Russia a natural partner for Canada
In this era of galloping globalization, geopolitical shifts and game-changing economic challenges, Canada has no choice but to develop much stronger economic linkages beyond North America. The primacy of the North American partnership, and the need to strengthen it, I believe, is a foregone conclusion. But our asymmetric dependence on the United States is a major risk exposure that must be balanced by new and more vibrant relationships with other countries.
The maturation of linkages with Europe is underway and urgently needed breakthroughs in the Asia-Pacific region are at least on the radar. But there are other unique opportunities as we develop a strategy for Canadian prosperity in the years ahead. A more substantial, committed and forward-looking relationship with Russia is a case in point.
With a population of 140 million, the world's largest national land mass, the world's largest Arctic presence, and a wealth of natural resource and agricultural potential, Russia is a natural partner for Canada.
Some might say we're too similar; that we are more competitors than collaborators. But in today's world of global networks of value creation that is no longer the case. Virtually every product we buy today has significant elements of value originating elsewhere. The research, the embedded technology, the innovation, the manufacture, the skilled labour and the components will inevitably be drawn from around the world. Even Canadian exports of goods and services often come back home embodied in imports. Similarly, market scale to enable efficient production, distribution, marketing, branding and finance now depend on worldwide reach and commercial integration. Neither Russia nor Canada has the market size to achieve competitive success in a world of countries with more than a billion people and trading blocs containing hundreds of millions.
Competitive success is about establishing and building durable Canadian roots and managerial leadership of tightly integrated networks of commerce and value creation that span the globe. Anything less is vulnerable to emerging competitors.
Notwithstanding high-profile examples like Research in Motion, Canada currently accounts for an extremely small percentage (about 2% or 3% and declining) of the world's innovation. And we are relatively poor when it comes to commercializing leading edge science. Our future as a knowledge-based economy will increasingly come from science, technologies and research related to the core economic drivers we love to disparage -natural resources and agriculture. "Hewing wood and drawing water" has gone high tech, while high tech is commoditizing at breakneck speed.
When you think of Canada's alternative economic futures in this way, the potential for teaming with Russia, and expanding commercial and technological linkage, begins to resonate.
Research collaboration around Arctic stewardship, natural resource opportunities and challenges, environmental imperatives, transportation and logistics, northern agriculture in a warming climate -all offer potential for a powerful partnership. And it's more than wishful thinking. Livestock breeding and crop selection in a northern climate; space and GPS technologies with numerous global monitoring applications; nuclear co-operation with applications in critical areas of medicine, computing and low-carbon energy; transportation technologies and approaches adapted to the environmental and ecosystem fragility of the North are very specific examples of low-hanging fruit that can be harvested through scientific and technological collaboration.
Joint initiatives between universities, research institutions and among private-sector organizations could put both countries at the leading edge internationally in areas vital to our economic future. But we need government-to-government framework agreements to define the modes of collaboration, deal with human mobility issues, security issues, funding mechanisms and so on. If government does not put the foundation in place, it probably will not happen.
Russia will soon be a member of the World Trade Organization, which will reduce the risks and uncertainty of trade and investment for Canadians and Canadian companies. With a framework in place that creates greater certainty and a fair basis for dispute resolution, companies in forestry, energy and mining from both countries will have endless opportunities to trade and to combine, often through joint ventures, to create highly advanced supply chains and value networks that can compete with the world's best.
The Russian economy is expected to be among the most rapidly growing in the world over the next 50 years. Governance and political risk remain, but Russian engagement with stable, democratic and non-imperial countries like Canada can only help.
It's time to go beyond the global value networks of professional hockey to forge a deeper, long-lasting partnership with Russia. Both countries can reach a higher plateau of knowledge-based competitive success. And, just maybe, we can develop co-operative approaches to managing the Arctic in a more peaceful, more economic and more environmentally sound way.
? David Emerson is a former federal Minister of Foreign Affairs Industry and International Trade.
Fury of poor would erupt without unions
There's no doubt where the global financial crisis of 2008, and the resulting worldwide recession, started. It was in the private sector. First in finance, then it spread to the "real" economy. We can argue about the precise causes of the crisis, and about whether subsequent policy responses were appropriate or not. But there can be no argument about where the whole problem started: squarely with business.
This makes it incredibly ironic that as Canada and the rest of the world are still crawling out of the recessionary muck, we face a torrent of vitriol aimed against trade unions that's more aggressive than anything since FDR and the New Deal.
