proposal.

To be continued. Part Four will deal with the Canadian economic union

Part 2: Parliamentary Committees and the public service

(This is Part 2 of "The descent of national politics into irrelevance and insignificance: Can it be reversed?" Part 1 is below).

Parliament and the national public service must regain the respect of a cynical people and once again attract the best and the brightest to implement a creative national agenda.

This requires new national leadership who makes it incontrovertibly clear that MPs and public servants are first and foremost working to serve the national interest, not kowtowing like sycophants to the Prime Minister’s Office.

We need new national leadership that will demand much higher standards of conduct of all our members of parliament and public servants.

We must put an end to the widespread practice of outsourcing government to over-paid consultants, and constant polling on unimportant matters, such as the current popularity of the government.

We must build up the ranks of the public service not only to reflect our diversity, but also to provide creative and innovative advice to elected representatives.

And we must put all MPs to productive work on well-resourced, televised parliamentary committees, and take the focus off our dysfunctional Question Period.

Committee work has a real impact on government policies and initiatives and is central to regaining respect for national politics. We must ensure that MPs have the expert advice and guidance they need to be serious legislators, including easy access to advisors on international affairs. This requires a substantial increase in the budget of the Library of Parliament responsible for servicing the parliamentary committees on a non-partisan basis (something that political commentator Donald Savoie has recommended for years).

Currently, committees are under-resourced and produce reports that are largely ignored by the government. This is exacerbated by a prime minister who manipulates committees to serve purely partisan purposes. The committee to investigate the caregiver dispute with Liberal M.P. Ruby Dhalla was not only unfair and inappropriate, but also a clever ruse by the Harper government to avoid dealing with the real problem - how to protect caregivers and prevent abuses of the caregiver program. It also gratified the alpha male mentality prevalent on Parliament Hill by pretending to defend immigrant women, while in fact diminishing both them and women MPs.

Committee funds have been further reduced by the Harper government’s insistence that the budget of the Parliamentary Budget Officer – the refreshingly direct and informative Kevin Page who is proving to be an irritant to the government that appointed him – draw funds from the same inadequate pool of resources available to the Library of Parliament.

Committee reform, more responsibility for MPs, improving and diversifying the public service – all must be top priority items for the next prime minister and national government.

To be continued. Part Three will deal with policy areas that need to be at arms-length from politicians and Parliament

The descent of national politics into irrelevance and insignificance: Can it be reversed? (Part One: Overview)

As yet another game of chicken over the federal election is played out, it is sobering to remember the huge numbers of Canadians who have dropped out of national politics. In 2008 almost half (42%) of all voters did not bother to vote.

Why?

Because voters do not trust politicians. Our national government is not transparent and accountable. We do not receive full and complete information on everything from the terrible state of the Chalk River isotope facilities, to the potentially dangerous side effects of drugs or chemicals, to the actual state of public finances. Politics and politicians seem to be all about partisan advantage and self-interest, not the public good and the national interest.

Because our national government lacks any coherence and national purpose. We do not feel that we are part of a collective effort to address the effects of severe recession or climate change. Canada’s global influence is waning even as more and more decisions in global forums have a direct impact on our daily lives.

Because too much of vital government business is out-sourced to overpaid consultants who are driven by personal profit, not public service. The public service itself is demoralized and unrepresentative of the diversity in Canadian society today.

Because our vote does not change anything. Election campaigns have become uninspiring and excruciatingly boring – with election platforms seemingly written by and for accountants, with no vision. Whatever the platform, the elected government governs only to maintain power, avoiding substantive intelligent debate, and muzzling its Members of Parliament. Other MP’s, unable or unwilling to play any sort of constructive role, are reduced to waiting for the chance to snap at an unlucky minister or call for a resignation.

Because Question Period is an embarrassment – the political counterpart to brawling in hockey.

Is there any escape from this depressing descent of our national politics into irrelevance and insignificance?

The short answer is yes. But we require bold and visionary national leadership to rally anxious and disillusioned Canadians, and remind us that we are stronger when we act together. We need leadership whose dedication to public service and the national interest is unquestioned, and who can inspire the same dedication in others. We need leadership to restore coherent national government at home and a clear Canadian voice on the world stage. Above all, we need leadership that looks beyond the horizon, and while charting an innovative course for the future, has the courage to recognize past mistakes and take corrective action.

Canada is a unique and fascinating 21st-century country. Canadians are increasingly global citizens – exploring the world, working in global communities, and establishing global networks that are enormously valuable economically, socially and politically. Studies reveal that three-quarters of Canadians have traveled outside the country, and one-half follows international events closely and is closely connected with one or more foreign countries.

Canadians are building a unique multi-ethnic liberal democracy that can be an inspiration to a world increasingly troubled by religious and sectarian friction. Our growing diversity of human talent is a great source of strength but also a great responsibility. If we can succeed in forging a shared national purpose among people who have never shared anything before, we will be capable of great social and economic advances at home and significant international influence opening up avenues for effective global cooperation.

This is where bold and visionary national leadership comes in. We like to believe Canada represents the best of universal values – justice, equality, diversity, the rule of law, fundamental rights and freedoms, non-discrimination, and the chance to live together in peace and humanity. We have extraordinary freedom to choose to associate with different religious, political, linguistic, and cultural communities and assume different collective identities.

But we need constant reminding that regardless of our collective identities, at all times we are individual Canadians – men and women, young and old – building an inclusive society where we are all responsible for each other, where preserving the dignity of our neighbour preserves the dignity of us all, and where our national purpose must be to improve the quality of life and build a better world for our children and grand-children. Too often our collective identities become barriers and an excuse for indifference and insensitivity among Canadians. Sadly, in this critical journey, our national leadership has been remarkably deficient.

How can we say we are building an inclusive society if we are still unable to eliminate third world conditions facing aboriginal Canadians? If we claim to be just, fair, compassionate, generous, why do the moral, political and legal issues presented by our indigenous population receive so little attention? Why are we still unable to provide aboriginal Canadians with the same quality of life and opportunities that we like to think that we offer to new Canadians? If we are and had been all the things we claim to be, places like Kashechewan and Davis Inlet would not exist. First citizens deserve once and for all to be in the first rank of national challenges to be resolved. Only when we finally face up to what has been done to aboriginal Canadians will we be able to recognize our own past religious intolerance, racism, sexual discrimination, unsustainable exploitation of natural resources, endemic abuse of privilege by authority at all levels, double standards and hypocrisy. Only when we fully acknowledge our responsibility for the harm that aboriginal Canadians still suffer, and take effective action, will we finally have the tools to address our other challenges to building an inclusive society.

