www.policymagazine.ca September – October 2013 1 Canadian Politics and Public Policy

Parliament: Stephen The New Harper Session

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2 From the Editor: Starting Over, Again

Canadian Politics and Public Policy

EDITOR L. Ian MacDonald [email protected]

ASSOCIATE EDITOR Lisa Van Dusen [email protected]

CONTRIBUTING WRITERS Thomas S. Axworthy Andrew Balfour Brian Bohunicky Derek H. Burney Catherine Cano Margaret Clarke The message of Stephen Harper’s July 15 cabinet shuffle was one of continuity and change. PMO photo Celine Cooper Fen Hampson COVER PACKAGE: PARLIAMENT: THE NEW SESSION Daniel Gagnier Robin V. Sears Brad Lavigne 3 Harper’s Quest for a New Agenda and a Legacy Kevin Lynch Jeremy Kinsman Geoff Norquay Velma McColl 7 The Making of the Speech From the Throne Geoff Norquay Bruce Carson Zach Paikin 11 A First Nations Agenda for the Throne Speech Robin V. Sears Tom Mulcair Gil Troy 14 Speech From the Throne: Harper Can Run But He Can’t Hide WEB DESIGN Nicolas Landry THE FEDERATION [email protected] Daniel Gagnier GRAPHIC DESIGN 17 Council of the Federation: Default Mechanism or Relic From the Past? AND PRODUCTION Velma McColl Monica Thomas Our Energy Future: A Little More Ambition Please [email protected] 21

Policy FEATURES Policy is published six times annually Kevin Lynch and Karen Miske by LPAC Ltd. The contents are The Curious Case of Rising Income Inequality copyrighted, but may be reproduced 24 with permission and attribution in Alison Redford print, and viewed free of charge at 30 What We Saw at the Floods: Albertan Resiliency and Canadian Solidarity the Policy home page at www.policymagazine.ca. Martin Goldfarb 33 Getting it Right: The Art and Science of Competent Polling Printed and distributed by St. Joseph Communications, 1165 Kenaston Patrick Gossage Street, Ottawa, Ontario, K1A 1A4 38 The Sorry State of Our Political Morality Thomas S. Axworthy Special thanks 41 A Shortage of Tolerance In a Sectarian Age to our advertisers. Gary Rackliffe 44 Smart Grids – A Network in Transition

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From the Editor / L. Ian MacDonald Starting Over, Again

elcome to our issue featur- Carson looks at one challenging politi- Also in this issue, we feature a person- ing a cover thematic on the cal file, aboriginal issues, and proposes al reflection by Alberta Premier Alison W second session of Canada’s a First Nations agenda for the throne Redford on what she saw at the floods 41st Parliament. For the prime minis- speech. While there’s no shortage of that ravaged her province in June. ter and his government, the Speech positive rhetoric on First Nations is- Apart from the unprecedented scale from the Throne represents an oppor- sues, notably housing and education, of the disaster, she writes “the second tunity to turn the page on the most there have been few positive out- thing that struck me and will stay querulous parliamentary session in comes. Carson proposes an ambitious with me forever is the overwhelming memory and to define an agenda for eight-point aboriginal issues agenda. strength and resolve of Albertans, cou- the second half of their majority man- Opposition Leader Tom Mulcair pro- pled with the incredible generosity of date, one that would take them into Canadians.” the next election in the fall of 2015. poses an NDP agenda for the new ses- sion, also suggesting he will hold the Canada’s political pollsters had an- The throne speech follows a major government to account for the prom- other bad spring when they complete- cabinet shuffle in July, one that sig- ises of the throne speech. Mulcair ly missed Christy Clark’s surge down nified both continuity and change. writes that Harper will “have to back the home stretch of the BC election in On the continuity side, senior min- up the ceremony of a throne speech which her Liberals defeated the heavi- isters such as Jim Flaherty in Finance with substantive action.” ly favoured NDP. Martin Goldfarb, the and John Baird in Foreign Affairs, re- dean of Canadian pollsters, offers his mained in the same portfolios. As for Income inequality may not be a sub- take on why the polls and media have generational change, Harper promot- ject for the throne speech, but it’s been getting it wrong. Not surprising- ed eight young faces from the Con- increasingly an important topic on ly, methodology plays no small part. servative back bench, four of them the global public policy agenda. Con- women. The cabinet boasts – at 12 – tributing Writer Kevin Lynch and his Veteran political observer Patrick the largest number of women of any BMO Financial Group colleague Karen Gossage reflects on the sorry state of in Canadian history. Miske write that for citizens in many Canada’s political morality, from the Our chief political writer, Robin Sears, countries, “rising income inequality Senate expenses scandal in Ottawa, notes that the shuffle and throne and declining personal expectations to the gas plants cancellation costs speech represent not only Harper’s appear to be part and parcel of the in Ontario, to the parade of disgraced quest for a new agenda, but the shap- new global reality.” They look across mayors in Quebec. He writes: “It is ax- ing of his political legacy. But in the OECD economies and assess where iomatic that the longer and stronger management terms, Sears observes Canada comes out on this issue. your enjoyment of power, the weaker that Harper also needs to make major your moral compass--and, the stron- changes to the Prime Minister’s Office, his is an interesting time in our ger your belief in your infallibility.” a place where grown-ups are in short federation, but then as Daniel From the Arab Spring to the Arab supply. As he writes: “This PMO can- T Gagnier observes, creative ten- Summer, Tom Axworthy decries an not function without more seasoned sions aren’t new, beginning with the absence of tolerance in a sectarian age. talent at the helm.” division of powers in the Constitu- “Excessive devotion to the doctrines Contributing Writer Geoff Norquay, tion. Energy is the latest national of a religion, sect or group,” he writes, who has worked on several throne conversation, and he commends the “threatens peace and order both with- speeches, explains why an SFT gal- premiers for “achieving the degree of in and between states.” consensus they did for their progress vanizes the bureaucracy as does no Finally, Gary Rackcliffe, head of smart other event. Looking ahead to this report” towards a Canadian energy strategy in July. grid development at ABB North Amer- throne speech, he notes that the gov- ica, offers a tutorial on this leading- ernment’s top priority remains bal- For her part, Velma McColl, our lead edge technology that is helping Cana- ancing the budget by 2015, and that writer on clean energy and the envi- da’s electricity industry achieve higher there won’t be a lot of money to pay ronment, agrees. “We are moving to- margins while leading the way in re- for new initiatives. What Stephen wards common ground on what the ducing greenhouse gas emissions. Harper’s writers are looking for is in- elements of a strategy might be,” she novative ideas that don’t cost much. writes, but adds it’s time to step up the Former Harper policy adviser Bruce ambition and political brokering.

Policy 3

Prime Minister Stephen Harper enjoys a lighter moment with Finance Minister Jim Flaherty and colleagues before the class photo of the cabinet shuffle on July 15. The message of the shuffle was one of continuity and change, with senior ministers such as Flaherty and John Baird remaining in their roles at Finance and Foreign Affairs, while eight new ministers, including four women, were promoted from the back bench. PMO photo Harper’s Quest for a New Agenda and a Legacy Robin V. Sears

abinet shuffles, like nostalgia, The July cabinet shuffle was long on cosmetics and short ain’t what they used to be. on strategic import, and was accompanied by the leak C Old-timers like to bore young politicos of the “enemies list” memo. Next comes a throne speech with their tales of big shuffles back in the day, “When ministers mattered!” fraught with intensely tangled expectations, positive and But as with nostalgia about every gold- negative. Before the next election, this new Harper team en era, aging memory and the mists of needs to pull off the European trade deal, the Keystone history do distort. XL pipeline and some important changes to and the bi- With the retirement of Senator Marjo- rie LeBreton from cabinet, Jim Flaherty zarre mismatch between Canada’s human capital and at Finance is the lone minister still the continuing serious skill shortages in key industries serving in the same portfolio as when the Harper government took ofice in and regions. Whether they, and the Prime Minister, suc- 2006. The next longest serving minis- ceed will determine his chances for re-election and of an ter in the same role is Gerry Ritz, who has been at Agriculture since August enduring legacy that matters to Canadians. 2007. Flaherty also assumes LeBreton’s former role as vice-chair of the cabi- net’s Planning and Priorities

September/October 2013 4 Committee (P&P). It’s also true that In every cabinet since the final Trudeau days, a thread the shuffles that moved the inner core dissected by shuffle analysts has always been future of any cabinet – Finance, Foreign Af- fairs, Treasury Board – in days gone by leadership implications. It is a mark of Harper’s solid hold often signaled big changes in policy, on party loyalty and power that tightening the leash on the leaders’ retirement plans, and election potential ankle-biters around him, those seeking to position timing. But the central figures in the themselves to succeed at his expense, seems once again not senior portfolios all kept their jobs in this one. The changes were the injec- to have been a factor. tion of new talent at the more junior portfolio levels – eight new ministers, downgrade was Jason Kenney, jealous- for end-of-term marking, is new. Tra- four men and four women – happy ly seen by some colleagues as having ditionally, mandate letters – welcom- news for them, fun to handicap, but used his Citizenship and Immigration ing messages from the PM to a new probably not consequential at the portfolio to build a nationwide team minister – started out as a cheerlead- strategic level. In terms of gender bal- of “New Canadians” as supporters. ance, the 12 women in the new Harp- ing call for hard work and team soli- But the charge is dubious, given that er cabinet is the most ever in Ottawa. darity, with a list of priorities that the Kenney has been tasked to deliver this ministry should consider. Under this In every cabinet since the final Trudeau government’s crucial labour market government, they have morphed into days, a thread dissected by shuffle ana- reform agenda. a highly specific set of instructions, lysts has always been future leadership Cabinet committee roles often say as with the caution that freelancing and implications. It is a mark of Harper’s much about ministers’ clout as their personal enthusiasms are unwelcome solid hold on party loyalty and power portfolios and in Kenney’s case he also until this homework is successfully that tightening the leash on the po- remains chair of the powerful Cabi- completed and turned in. No more, “I tential ankle-biters around him, those net Operations Committee (Ops). On had an interesting idea suggested by a seeking to position themselves to suc- the other hand, the skills dossier is business leader last week” discussions ceed at his expense, seems once again very problematic in terms of federal- at cabinet committee or at the now not to have been a factor. provincial relations, as the provinces rare meetings of the full cabinet. Such This is quite a fascinating dog-that- made clear at the Council of the Fed- Mulroney – and Martin-era brain- didn’t-bark element of the Harper era. eration meeting in July, unanimously storming around the cabinet table Think back to the 1993-2003 decade denouncing the Canada Job Grant would earn the hapless newcomer a when Jean Chrétien and Paul Martin program as an invasion of their juris- painful timeout in the corner of this and their putative allies jabbed and el- diction in education and training. So cabinet room – facing the wall. bowed each other endlessly at the cab- perhaps Kenney’s critics will be prov- inet table. Or Brian Mulroney’s unfor- en right, chuckling at his being offered Harper’s promotion of those tunate attempt to give Kim Campbell a a suicide chair at the cabinet table. loyal to him, balanced by strong cabinet platform for her launch gender, region, and ethnicity in the dying days of his government. arper’s promotion of those are no different from Sir John Or the angry departure of John Turner loyal to him, balanced by gen- from cabinet in 1975, and the suspi- der, region, and ethnicity are A.’s challenges nearly 150 cions that wafted for years around all H years ago. But his focus on a no different from Sir John A.’s chal- those thought to have been his sym- lenges nearly 150 years ago. But his fo- crisp set of must-dos for each pathizers at the table. cus on a crisp set of must-dos for each minister, delivered with a This time, the only possible candidate minister, delivered with a manage- that pundits were able to finger for a ment consultant-like report card form management consultant-like report card form for end-of- term marking, is new.

This rigorous focus on an incremen- tal, transactional agenda is assailed by critics and allies alike, all decrying the lack of a Big Idea that could mark the Harper decade’s legacy. Cutting taxes on hockey pads and plastic toolboxes from Canadian Tire may have been a good campaign tactic but as a political legacy they are merely fodder for car- toonists. However, like Beliebers’ loy- alty to their teen idol – in defiance of a lengthening list of the young singer’s spreading black stains – true-believer Generational change: Harper out for a walk on the grounds of Rideau Hall with his new ministers, Harper fans say we just don’t under- including (from left), Chris Alexander, Kellie Leitch, Candice Bergen and Shelley Glover. PMO photo stand the genius of his method.