The stripping of collective bargaining rights from public-sector workers in Wisconsin has captured headlines. But the same crusade is underway in many other jurisdictions. Dozens of U.S. states are pondering measures to limit or prohibit union rights, across increasingly far-flung swaths of the economy. Never mind that most of the world (including Canada, since the historic Supreme Court Health Services decision in 2007) considers collective bargaining to be a fundamental human right, and hence many of these new U.S. laws would be immediately struck down. (The United States, in contrast, never ratified most United Nations conventions on labour rights, and its constitutional protections for union rights are weak.)
Yet the politics of this anti-union tide, if not its precise policies, are certainly bubbling up here in Canada, too. Several mayors (such as Toronto's Rob Ford) have declared outright war on unions. Provincial politicians like Ontario's Conservative leader Tim Hudak (who has already painted labour arbitrators as Public Enemy No. 1) aim to fan the anti-union fires, for maximum electoral gain. If the Harper Conservatives should win a majority in the current election, I fully expect a similar tone to infect labour policymaking at the federal level.
How is it, then, that in the wake of the most spectacular failure of private enterprise in 80 years, the most pointed focus of populist animosity has been the very organizations that were formed to protect common working people against the excesses of private enterprise?
Why wouldn't populist jealousy be directed against bankers or CEOs, whose gluttony dwarfs the salaries and perks of any unionized workers? After all, Canada's big six banks alone paid out a record $9-billion in bonuses last year, while other Canadians struggled to make ends meet. Strangely instead, it's the humble garbage-collector on the receiving end of the vitriol.
Don't accept for a moment that this is because bankers' bonuses and CEO fortunes are determined by the "market," while union wages reflect some kind of "distortion." There's no bigger distortion than someone -anyone -who takes in eight or even nine figures in a single year, and whose behaviour is perverted by the all-encompassing drive to boost the share price, at any cost. More likely, the misdirection of modern populism reflects the business-friendly power of media and think-tanks, which glorify highly paid executives while demeaning those who perform the more humble tasks that really make our economy go round.
All this finger pointing against unions is misplaced and dangerous. It's misplaced: unions did not cause the financial crisis or the recession, unions did not cause deficits, unions did not cause $1.25 per litre gasoline. Corporations did all those things. The finger pointing is dangerous: an orchestrated effort to vilify and scapegoat any identifiable group of people, and to take away their rights, justified by economic tough times. This fundamentally undermines democracy; it paves the way to the marginalization and repression of other vulnerable groups.
Unions play a constructive and valuable economic role. That role is just as important during times of crisis as during times of vibrant growth. We limit the erosion of wages during times of mass unemployment, thus stopping deflation. We negotiate innovative provisions, like work-sharing and early retirements, which share the pain and preserve needed jobs until the recovery comes. We boost productivity by reducing turnover, facilitating lifelong learning, and forcing employers to treat labour as a valuable resource (rather than a cheap, just-in-time, throwaway input).
Above all, we push both employers and governments to act with a measure of fairness in the labour market, promoting equality, inclusion and hope. No society without free and vibrant unions is truly democratic. And no economy without widespread collective bargaining has ever attained truly mass prosperity.
Imagine if the Scott Walkers of the world had their way, and unions were somehow banned altogether. The non-union workers at the local fast food outlet would still be making minimum wage, with no benefits, no security, and no pension. But a crucial, constructive channel through which their hopes and frustrations could be directed, has now have been closed off. Who knows where and how the simmering fury of exploited, poor people would then bubble up?
Thoughtful opinion leaders in Canada's business community, therefore, should think twice before throwing in their lot with this anti-union bandwagon. We can work together to build prosperity, fairness and innovation. Or we can expend all our energy and creativity in a fight to the end, over whether unions are even allowed to exist. Even if business was to eventually win that fight, it's our whole society that would lose.
This makes it incredibly ironic that as Canada and the rest of the world are still crawling out of the recessionary muck, we face a torrent of vitriol aimed against trade unions that's more aggressive than anything since FDR and the New Deal.
The stripping of collective bargaining rights from public-sector workers in Wisconsin has captured headlines. But the same crusade is underway in many other jurisdictions. Dozens of U.S. states are pondering measures to limit or prohibit union rights, across increasingly far-flung swaths of the economy. Never mind that most of the world (including Canada, since the historic Supreme Court Health Services decision in 2007) considers collective bargaining to be a fundamental human right, and hence many of these new U.S. laws would be immediately struck down. (The United States, in contrast, never ratified most United Nations conventions on labour rights, and its constitutional protections for union rights are weak.)
Yet the politics of this anti-union tide, if not its precise policies, are certainly bubbling up here in Canada, too. Several mayors (such as Toronto's Rob Ford) have declared outright war on unions. Provincial politicians like Ontario's Conservative leader Tim Hudak (who has already painted labour arbitrators as Public Enemy No. 1) aim to fan the anti-union fires, for maximum electoral gain. If the Harper Conservatives should win a majority in the current election, I fully expect a similar tone to infect labour policymaking at the federal level.