How can we say we are building a society with equality of opportunity when the evidence now shows that the latest wave of immigrants, while perhaps better educated than their predecessors, face more difficulties with respect to employment, reuniting their families, proper housing and health services? The huge mismatch between the skills of new Canadians and what they are actually employed to do here is jaw dropping. Too many newcomers have now become a source of low-paid labour, instead of the much-needed source of upgraded skills in the manufacturing, professional and knowledge sectors. No less than 41% of immigrants with university degrees are now in chronic low-income categories, compared to only 13% in 1993, before the immigration laws were changed to encourage more educated immigrants to come to Canada. Especially among second generation visible minority immigrants, there is a real sense of exclusion as the disaffected are left to lash out against a society that fails to give them equal opportunity in practice. They are less likely to vote, and more likely to express lower levels of a sense of belonging and general satisfaction with life than their parents’ generation.

Now the economic crisis has revealed that our ability to maintain an open, progressive, compassionate society – through environmentally sound development, excellent health care and public education, and an adequate safety net – is seriously compromised. Too many Canadians lack the necessary education for the jobs of today and in the future. Too many Canadians go to bed hungry with inadequate shelter. Even our signature national programs – Employment Insurance, Medicare, Canada Pension Plan, Equalization – can no longer be said to be truly national programs serving all Canadians effectively and equitably. We are unable to assure clean air and water, clean energy. We do not even have an economic union that permits all Canadians to train, work and do business anywhere in the country.

In order to grasp the challenges and opportunities of the 21st century, it is critical to have national leadership that will boldly place the well-being and potential of aboriginal Canadians at the centre of national affairs, initiate an innovative program to guarantee the fundamentals of Canadian citizenship, fulfill our collective responsibility to assist disadvantaged Canadians, and provide a respected voice in global affairs.

Unfortunately our current prime minister is not only incapable of providing this leadership but he is pushing the decline in national leadership to a critical level. Although open about his ideological preference for unwinding the federal government, his hyper-partisan pursuit of the goal of maintaining power at all costs frequently results in setting provinces against provinces, and Canadians against Canadians. Even the stimulus spending – from bailouts to tiny band aids on big gaps in our social security net – is unprincipled, inefficient and divisive. We know all too well that, once the recession is over, there will be an unprecedented and equally unprincipled, inefficient and divisive contraction in public investment, while the national deficit is offloaded on the backs of the provinces and municipalities.

Replacing Mr. Harper is a necessary but not sufficient condition for restoring both moral authority to national politics, and a critical sense of solidarity among Canadians, as Canadians. Bold and visionary new leadership is essential to realizing our great potential in a world without borders.

Subsequent blogs will outline proposals for reviving both public confidence in Parliament and the capacity of our national government to initiate and implement a creative innovative agenda. Part Two will discuss parliamentary committees and the public service.

To gaffe or not to gaffe: that is not the question

CBC commentator, Rex Murphy, recently defined a “gaffe” as a politician stumbling by saying something he actually believes. Apparently Michael Ignatieff “gaffed” when suggesting that, after emerging from this recession with a deficit possibly approaching $80 billion, we may have to consider raising taxes rather than cutting back on important services and programs. The Conservatives, predictably, are preparing to bombard the public with negative advertisements about Ignatieff’s hidden agenda to raise taxes. They hope this will scare Canadians back to the comforting ‘we-cut-the-GST-aren’t-we-great’ Conservative fold, and reduce political discourse to a one-dimensional contest: tax-and-spend Liberals versus tax-cutting Conservatives.

Well here’s to more political gaffes. Canadians are not shallow simple voters living in a one-dimensional world. We deserve respect, not the condescension of our political leaders. We can handle serious discussion about the provision of important public services and investment – public pensions, healthcare, education, public transit, police – to name but a few. We know that we are stronger when we act collectively. We know that protecting the dignity of our neighbour protects the dignity of us all.

A recent Maclean’s article quotes former Harper chief of staff, Ian Brodie, as saying that before the 2006 election, Conservatives decided their ticket to political power lay in branding themselves as the party of tax cuts. They simply had to cut a tax that Canadians could not forget at election time – the GST. Conservative strategists knew that reducing the GST made no economic sense, but considered it perfect for tiny sound bites for tiny Canadian attention spans. That it was contrary to the national interest was no impediment to their goal of gaining political power.

The Harper conservatives are following the playbook of U.S. republicans like Sarah Palin who argue that paying taxes is unpatriotic. Contrast President Obama. During the U.S. election, Mr. Obama took time on camera to explain to Joe the Plumber that extra taxes paid as a result of financial success, are not transferred to some stranger, but to a version of your former less-successful self – someone now needing the help of public services and programs to get ahead. People enjoying success should care for the ones left behind, because in most cases they were once left behind themselves.

Engaging citizens in a national debate over taxes clearly did President Obama no harm on election day. Michael Ignatieff should take heart.

Putting Autism on the National Agenda: Medicare for the 21st Century

Today (April 2nd) is World Autism Day. Almost all of us know someone who is afflicted with autistic spectrum disorder (ASD). The Geneva Centre for Autism in Canada estimates that 1 in every 169 children is on the autistic spectrum. ASD presents an enormous challenge to our society in the 21st century.

Access to effective autism treatment such as Applied Behavioural Analysis (ABA) is very restricted across provinces, and little is available under Medicare with the notable exception of Alberta. Most provinces provide services for ASD children in a haphazard way generally through social services and mainly for respite and support, not medical treatment (although Ontario, for example, does provide some funds that can be used at home for ABA-type intervention).

Firm national action and leadership is required to provide effective autism treatment to all Canadians who need it, and ensure that the huge and growing numbers of children with ASD are able to contribute to society to the best of their abilities and do not become a heavy burden on the health care system as they grow older. Yet the current federal government refuses to take action to ensure equitable national access to medical treatment for autism on the grounds that it is not of national concern and is only a provincial matter. In contrast President Obama speaks eloquently on the national interest in dealing with autism and is a supporter of federal legislation – the Combating Autism Act – which allocates $945 million to autism treatment and research.

Surely Canadian history teaches us the importance of national initiatives that strengthen our social fabric and advance justice and equality. Surely we have learned that the measure of a great society and nation is how well we collectively take care of disadvantaged Canadians. Preserving the dignity of our neighbour preserves the dignity of us all. When we all contribute to and share the benefits of, for example, good health care, we are all better off.