Policy 5 Sadly, for them and for this govern- the government’s steady evisceration ay and Jim Prentice. Three remain, ment, that is not the way legacies are of the external sources of policy coun- but MacKay has been moved into the made or judged. sel to the government – from the gut- far lower profile role of Justice from ting of Statistics Canada’s indepen- Defence, although in terms of a post- One might hope that adding dence to the slow strangulation of the political career, he could one day as a dozens of exemptions to the Rights & Democracy Institute – are former justice minister practise law in tax code to reward dieting, insider concerns, not ballot-question any Canadian province. Baird was de- decisions for voters. termined to remain at Foreign Affairs homework and avoiding and his service as this PM’s go-to guy, exposing your kin to the Indeed, the elevation of Pierre Poilievre, probably among the the from one portfolio to the next, meant well-documented risks of most disliked members of the 41st Par- that he could not be moved. communal daycare with liament, and the retaining of Peter Van The rumour mill in Ottawa and To- strangers, would congeal into Loan as House Leader, are the Prime ronto had Flaherty leaving in this a widely embraced political Minister’s raised middle finger to all shuffle, as a result of his recent health vision. It doesn’t. those critical of the thuggish tone of challenges, permitting a new minister communications this government to get established before the budget has been proud of from the day of its next spring. Now the rumours are that first Cabinet swearing-in ceremony. he may step down next summer, retir- ne might hope that ad- Clearly, the increasingly tight circle of ing to Bay Street, as a hundred years ding dozens of exemptions loyalists around Harper believe that a of Canadian finance ministers have to the tax code to reward diet- O touch of the lash is all that is required done. Yet he says he looks forward ing, homework and avoiding exposing for the increasingly restive caucus. to budgetary balance by 2015, which your kin to the well-documented risks would prove to be his political legacy of communal daycare with strangers, When things begin to go should he decide not to run again. would congeal into a widely embraced political vision. It doesn’t. This new sideways – as they do without Smart and capable newcomers like Harper team needs to pull off the Eu- exception for every long- Chris Alexander at Citizenship and Im- ropean trade deal, the Keystone XL term government – it is not migration and Kellie Leitch at Labour pipeline and some important changes good enough to be feared will quickly come to understand that to Canada’s bizarre mismatch between there is little ministerial independence 300,000 immigrants and refugees per to survive. To be respected, from this command and control PMO. even loved, is a far better year, the highest post-secondary grad- The repercussions of the sad depar- uate rate in the world after South Ko- protection in hard times than ture of Harper’s former chief of staff rea, and continuing serious skill short- a brandished bullwhip. Nigel Wright, one of the few adults ages in key industries and regions. Jobs in PMO, are still being felt across the without people, as has been noted, government. and people without jobs. he deliberate leak, on the gov- Still, this PMO-driven government Failure to deliver on at least two of ernment’s very renewal day of cannot function without more sea- the three will leave the Harper legacy T smiling fresh cabinet ministers soned talent at the helm, and like in the same category as John Diefen- beaming at their elevation, of a memo Kremlinologists of old, Langevin ob- baker’s or R.B. Bennett’s – irrelevant calling for each minister’s office to cre- servers are wondering whether the to most Canadians, quickly erased by ate an enemies list for their incoming PM has the wisdom to reach outside successors, and a disappointment to boss, is some proof that further pun- his own circle to get him through this all but the most uncritical of his ag- ishment of dissent may not be a pru- difficult period of the Senate expenses ing, shrinking fan base. dent strategy for a government com- scandal, which became the headline A political scientist might argue that ing to the end of its term after nearly of the spring sitting. this is unfair, and minimizes the long- a decade in power. That was a knife blow delivered by an unhappy insider. It is fair to say that Trudeau might term impact of such achievements not have survived far beyond his 1972 as the Americanization of the justice That one of those staffers aparently near-death minority experience if he system with more fixed prison terms, sabotaged the government’s best day had not brought in Jim Coutts as his more inflexibility for judges and pros- in months is perhaps proof of old-tim- principal secretary after regaining a ecutors, and a consequent bump up in ers’ persistent caution to the PM that majority in 1974. Derek Burney, a Canada’s incarceration rate. when things begin to go sideways – as civil servant from Foreign Affairs, of Others might point to the streamlin- they do without exception for every all unlikely places, played a similarly ing of the environmental safety pro- long-term government – it is not good transformational role in a troubled cesses in assessing major projects, and enough to be feared to survive. To be Mulroney PMO from 1987 to 1989. Is claim that future pipeline successes respected, even loved, is a far better there someone of that stature in the are its reward. More likely, pipeline protection in hard times than a bran- Conservative orbit, a grown-up who leaks and disasters such as Lac-Mé- dished bullwhip. can bring gravitas and maturity to the gantic will be laid at the feet of the Four ministers originally came into PMO, someone to shape and shep- cutback in regulatory oversight and cabinet in this government with any herd a throne speech that will give environmental assessment rules. But public profile or independent status – the Conservatives a new agenda for Harper understands that these, like John Baird, Jim Flaherty, Peter MacK- the second half of their mandate?

September/October 2013 6 Few throne speeches will have had Few throne speeches will The most successful Canadian federal to endure such cruel expectations as have had to endure such governments get a decade or so before this next outline of the Harper vision being dismissed. In the Trudeau/Turn- for Canada. If it is well received and cruel expectations as this er, Mulroney/Campbell and Chrétien/ defended in the opening of the fall next outline of the Harper Martin cases, the dismissal was sud- session, Conservatives can breathe a vision for Canada. If it is well den and the verdict was swift: be gone. The Harper government has probably little easier about the coming winter. received and defended in the It is, however, hard to see what magi- been more fearless, and imprudent, cal ingredients could be added to this opening of the fall session, in its enthusiasm for antagonizing its government’s increasingly tired po- Conservatives can breathe a opponents – extending bizarrely this litical menu to achieve such a victory. summer to the leaked memo on Nixo- little easier about the coming nian-style enemies lists. Crime is a thoroughly beaten political winter. horse. Further public whipping of civ- Even more foolishly it has begun to alienate its own base. The defection il servants is useful sport only for the of a disgruntled MP is not usually a most dedicated angry partisans. As for called the “tar sands” rather than the oil sands, and he even questioned the regime-shaking event. But first the “Canada’s Economic Action Plan” and Senate expense scandals and then the its multi-million dollar promotion number of jobs the project would cre- ate during the construction period. sharp denunciation of the Conserva- campaign this summer, the govern- Obama told the Times: “The most reli- tive way of doing things by depart- ment’s own research revealed it had able estimate is that this might create ing MP Brent Rathgeber were signs of the lowest recall in public memory of 2,000 jobs during the construction of something more serious than person- any program ever studied. the pipeline – which might take a year al pique or end of term fatigue. Being seen to have met deficit targets or two, and after that we are talking Rathgeber’s condemnation that the is one of those political lines in the about somewhere between 50 and 100 Harper government had become the sand where the outcomes can be to jobs in an economy of 150 million very thing that most of its zealots had the downside. If you fail, your op- working people.” come to Ottawa to kill – an arrogant, ponents sneer. If you deliver, many Which does not bode well for Keystone. entitled regime – was repeated over citizens shrug – you’ve just done your And all the Canadian domestic pipeline and over with worried nods. Tory cau- job. Squeezing spending in defence, projects, to the West and East coasts cus members reported getting an ear- as the government has conceded it is alike, face significant hurdles that come ful from unhappy supporters at sum- doing as part of its deficit drive, an- down to two words – social license mer barbecues. gers as many possible Tory voters as it from provinces, communities and First might entice. Nations along the proposed routes. tephen Harper is a political lifer. Like his now badly shrunken in- The Harper government’s most re- ner circle of staffers, he has little he government’s three big pol- cent effort at legacy creation, major S experience of the outside world, unless icy goals for the second half of reform of the Canadian labour mar- their majority each appear to you count his curious brief chapter as a T ket through a new skills training, im- libertarian lobbyist at the National Citi- be on an uphill course. If they are able migration and productivity agenda, zen’s Coalition. to overcome the resistance of Cana- stalled badly mid-summer when it was dian beef farmers to making the con- summarily dismissed by the premiers. He is famously focused and intensely cessions to the European Union that disciplined about political war games, a Canada-EU trade deal will require, This government, one that had started however, and fights them with a sul- it will come at a considerable cost. off being especially respectful about len passion. If anyone can pull off his Saskatchewan Premier Brad Wall and the prerogatives of the provinces, wad- required political trifecta – trade deals, Alberta Premier Alison Redford have ed into that most dangerous ancient pipelines, and productivity reform – signaled they will be loud and tough swamp of Canadian politics, federal/ Stephen Harper’s odds of making it in their response. Quebec and Ontario provincial jurisdiction. By unilater- into a second decade of power are bet- will snarl about higher drug and infra- ally, without consultation, attempt- ter than most of his predecessors. ing to elbow the provinces out of the structure costs. The opposition will say In the often bitterly unfair life of poli- driver’s seat on as sensitive a constitu- that they would have delivered a better tics at the top, however, he may suf- deal. Achieving the trade deal will be a tional issue as training and education, fer the same fate as the three majority serious political battle from its initial- they stepped into the quicksand that prime ministers before him, Trudeau, has been the demise of several govern- ing ceremony through to its finaliza- Mulroney and Chrétien. Their legacy ments before them. Adding the gratu- tion in enabling legislation before the achievements – the Charter, free trade itous threat of a complete shutdown next election. and balancing the budget after de- in federal funds for any non-com- cades of deficits – were all widely her- The government’s second big goal, pliant provincial government was a alded signature achievements. new pipeline access for Canadian oil step too far for even dependable allies and gas to the US and Asia, faces seri- such as premiers Redford and Wall. But only in their political obits, years ous political obstacles in both the US Given the angry rhetoric from some after they’d left office. and Canada. In an interview with the premiers on the subject, it is hard to Contributing Writer Robin V. Sears is a New York Times on July 27, President see how Ottawa can retrieve a politi- Barack Obama pointedly said Canada cal win on this third file, either. This principal of the Earnscliffe Strategy Group “could potentially be doing more” is Jason Kenney’s daunting task as, ef- in Ottawa. to mitigate emissions from what he fectively, minister of Jobs. [email protected]

Policy 7

Prime Minister Harper and Governor General David Johnston in conversation before the 2011 Speech from the Throne. No event engages the government like a throne speech. PMO photo

he Government of Canada The Making of Challenger soared over north- T western Ontario. There were only two passengers, Brian Mulroney and me. It was the fall of 1986 and the Speech From the prime minister was on his way to Saskatchewan to meet with Premier Grant Devine to discuss some difficult the Throne agricultural issues. I was on the flight as one of the PM’s policy staff but for Geoff Norquay another purpose as well. There was a new session of Parliament about to open, and the PM had asked me to The Speech from the Throne is a critical element of the Brit- bring the final draft Speech from the ish parliamentary tradition; it contains the agenda of the Throne (SFT) with me. It was time for the last “snake check” and the final government for a new session of Parliament – the priorities, sign-off before the speech went off to the issues and the directions – in other words, the narrative the printer, and we would do that on of governing. At the beginning of a newly-elected govern- the flight west. I knew the SFT process well. I had ment, it outlines a set of departures from the previous gov- been the principal writer for the first ernment’s agenda. In the middle of a mandate, it can also Mulroney government throne speech rejuvenate a tired or flagging agenda, and help put a “new in 1984 and knew it was complex, with as many as 40-50 successive face on the old crowd.” And, overall, an SFT galvanizes the drafts and numerous hands on the bureaucracy more than any other event. Except of course, pen along the way. Inspired by the platform that had elected us in 1984, for an actual change in government. the overall political narrative and the basic framework originated with the Prime Minister’s Office (PMO), but after that, there were scores of one- on-one consultations and negotia-

