Another Chance for Canada
After nearly a decade of traumatic change, Canadians have earned another chance.With progress on government deficits, low and stable inflation, and economic growth on the rebound, we have a chance to do things right this time. The challenge will be to learn lessons from the past, and to begin to address some of the damage done by both government and industrial restructuring.
Think back to 1945, when our predecessors set the course for post-war and post-depression recovery. The federal government had a huge burden of war debt, but it made a commitment to both economic and social renewal — family allowances, housing, education, and other measures to help families get back to civil life. These investments recognized that a lot of people came out of the war damaged — physically. emotionally, and financially.
It took 25 years to get there, but by the late 1960s, it was clear that post-war policies helped to generate economic growth, to create a comprehensive social security system, and to dramatically reduce the public debt.
We now have to plan for a post-deficit, post-stagflation Canada. And the big issue is where to invest. One lesson stands out from the pain of recent times — we have to pay down much of the debt. Never, does Canada want to get into that financial quagmire again.
But paying down the debt is only one investment. There must be others which address the damage of rapid restructuring and create the foundation for success in a knowledge-based society. What should be on the list?
1. Social cohesion
The war effort and post-war success created a rich legacy of social cohesion. Canadians developed a strong sense of collective enterprise, of pooling risk, of participating in community life.
How much of that cohesion has been undermined by the ravages of restructuring? When social security systems are curtailed, when plants close and jobs are lost, when funding for community agencies is slashed, vital social connections are lost. People are alienated, burned out, losing faith in themselves and in the political process.
While there is a world-wide tendency for confidence in governments to decline, Canada is on the leading edge. Confidence in government has fallen further and faster here than it has in the United States.
To restore respect for institutions and the sense of collective enterprise, investments must be made that mobilize the energy of citizens working together. These investments should include a mix of large and small community-based ventures, focused on the needs of local citizens. The small ones may include playgrounds, day care, job creation, literacy, services for the elderly. The big ones may involve a national commitment to give children a healthy start on life.
Building a healthier democracy is also part of social cohesion. Governments can also begin to reestablish a sense of connection to citizens: by providing information so decisions are more transparent; by establishing clear accountability for the outcomes from tax and spending programs; and by using more deliberative processes for public participation in policy debate processes which permit citizens to reflect on difficult policy issues where values are in conflict.
2. Human development
Restructuring has created lots of winners, but it has also left Canada with a polarized and traumatized population. Many people have been pushed to the margin. Most of them share one common handicap — they lack skills and education to fit the current world of work.
Here we have some major deficits. Three come to mind: a) the young people who continue to drop out of the education system, or lack necessary literacy skills; b) the people who managed to earn a living in the old industrial structure, but who cannot adapt to the new skill requirements; and c) the people who have lots of education, but, because of seven years of high unemployment, have never found the job that matches their skill, and thus have not acquired the experience to help them compete today.
To be successful, a knowledge-based society has to offer rich learning opportunities for everyone. It must start with the understanding that learning curves matter. Human capital is built over time. Early childhood experience shapes the adult.
Governments provide much of the infrastructure for education and training — they build schools, set the standards for day care and training. But this is a joint enterprise. Employers have to invest in training, in internships, and in the work-family interface. Families have to invest in raising children and in their education. Communities can do much to support families and to create learning opportunities for people who are hard to reach.
Now that the economic fundamentals are in place, Canada needs to pay down the debt. But at the same time, it must invest on three fronts: not just physical and technological capital, but also knowledge capital and social capital.
All three are essential if Canada is to make good on its new chance at collective prosperity.
Judith Maxwell is President of Canadian Policy Research Networks (www. cprn. com) She is based in Ottawa.