Unfortunately our current national leadership ignores this important legacy, preferring minimalist national government (despite being forced into a temporary stimulus package), adhocery, divisive policies and rhetoric, and no vision. The few Canadians who voted in the depressing election last fall did so with little enthusiasm or sense of national pride.

We desperately need to put some energy and passion back into national politics, and demand bold and visionary leadership from our national politicians. So it is extremely refreshing to see the emergence of a strong grassroots network of parents and many others from all provinces and territories, who have set aside the all-too-prevalent cynicism, and have joined together to demand national action and to vigorously campaign for changes to Medicare to assure equitable access to autism treatment across Canada (See: National Autism Strategy/Medicare for Autism).

I view this national campaign for universal access to effective autism treatment as part of a much needed larger national debate – revamping Medicare for the twenty-first century.

Medicare has become less and less a national program and symbol drawing us together, and more and more an uneven patchwork of medically-required services across provinces, with tragic consequences as in the case of cancer pathology in Newfoundland and elsewhere. The time is long overdue to establish, at the national level, the services and medical treatments, as well as the associated national standards, which should be available to all Canadians under Medicare. Canadians in all provinces must have equal access to, for example, extensive services for autistic children, physiotherapy, adequate cancer treatment, or MRIs.

The Harper government is wrong to refuse to address the issue. At the very least, Medicare funding decisions must be made in a coherent fashion in a national framework given that we invest no less than $160 billion annually, of which $113 billion is from the public purse. But more importantly, there is a clear national interest and concern in preserving and updating our national health care system – an essential pillar of a strong 21st century nation, and a significant Canadian achievement to which the Americans now aspire.

We should establish a high profile arms-length national health commission (building on the existing National Health Council), with a clear mandate to develop a consensus and advise governments in a persuasive and public way on a whole range of issues such as:
• national standards in terms of coverage,
• how to ensure that Canadians do not have to leave the country for essential medical treatments or take governments to court to pay for essential medications or treatments,
• what is the acceptable degree of private delivery of publicly insured health services,
• how to ensure the portability of Medicare across the country.

We must also find the political will and determination among our elected representatives to bring coherence, consistency and accountability to the current mess of federal-provincial financial transfers, of which health care is a significant component. Regrettably we can no longer measure how well the myriad of federal contributions to the provinces, including equalization, helps to ensure comparable public services across Canada. No amount of tinkering with the arcane equalization formula, or ad hoc adjustments to transfers for health, education and social services, will fix this fundamental problem, especially in the purely partisan and divisive way pursued by the prime minister to date.

We need a permanent non-partisan advisory commission (similar to Australia) to take charge and establish a system of federal contributions to provinces that is much more transparent and subject to public scrutiny. Through such a commission, decisions relating to federal-provincial fiscal relations and transfers to provinces to support national programs and objectives, are much more likely to be based on intelligent debate and to contribute to the national interest in building stronger ties among Canadians rather than weakening them.

World Autism Day provides us with a good occasion to reflect on how far we have come and how far we have yet to go in building a fair and compassionate society, and discharging our collective responsibility for those less fortunate than ourselves.

Clean energy and the environment: Obama impresses, Harper regresses

President Obama’s proposed 2010 budget makes it clear he intends to achieve significant progress on the climate change and clean energy front, despite the formidable economic crisis. The President had signaled his seriousness throughout his campaign for the presidency and then with his cabinet appointments. His budget now includes a wide-range of concrete steps toward reducing dependence on oil; makes huge investments in clean technology, renewable energy and energy efficiency; increases the budget of the Environmental Protection Agency by 35%; and generally aims at switching the transportation system to electric vehicles while increasing fuel economy standards in gas-powered vehicles.

Predictably the opposition in Congress is gearing up for battle, hysterically projecting enormous increases in gas prices at the pump and retail electricity rates, and calling the cap and trade proposal that will put a price on carbon to reduce CO2 emissions, “a tax on everything”. Sound familiar?

Whatever the outcome, Obama’s bold national leadership on global warming, and his determination to proceed, is unambiguous and genuine. And he will use his exceptional ability to connect with Americans over the heads of his opposition with all the tools at his disposal.

Contrast Harper’s approach to climate change and clean energy – the antithesis of bold national leadership, transparency, and constructive debate bringing Canadians together.

While Obama champions an effective national cap-and-trade system that sets hard caps on carbon emissions, Harper silenced any intelligent discussion during the last election and produced an anemic plan for intensity targets, applicable only to large industrial emitters, that is justly ridiculed for allowing emissions to rise with production levels. His recent budget lacked any serious environmental focus whatsoever, notably with respect to renewable energy and energy efficiency. The federal government is so missing in action that Ontario and Quebec have now joined Manitoba and British Columbia to extend caps on CO2 emissions beyond large industrial emitters as part of the California-led Western Climate Initiative.

While Obama has taken steps to encourage maximum progress at the state level, Harper has sat pathetically on the sidelines while forward-thinking proposals for a modest carbon tax, adopted in British Columbia last year, have been undermined at every turn by the provincial NDP opposition. And we are unlikely to hear anything positive from the prime minister about the far-sighted action in Ontario’s recent Green Energy Act.

While Obama and his administration debate openly and transparently (See www.whitehouse.gov) and try to bring Americans together, Harper stifles debate at every turn, and prefers divisive regional wrangling and petty partisanship. Regional tensions, real or imagined, simmer and rise to fill the void left by the absence of national leadership. Canadians who express legitimate concern over the environmental impact of the oil sands development are subtly cast as eastern whiners, opposed to Alberta’s success in oil and gas. Quebec forges ahead to lock in huge exports of hydro-electric power to the United States, yet no national discussion takes place on the urgent need for an east-west smart electricity grid.

Recently, the prime minister has taken to complimenting himself on the strength of Canada’s banking system compared to the mess in other developed countries, notably the U.S. But he fails to draw the most important lesson. Our relative stability is due to long-standing coherent national regulation of our banking system, which fortuitously included higher capital ratios than was required internationally. Greater transparency has also meant that our exposure to sub-prime mortgages and synthetic derivatives was much less. In the U.S. during the 1930s, money-lending functions were assumed by local and state-chartered banks, leading to the decentralized, unregulated, anarchic system that exists today. In other words, we have a banking system that is stable thanks to coherent national action and regulation in Ottawa that predate Harper – the very kind of action required to make real progress on climate change and clean energy, but that Harper avoids.

Bold national leadership, transparency and constructive debate seem to be too much to hope for in Canada. No wonder so many Canadians look enviously at the United States and are cheering Obama on.