September/October 2013 8 tions with ministers and their policy Throne speeches are a critical element of the British staff to find the right content and parliamentary tradition; they contain the agenda of the nuance as the speech developed. Suc- cessive drafts bounced back and forth government for a new session of Parliament – the priorities, between PMO and the various groups the issues and the directions – in other words, the narrative in the Privy Council Office (PCO) and of governing. the Federal-Provincial Relations Of- fice for their expert advice, and every four letters and passed the page across challenges of public policy are broadly few days, the latest draft would go to the PM. A huge laugh resulted. known, the trick is always to find the up to the PM for his input and direc- right balance between the major ob- I never did find out who it was that tion. Mulroney is a gifted writer, and jectives the government has already got to name the new agency, but I he took this seriously; he constantly been pursuing and the new direc- do know that that is how the Atlan- challenged us to say it more elegantly, tions it wishes to take. In positioning tic Canada Opportunities Agency – more completely, more accurately. He new directions as logical outcomes of ACOA – was born. worried over every word. well-worn paths, governments tend The drafting process for the 1986 SFT to step on their own message. As a was no different, except that my col- hrone speeches are a critical result, throne speeches are usually league L. Ian MacDonald, from the element of the British parlia- proclaimed to be a disappointment by PMO communications group had T mentary tradition; they con- the media: “Nothing much new here; the pen, and so far, I had not really tain the agenda of the government for no surprises; no grand vision for the been that intimately involved. So a new session of Parliament – the pri- future; no radical departures; business here I was with the PM in the Chal- orities, the issues and the directions as usual.” lenger, reading the speech for the fi- – in other words, the narrative of gov- nal time, page by page, paragraph by erning. SFTs can serve other purposes paragraph, word by word, checking as well. At the beginning of a newly- Since the key challenges of flow, phrasing, meaning and tone. At elected government, they signal a public policy are broadly a certain point, I began to get the un- new beginning and a set of departures known, the trick is always easy feeling that perhaps I had missed from the previous government’s agen- something, so I went back a few pages da. In the middle of a mandate, they to find the right balance to revisit the earlier text. can also serve to rejuvenate a tired or between the major objectives flagging agenda, and help put a “new In the months leading up to the fall of the government has already 1986, we had promised to provide new face on the old crowd.” been pursuing and the new directions to regional development One of the key impacts of a throne directions it wishes to take. in Canada, and had decided to create speech is the “mobilization” of the new economic development agencies various departments of government. for both Atlantic and Western Can- When the message goes out from PMO As a government at mid-term, the ada. Through successive drafts of the to ministers and from PCO to deputy Harper Conservatives have estab- speech, I had seen that various folks ministers that an SFT is in the works, lished some hallmarks through which throughout the system had tried their the ideas flow in to the centre. They they have become known: competent hand at naming the new agencies and may be specific or general, and legisla- economic management, trade expan- that the names kept changing with tive, programmatic or policy oriented. sion, a more independent and ro- each new draft. I hadn’t really paid it They may adjust or fine-tune old pro- bust foreign policy, re-equipping the that much attention until the uneasi- grams or propose new ones. armed forces, and many “tough on ness struck that day on the plane. crime” initiatives. At the same time, There is often a fair amount of compe- however, many of the priorities out- I found the paragraph, and here is tition for the attention of the PM and what it said: lined in their first majority govern- cabinet. Every department wants to ment SFT have already been achieved, “As a first step in achieving have its piece of the new action that or are in the hands of others; the improved results from this sus- is represented by a throne speech. In Canada-Europe Comprehensive Eco- tained national approach, an addition, to the extent that they set nomic and Trade Agreement (CETA) Atlantic Canada Development new priorities, or raise lower ones and the Keystone XL Pipeline are two Corporation will be constituted to higher status, SFTs often require prominent examples. So what might to facilitate and coordinate all the reallocation of fiscal and staff re- be the content of a renewal narrative? federal development initiatives sources within departments to meet What are the key issues we can expect in the area.” new circumstances and pursue new the throne speech to address? objectives. Overall, an SFT galvanizes Staring at the words, it finally struck the bureaucracy more than any other me. We were about to announce a espite the political challenges event, except of course, for an actual new agency and the obvious acronym faced by Stephen Harper in change in government. by which it would instantly be known D May and June, summer polls was “AC-DC”. This carried certain SFTs nearly always contain an internal confirmed that he still retained a solid sexual undertones that would have inconsistency, a battle between conti- lead over his two opposition rivals in instantly made us the laughingstock nuity and departure, between same- the public’s rating of capability on of the western world. I underlined the ness and innovation. Since the key economic issues. Harper still stands at

Policy 9 the delays on the approval of the Key- stone XL pipeline to the US Gulf of Mexico, and opposition to the Gate- way Pipeline across northern British Columbia. The primary objective is to get Canadian oil and gas to “tidewa- ter” – in any direction – from western Canada to the southern US, from the west to the east within Canada, and from Alberta through BC to the Pa- cific. The environmental review of the Gateway pipeline is not due until the end of the year. Expect commitments Governor General Johnston reading his first throne speech. With his second one this fall, written by the of federal support to facilitate all of Prime Minister’s Office, the Harper government hopes it can brreak out of its spring slump. PMO photo these major capital projects. The throne speech will likely address 40 per cent approval on the economy, Kenney now inherits the all- the long-promised federal green- while Liberal Leader Justin Trudeau house gas regulations for the oil and trails at 21 per cent, with NDP Leader important skills file. He must make the new Canada Job gas sector. If they are already out by Tom Mulcair at 14 per cent. then, expect the federal government We should therefore expect a throne Grant program work with the to signal its desire to seek equivalency speech that is long on fiscal prudence provinces, and continue efforts agreements with provinces wherever and economic management, because to encourage the provinces practical. Canada’s GHG policies have the government’s imperative remains to take down professional been in lock-step with the US for the to return to budget balance by 2015. credentials barriers that stifle last few years and, depending on new This is the key to satisfying Harper’s policies from the Obama administra- base, many of whom felt queasy about inter-provincial mobility and tion, the government will likely con- the deficit-creating stimulus package keep skilled immigrants tinue this approach, although any adopted to combat the financial crisis driving taxis. US linkage between Canada’s GHG and global recession of 2008-09. Bud- policies and approval of Keystone will get balance is also essential to meeting prove tricky. some important carry-over Conser- vative commitments from the 2011 On the jobs front, the July cabinet The throne speech will likely election, such as income splitting up shuffle signaled a continuation of address the long-promised to $50,000 for families with children the government’s extensive efforts federal greenhouse gas under 18. The imperative of returning to remake the Canadian labour mar- regulations for the oil and gas to budget balance also means that the ket. In moving Jason Kenney from SFT will not be throwing much new Citizenship and Immigration to the sector. If they are already out money around. Moreover, the gov- newly-named Department of Employ- by then, expect the federal ernment faces an unknown but hefty ment and Social Development, the government to signal its price tag for the costs of the southern Prime Minister effectively made Ken- desire to seek equivalency Alberta floods and the railway disaster ney “Minister of Jobs.” In addition at Lac-Mégantic. to completing the controversial em- agreements with provinces Steps to facilitate economic growth ployment insurance reforms begun by wherever practical. and job creation will be the next major his predecessor Diane Finley, Kenney economically-oriented throne speech now inherits the all-important skills theme. Trade will continue to have file. He must make the new Canada pride of place in the government’s Job Grant program work with the Whether we are talking about pipe- economic agenda. If the government provinces, and continue efforts to en- lines or mining development, one of has concluded the CETA negotiations courage the provinces to take down the most challenging natural resource with Europe by September-October, professional credentials barriers that issues to be resolved is revenue shar- the SFT will contain a commitment to stifle inter-provincial mobility and ing, without which it is difficult to see implement CETA, which will involve keep skilled immigrants driving taxis. how resource development can meet significant legislation. If the agree- And finally, he will need to manage the promise of durable economic par- ment has not yet been finalized, yet changes to the controversial Tempo- ticipation for First Nations commu- another pledge will be made to bring rary Foreign Workers Program, which nities and jobs on reserves as well as the negotiations to a successful con- caused the government some grief in non-native remote and northern clusion. After that, it is on to the ne- earlier this year. communities. The provinces and ter- gotiations towards the Trans-Pacific ritories hold most of the cards, since Partnership, and the continuation of n energy and pipelines, Harp- resource revenues belong to them. It the ongoing trade talks with India and er’s touting of Canada’s fu- will be interesting to see if the throne Japan, among other bilaterals under O ture as an “energy superpow- speech signals federal efforts to re- negotiations. er” has hit some heavy weather with solve this issue.

September/October 2013 10 There are a variety of smoldering refreshed Science and Tech- provinces and territories over the next aboriginal files, including First Na- nology Strategy to continue ten years. tions land tenure, the need for in- A driving the innovation agen- The Prime Minister has sent a refer- creased federal funding for education da is a strong likelihood in the SFT. ence to the Supreme Court on the on reserves along with a governance The government considers innova- future of the Senate, concerning both structure, and a way forward on com- tion and the commercialization of method of appointment and possible prehensive claims and treaty imple- research to be critical in increasing abolition. Given that the Supreme mentation. Expect most or all of these Canadian competitiveness and pro- Court will not release its response un- to be addressed in the SFT, in one way ductivity. (The former minister of til the end of the year or early 2014, or another. state conducted quiet consultations it is hard to guess what the SFT can And then there’s defence procure- aimed at updating the current strat- definitively promise. The best way ment and aerospace. egy in recent months.) forward to abolition would likely be This has proven to be a nine-alarm The throne speech will very likely the calling of a referendum, but that catastrophe for the government, with promise a significant Elections Act is hard to do while the issue is still cost over-runs, huge delays and too reform initiative that will address the before the court. Expect stirring com- many “reset buttons” to count. In “robocalls” fiasco as well as the many mitments to solve the Senate conun- response to the David Emerson Aero- other challenges facing Elections drum once and for all, but few details space Review and Tom Jenkins’ report Canada, and attempt to restore the in the throne speech. “Leveraging Defence Procurement credibility of the electoral process in Contributing Writer Geoff Norquay is a Through Key Industrial Capabilities,” Canada. principal of the Earnscliffe Strategy Group the government is likely to promise in Ottawa. He was social policy adviser changes to the organization, decision- The SFT will follow up on the 2013 to Prime Minister Brian Mulroney and making and management of procure- federal budget’s commitment to im- later communications director for Stephen ment in the space, aerospace and de- plement the long-term infrastructure Harper in the Office of the Leader of the fence sectors. Anything proposed is plan, which begins April 1, 2014 and Opposition. likely to be welcomed as an improve- which will involve some $56 billion ment in this disaster zone. in federal spending and transfers to [email protected]

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Policy 11

A group of Cree youth that walked 1600 kilometers to bring attention to aboriginal issues at Parliament Hill in Ottawa, Ontario. Shutterstock photo A First Nations Agenda for the Throne Speech Bruce Carson

The high-water mark of relations between the Harper gov- he importance of this fall’s Speech from the Throne (SFT) ernment and First Nations occurred in early 2009, follow- T to the second half of the Harp- ing the Residential Schools apology, when the Prime Minis- er Government’s mandate and to its fortunes in the 2015 federal election ter met with aboriginal groups in his Langevin Block Office. cannot be overstated. Other than its The promise of that moment was squandered, Idle No More continual emphasis on the economy, which is recovering but not with great was formed, and another moment of promise was produced enthusiasm, the government has pre- in January, 2013 when a high-level working group was sented few new policy ideas to grab the imagination of the Canadian people. formed, led by then-PMO Chief of Staff Nigel Wright and This SFT has to set out both in tone and content a government knowing Privy Council Clerk Wayne Wouters. Again, distractions where it wants to go, engaged on is- have sidelined the file and drift has set in. The Speech from sues that need to be addressed and it has to explain how addressing them the Throne is an opportunity to re-set the relationship and over the next five years will enhance make legitimate, lasting progress. the lives of all Canadians, especially those who are directly affected by the proposals contained in the SFT. As the Prime Minister searches for subjects for the SFT, he need look no further than the panoply of matters affecting Aboriginal Peoples in Cana- da. This would include First Nations, Métis and Inuit as well as non-status Indians living off reserve in commu- nities across this country. The Harper government has at best an uneven record of addressing these is-

