Note: I know you’re all probably expecting me to have a write-up on the Laurentian University omnishambles, but contrary to popular belief I both have a day job and require sleep, so you’re all going to have to wait another 24 hours for me to put that one together.  In the meantime…

A few months ago, I made the point that Canadian policymakers at both the federal and provincial levels have more or less given up on the idea of economic growth.  It barely features in throne speeches or political manifestos, long since having been replaced by promises about “pocketbook issues” or enhanced transfers to individuals (with nary a word about how to pay for it).  It’s not that these new spending priorities are bad – please, spend more on early childhood education! – but that we seem to have forgotten that we need eventually to pay for this.  And for that, we need economic growth.  Without it, we’re toast (and also, incidentally, if no one cares about growth, it’s not clear why they should care about universities or colleges either, or at least their knowledge-generating functions).

Breaking down the problem into a few different facets:

• Governing parties lose their intellectual capital quickly. There are very few Canadian governments that have introduced interesting policy ideas in their second terms (Chretien’s second term being the real outlier here). And at the federal level, we have a government which is not only a second-term government, but a minority one as well, which would reduce cognitive capacity for “big thinking” even if we weren’t in the middle of a pandemic.
• The Canadian public service is not and has never been – except possibly for a brief period in the 1990s when the country looked like the country was about to go over a cliff – a wellspring of new ideas. It exists mostly to evaluate and execute policies generated at the political level. Which, on the whole, is quite proper.
• At the federal level, thinking about economic growth has been impoverished for awhile. The NDP never talks about it because a good chunk of the party sides with the Greens in thinking it is bad. It’s been at least two decades since the Conservatives had any real ideas beyond lower taxes and doubling down on resource exploitation (Sean Speer is doing sterling work trying to get them to go beyond this but I’m not sure there is much evidence of take-up yet.) And the Liberals, while having some useful thinking about the connection between reducing poverty and increasing aggregate demand and some vague notions about how dropping slightly more money on science than the Tories is a Good Thing, genuinely seem to have trouble envisaging how technological development happens in the absence of government dropping cheques. So, let’s just say the intellectual soil isn’t super-fertile in the overgrown logging town we call a capital.
• In other countries, one method of ensuring that governments never run out of ideas is to have a robust independent think tank sector that churns them out. I won’t say this is always a success – London, for instance, has no shortage of think tanks but that hasn’t stopped the UK from becoming a quasi-failed state led by a cretinous troupe of simians stuffed into business suits – but it helps. We have a few, and some of them do good work, but they are tiny and have little pull with the media or on the hill. Canada 2020 had some pull with the current lot – mainly because they were drawn from the same central-Canadian Gen X networks – but except for the period when Mike Moffatt and Hannah Rasmussen were doing work for them, they were never that interested in economic policy (and never ever cared about the skills/education angle).
• In the absence of think tanks, what Ottawa has instead is a whole load of single-issue lobby groups – like CICan, Polytechnics Canada and Universities Canada, who may talk a lot about how their pet projects may increase economic growth, but they are (correctly) not entirely trusted by government because their suggestions are (properly, given their mission) massively self-interested. And frankly, an actual growth agenda needs to knot together actions across a whole bunch of sectors and the Universities Canadas of the world simply don’t do that kind of thing.
• In fairness, coherent growth policy is hard to do in federal countries, because the key levers are usually split between different levels of government. And the increasingly juvenile approach to federalism amongst Canadian governments makes it hard to execute cohesive growth policy.

Now, one might well ask: if all of this is true, how have Canadian governments ever managed to make progress on growth policy?  One plausible answer is that they haven’t, in a co-ordinated way at least, but that our market economy has managed to plug along regardless.  But this is too negative, because I can think of at least one serious attempt at growth policy working in Canada, and that was what occurred in the wake of the Royal Commission on Economic Union and Development Prospects for Canada (also sometimes known as the MacDonald Commission after its chair, the unlikely-monikered Donald MacDonald–Scots, man, smh).  Created by Trudeau père but eventually reporting to the Mulroney government, this document was largely responsible both for Canada’s acceptance of more liberal approaches to trade (both FTA and NAFTA can be traced directly to it) as well as of the more generalized modernization of both the welfare state and the tax system in the later half of the 1980s.  Obviously, neither the federal nor provincial governments were bound by the recommendations, but the themes tackled by the commission in its 3-volume report – and the 72 volumes of very detailed research studies that accompanied it – were hugely influential at both levels of government. Indeed, in some respects, they continue to be so: the Canada Training Benefit introduced in the 2019 Budget was to some degree inspired by the idea of a “Time Bank” for training, which appeared in the study looking at skills acquisition and economic growth.

Now, I am not sure that a Royal Commission cuts it in the 2000s: among other things, three years is considered much too slow now, and I suspect that deference to expertise might be a lot lower than it was 35 years ago.  But you can see how some kind of gathering of experts, with a precise mandate to focus on a “big” challenge like economic growth, might deal with a whole bunch of the barriers to good policy.  As an independent group, it would transcend narrow interest-group politics, and with the right mandate can work to knit together policy frameworks that span across policy silos.  It would attend directly to the task of looking at how growth can be encouraged, and if written correctly would likely generate a lot of ideas, not all of which would be universally applauded, but at least a few of which could be claimed by each political party, thus invigorating policy thinking right across the political spectrum and across both levels of government. 

Bottom line: there are several reasons that governments – particularly the feds – seem incapable of developing policies to improve growth, the main one being that that they are stuck for ideas.  So, let’s find a way to generate them.  Let’s reinvent the Royal Commission for the 21^st Century.   The alternative, I fear, is a persistent drift and ultimately a real blow to our ability as a country to envisage a future as a country which is serious about growing its knowledge-intensive industries.