Equalization for uncertain times

From MetroNews, Wednesday February 18 (http://www.metronews.ca/toronto/Comment/article/183583)

How many times must Premier Danny Williams verbally explode about “equalization” before the Harper government abandons its hyper-partisan approach to serious matters of national interest?

Equalization is a very serious matter, which, together with other federal-provincial transfers for health, education and social services, plays a critical role in promoting equality of opportunity and comparable levels of services across Canada. This commitment defines a great nation.

Regrettably, we can no longer measure how well the myriad of federal contributions to the provinces, including equalization, helps to ensure comparable public services across Canada.

No amount of tinkering with the arcane equalization formula will fix this fundamental problem, especially since too many other federal programs incorporate confusing equalizing elements that exacerbate inequities among Canadians. The best example is employment insurance, which is structured to benefit the unemployed who live in weaker areas of the country.

There is urgent need to bring coherence, consistency and accountability to the jumble of federal contributions to provinces, especially with Ontario qualifying for equalization.

Unfortunately, the Harper government has no interest in promoting comparable public services — the recent manifestation of this being the elimination of all federal funds for child-care operations. Harper’s seemingly real agenda is to downsize the national government, download responsibilities and fiscal room, permanently eliminating Ottawa’s ability to pursue national standards and objectives in most public services and programs.

With every month in power, Harper draws closer to achieving his goal.

Harper’s signature step — the GST cut — reducing national revenue by $60 billion over five years, was a bad step in the best of times, universally condemned by economists, and now cripples the national government’s ability to respond in this, the worst of times. Yet Harper refuses to reconsider.

Opposition parties must directly challenge this agenda. Explain to Canadians why we must stop weakening the fiscal position of the federal government — taking care not to turn national politics into a complex and excruciatingly boring accounting problem. Propose the establishment of a permanent non-partisan advisory commission to make the system of federal contributions to provinces more transparent and subject to public scrutiny.

And ensure that, through the commission, decisions relating to federal-provincial fiscal relations are based on intelligent debate and reflect longer-term national objectives to build stronger ties among Canadians rather than weakening them.

Budgeting Backwards

From Metro News on Wednesday, February 4 (http://www.metronews.ca/toronto/Comment/article/176492):

As the dust settles after the much-anticipated delivery of Budget 2009, one troubling feature is emerging:

Despite the fact that women constitute 47.4 per cent — almost half — of the national workforce, the vast majority of the billions of stimulus dollars targeted for job creation favours men. And the margin is huge — whether in housing, construction, forestry, autos, or manufacturing.

But it’s not just women who should be concerned: By failing to address the worst economic crisis in decades within a fair and equitable framework, the budget illustrates a serious lack of forward-thinking at a time when we need to restructure the Canadian economy around industries based on innovative technological advances and our vibrant service sectors — major employers of women.

Budget 2009 has been called everything from “historic” to “inadequate” to “excessive” to “the end of conservatism.” It is none of these things. It is vintage Stephen Harper: A mishmash of mainly short-term job creation and credit-easing initiatives aimed at holding onto power and responding to the most basic expectations of frustrated Canadians who most certainly did not want an election or a repetition of the pre-Christmas hysterics.

To the extent the budget even considers the future, it does so through a rearview mirror: Shortsightedly subsidizing — rather than transforming -- declining sectors like the auto industry; failing to adequately adapt employment insurance and other social security provisions to the current challenging environment; and concentrating the stimulus spending primarily on physical infrastructure, however important.

Yet our social infrastructure — underpinning our all-important service sector where the vast majority of women (and Canadians) work — requires just as much attention as our decaying physical infrastructure.

At a minimum, significant new long-term public investment is required in scientific ­innovation and basic research, in education at all levels, in child care, geriatric care, community and social services. This will go far to support our most important national asset — our human capital — and ensure that we pull out of this crisis with a greener, more sustainable economy, and an educated, more productive workforce employed in 21st-century industries. Moreover, investing in women is smart economics according to participants at the recent World Economic Forum in Davos, from Nike’s chief executive, to the head of UNICEF, to Melinda Gates. This holds true as much for developed countries like Canada as it does for developing countries.

Let us hope the women of Canada, who represent not only half the workforce but also half of the electorate, remember the inadequacies of this budget and this government at the next election.

Economic Crisis as Opportunity: Late Night Thoughts Listening to Late Night Pundits (with apologies to Lewis Thomas and Mahler's Ninth Symphony)

2008 has now passed into history as a year most people want to forget. 2009 is quickly shaping up as the year most people wish was already over, (or perhaps one that we could live backwards like Benjamin Button).

There is no longer any doubt that the world-wide financial crisis and credit freeze have precipitated the worst economic conditions in decades. Recession has clearly settled in and could get worse, as individuals and businesses begin to lock in longer term spending and investment plans that incorporate seriously reduced expectations.

Pensioners urgently need some hope that their retirement funds will recover sufficiently in their lifetimes; young people need to be confident that the billions of dollars now being spent is in their long-term interest, not a lifelong burden. And the many Canadians in between need inspiration and bold visionary national leadership to help lift the clouds that obscure what is still a bright future.

Canadians know that the economic crisis is not simply the result of greed and insanity on Wall Street that can be cured through a gigantic consumer shopping spree, financial regulatory reforms and more ethical behaviour. We know that we cannot simply spend or regulate our way out of fundamental social and economic change.

The multi-partisan consensus emerging on the need for a massive economic stimulus package, increases in social security payments, and critical financial reforms to ensure adequate credit, can only go so far to address our distress in the short-term.

We must now confront the consequences of our collective myopia over many years of excessive consumption with easy credit. Shopaholic consumers drove our savings rate to zero and sent household debt soaring, while we allowed the planet to overheat, the polar ice caps to melt, and dangerously degraded the quality of our air and water.

And not only did we fail to discharge our responsibility as custodians of the planet. But we also failed to discharge our responsibility to our fellow citizens and future generations.

As the world came to Canada, and we provided a safe haven and a stable base for so many new Canadians, we transformed in a relatively short period of time into the most cosmopolitan and diverse society in human history. And while we often acknowledge that our increasing diversity as a people, our huge pool of human talent, is our greatest strength, we have failed to pay sufficient attention to the increasing inequalities of opportunities and the rising inequalities of income and wealth. Building a fair and compassionate society is not a static destination, but an ongoing journey that demands mutual respect and cooperation on the part of us all. The fight for greater equality and justice can never end. And the measure of a great society and nation will always be how well we collectively take care of and lift up the most disadvantaged members, and how well we preserve the dignity of our neighbour in order to preserve the dignity of us all.