September/October 2013 12 sues. It got off to a good start dealing- dents in the Residential Schools estab- feet of the federal government. first with the Residential Schools Set- lished by the government of Canada. The Crown Gathering held on January tlement which appeared on its plate This apology, written principally by 24, 2012 attended by the Governor shortly after forming government in the Prime Minister himself, should General and the Prime Minister, as 2006. This putative settlement had not have represented the beginning of well as First Nations chiefs from across been approved by the Martin Cabinet renewal of the relationship between the country, detailed Treaty Rights , and was left for Stephen Harper and the federal government and Canada’s accountable governance structures, Jim Prentice, then minister of Indian Aboriginal Peoples. It was perhaps his education, sustainable communities, Affairs and Northern Development, finest moment in the House of Com- economic development opportuni- to review, adopt and implement, mons. Another positive note occurred ties and the culture of First Nations as including the establishment of the at the beginning of 2009, when the matters upon which progress was to Truth and Reconciliation Commis- Prime Minister met with leaders of the take place. The idea was to reconvene sion. While the government was not main aboriginal groups in his Langevin the group within the year to report going to implement the Kelowna Ac- Block office to discuss the upcoming progress on all matters. cord, it did want to engage with Phil stimulus budget and what it could Fontaine, then National Chief of the Unfortunately, the high expectations mean with regard to addressing in- Assembly of First Nations (AFN) to es- of the Crown Gathering were never frastructure needs. These leaders were tablish a menu of concrete actions on realized. The follow-up on education also invited to meet with first minis- infrastructure, clean water and hous- through an education task force has ters on the evening before the January ing. This was to be the Harper way of not been successful and the govern- 2009 First Ministers Meeting to discuss approaching First Nations issues. Set a ment has now cobbled together a bill issues of mutual concern. This repre- target, put together a budget and get dealing with First Nations education sented the high water mark of relations the work done. The government also which is presently opposed by the between the Harper Government and recognized that, in addition to these Canada’s Aboriginal Peoples. AFN. Both budget implementation specific measures, there would be no bills in 2012 were opposed by ab- progress from either the government’s If the five years since the apology had original groups as rolling back envi- or Aboriginal Peoples’ points of view been followed by action based on a ronmental protection at the expense unless both education and economic common, shared agenda developed of energy development. One of the opportunity were tackled through all jointly, the dire situation facing the main complaints about both budget parties working together. In addition, government on this front would not bills, and with regard to other federal there were the matters of health care have developed. legislative initiatives affecting aborigi- and safe communities that had to be In the summer of 2009 the AFN Chiefs nal rights, has been lack of consulta- part of the agenda. meeting in Calgary elected Shawn A- tion with affected groups. Also, First Nations say little progress was made While there have been two in-chut Atleo as their National Chief. This held great promise for both on infrastructure issues such as hous- major meetings in the last First Nations and the government as ing and clean water. Furthermore, two years involving First Atleo’s style is one of quiet yet intense throughout 2012 one of the main is- Nations Chiefs and the federal negotiation, recognizing that little is sues raised by National Chief Atleo to be gained by grandstanding or con- was the need for First Nations involve- government, little has been frontation. He also has a great sense ment in decisions which affect the de- accomplished. And for the and knowledge of the history of his velopment and distribution of energy most part, the reason for people. Their relationship to the fed- and natural resources in Canada. It is eral government is set out in the Royal through education and involvement this lack of progress can be Proclamation of 1763, the Constitu- in the development of Canada’s ener- laid at the feet of the federal tion Act, 1982, as well as subsequent gy future that unemployed aboriginal government. attempts to further develop it such as youth, the largest and fastest grow- those contained in the 1983 Penner ing cohort of Canadian youth, will Report on Self Government and the find jobs and some measure of fulfill- ork progressed on all of Charlottetown Accord of 1992, which ment. Free, prior, informed consent these fronts, perhaps not as came as close as any document to es- obtained through open and honest quickly or as effectively as tablishing First Nations as “Third Or- consultations with the energy indus- Wall parties wanted. In the summer of try and government is what the Na- der of Government” in Canada. All 2007, the government and the AFN es- of this taken together builds on the tional Chief has asked for, so far with- tablished a Joint Task Force to develop Fiduciary Duty owed by the Federal out result. a new, quicker method for resolving Crown, the importance of the Treaty All of this frustration boiled over Specific Claims. The Task Force was Relationship and then branches off with the creation of the Idle No More chaired jointly by Shawn Atleo, now into educational opportunities, eco- movement and the hunger strike by AFN National Chief and myself and nomic development, health care, in- Appawapiskat Chief Theresa Spence. it arrived at conclusions and recom- frastructure and the quality of life in This produced a meeting convened mendations that were implemented strong, sustainable communities. by the Prime Minister on January through federal legislation supported 11, 2013 in the Langevin Block at- by the AFN. Continuing on this posi- hile there have been two tended by various ministers and Na- tive track in June, 2008, the Prime major meetings in the last tional Chief Atleo, as well as 20 chiefs Minister in the House of Commons two years involving First from all provinces except Ontario delivered an apology on behalf of the NationsW Chiefs and the federal govern- and Manitoba. It also marked a break Government of Canada to the Aborig- ment, little has been accomplished. with the leadership of the AFN as inal Peoples of Canada for the abuses And for the most part, the reason for some chiefs, notably Derek Nepinak suffered by those who had been resi- this lack of progress can be laid at the of Manitoba decided to boycott the

Policy 13 meeting wanting instead to meet with Whatever is crafted should speak to a commitment by the the Governor General. The Langevin government of transformative change in the lives of Canada’s meeting resulted in a measure of suc- cess, including the creation of a high Aboriginal Peoples. Playing at the margins just won’t cut it level working group led by then chief either for the Prime Minister or for those both needing and of staff Nigel Wright from the Prime demanding change. Minister’s Office and Privy Council clerk Wayne Wouters. It included to effectively move this relationship Education Bill so that it can support First Nations leadership to deal with forward: the implementation of an effective treaties and their implementation and education system. well as issues regarding the settlement 1 The most recent revelation of 1,300 of land claims and self government. Residential School children being 6 The government could recommit to The Prime Minister seemed open to used as human guinea pigs for experi- providing funds for infrastructure, tripartite discussions on resource rev- ments in starvation and other atroci- housing, clean drinking water and enue sharing. The promotion of natu- ties must be addressed, an apology healthcare for First Nations. ral resources with the cooperation of delivered and a direction given to Ab- 7 Regarding the issue of murdered original Affairs Bernard Valcourt to First Nations fits well within Harper’s and missing aboriginal women, the release all relevant documentation to economic agenda and having First government could establish an in- the Truth and Reconciliation Com- Nations participate in these develop- quiry under the Public Inquiries Act mission. There should be another ments fits both within their educa- to get to the bottom of this matter direction to Valcourt to effect the tion and economic agendas. The take- and present recommendations so away from this meeting was that the orderly release of all documentation required by the Commission that is that nothing like this ever happens high level working group would com- again. mence its work and there would be in the possession of the government. a follow up Harper-Atleo meeting in 2 The treaty relationship between First In order to accomplish this admitted- short order. Nations and the Crown should be ly ambitious agenda, the clerk of the Privy Council could be asked to as- While the Working Group got off to addressed with recognition of the fact that treaties have not been hon- semble a “high level working group” a good start it has been sidelined as that includes a leader’s representative the government dealt with other is- oured and that treaty implementa- tion is a priority for this government. from the AFN, the Métis, the Inuit, sues. There was only one Atleo-Harper Congress of Aboriginal Peoples and meeting, but it was in the context of 3 In the same way that treaty imple- the Native Women’s Association and the fifth anniversary of the residential mentation is a priority so is land a senior member of the office of the schools apology. To complicate mat- claims settlement and the conclu- Prime Minister as well as the clerk of ters further for both Atleo and Harper, sion of self-governing agreements so the Privy Council. Manitoba Chief Nepinak has found that the potential of all First Nations traction for the establishment of a new members may be unlocked. 8 For over 130 years, the Indian Act group of treaty based First Nations on has governed the relationship be- 4 The development of Canada’s vast tween the federal government and the basis that the AFN has no man- wealth in energy and natural re- date or jurisdiction to address treaty First Nations and their members. It sources cannot be developed with- is time to work with First Nations to issues. Nepinak argues that treaty is- out the free, prior, informed consent sues can only be dealt with nation to determine the future of the Indian of Canada’s Aboriginal Peoples. The Act. It is time to move beyond the nation with the federal government government should establish a tri- Indian Act but only with the consent or perhaps the Crown. partite working group to include rep- and approval of First Nations. The resentatives from government, both government should establish in con- ll of this provides the back federal and provincial, and industry sultation with First Nations leader- drop against which an SFT ad- to work with aboriginal leadership ship a Blue Ribbon Panel to Report to A dressing aboriginal issues is to to ensure that its priorities and inter- be written. Whatever is crafted should the clerk’s high level working group ests are respected and addressed. Op- speak to a commitment by the gov- portunities in natural resources are within a year of the Panel’s establish- ernment of transformative change in limitless and will begin to address ment on the future of the Indian Act the lives of Canada’s Aboriginal Peo- the economic needs of Aboriginal and, where applicable, its repeal. ples. Playing at the margins just won’t Peoples while respecting the envi- These commitments to Canada’s Ab- cut it either for the Prime Minister or ronment. Prior consent obtained for those both needing and demand- original Peoples placed in the SFT through a consultative approach is ing change. amount only to words and those required if Canada is to obtain its words must become the subject of im- Given the relationship between Can- stature of an energy superpower, a mediate action if the promises of the ada’s First Nations, Inuit and Métis goal announced by Harper in his Royal Proclamation and the Constitu- and the Crown, it is entirely appropri- London speech of 2008. tion Acts, 1867 and 1982 are to be- ate that the transformative words are 5 There are as many aboriginal young come reality. spoken by the Governor General, and people being incarcerated as are written by the Prime Minister and his graduating from high school. The Bruce Carson is a former senior policy office. It is also important, symboli- government could recognize that adviser to Prime Minister Stephen Harper cally and practically, that this part of only through an education system from 2006-2008 and was later director the SFT be placed near the beginning, put in place through joint agreement of the Canada School of Energy and the that it be fulsome and not be seen as and action will this situation begin Environment at the University of Calgary. an afterthought. to be addressed. In this spirit, the He now publishes Morning Brief, a daily In a perfect world, the following issues government should work with First political newsletter. would be addressed if the SFT is going Nations to revise the First Nations [email protected]

September/October 2013 14

Opposition Leader Tom Mulcair writes that the PM must “back up the ceremony of a throne speech with substantive action”. NDP photo Speech From the Throne: Harper Can Run But He Can’t Hide Tom Mulcair

It is a ritual familiar to Canadians for its pageantry and tradition. But this throne speech may also be notable for its irony; delivered in the same Red Chamber that has generated both debate and scandal during Stephen Harper’s tenure. For Opposition leader Tom Mulcair, abolishing the Senate is just the centrepiece of what should be, but likely won’t be, in Stephen Harper’s Speech from the Throne.

he Speech from the Throne is a new face to the voting public. We’ve the Harper Conservatives. It has shak- most paradoxical event: an op- watched this scene play out the same en their government to its core. And T portunity for renewal, steeped way, dozens of times. And yet, this the Prime Minister is well aware that in tradition as old as Parliament itself. time it will be different. it will take more than a good show to The Usher of the Black Rod banging on This fall, as Stephen Harper tries des- distract Canadians from the onslaught the doors of the House of Commons; perately to turn the page on the scan- of allegations facing his government. the slow procession past portraits of dal and ethical lapses that have con- If Harper is to have any hope of con- past prime ministers; the lavish con- sumed his government, the plush vincing Canadians that he’s embarked fines of the upper chamber. surroundings of the Red Chamber will on a new course, he’ll have to back The pomp and ceremony seem almost serve as a counter balance – an indel- up the ceremony of a throne speech as though they were designed to help ible reminder of the very missteps and with substantive action. He’ll have Canadians forget what’s come before. controversies that have engulfed his to address not only his government’s The opulent Senate chamber serving party, his government and, indeed, his ethical failings, but also the day-to-day as the perfect media backdrop for a own office. priorities that hit Canadians closest to government looking to present a fresh, The Senate expense scandal has rattled home.