How is it, then, that in the wake of the most spectacular failure of private enterprise in 80 years, the most pointed focus of populist animosity has been the very organizations that were formed to protect common working people against the excesses of private enterprise?
Why wouldn't populist jealousy be directed against bankers or CEOs, whose gluttony dwarfs the salaries and perks of any unionized workers? After all, Canada's big six banks alone paid out a record $9-billion in bonuses last year, while other Canadians struggled to make ends meet. Strangely instead, it's the humble garbage-collector on the receiving end of the vitriol.
Don't accept for a moment that this is because bankers' bonuses and CEO fortunes are determined by the "market," while union wages reflect some kind of "distortion." There's no bigger distortion than someone -anyone -who takes in eight or even nine figures in a single year, and whose behaviour is perverted by the all-encompassing drive to boost the share price, at any cost. More likely, the misdirection of modern populism reflects the business-friendly power of media and think-tanks, which glorify highly paid executives while demeaning those who perform the more humble tasks that really make our economy go round.
All this finger pointing against unions is misplaced and dangerous. It's misplaced: unions did not cause the financial crisis or the recession, unions did not cause deficits, unions did not cause $1.25 per litre gasoline. Corporations did all those things. The finger pointing is dangerous: an orchestrated effort to vilify and scapegoat any identifiable group of people, and to take away their rights, justified by economic tough times. This fundamentally undermines democracy; it paves the way to the marginalization and repression of other vulnerable groups.
Unions play a constructive and valuable economic role. That role is just as important during times of crisis as during times of vibrant growth. We limit the erosion of wages during times of mass unemployment, thus stopping deflation. We negotiate innovative provisions, like work-sharing and early retirements, which share the pain and preserve needed jobs until the recovery comes. We boost productivity by reducing turnover, facilitating lifelong learning, and forcing employers to treat labour as a valuable resource (rather than a cheap, just-in-time, throwaway input).
Above all, we push both employers and governments to act with a measure of fairness in the labour market, promoting equality, inclusion and hope. No society without free and vibrant unions is truly democratic. And no economy without widespread collective bargaining has ever attained truly mass prosperity.
Imagine if the Scott Walkers of the world had their way, and unions were somehow banned altogether. The non-union workers at the local fast food outlet would still be making minimum wage, with no benefits, no security, and no pension. But a crucial, constructive channel through which their hopes and frustrations could be directed, has now have been closed off. Who knows where and how the simmering fury of exploited, poor people would then bubble up?
Thoughtful opinion leaders in Canada's business community, therefore, should think twice before throwing in their lot with this anti-union bandwagon. We can work together to build prosperity, fairness and innovation. Or we can expend all our energy and creativity in a fight to the end, over whether unions are even allowed to exist. Even if business was to eventually win that fight, it's our whole society that would lose.
It's the thought that counts
Coming, as it does, on the heels of their March 2011 budget, the Conservatives' election platform offers few surprises. For better and worse, it reiterates many of the party's budget commitments: A renewal of the ecoENERGY home renovation tax-credit program, increased support for seniors, a children's arts tax credit and the purchase of the F-35 fighter jets. But the platform also contains many long-standing conservative policies, several of which deserve a hearty thumbs-up. These include: Phasing out public political subsidies, which disproportionately benefit the Bloc Québécois; presenting a bill to rid the country of the costly and ineffective long-gun registry; and reforming the Senate. The Conservatives' proposed omnibus crime legislation, which rolls at least 11 bills into one, would be passed within 100 days of a new Tory government taking office.
The platform also maintains planned corporate tax cuts and offers a pleasant surprise: Eliminating the deficit one year earlier than forecast (according to the Tories' somewhat contentious math, at least). Even under this scenario, however, Canadians will still see their national debt increase until 2014; it would have been more pleasant had the Tories rolled this date back by an additional year or two.
If the books are balanced and the Tories are still in office in 2014 -we are promised -Canadian families with children under 18 would benefit from a welcome change to the tax structure: Income splitting for families. This measure would equalize the tax burdens of single-and dual-income households that bring home the same combined wage. That would make it possible for more families to have one parent care for their children at home, rather than relying on daycare and a second job for daddy or mommy.
The Tories also hold out other, far more dubious, carrots, in the form of increased fitness credits for children and adults, which, likewise, are reserved for the days when the budget is balanced three years from now. As with income-splitting, these baubles may well be forgotten by the time 2014 rolls around. Three years is a lifetime in politics, and the Tories' 2014-targeted promises should be seen as akin to the professions of love offered by young paramours who, at their high school graduation, promise to marry one another ... after they've both finished with college.