The economic crisis has exposed our collective weakness: that our ability to maintain an open, progressive, compassionate society – through environmentally sound development, excellent health care and public education, and an adequate safety net – is seriously compromised. Too many Canadians lack the necessary education for the jobs of today and in the future. Too many Canadians go to bed hungry with inadequate shelter. Meanwhile too much valuable political energy has been dissipated on our regional differences over everything from energy, to the environment, to transfer payments. And too many of our politicians have put parochial, petty and divisive concerns ahead of the national interest.

We urgently need bold and visionary national leadership, not just to show us how to deal with the economic crisis in the short term, but also how, in the long term, all Canadians can come together to moderate consumption and our carbon footprint, guarantee equality of opportunity, eliminate poverty and unemployment to the greatest extent possible, and undertake the long overdue social and economic adjustments to the profound changes in the global economy.

We are now poised at the beginning of what may be a decade of serious declines in older Canadian manufacturing industries. Already we face shortages of skilled workers for the new jobs being created, from mechanics, to specialized technicians for sophisticated machine tools and for work in power stations.

To succeed in the global economy and provide meaningful jobs, equality of opportunity and adequate income to all Canadians now requires the Canadian economy to restructure around industries based on innovative technological advances, and around the expansion of the vibrant service sectors in our urban centres.

Our biggest challenge during this transition is the training and education deficit. This is the result of years of underfunding and lack of purpose and direction on the part of both governments and employers.

We must commit ourselves to nothing less than giving every Canadian the opportunity for the best education and training possible to assure meaningful work and ongoing employment in 21st century industries.

Establishing this fundamental education foundation will involve significant new investments at all levels, from early childhood education, elementary and high schools, to a wide range of post-secondary education. Indeed since virtually all the meaningful jobs of the future will require at least a couple of years of community college, two years of community college should be publicly funded and delivered free of charge for occupations facing critical shortages, as we do elementary and secondary school education. Among other things, easy availability of ongoing community college training for employees in some U.S. states has proven to be a significant attraction to the location and expansion of companies on the leading edge of technological change.

We must dramatically expand accessibility to all forms of post-secondary education to all qualified Canadians through our national network of 94 universities and 132 colleges. We have to start now to train many more teachers and to educate many more scientists and engineers. We must guarantee that the education and training credentials of new Canadians will be expeditiously recognized and/or supplemented. The 40% of immigrants with university degrees who are now in chronic low-income jobs constitutes a tragic waste of human talent that cannot be ignored. And we must guarantee that all education and training credentials will be recognized across Canada and ensure full mobility of workers. (Fortuitously, after years of resistance, the provinces appear to have finally agreed to eliminate all barriers to the full mobility of persons, goods, services and investments within Canada by next year. Astonishingly we may at last have something approximating a real national economic union, 142 years after becoming a nation).

At the same time, we need to make sure that employers as well can embrace the challenges of a knowledge economy. Canada ranks poorly compared to other industrialized countries in on-the-job training. Our productivity growth rate, our ability to work smart, has fallen below that of our competitors. We need to provide incentives for employers to train their workers and to invest in productivity improvements that can maintain our competitiveness.

Only with a staunch national commitment to a solid education foundation will we be able to find the workers to transform Canada’s traditional factory base into, for example, a “hub of green manufacturing” on the leading edge of technological change in a wide range of areas. We can build a world class manufacturing base in renewable energy components spurred on by the massive changes in the global energy sector and the growing public concern with energy conservation and efficiency. Our rural sector can be on the leading edge of “green agriculture” and expanding viable organic food production operations. Our forestry sector can be leaders in eco-efficiency and building pulp and paper mills that reuse mill residue to produce energy, fuels or chemicals. New and upgraded power grids can be constructed, including a long overdue East-West electricity grid for wheeling electricity across provinces. Alberta can become a world leader in clean energy and green technologies. Municipalities can be on the leading edge of developing integrated energy systems involving on-site renewable energy, district energy and combined heat and power. Public transit, high speed trains, broadband networks and even putting medical records online are all promising areas for a vibrant 21st century economy and will be more easily pursued with a well-educated workforce.

Most importantly, substantial financing is needed for basic scientific research that will foster free-ranging scientific innovation subject to open access policies. This will spur everything from medical breakthroughs on cancer and the environmental causes of ill-health, to new discoveries for greater energy efficiency and effectiveness and waste reduction (green chemistry initiatives such as the ability to mix and then separate oil and water, discovered by the 2009 recipient of the prestigious Polanyi research grant), to new batteries that will store electricity for transportation, wind and solar generation, to safer cell phone technology, and to effective action to protect Canadians by eliminating the dangerous toxins in the food we eat, the water we drink, and the air we breathe.

The recent collapse of Nortel put an end to the biggest corporate spender on research and development in the country, and exposed the shallowness of our advanced technology sector, leaving only Research in Motion as a world class Canadian success story. And parts of Nortel may well be sold to Huawei Technologies, a Chinese rival that has been seeking to expand its North American base. There has never been a more urgent time for public investment to play a central role in strengthening our capacity to innovate and lead in technological developments.

The other long-term source of productive employment is the already dominant service sector especially in our vibrant urban centres. Intensifying media, financial and arts and cultural hubs is a natural avenue. We must also employ many more service providers in a national program for child care and early childhood education, in assisting our senior citizens both in their own homes and in retirement homes, and in providing the wide range of community services that are in high demand whether for assistance to new Canadians, for opening schools as community hubs after the school day ends, for services for disabled Canadians.

We absolutely must emerge from this crisis with a greener, more sustainable economy, and an educated, more productive and innovative workforce employed in 21st century industries and globally connected around the world. Our national leadership must start now to promote a cultural transformation that redefines wealth as well-being, not well-having. We need leadership to encourage us to live intelligently and frugally, not wastefully. We need to build a Canada where achievement is measured by our commitment and responsibility to our fellow citizens, not by our level of consumption. And most importantly, we need our leaders to encourage Canadians in all parts of the country to listen and respond to the concerns and aspirations of others, and understand the urgency to undertake together the national initiatives and programs that strengthen us as a whole and will benefit future generations.

We are Canadians without borders, with bridges and bonds to many countries, looking forward to an exciting future. We want to embrace our national responsibilities that are integral to our citizenship in this great nation. We are prepared to ask at least as much of ourselves as we ask of our governments. But we need bold and visionary national leadership to guide us out of the current economic morass with a combination of domestic initiatives and international engagement, which can inspire us once again to look over the horizon and leave a better world for our children and grandchildren.