Policy 15 We know that Harper is unlikely to If Harper is to have any hope of convincing Canadians that he’s suddenly embrace issues like climate embarked on a new course, he’ll have to back up the ceremony change, early childhood education and prescription drug coverage – is- of a throne speech with substantive action. He’ll have to sues that have gone unaddressed by address not only his government’s ethical failings, but also the successive Liberal and Conservative day-to-day priorities that hit Canadians closest to home. governments alike. Yet, even within the limitations of what one can expect from a Conservative throne speech, mounting household debt as the sin- the integral role that cities play as re- there is still room for real action. gle greatest factor preventing it from gional hubs of economic activity. It is doing more to stimulate our economy our cities that bring together the clus- ince the financial crisis of 2008, and create jobs. Perhaps most disturb- ter of skills, capital and infrastructure the economy has weighed most ing, Canadian household debt is now that allow our economy to flourish. heavily on the minds of Cana- within hailing distance of American As such, a vision for thriving cities S should be at the centre of any strategy dians. We’ve faced a seemingly end- levels just prior to the crisis of 2008. for jobs and growth. But to succeed, less string of economic threats from In the face of this record debt, Con- our cities need a federal government abroad. The US financial crisis – and servatives must do more than tighten that understands the vital role they the global recession it brought about – mortgage rules and choke off credit. play in our economic future. have led to a steep decline in demand This fall’s throne speech must attack for Canadian exports. Our recovery the underlying causes driving our na- The first step in this government’s has been marred by the uncertainty tional indebtedness. new agenda for job creation should of debt spirals in Europe and political be to restore the $6 billion it slashed gridlock in the United States. The Conservatives should propose from community infrastructure fund- new rules to rein in the most abusive Even as those global economic storms ing in the last federal budget. practices of credit card companies and subside, Canada now faces a new other lenders. They should ensure all Canada is among the most entrepre- range of economic threats that spring Canadians with a clean credit record neurial countries in the world. Even from waters much closer to home. have access to at least one low limit, through the worst of the recession, Today, record household debt is per- no frills credit card through their bank Canadian small businesses continued haps the most immediate threat to or financial institutions. Conserva- to thrive and multiply. Yet one of the our national economy. Canadian tives should respond to anti-compet- most disturbing trends in Canadian families are caught between a rock itive practices in the debit and credit business development is that alarm- and a hard place, struggling to keep ingly few of those small businesses up as the cost of living continues to card industries by limiting ATM fees. They should crack down on payday are growing into medium-sized busi- rise. Youth unemployment has been nesses and beyond. in the double-digits for more than five lenders that use deceptive practices years, robbing an entire generation of and prey on less-informed borrow- From 2006 to 2010, Canada actually the experience and opportunities they ers to charge interest rates as high as lost more than 1,500 medium-sized need to build a career. And no longer 1,000 per cent. businesses – even as the number of is it a lack of demand that threatens In short, Conservatives should ensure small and large businesses grew. Dur- Canadian energy exports, but rather at least basic protections for Canadian ing that period, mid-sized businesses an American public eschewing Cana- consumers and, in doing so, make life were 10 times as likely shrink or shut dian energy imports in response to more affordable for Canadian families. down as they were to grow. the repeated failure of Canadian gov- New Democrats have proposed a job ernments to address the impacts of f course, plans to address bor- creation tax credit for small and medi- climate change. rowing and consumer credit um-sized enterprises. The government will only balance one side of should provide targeted tax incentives Today, record household debt O to businesses that create new jobs the affordability ledger. Conservatives is perhaps the most immediate must also present a credible plan to and new opportunities for economic threat to our national create high-paying, quality jobs – jobs growth – not across-the-board corpo- rate tax cuts that benefit only the larg- economy. Canadian families that come with decent benefits, a se- cure pension and enough of a salary est and most profitable companies. are caught between a rock for a family to live on. There are con- and a hard place, struggling crete actions that can be taken – if the ith youth unemployment to keep up as the cost of living Conservatives are willing to act. stubbornly high, it’s vital that we specifically target continues to rise. While the current government has W youth job creation as well. Succes- done its level best to promote an ac- sive Liberal and Conservative govern- tive image in pursuit of economic Over the last five years, household ments have watched as a generation growth with “Action Plan” ads, its debt has escalated to near crisis lev- of middle-class jobs has disappeared, true tendencies have been more pre- els. By 2012, household debt stood at but they have done nothing to create dictably conservative. Again, the a record high of 167 per cent of dis- the next generation of middle-class posable income. Mortgage debt alone throne speech presents an opportu- jobs. The TD bank recently found that now stands at over $1 trillion. The nity to change course. young people graduating into the cur- Bank of Canada has declared fear of A growing body of research confirms rent job market face such poor job

September/October 2013 16 prospects that entry level wages are With youth unemployment stubbornly high, it’s vital that we down 4-5 per cent and are likely to take up to 17 years to fully recover. specifically target youth job creation as well. Successive Liberal and Conservative governments have watched as a generation Just as New Democrats have proposed a job creation tax credit for small and of middle-class jobs has disappeared, but they have done medium-sized businesses, we have nothing to create the next generation of middle-class jobs. proposed similar measures to tackle skyrocketing youth unemployment as well. it would pave our path to prosperity. that his government will respond to In the greatest irony of all, it was exact- calls from Alberta Premier Allison Conservatives, frankly, don’t seem ly this sort of unfettered deregulation Redford for a Canadian energy strat- to understand the life of the modern that led to the greatest global econom- egy – a strategy that includes a plan young worker. This generation is faced ic crisis since the Great Depression. for value-added jobs, energy security not only with a historically tough job and tackling the threat posed by cli- Here in Canada, the failure of both Lib- market – and the prospect of years mate change. spent working part-time, split shifts eral and Conservative governments to and contract jobs – but even once a address the impact of climate change The Prime Minister can recognize the permanent full-time job is found, it’s now threatens our economic relation- legitimate grievances of First Nations less and less likely to come with ben- ship with the United States. So much that have given rise to movements efits or a pension. so that the Obama administration is such as Idle No More and agree to now under intense pressure to block meaningful consultation aimed at It was with this in mind that many of projects like Keystone XL that would restoring a rigorous federal system of us took great heart at the finance min- boost production from the Canadian environment assessments. ister’s announcement last year that he oil sands. Rather than heed the warn- would meet with his provincial coun- Of course, the Prime Minister can also ings of scientists, economists and First terparts this summer to draw up plans take real action to show Canadians Nations, Conservatives have instead to increase benefits for the next gen- that he is committed to reversing the pushed ahead with legislation to gut eration of recipients under the Canada ethical slide of his eight year old Con- environmental assessments and elimi- Pension Plan. Yet summer has come servative government. nate protections for fish habitat and and gone with no meeting and no navigable waters. As it stand now, for the past eight plan. If Stephen Harper is to regain the years Stephen Harper stood by the trust of young Canadians, he’ll need The failure of both Liberal and Senate he’s pledged reform. After to start by renewing that commitment these eight long years, I believe most and keeping his government’s prom- Conservative governments to Canadians would agree that the state ise to strengthen the CPP. address the impact of climate of affairs in the Senate is worse now Beyond economic matters, there are change now threatens our than ever. issues Conservatives could address economic relationship with the Harper is clinging to an old Conser- that go to the very heart of what kind United States. So much so that vative dream. He wants to radically of country we want to be. change the way our system works. He the Obama administration is wants to bring US-style gridlock into or decades, health, safety and now under intense pressure to Canadian politics – two elected Hous- environmental protections have block projects like Keystone XL. es blocking each other’s every move. been chipped away at in the But, the truth is, for all the noise made F by those desperately trying to defend name of economic progress. Both Lib- eral and Conservative governments the Red Chamber, the fact is that abo- have dismantled rules meant to pro- Where governments once took a lead- lition is in many ways the conserva- tect the public and imposed industry ership role in protecting the public tive option for Senate reform. self-regulation instead. interest, now they protect only pri- This country is a democracy. It has We have seen the legacy of these cuts vate interests. In doing so, they have been for nearly 150 years. Except on in a listeriosis outbreak that killed 22 sacrificed our long-term prosperity for those rare occasions when unelected people. We’ve seen it in the largest their short-sighted political gain. This senators have the audacity to inter- beef recall in Canadian history. And has to end. fere, it is our democratically elected we’ve seen it in pipeline spills that In the Speech from the Throne, the leaders who write our laws. It is, in have grown all too common. Prime Minister can signal that he in- practice, the House of Commons that governs our affairs. Today, experts from the Transpor- tends to change course. tation Safety Board and Transport The Prime Minister can call for full If Stephen Harper is truly committed Canada are investigating the role that and open hearings of the House of to changing course – and changing decades of deregulation played in the Commons Transport committee to the culture of entitlement in Ottawa – death of 47 people this summer in investigate rail safety and the impacts he should make it official and read the Lac-Mégantic, Quebec. of two decades of safety deregulation. Red Chamber its last rites. The Prime Minister’s party has thus This attack on basic health, safety and Tom Mulcair, leader of the New environmental protections was sold to far blocked such hearings. Democratic Party, is Leader of the the voting public on the promise that The Prime Minister can announce Official Opposition.

Policy 17

Host Premier Kathleen Wynne and her fellow first ministers from the provinces and territories at the Council of the Federation meeting at Niagara-on-the- Lake in July. Their agenda ranged from energy to First Nations, and they were unanimous in opposing the federal Jobs Grant initiative. Flickr photo

hen I first joined the pub- Council of the lic service of Canada in W 1968, Lester B. Pearson had moved on and the Liberal Party of Canada was in full flight to elect a Federation: Default new leader, Pierre Elliott Trudeau. In subsequent years, I moved through international and Ottawa-based as- Mechanism or Relic signments, occasionally experiencing that typical Canadian political consul- tative mechanism, The First Ministers’ From the Past? Conference (FMC). Daniel Gagnier In my most senior roles as deputy clerk of the Privy Council for com- munications, principal secretary to Ontario Premier David Peterson and The methods of resolving federal-provincial and interpro- two stints as chief of staff to Quebec vincial issues have evolved in the past three decades but the Premier Jean Charest, I sat behind the practice itself remains a uniquely Canadian combination people sitting at the federal-provincial and provincial-provincial tables of- of art, science and cottage industry. Has the Council of the ten enough to be able to compare the Federation finally hit on the magic formula? The Niagara- various consultative approaches, from FMCs to more informal First Minis- on-the-Lake meeting provided some hope, especially on the ters’ Meetings (FMMs) to the Council energy file. Above all, it proved that cooperation trumps di- of the Federation. vision in this most decentralized federation. During the 1970s and 1980s, we oper- ated on the sometimes successful but most often frustrating model of FMMs on everything from the economy to free trade to constitutional to aborigi- nal issues. These were supplemented