Which is to say: It's a nice thought -but a lot can happen in the intervening years to make you forget it.
The biggest elephant in the room remains health care. The Liberals call it the "sleeper issue" and are determined to shake voters awake, by challenging the Conservatives to match their commitment to renewing a 6% escalator clause in the next round of federal health transfer negotiations in 2013. The Conservatives have promised to renew health-care funding, but properly make no mention of the escalator clause in the platform. However, Mr. Harper has stated that he supports a regular 6% increase.
Mr. Harper's attitude is disappointing: Two years in advance of the accord's renewal date, it does not make sense to tie the federal government to an arbitrary number, nor to an automatic escalator. There are many other, more market-oriented means of improving health care without additional federal dollars, and these should be explored before throwing more taxpayer money at the system.
Other Conservative measures, such as requiring bureaucrats to eliminate one existing regulation for every new one they enact, may make good sound bites on the campaign trail, but would be entirely impossible to put into practice; a better policy would simply have been to set an overall target for regulation reduction. The Conservatives also have pledged to implement a one-year review of federal programs to find what they hope will be about $4-billion in savings; whether that number is more than wishful thinking is unclear, as savings have yet to be identified. In any event, all politicians say they will find massive waste and inefficiencies in the existing system; few, once elected, seem to find it.
Overall, the Conservatives' platform is a stay-the-course program, ornamented with specific vote-buying pledges and elements of eyebrow-raising political science fiction, but which at least has the virtue of staking out the right ideological ground and offering modest progress toward reducing taxes and slaying the deficit. Not the most exciting fare on offer, but still preferable to the explicitly Trudeauvian, big-state vision offered by the other two federalist parties.
The platform also maintains planned corporate tax cuts and offers a pleasant surprise: Eliminating the deficit one year earlier than forecast (according to the Tories' somewhat contentious math, at least). Even under this scenario, however, Canadians will still see their national debt increase until 2014; it would have been more pleasant had the Tories rolled this date back by an additional year or two.
If the books are balanced and the Tories are still in office in 2014 -we are promised -Canadian families with children under 18 would benefit from a welcome change to the tax structure: Income splitting for families. This measure would equalize the tax burdens of single-and dual-income households that bring home the same combined wage. That would make it possible for more families to have one parent care for their children at home, rather than relying on daycare and a second job for daddy or mommy.
The Tories also hold out other, far more dubious, carrots, in the form of increased fitness credits for children and adults, which, likewise, are reserved for the days when the budget is balanced three years from now. As with income-splitting, these baubles may well be forgotten by the time 2014 rolls around. Three years is a lifetime in politics, and the Tories' 2014-targeted promises should be seen as akin to the professions of love offered by young paramours who, at their high school graduation, promise to marry one another ... after they've both finished with college.
Which is to say: It's a nice thought -but a lot can happen in the intervening years to make you forget it.
The biggest elephant in the room remains health care. The Liberals call it the "sleeper issue" and are determined to shake voters awake, by challenging the Conservatives to match their commitment to renewing a 6% escalator clause in the next round of federal health transfer negotiations in 2013. The Conservatives have promised to renew health-care funding, but properly make no mention of the escalator clause in the platform. However, Mr. Harper has stated that he supports a regular 6% increase.
Mr. Harper's attitude is disappointing: Two years in advance of the accord's renewal date, it does not make sense to tie the federal government to an arbitrary number, nor to an automatic escalator. There are many other, more market-oriented means of improving health care without additional federal dollars, and these should be explored before throwing more taxpayer money at the system.
Other Conservative measures, such as requiring bureaucrats to eliminate one existing regulation for every new one they enact, may make good sound bites on the campaign trail, but would be entirely impossible to put into practice; a better policy would simply have been to set an overall target for regulation reduction. The Conservatives also have pledged to implement a one-year review of federal programs to find what they hope will be about $4-billion in savings; whether that number is more than wishful thinking is unclear, as savings have yet to be identified. In any event, all politicians say they will find massive waste and inefficiencies in the existing system; few, once elected, seem to find it.
Overall, the Conservatives' platform is a stay-the-course program, ornamented with specific vote-buying pledges and elements of eyebrow-raising political science fiction, but which at least has the virtue of staking out the right ideological ground and offering modest progress toward reducing taxes and slaying the deficit. Not the most exciting fare on offer, but still preferable to the explicitly Trudeauvian, big-state vision offered by the other two federalist parties.
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