The short-term - Budget 2009 and beyond

There is widespread agreement that in order to promote economic recovery and generate as much employment as possible, Canada must implement an economic stimulus package with sufficient public investment and spending to offset the serious decline in private investment and spending. To the greatest extent possible, all public initiatives should try to reflect our longer-term priorities of investing in a more productive economic base and ensuring that the return to economic prosperity coincides with environmental protection.

Large investments in our essential physical infrastructure such as in public transit, transportation networks, social housing, installing solar panels, retrofitting buildings, fixing our decaying sewers and water mains, will all be crucial components of an effective stimulus package. Related tax measures could include refundable tax credits for home renovations, and for energy efficient buildings and appliances. Provisions could also be made for low-interest loans to renewable energy developers, and for accelerated depreciation on the production of energy efficient goods and services. And a high priority should be attached to doing whatever is necessary to eliminate the unacceptable third world conditions that exist in too many of our aboriginal communities.

In addition to physical infrastructure, we need to invest in our social infrastructure, to ensure the early childhood educators and geriatric home support workers can meet the needs of Canadians. Moreover, since it is likely that most physical infrastructure projects have a disproportionately male workforce, this is a way to ensure that women can also benefit from a stimulus jobs package.

Urgent action is also needed to address the immediate financial distress faced by Canadians, and to put adequate funds in the hands of the most vulnerable Canadians. Fortunately Canada is in a position to rapidly expand/adjust certain components of our social safety net to improve financial security for Canadians. We can enhance Employment Insurance (eligibility requirements, income replacement levels etc), restore a financial contribution by the national government, and recognize that an unemployed person is the same as any other unemployed person in Canada no matter what the regional unemployment rate. We must also expand the use of EI for training, and improve eligibility access to EI programs. Other steps include increasing the child tax benefit, the working income tax benefit and the GST credit, and implementing income tax cuts, but only for those at the lowest end by both lowering the lowest tax rate and raising the basic exemption below which no taxes are payable. (Consideration may have to be given to eventually assisting provinces with their increased welfare costs as more and more of the newly-unemployed exhaust or are unable to access EI).

It is important to be principled with respect to any changes on the tax front. Most experts including economists agree that, unlike direct spending, tax cuts (except at the lower income levels) will not result in a significant stimulus to the national economy. Taxpayers will save the largest proportion of any tax cut, and another chunk will leak out as imports are purchased.

Taxes are indeed “the price we pay for a civilized society”. During the recent U.S. election, Barack Obama responded to the shrieks of Sarah Palin that paying taxes was unpatriotic, by patiently explaining to Joe the Plumber, the contrary: that the extra taxes you may pay as a result of becoming more successful and earning more income, are not transferred to some stranger, but to a version of your former less successful self – a person who now needs the help to get ahead themselves. People who are now successful should care for the ones left behind, because in most cases they were once left behind themselves. More generally, our embrace of an economic system that can generate so much wealth should be balanced by our promotion of social programs that redress the economic imbalances that the system creates.

Whatever short term steps are taken on the spending, investment or taxation fronts, we must devise some mechanism to assure Canadians that the investment and spending is indeed furthering our long term interest in building a sustainable, dynamic social economy. We need some sort of national monitoring program that is open, accessible and accountable, and a national registry of projects receiving funds. During the U.S. election, Barack Obama endorsed the idea of a National Infrastructure Bank (or Bank for Infrastructure Development) that could determine the value of each project and its environmental impact, streamline the process of reviewing and signing off on major projects, and perhaps even raise money itself, or in connection with a network of local investment banks, regionally operated, that would invest in the best local organizations. A Bill proposing the creation of the bank is currently working its way through the U.S. Senate, and mandates a bipartisan board of directors, and a CEO to be appointed by the President and confirmed by the Senate. Canada should certainly consider something similar.

The proposed auto bailout illustrates well the need to monitor expenditures objectively and carefully. A bailout of the North American automobile industry should only very reluctantly be undertaken because of the catastrophic results of an immediate collapse. The public investment must carry very strict conditions. For example, supplicant companies must accept, say, a 3 year deadline for the production of a substantial proportion of fuel-efficient vehicles, as well as provide detailed plans to transform some of their factories into research and manufacturing centres for the development of light rail cars and high speed trains. We should not forget that the current corporate leadership of the big three North American auto makers are the ones who have spent millions of dollars fighting tighter emissions standards imposed by California and other states, and who, only a couple of months ago, moaned that their dire plights were not the result of their failure to anticipate the need for smaller more fuel-efficient cars, but the fault of consumers who let them down by first demanding and then abandoning gas-guzzling SUVs. (The Ford slogan of “Everything we do is driven by you” perfectly reflects the abdication of corporate leadership). The astonishing mediocrity of corporate leadership in this and so many other areas, notably financial, should lead us to be severely skeptical of allowing any of those persons responsible for the current crisis to have a serious role in taking us out of it.

One simple first step toward a responsible approach to our public finances and dealing with the projected $34 billion deficit for 2009-2010 and a possible $105 billion deficit over the next 5 years, is a firm commitment to ensure that ecological principles are integrated every step of the way into our budget, investment and planning processes. We must also seek out new sources of revenue to help finance the huge investments and spending. One such source could be a financial transactions tax – perhaps a 0.25% levy on the sale or transfer of stocks, bonds and other financial assets. This would be a relatively lucrative and progressive tax, and would go far to ensure that we do not leave an unbearable burden of debt to future generations. Another step could be the harmonization of the GST and provincial sales taxes which would not only help businesses across Canada and solidify the nascent national economic union, but also could be calibrated to restore an appropriate and acceptable level of consumption tax revenue to the national government.

Finally, bold short term action is needed on the financial front to ensure adequate credit for businesses and employers to help boost the economic recovery. We should of course be relieved that Canada has escaped the worst of the banking crisis, thanks in part to our conservative capital requirements requiring banks to maintain a ratio of 7% of their loans and investments, a ratio that is higher than the international requirement of 4%. But credit is very tight in the Canadian economy and businesses of all sizes, even with impeccable credit records, are unable to borrow what they need. The federal government has already bought $75 billion of mortgages from bank portfolios, offered temporary federal insurance on inter-bank loans to loosen the flow, invested $350 million in the Business Development Bank of Canada, and is now considering amendments to the Bank Act to allow it to buy shares in banks. With decidedly mixed results, the Office of the Superintendent of Financial Institutions has loosened the rules for so-called Tier I capital so that banks can count more as capital toward maintaining their minimum capital ratios. But more will have to be done to ensure that banks and non-banks get back in the business of lending again.