September/October 2013 18 by ministerial meetings on health, education and other subject matters of interest. At times it seemed that meetings were a Canadian cottage in- dustry, an employment program for public servants and a national sport for politicians. With the transition beyond Prime Minister Mulroney’s tenure and in re- cent years, the mechanism of choice for federal-provincial collaboration or dispute became bilateral agreements and the forum of choice the Councils of Ministers, chaired usually by the federal portfolio minister and his/her counterpart in the province playing host. We are still recovering from an overdose of years of media coverage Six women at the COF table, L to R, Newfoundland and Labrador Premier Kathy Dunderdale, Nunavut of multiple, sometimes boring and of- Premier Eva Ariak, Alberta Premier Alison Redford, Ontario Premier Kathleen Wynne, British Columbia Premier Kristy Clark and Quebec Premier Pauline Marois. Flickr photo ten stressful disputes among our first ministers. formulas and calculations difficult funding over 10 years to 2014, with to fully comprehend. Into this brew growth indexed at 6 per cent per year. This country has never you add decades of national unity Charest was convinced that without a been easy to govern or concerns and the realities of cheque Council we would find it more diffi- comfortable politically. Since book federalism and you get the out- cult to share our problems and iden- Confederation, regions rage expressed when Quebec Premier tify solutions. His experience nation- have been at odds, jealously Pauline Marois said her government ally and on his many forays into the wasn’t interested in developing mas- international arena convinced him protecting their constitutional sive natural gas reserves because she that the Council would fill not just a entitlements and often didn’t want to see half of the benefits need but a void. (read: cash) heading down the road to aggressively expressing their I was privileged to be at the 2008 views of how Ottawa should Ottawa to be dispensed as it sees fit in the future. meeting of the Council in Quebec be treating them. during the 400th Anniversary of the Charest was convinced that founding of Quebec City. The key topics there were internal trade and without a Council we would labour mobility. Halifax in 2012 was find it more difficult to share intense and showed that the provinc- his country has never been easy our problems and identify es are not always aligned on energy to govern or comfortable po- solutions. His experience and infrastructure issues. T litically. Since Confederation, nationally and on his many regions have been at odds, jealously s Ontario Premier Kathleen protecting their constitutional en- forays into the international arena convinced him that the Wynne pointed out, this Coun- titlements and often aggressively ex- cil of thirteen now has six pressing their views of how Ottawa Council would fill not just a A women elected to head their provin- should be treating them. There is no need but a void. cial governments – a first in the his- greater example than the fight for re- tory of the country. The issues were source revenue in the West. To listen both in keeping with past agendas to contemporary views the original and included discussions on more signatories to confederation believed topical and recent events such as cy- the wealth that was coming from the The Council of the Federation (COF) berbullying and necessary changes to West should be dispersed to the east- is not a new idea. It has been around the Criminal Code, as well as violence ern provinces; that the West was not for some time and sees expression in against aboriginal women, public se- then and is not now an equal partner other regions of the world. It came to curity, helping those in emergencies in the governance of this country. fruition when Premier Jean Charest and the abolition/reform of the Cana- Today too many believe that the West proposed its creation and its found- dian Senate in light of the federal gov- is paying for expensive social benefits ing occurred in December of 2003 ernment’s reference to the Supreme and rich systems in the East and that in Charlottetown. It first met in Sep- Court of Canada. Recent expense equalization payments are anything tember 2004 with Prime Minister claim improprieties by a number of but equal. Many have tried to lay this Paul Martin to discuss reforms to the members of the Red Chamber were to rest but myths die hard especially Canada Health Act. The 2004 Health not on the agenda, although in this when they are based on complex Accord saw $41 billion in new federal age of constant media coverage Ca-

Policy 19 nadians’ imagination was constantly The country’s first ministers ripped into the proposed Canada stimulated by faulty moral and ethical Job Grant. They made the case the program would put at risk judgment on the part of politicians at every level. the provinces’ existing training programs, especially those Job training, energy and infrastruc- aimed at the people most in need. ture, health care funding and innova- tion, as well as water, inter-provincial/ territorial trade rounded out repeat issues. One topic in this line up has sound basis and the realities under- preparing the report and the other incensed the provinces to the point pinning Ottawa’s unilateral decision. due to revenue sharing issues and where they are unanimous in their op- As if sophisticated provincial admin- policy differences. In both cases, bi- position. This is the unilateral move istrations are incapable of measuring lateral working groups are looking at by Ottawa to redefine the Federal Job the risks and benefits. resolving differences and advancing solutions. Training Program. When premiers argued on energy The country’s first ministers ripped and infrastructure issues in Halifax The COF Report pleads for a height- into the proposed Canada Job Grant. in 2012 you could feel the tension ened awareness and a maximization of They made the case the program in the room and in the press confer- the value of renewable energy within would put at risk the provinces’ ex- ences. I remember thinking how do the Canadian energy mix. Provincial isting training programs, especially we hope to meet our needs for energy and territorial interconnectivity issues those aimed at the people most in of all kinds and export to an energy are also raised. These are far from new need. Not a new complaint but both hungry world? How do we do this in – Prime Minister Brian Mulroney and Ontario and Quebec have invested an environmentally responsible man- Premier Robert Bourassa had these is- massively and have successful well- ner? In light of recent events in Lac- sues in their sights back in the 1980s. tailored job programs that have yield- Mégantic and various accidents over One initiative taken by the premiers ed positive and concrete results. the past few years, how to we reassure since Halifax is the creation of the “Not a single province is going to the public on safety while meeting Canadian Energy Strategy Working take it up,” said British Columbia the country’s need for revenue to pay Group led by Alberta , Newfoundland Premier Christy Clark on Ottawa’s for the social, educational and health and Labrador and Manitoba. They, unilateral attempt to streamline the benefits we hold so dear? their ministers responsible for energy federal program to supposedly ensure and senior officials have done us all a better alignment with the needs of In light of recent events in service in framing and articulating the Canada’s private sector. She went on Lac-Mégantic and various state of play on an energy strategy. In to say there is “consensus from coast accidents over the past few a sense they have given meaning to the research and public policy recom- to coast” among the premiers that years, how to we reassure the grant program won’t work as the mendations that the Energy Policy federal government pitched it in the the public on safety while Institute of Canada provided to gov- 2013 budget. meeting the country’s need ernments in late 2012. The plan calls for work to continue over the coming Let’s put this in simple terms. These for revenue to pay for the year and a final strategy to be released are shared programs, with Ottawa social, educational and health at the COF meeting of 2014 in Prince providing part of the funding and the benefits we hold so dear? Edward Island, a symbolic location provinces not only investing their dol- as the birthplace of Confederation lars but delivering and administering and also the founding meeting of the the funds. When Ottawa unilaterally Council of the Federation. decides to re-profile its contribution, we are talking of a $600million-plus Unfortunately, in the days after the burden on the provinces in an at- The progress report that premiers re- COF, the Prime Minister’s Office re- tempt to match federal dollars. The viewed on the Canadian energy strate- fused to comment on the provincial prognosis for much slower growth for gy and which is available to the public work toward a national strategy, de- our economy in the coming several outlines basic principles and justifica- spite the federal government’s strong years does little to make anyone feel tion for moving forward. It focuses on push toward increasing resource pro- secure. Premier Wynne hit the nail the three areas – conservation and lit- duction across Canada. eracy; innovation and moving energy squarely on the head when she point- Andrew Coyne in his column of July to people (infrastructure) and gives ed out just how critical employment 27 decried the COF as premiers rather a snapshot of what governments are insurance is during unstable econom- than “attending to matters within doing. ic times. She said the Council agreed their own jurisdiction,” wasting “their the program should support “unique The one point on which provinces time (and our taxes) telling the federal economic circumstances that exist in and territories agree is that they are government how to suck eggs”. Coyne all areas of Canada.” the primary players on natural re- then goes on to fashion an agenda of The federal government’s response sources. Quebec and BC have reserved what they could or should have tack- was to offer up its newly responsible positions – the one due to traditional led if they were really interested in minister to explain to premiers the positions and lack of involvement in making things better. His list is not

September/October 2013 20 Our constitutional reality, our history and our democratic values condemn us to not only live together but to ar- gue and discuss how we want to do it. The Council of the Federation is a surrogate, for lack of a better mecha- nism, to foster collaboration and a re- flection of the fact that our lives on a daily level are affected just as much if not more by the municipal, the pro- vincial and territorial governments as by Ottawa. Ottawa is important but on any given day it is farther than the provincial capitals and the seats of municipal governments. On a macro level, provinces will de- fine their interests on a regional basis (Premiers Clark and Redford have a working group on promoting the ex- port of resources and Premiers Marois and Redford both have officials work- ing the Alberta-Quebec energy issues. The economic and social impacts of Premier Wynne and Premier Redford in conversation at Niagara-on-the-Lake. Flickr photo an accommodation on the energy file bad from a policy point of view and cisions to revamp a program like job are significant for all. much of it is within provincial juris- training, is counter-productive. As we approach our 150th anniver- diction (interprovincial trade barriers, The three premiers who lead the effort sary as a country it may be a clarion discriminatory conduct by profession- on a Canadian Energy Strategy should call to dedicate ourselves to fulfilling al associations, a common accounting be congratulated for achieving the de- Canada’s potential not so much as an system for budgets, etc.). gree of consensus they did for their example to the world but for the ben- To quote from his article “Instead, progress report. Even if it is a vision efits of our people, our communities they talk about the feds: what Ottawa and principles document it supports and especially for our children. If for should do, how much money it should the main recommendations of the no other reason, the Council of the spend, and on what. On this, let it EPIC 2012 report on market diversifi- Federation has relevance and value. be said, they have no trouble agree- cation, transportation, infrastructure, The premiers deserve to be heard and ing... And when they have finished energy conservation and innovation. to demonstrate to Canadians in ev- all this – when they are done writing We can decry the slowness of progress ery region that co-operation trumps Ottawa’s budget, and amending the but not the direction or the salutary division in this most decentralized Criminal Code, and drafting federal effect it is having on educating Ca- of federations. The leadership role of safety regulations, and demanding to nadians on energy literacy and their the federal government is paramount be consulted on everything under the choices. and can only be fully realized by stak- sun – the premiers use whatever time The missing link here is the federal ing out with the premiers, no matter they have left to complain about fed- government. It shares many of the how difficult, the pathways to suc- eral interference.” objectives but seems to have devel- cess for this country. oped a belief that meeting a la grande Canada since its inception has been Contributing Writer Daniel Gagnier is largely an entity governed by divided table with 13 premiers and one prime minister would accomplish little but President of the Energy Policy Institute jurisdictions with real constitutional of Canada. He is a former chief of Staff powers. We are not a unitary state and a repeat of the massive gang-ups and bitch sessions of the past. There is an to Premier Jean Charest in Quebec, our history is fraught with disputes, principal secretary to Premier David feelings of inequitable treatment and element of truth to that, but then be- ing gutted by a hundred knife cuts Peterson in Ontario, and deputy conversations to try and align mul- secretary to the Cabinet at the Privy tiple governments to work together out of frustration will cause its own problems. Council in Ottawa. In the private sector, for the benefit of all. The COF is noth- he was senior vice president at Alcan, ing but the latest expression of a need No one who has observed the last 40 with global responsibility for corporate for a mechanism where our political years of federal-provincial relations affairs, health, safety and environment. leaders can have that conversation. would maintain that Canadians have It cannot simply be unilateral action not tried differing formulas to reach when it suits and bilateral negotia- consensus. You would have to be a to- tions when possible. Ignoring a call tal cynic to conclude that none of it by provincial and territorial leaders has worked. The truth lies somewhere for participation, at least prior to de- in between cynicism and hope.

Policy 21

Premiers Alison Redford of Alberta, Kathleen Wynne of Ontario and Christy Clark of BC at the Council of the Federation conference at Niagara-on-the-Lake in July. All three are key players in making progress towards a Canadian Energy Strategy. Flickr photo Our Energy Future: A Little More Ambition Please Velma McColl

With the federal government focused elsewhere, and in- remiers talked energy this sum- mer at the Council of the Fed- creasing demands from the public and major players in P eration (COF) and issued prog- the private sector, a somewhat surprising group is stepping ress report, a placeholder to give them more time to negotiate a broader Ca- into the leadership vacuum on energy policy: Canada’s nadian energy strategy. Alberta Pre- premiers. Progress has been made to define a Canadian mier Alison Redford was the original driving force and she is now joined energy strategy over the past few years – but now politi- by Premier Greg Selinger of Manito- cal capital is needed to broker a credible deal by summer ba and Premier Kathy Dunderdale of Newfoundland and Labrador in lead- 2014. With a little more ambition and effort to push past ing the premiers toward a full report traditional intergovernmental lethargy, a plan can be cre- in 2014. They were smart to take a slower approach last year, framing ated that works for the regions and for Canada’s economic the debate and surfacing – but not re- and environmental future. solving – some of the uncomfortable issues. Moving forward, they need to start addressing the concerns over energy infrastructure, innovation, conservation and climate change and develop a credible package that stake- holders and the public can support. This will require a little creativity, common sense and, to broker some- thing worthy of Canada’s energy am- bition, some political capital. The premiers took up the mantle of the Canadian energy strategy, under-

September/October 2013 22 standing that there was public interest Today we are moving toward more common ground on what and demand. Three years ago, an odd array of interests began to ring the bell the elements of an energy strategy might be. This makes it less and call for a Canadian energy strat- interesting to the media but potentially more constructive for egy. A full range of environmental the country. groups spoke up, as did Canada’s larg- est think tanks, business leaders and, more recently, strong voices began about their interim report on the Ca- will be to broker a balanced package emerging from First Nations, labour, nadian energy strategy. It laid out of specific measures that will make transportation interests and munici- three key areas – energy conservation a difference for the country’s energy palities. We even saw the creation of and literacy; technology and innova- future, one that envisions Canada’s a new voice for business – the Energy tion, and moving energy to people participation in global markets for Policy Institute of Canada (EPIC). And (infrastructure for electricity and get- raw energy resources (oil, gas, ura- in the face of the long delays on Key- ting Canadian energy to global mar- nium, electricity to the US) as well as stone XL through the US and the pub- kets). Governments consulted with export of clean technologies into both lic hearings on pipelines, other media a wide range of stakeholders earlier developed and developing countries and public voices have started echo- in June and drew these themes from and deployment of those same tech- ing the need for greater coherence in their own provincial and territorial nologies in Canada. Broader domestic Canada’s approach to energy. priorities. However, the interim re- policies are needed to address a low- port is little more than a catalogue carbon future, diversification of our The recent and growing conversation of what’s currently happening in the electricity sources and infrastructure, began tentatively at first, given the country and does not map out a fu- increasing electrification of transpor- politically charged discussions on en- ture energy vision or identify clear tation and urban environments, and ergy and climate change over the last pathways for success. Hopefully that better environmental performance in 40 years. The dividing lines have been traditional industries such as energy, cut and re-cut in many directions – re- resolve will emerge over the next ten months. mining, forestry, manufacturing and gionally with East vs. West or Alberta aerospace. All of this can be married vs. Ontario or Newfoundland vs. Que- with an understanding that different bec; philosophically with environ- It’s well understood that the Harper government doesn’t regions need a different mix of these mental groups, business interests and options. First Nations; and, politically with like grand strategies and parties traditionally picking a side in particularly not in areas of Many question the relevance of a Ca- the old environment vs. the economy nadian energy strategy, with some debate based on electoral calculations. provincial jurisdiction. If the suggesting “hands off” – the market More often than not, these divisions premiers foresee a future will decide. Still others suggest that have been exploited for short-term reconciliation across all premiers should just stick to their political advantage and the complex- interests, they may need to knitting within their own borders, ity of energy trade-offs has been lost. turning a blind eye to the national re-cast their work as a more or international context. It’s been owever, with the new inter- flexible energy “framework”. our modus operandi for years in this est-based approach to Cana- country and it’s time to ask objective- H da’s energy challenges, a ly how that’s working out for us. greater and greater consensus has been It’s impossible to ignore the national The three premiers (Redford, Dun- emerging, crossing these historic di- headlines or the delays and controver- derdale and Selinger) will now work vides. The key themes are energy con- sies on major energy decisions facing closely with Ontario Premier Kathleen servation, innovation, a low-carbon us each week: transportation of en- Wynne as current COF Chair to de- future, diversification of energy sup- ergy by pipeline (Keystone XL, Gate- liver a robust report. For now, BC and ply and energy markets, even carbon way, Energy East) or by rail (Kinder Quebec are playing it cool and the pricing. Only a few years ago, we were Morgan’s proposal through BC, the fighting fiercely over so-called Dutch federal government is not at the table. fall-out from Lac-Mégantic); building disease, where eastern manufacturing It’s well understood that the Harper of new electricity infrastructure (Mari- was suffering from rising energy rev- government doesn’t like grand strat- time Link, Site C Dam in BC, Bipole enues or the West was disadvantaged egies and particularly not in areas of III in Manitoba); siting of wind energy by Kyoto climate change policies or provincial jurisdiction. If the premiers projects; investments in our resources Stephane Dion’s Green Shift was a tax foresee a future reconciliation across by state-owned enterprises or mul- on families (actually we’re still fight- all interests, they may need to re-cast tinationals; the development of the ing a variation of that one). However, their work as a more flexible energy Arctic; and the growing desire of First today we are moving toward more “framework”. Nations for resource revenue sharing common ground on what the ele- to name but a few. All of these major ments of an energy strategy might be. hile three years has moved decisions affect our energy prospects. This makes it less interesting to the the dialogue from outside We appear, by default, to believe these media but potentially more construc- stakeholders to squarely on factors require no larger policy coher- tive for the country. W government agendas, the consensus ence and that there is no need to have When the premiers met this summer, becomes much more fragile just below an informed public that understands there was actually little controversy the surface. The real work for the COF the complexity of the trade-offs.

Policy 23 It’s true that domestic and interna- both communicate what Canada is China, Japan and Europe are all test- tional market imperatives have been doing (because we do have a story to ing economic instruments to drive the driving force behind the expan- tell) but also put more in the window, environmental and, ultimately, eco- sion of pipelines, oil by rail, the ex- Prime Minister Harper has sent a letter nomic performance. We need to face port of LNG and the modernization of to US President Barack Obama formal- the environment and energy divide our electricity infrastructure to meet ly proposing “joint action to reduce squarely and with more courage than growing population and demand. It’s greenhouse gas emissions in the oil we’ve shown so far. There is a temp- also true that all these energy deci- and gas sector”. The politics suggest tation to make the Canadian energy sions at some point turn a corner and that if Canada doesn’t meet the US at strategy only about energy produc- meet public imperatives such as com- least part of the way, the project will tion but that ignores at least half the munity interest, social license to oper- likely slip into the 2014 pre-election equation – and deflects the issues that ate, First Nations rights and title, and window and could easily be subject the next generation will face. concerns over environmental impact to further political delay. Over the In essence, the context has changed, on land, air and water. To pretend next six months, it is anyone’s guess the lines are being re-drawn and Can- otherwise is to ignore the history of whether Ottawa and Alberta can agree ada needs to catch up. Though we the never-built but much debated on a plan for the sector and then have are rich in energy resources, services MacKenzie Valley pipeline through the US accept it. The stakes are high and technology, we are on the verge the North. Or continue the fallacy for Canada so our Ambassador to the of squandering economic opportuni- that Keystone XL will be passed in US Gary Doer will have his work cut ties by failing to reconcile market and the US because Canada believes “it’s out for him. public imperatives or take advantage a no-brainer”. Market imperatives and At the same time, we cannot remain of innovative policy tools. We need public policy imperatives must be rec- blind to the rapidly changing global to also watch that the COF and the onciled at some point or energy ad- context for our energy. Global players lethargy of our intergovernmental vances wither away. continue to want Canada’s resources processes don’t drag the whole ini- either for export or as investments – tiative down. Energy ministers, their On Keystone, everyone is though our policy delays are becom- officials and stakeholders have been reading the tea leaves on what ing increasingly unattractive. The pushing (some more than others) but US President Barack Obama global market for clean technology they should now be given license to be creative. will decide later this fall. One will be $3 trillion by 2020. Canada has a sliver of this market now but we COF and the premiers took an impor- thing is certain. He has sent a could grow our advantage and support tant step this summer with the prog- clear signal that Canada needs SMEs ready to create jobs and support ress report but now it’s time to step up to do more to reduce carbon our economic recovery. Domestically, the ambition and political brokering. from energy production. we should envision an increasingly With a little determination, we can integrated North American electricity create an energy framework worthy market – and build infrastructure that of the country, transforming dysfunc- both meets the needs of our consum- tion and delay into opportunity at n Keystone, everyone is read- ers at reasonable prices and allows for home, in North America and world- ing the tea leaves on what US export. The US doesn’t just need our wide. President Barack Obama will oil, it needs our clean electricity too. O Contributing Writer Velma McColl is decide later this fall. One thing is cer- It’s also time to recognize that, in to- tain. He has sent a clear signal that day’s world, it’s possible to merge eco- a principal of the Earnscliffe Strategy Canada needs to do more to reduce nomic and environmental outcomes Group, where her practice focuses on carbon from energy production. Un- with creative policy and fiscal tools. energy, clean technologies and the derstanding that our governments Alberta, BC and Quebec are leaders environment. needed to respond and find a way to with pricing policies on carbon but [email protected]

September/October 2013 24 The Curious Case of Rising Income Inequality Kevin Lynch and Karen Miske

The financial meltdown of 2008 and the subsequent Great Recession brought the issue of income inequality out of the realm of charts and graphs and into the streets with the “Oc- cupy” movement, as well as into the voting booths as a major theme of the 2012 US presi- dential election. But the gap between rich and poor has been widening in Canada since the 1990s and in the US since the decade before that. What do the charts and graphs tell us now about the trends in wealth disparities, and about the prospects for change in the lives of the people behind the numbers?

or citizens in many countries, Even viewed from the Davos Bear in mind that these measures of rising income inequality and de- mountain tops, income income inequality take into account F clining personal expectations inequality tops the charts in the redistributive impacts of transfers appear to be part and parcel of the new and taxes. We can also measure the global reality. Underscoring this, Pres- the World Economic Forum’s Gini coefficients for income before ident Barack Obama recently observed 2013 rankings of the most adjusting for transfers and taxes, es- in a New York Times interview that likely global risks over the sentially “market incomes”. And, by “years of widening income inequal- coming decade. comparing the Gini coefficients calcu- ity and the lingering effects of the fi- lated before and after accounting for nancial crisis had frayed the country’s transfers and taxes, we obtain a some- social fabric and undermined Ameri- times surprising perspective on how cans’ beliefs in opportunity.” much these redistribution systems re- income inequality is called the “Gini But, while income inequality has been duce income inequality (see Table 1). coefficient” – an index that ranges on the rise for three decades, its ascen- from 0 in an economy where every- Start with the United States. Its trans- sion to political prominence is much body has the same income (complete fer and tax system reduces income more recent; a legacy of the global fi- inequality by 23.8 per cent, one of income equality), to 1 in an economy nancial crisis and recession that has the smallest reductions in any OECD where a single individual receives all informed cultural content and pro- country. Perhaps no shock there, but the income (perfect income inequal- voked social movements. Income in- Germany, France, and Italy do sur- ity). Among advanced countries, for equality in these troubled times rated prise – they have market income in- example, it ranges from 0.249 in Nor- a special report in the Economist (“For equality (i.e., incomes before transfers richer, for poorer”, October, 2012) way at the lower end of income in- and taxes) that is both unexpectedly that asserted that “growing inequality equality to 0.380 in the United States high and quite similar to the US How- is one of the biggest social, economic, at the higher end, with Canada not far ever, with very progressive transfer and political challenges of our time”. from the average at 0.320. and tax systems which reduce income Even viewed from the Davos moun- There has been an increase in income inequality in the order of 40 per cent, tain tops, income inequality tops the inequality since the 1980s in 18 of the their income inequality after trans- charts in the World Economic Fo- 21 OECD countries for which longer fers and taxes is not only much less rum’s 2013 rankings of the most likely term data are available (see Table 1). than the US but also below the OECD global risks over the coming decade. And, surprisingly, some of the largest average. With all this focus on rising income increases in Gini coefficients occurred Canada also surprises. We have much inequality, what are the facts and in Finland and Sweden, both coun- lower income inequality after trans- what have we learned? tries with low income inequality, and fers and taxes than the United States That income inequality has been ris- in Germany, which also has below av- and you might be tempted to attri- ing, and for some time, is corroborat- erage levels of income inequality. In- bute this to the redistributive impacts ed by an extensive array of measures come inequality in Canada worsened of Canadian transfers and taxes, but across a wide cross-section of coun- in line with the overall OECD deterio- you would be wrong to do so. In fact, tries. The best-known such measure of ration of almost 10 per cent. the reduction in Canadian inequality

Policy 25 TABLE 1: Selected Measures of Income Inequality: OECD Countries, mid-1980s to Current

% Increase Gini Coefficient in Income % Reduction Ratio of Income (after Taxes and Gini Coefficient Inequality from Gini coefficient in Income of Top 10% to Transfers) – Mid- (after Taxes and Mid-1980s to at Market Inequality due Bottom 10% 1980s (or earliest Transfers) – 2010 2010 (or latest Income – 2010 to Taxes and 2010 (or latest Country year) (or latest year) year) (or latest year) Transfers year) Norway 0.222 0.249 12.2% 0.423 41.1% 6.0 Denmark 0.221 0.252 14.0% 0.429 41.3% 5.3 Czech Republic 0.232 0.256 10.3% 0.449 43.0% 5.4 Finland 0.209 0.260 24.4% 0.479 45.7% 5.4 Sweden 0.198 0.269 35.9% 0.441 39.0% 6.1 Luxembourg 0.247 0.270 9.3% 0.464 41.8% 5.6 Hungary 0.273 0.272 -0.4% n/a n/a 6.0 Germany 0.251 0.286 13.9% 0.492 41.9% 6.7 Netherlands 0.272 0.288 5.9% 0.424 32.1% 6.9 France 0.277 0.303 9.4% 0.505 40.0% 7.2 New Zealand 0.271 0.317 17.0% 0.454 30.2% 8.0 Italy 0.287 0.319 11.1% 0.503 36.6% 10.2 Canada 0.293 0.320 9.2% 0.447 28.4% 8.9 Australia 0.309 0.334 8.1% 0.469 28.8% 8.9 Japan 0.304 0.336 10.5% 0.488 31.1% 10.7 Greece 0.345 0.337 -2.3% 0.522 35.4% 10.8 United Kingdom 0.309 0.341 10.4% 0.523 34.8% 10.0 Israel 0.326 0.376 15.3% 0.501 25.0% 13.6 United States 0.340 0.380 11.8% 0.499 23.8% 15.9 Turkey 0.434 0.411 -5.3% n/a n/a 15.1 Mexico 0.452 0.466 3.1% n/a n/a 28.5 OECD 21-Average 0.289 0.316 9.4% 0.473 33.1% 9.6