On the monetary policy front, with the Bank of Canada key lending rate now at historic lows, the Bank has only limited additional room for controlling the money supply by lowering the price of credit. But there are other avenues open to the Bank to expand credit in the financial system and get more money into the public’s hands. For example, the Bank can bypass the banks and buy for the first time a wide range of securities including commercial paper and other loans that are packaged into bonds.

The proposed National Securities Commission could enhance the capacity to raise capital now and for the Canadian businesses of the future, as well as provide much more effective investor protection. A strong regional component to the Commission will be important given the concerns of Alberta and Quebec, and as a way to ensure that the incestuous relationship that developed between Wall Street and the enforcement/oversight side of the U.S. Securities Exchange Commission which allowed the Madoff fraud and others to fester, will not be replicated between Canada’s major securities centre, Bay Street, and the Canadian commission.

Pension reforms are also necessary to ensure Canadians greater security from the vagaries of the stock market and ill-advised investment strategies. Already the federal government has loosened regulations to permit private pension plans to cover shortfalls in 10 years instead of 5, and most provinces which in fact have jurisdiction over 90% of the private pension plans, are moving in the same direction. The federal government is also considering new types of pensions – permitting multiple employers to jointly sponsor pension plans, and a hybrid plan to permit employees to help share the cost of a shortfall especially in defined contribution plans. But given the magnitude of the underfunding difficulties now emerging in private pension plans as companies go bankrupt and are relieved of their pension funding obligations, it may be advisable over the long term, to enhance the Canadian/Quebec Pension Plan, still the largest and most efficient pension arrangement in the country, covering all Canadians.

One case study in poor corporate leadership that merits close scrutiny involves Canada’s largest pension fund - the Caisse de dépôt et placement de Québec. The Caisse was in large measure responsible for Canada’s version of the sub-prime market mess. Fortunately, the $30 billion Asset-Backed Commercial Paper (ABCP) crisis has now been contained through the efforts of two men – the legendary fixer Purdy Crawford and the new Bank of Canada governor, Mark Carney – only in Canada, eh? But this was no thanks to the Caisse which is now in the process of writing down some $13 billion of ABCP to the detriment of its clients, after precipitating, to save itself and the other major ABCP investors, the freeze in the ABCP market that has been in effect since August 2007 and that has adversely affected the legitimate commercial paper market.

We most certainly need new financial regulations and oversight, and more competent corporate leadership, to ensure that these kind of risky securities never see the light of day again, together with the alphabet soup of so-called synthetic derivatives on which too many of our best and brightest misguidedly wasted their energy and talents. And investors need to realize that if an investment return seems too good to be true, it probably is.

International Engagement

As Canada joined the other members of the newly recognized Group of 20 at George Bush’s emergency summit last November, one could not fail to note how Canada’s relative global position has weakened particularly vis-à-vis the emerging markets, at least according to the traditional indices of national and global economic power. Fortunately Canada is well-positioned to recover a preeminent position in the 21st century for two reasons. National power and global influence will increasingly depend on a nation’s social stability, access to safe, clean sources of energy, clean air and water, a good health care system and adequate preparedness to withstand a pandemic. National power and global influence will also increasingly depend on a nation’s growing diversity of population, its ability to absorb new people and cultures and create a huge pool of human talent, which is firmly networked into the international community. Canada starts out reasonably well on both counts, although we need to improve our social safety net and our anemic environmental record.

More and more Canadians are global citizens – Canadians without borders – exploring the world or staying connected to our countries of origins more instantly, more easily, and more inexpensively than ever before. A recent study shows that three quarters of Canadians have traveled outside the country, and one half is closely connected with one or more foreign countries and is following international events closely. Canada provides a safe haven, and a stable base that permits more and more Canadians to build business and commercial links to their home countries and nurture global networks that are enormously valuable economically, socially and politically. We should encourage these networks and the associated employment opportunities for all Canadians, possibly using tax incentives and subsidies to assist new Canadians who create businesses based on their links to their home countries.

With the unlamented and widely ignored collapse of the most recent round of multilateral trade talks (Doha Round) after its drift into irrelevance as food prices soared and no progress was made on agricultural tariffs, we should explore how to strengthen our global networks through “New Economy relationships” with other countries around the world, going beyond the classic free trade agreement approach. For example, trade between Canada and India is still relatively small and our exports are predominantly minerals and agricultural and forest products. A senior advisor to the Asia-Pacific Foundation of Canada, Paul Evans, suggests sensibly that we should expand the economic ties between our two countries in different directions, through increasing science and technology cooperation, including university exchanges, and measures to address barriers to investment.

As we thoroughly integrate into the economic, social and political global networks of the 21st century, it is very important for Canada to play a significant and creative role shaping the structure and rules of global governance.

Yet at the recent G-20 Summit, the Canadian government regrettably took the very backward-looking position of supporting the then lame duck American president, George Bush, in opposing the European-led call for global regulation of the international financial markets. And virtually no thinking appears yet to have gone into a coherent Canadian position on the larger issue of building a new international institutional structure to replace/update the post-World War II international financial and monetary system.

Perhaps most urgently, Canada must be at the front ranks of the G-8 and G-20 in supporting the World Bank president's call for a vulnerability fund to dispense fast and flexible aid to developing countries which cannot afford bailouts and deficits, and which are still suffering from astronomical food prices. The economic crisis has already pushed 100 million people back into poverty, through no fault of their own, and will inevitably provoke dangerous unrest. One option is for countries to commit a certain percentage of their stimulus package to the vulnerability fund - perhaps 0.7% (parallel to the percentage of GDP that Canada and others have committed to and, shamefully, never yet succeeded in providing for international aid.

The 2008 stock market crash and world wide credit freeze has put an end to the post-war American dominance of the international economic order and has undermined the U.S. dollar as the world’s reserve currency. For decades no one seriously questioned the value of the American dollar, and the U.S. was able to consume much more than it produced and run enormous current account deficits. For better or for worse, countries like China, India, Russia and the Gulf States were willing to hold huge amounts of U.S. dollars as reserves, wrongly believing that this would protect them from sudden withdrawals of foreign capital, while it instead fuelled the global credit bubble.

As Niall Ferguson describes well in this latest book, The Ascent of Money, China’s willingness to hold U.S dollar securities as payment for the exports from China that allowed the Chinese economy to grow so phenomenally quickly, in turn helped keep interest rates low in the U.S. giving Americans the money to buy shares, flat screen TVs and homes, and then borrow against their homes to the hilt. And thus was created the global asset and credit bubble which finally burst in 2008. The global crisis is therefore as much the result of policy mistakes and a failure to counter the rapid build up of reserves in the emerging markets, as it is the result of greed and insanity on Wall Street. (Note the irony that China is effectively financing the Iraq War, even while protesting the conflict and financing its own highly questionable geopolitical spending in pursuit of resource security, in the Sudan and elsewhere).

Americans have now lost most of their credibility on the international financial stage. As Nobel Laureate Joseph Stiglitz notes acerbically, there is great hypocrisy in how the U.S. used to lecture the rest of the world about getting their economic house in order by imitating the American way – deregulation, privatization, freeing market forces, reducing deficits, lowering taxes. Few countries, especially those that suffered the indignities of the U.S.-inspired and IMF-imposed conditions for financial assistance during the 1990s financial crisis, now consider the American financial system and deregulation to be a model to follow.

Canada should play an active role in encouraging the international community to come together to design a new international regime to reflect the new power realities, and to manage in a more integrated way not just financial issues, but also climate change and trade.

In the IMF, for example, China holds only 3.5% of the voting rights despite the fact that it is the world’s third largest economy, while the U.S. has 17% and a veto over all significant IMF decisions. At the very least, a large and dynamic economy like China’s must be allocated more voting weight in the IMF, commensurate with a substantial increase in their contribution to the IMF’s capital base. And the IMF should expand its operations, reduce its controversial conditionality, and eventually establish a swap line with the central bank of China, as it has done with the European Central Bank and the U.S. Federal Reserve. This will ensure that the IMF will be able to react more quickly in future crises. Only recently have IMF loans finally been extended to Iceland ($2.1 billion), Hungary ($25.1 billion), Ukraine ($16.5 billion), and Pakistan ($7.6 billion), and a new IMF short-term liquidity facility now grants unconditional three month loans to emerging markets with manageable debts. But the initial delay in the IMF responding, for example, to the Iceland bank meltdown allowed Russia to step in quickly with a substantial contribution that was clearly motivated by its geopolitical aspirations in the Norwegian Sea.

In restructuring the IMF and increasing China’s weight and contribution, one can fully expect China to continue to complain about any assessment by the IMF as to whether the Chinese currency is being deliberately undervalued to give China a trade advantage. (China is currently blocking an IMF report in this regard). Yet however true this assessment might be, even if the report is published, the IMF has no enforcement capability. Therefore, any restructuring of the international institutions dealing with trade and finance must reassess the IMF jurisdiction over exchange rates and balance of payments problems and ensure coordination with the jurisdiction of the more recently created World Trade Organization (WTO) that is authorized to take action against illegal export subsidies or import taxes, of which an undervalued currency is the equivalent.

Canada should be very active in all discussions to design a new international regime to manage both climate change and trade at the upcoming United Nations Climate Change Conference in Copenhagen in November 2009. This is the follow-up to the Kyoto meeting which produced the U.N. Framework Convention on Climate Change. Dealing with climate change and the urgent need to reduce our carbon footprint on the planet remains a top priority for most nations despite the economic crisis. The central objective at Copenhagen must be to involve all major carbon emitters from both developed and developing nations and to move away from trade sanctions against countries that do not adequately support the environment. As Nicholas Stern, the former chief economist of the World Bank, recommends, participation and compliance is better obtained through transfers of finance and technology. China and others will certainly agree with this since they view climate change as a problem caused by the richer industrial nations. Whatever is ultimately achieved at the Copenhagen Summit, the WTO must be involved in a subordinate way to ensure that any “green tariffs” at the national level do not result in damaging trade distortions.

With a new and popular America president who has promised to “reengage” and “work constructively within the UN Framework Convention on Climate Change”, and who intends to be proactive on the environment, the international calculus for the Copenhagen Summit has changed considerably. Indeed perhaps a good sign is that Republican stalwarts like John Bolton are already starting to panic and ring alarm bells about a “disturbing trend” toward support for global governance in the Obama administration, and the possibility that Obama may bring into force certain international treaties such as the Climate Change Convention, with only the support of majorities in both Houses of Congress, rather than the stricter condition of a 2/3rds majority in the Senate.

Finally, Canada must be active with the other G-20 regulators of cross-border financial institutions that were tasked to form “supervisory colleges” of sorts to work out better international financial regulations and coordination. A number of ideas for coordinated international action include:

1.End the official status of rating agencies. Issuers should be banned from paying for ratings. Investors should pay privately, or the service should be publicly provided.

2.Draft an international code of conduct for Sovereign Wealth Funds (SWF) that will focus on transparency and maintaining purely commercial objectives of SWFs. (The IMF completed one such draft in October 2008). Although countries have rules to prevent foreign control of strategic assets, it is reasonable to be concerned about state-based investors especially when most of the trillions of dollars of funds are held by a small group of authoritarian countries – China, Saudi Arabia and Russia. Concentrated ownership by authoritarian governments is a strategic and economic concern to many, and merits a coordinated international response.

3.The Bank for International Settlements (BIS) that has been responsible for establishing international capital requirements for banks is preparing, together with the Financial Stability Forum, to make significant policy changes in the wake of the international credit freeze. A consensus has emerged that the so-called Basel II Accord that required banks to lower their reserves in good times but then increase them in bad times, is in fact the opposite of what is required for the capitalization of banks. Instead reserves must be built up in the good times so that there is a cushion that can be drawn upon during the bad times such as now.

4.Eventually we should consider international coordination with respect to a common approach for stabilizing and recapitalizing banks, and with respect to coordinated interest rate cuts.

Almost every aspect of our daily lives has a global dimension. All the serious challenges we face whether the current economic crisis, climate change, dreadful poverty, wars, sicknesses, nuclear proliferation, terrorism, all require global cooperation and global solutions, but also decisive national leadership at home.

The longer we fail to act coherently and effectively, both nationally and internationally, the narrower our options and the greater the potential for catastrophe.

With so many of us active outside Canada and globally-connected, Canadians must demand a clear and respected Canadian voice on the world stage and in the global corridors of power. Canada and Canadians can and must play a leading role in the pursuit of greater peace and humanity, a narrowing of inequalities across developed and developing nations, and greater respect for our fragile ecosystems and planetary survival.

There should be no doubt that with clear global vision and decisive national leadership, Canadians are uniquely positioned to be in the front ranks of a world without borders.