Source: OECD Library, data extracted August 1, 2013. OECD 21 set of countries based on “Divided We Stand, Why Inequality Keeps Rising” (OECD) with the addition of Australia

CHART 1: Per cent Reduction in Inequality due to Taxes and Transfers due to our progressive transfer and 50% tax redistribution system is only 45% slightly greater than the US at 28.4 per cent (see Chart 1). 40%

35%

30%

25%

20%

15%

10%

5% UNITED STATES 0% FINLAND SLOVENIA BELGIUM AUSTRIA IRELAND CZECH REPUBLIC GERMANY LUXEMBOURG DENMARK NORWAY REPUBLIC SLOVAK FRANCE SWEDEN ICELAND ITALY GREECE POLAND UNITED KINGDOM ESTONIA PORTUGAL SPAIN NETHERLANDS JAPAN NEW ZEALAND AUSTRALIA CANADA ISRAEL SWITZERLAND KOREA CHILE

Source: OECD (extracted Aug 1, 2013). 2010 or latest year.

September/October 2013

Good idea 2007 56% As a concept do you think Canada as 2013 52% Q an emerging energy superpower is a good idea or a bad idea? 39% Bad idea 29% 2007 9% 2013 20% 23% 19% 17% 18% 17% 13% 9% 7% 7% 2%

Very good Somewhat Neither good Somewhat Very bad Don’t know good nor bad bad 26 The reason is that there is much low- commonly supposed. ada, over the 1980s and through the er inequality of “market incomes” in Chart 3 presents the Canadian and first half of the 1990s, and has contin- Canada. Indeed, the Canadian Gini American Gini coefficients, measured ued to drift upwards to this day. coefficient measured on market in- on incomes after transfers and taxes comes is in the lower third of all OECD are taken into account, for the period While the emphasis on rising countries, and it is markedly less than from 1980 to today. The rise in this income inequality has been any other G7 country (see Chart 2). measure of Canadian income inequal- recent, the deterioration While the emphasis on rising income ity largely transpired between 1995 in a number of countries, inequality has been recent, the dete- and 2000, and today’s levels are little including Canada, actually rioration in a number of countries, in- different than then. The American ex- cluding Canada, actually occurred in perience again is different: US income occurred in the 1990s, the 1990s, not during the 2000s as is inequality increased earlier than Can- not during the 2000s as is commonly supposed. CHART 2: Inequality as Measured by Market Incomes

0.7 Emerging markets have also seen movements in income in equality, and not always in the preferred di- 0.6 rection. The region that has seen the most progress, albeit starting from 0.5 very high levels of inequality, is Latin America. The Gini coefficient today 0.4 for Brazil is roughly 0.55, down im- pressively from the 1990s. Going in the other direction are India (0.33), 0.3 China (0.41) and Russia (0.42). South Africa, among the expanded BRICSs, 0.2 is worrisome at 0.7. Despite its pedigree, many prefer to 0.1 compare the “rich to the rest” rather than analyze the movements of Gini NEW ZEALAND KOREA SWITZERLAND ICELAND NORWAY NETHERLANDS DENMARK REPUBLIC SLOVAK SWEDEN CANADA CZECH REPUBLIC SLOVENIA LUXEMBOURG POLAND AUSTRALIA BELGIUM AUSTRIA FINLAND ESTONIA JAPAN GERMANY UNITED STATES ISRAEL ITALY FRANCE SPAIN GREECE PORTUGAL UNITED KINGDOM CHILE IRELAND 0 coefficients. To do so, two common measures that allow comparisons of inequality within and across countries Source: OECD (data extracted on Aug 1, 2013) are the ratio of the disposable income Data for 2010 except for Chile (2011) Ireland, Japan, New Zealand, Switzerland, (2009) of the top 1 per cent to the disposable income of the bottom 99 per cent, and CHART 3: Canada and US Gini Coefficients, 1980-2010 (Income After the ratio of the disposable income of Taxes and Transfers) the top 10 per cent to the disposable income of the bottom 10 per cent.

0.39 The “1 per cent versus the rest” measure for Canada 0.37 shows the top 1 per cent taking in 10.6 per cent of 0.35 national income in 2010 0.33 while paying 21.2 per cent of federal and provincial income 0.31 tax. This is well up from their 0.29 7 per cent share of total income in the early 1980s but 0.27 actually down from a pre- recessions peak of 12.1 0.25 per cent. 1980 1982 1986 1988 1990 1992 1996 1998 2000 2002 2006 2008 2010 1984 1994 2004 Canada United States The “1 per cent versus the rest” mea- sure for Canada shows the top 1 per Source: OECD cent taking in 10.6 per cent of nation-

Policy 27 al income in 2010 while paying 21.2 CHART 4: Ratio of Disposable Income: Canada and US Top 10 per cent to per cent of federal and provincial in- Bottom 10 per cent come tax. This is well up from their 7 per cent share of total income in the 16 early 1980s but actually down from a pre-recessions peak of 12.1 per cent. 14 In the US, the top 1 per cent account- 12 ed for 8 per cent of national income in the early 1980s and this more than 10 doubled to 17 per cent in 2010 (World 8 Top Incomes Database, Alvaredo et al). Unlike in Canada, today’s share of 6 the top 1 per cent in the US is higher 4 than it was pre-financial crisis and recession. 2 0 Looking at the ratio of the disposable 1990 2000 2010 income of the top 10 per cent to the Canada United States bottom 10 per cent, the Canadian and American stories are again rather dif- Source: OECD (data extracted August 1, 2013) (US 1990 data not available so 1989 used) ferent (see Chart 4). The 2010 ratio Ratio represents the ratio of the average income of someone in the top 10% to the average income for the US is 15.9 – that is, the aver- of someone in the bottom 10% age income of someone in the top CHART 5: Ratio of Disposable Income: Top 10 per cent Versus Bottom 10 per cent is 15.9 times greater than 10 per cent 2010 or Latest Year the average income of someone in the bottom 10 per cent of the income 30.0 distribution. This is up strongly from 2000, and is almost double the Cana- 25.0 dian ratio. In Canada, the ratio rose in the late 1990s, but today, at 8.9, it is 20.0 slightly below its 2000 levels. To provide some broader context for 15.0 this measure of income inequality, 10.0 Chart 5 provides comparable mea- sures for all OECD countries in 2010. 5.0 The ratio for Sweden is 6.1, it is 6.7 for Germany, the Australian ratio is basi- - cally the same as Canada, and Chile Italy Israel Chile Japan Spain and Mexico are dizzily above 25. Korea France Austria Ireland Turkey Poland Estonia Greece Iceland Finland Mexico Canada Sweden Norway Slovenia Belgium Portugal Australia Hungary Denmark Germany Switzerland

Should we be worried about Netherlands Luxembourg United States New Zealand Czech Republic the potential for a negative Slovak Republic United Kingdom dynamic among rising Source: OECD income inequality, high CHART 6: Change in Median Disposable Income and Change in GDP unemployment, low growth, 2000 to 2010, Selected Countries and declining expectations in a number of countries? The 50% OECD argues emphatically, 40% yes. 30%

Should we be worried about the po- 20% tential for a negative dynamic among 10% rising income inequality, high unem- ployment, low growth, and declining 0% expectations in a number of coun- Italy

-10% Israel France tries? The OECD argues emphatically, United Finland Mexico Canada Sweden Norway States Australia United Kingdom Denmark Germany yes in a recent report (“Divided We -20% Japan

Stand: Why Income Inequality Keeps Netherlands Rising”, 2011). A brief glance at Chart Change in Mean Disposable Income Change in Real GDP 6, which presents the cumulative changes in real GDP and real median Sources: OECD, IMF (data extracted Aug 1, 2013)

September/October 2013 28 CHART 7: US Job Losses: All Post WWII Recessions

1.0%

0.0%

-1.0%

-2.0%

-3.0%

-4.0%

-5.0%

CURRENT EMPLOYMENT PER CENT JOB LOSSES RELATIVE TO PEAK EMPLOYMENT MONTH -6.0% RECESSION DOTTED LINE EX-CENSUS HIRING -7.0% 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 NUMBER OF MONTHS AFTER PEAK EMPLOYMENT 1948 1953 1957 1960 1969 1974 1980 1981 1990 2001 2007

Source: Starfort Investments

incomes over the last decade (2000 to ed States since the 1930s (see Chart 7). societal preferences countries make 2010), suggests why. This, plus declining median real dis- between equality of opportunity ver- posable incomes, affects both public sus equality of outcomes in designing espite cumulative real eco- confidence and personal expectations. policies. And, it is certainly not to sug- nomic growth over the de- Many European countries are going gest that lower income inequality per cade of almost 20 per cent through their own economic trau- se produces better economic results - D numerous examples over the postwar in the United States, growth in the mas. With youth unemployment median real disposable income was rates above 40 per cent in four Euro- period of high-tax, large, and inef- actually negative. Japan, with almost zone countries, with overall unem- ficient welfare states with poor track 10 per cent real GDP growth over the ployment rates above 25 per cent in records of economic growth make the decade, had an even larger decline in several, and with growth slow in all, counter argument rather persuasively. its median real disposable income. fraying of the implicit social contract A reasonable place to begin is the The increase in the median real dis- is something European policy makers OECD report “Divided We Stand: Why posable income was weak and signifi- need worry about. Income Inequality Keeps Rising”. It cantly lower than real GDP growth in o what have we learned about the analyzed a number of potential driv- several important European countries possible causes of this rising in- ers of increasing income inequality including Germany, Italy and the come inequality across this and came to several interesting, and Netherlands. For all these countries, S at times non-consensus, results which broad cross section of countries and the wedge between growth in median over broadly similar timeframes? To are worth summarizing. real disposable incomes and growth be clear, the intent here is not to re- First and foremost, the OECD research in real GDP output over the 2000 to hash the longstanding debate about points to technological change as a 2010 decade was appreciable. economic growth versus income re- key driver of income inequality. Just As the IMF has demonstrated, the distribution, one where the econom- as technological change has increased 2008 recession was atypically severe ics profession has generally opted the demands for, and market incomes and the recovery has been atypically for economic growth provided that of, workers with higher skill levels, it slow in a number of advanced coun- income gaps are not so large and so has reduced the demand for workers tries. For example, in terms of job loss- rigid that they themselves become with low skills and only then at lower es, this has been the worst downturn an impediment to sustained growth. wages. And, to the extent public ed- and the slowest rebound in the Unit- Nor is it to venture into the differing ucation systems, for a variety of rea-

Policy 29 sons, have not been able to raise skill Regulatory reforms to increase competition in labor and levels, particularly for disadvantaged product markets have had mixed effects on income inequality groups, these wage gaps have widened further. Some have referred to this dy- – they have increased employment rates, which brought more namic as “the race between education low skilled workers into paid employment, but they have also and technology”. widened the distribution of wages in these now less regulated Regulatory reforms to increase com- labor markets. petition in labor and product markets have had mixed effects on income inequality - they have increased em- ployment rates, which brought more the marketplace and has opted for a What emerges clearly and strongly is low skilled workers into paid employ- focus on protecting workers not jobs, that a strong public education system, ment, but they have also widened the with a safety net more geared to skills managed for outcomes, rewarding ex- distribution of wages in these now less upgrading and retraining for the new cellence and willing to innovate, is regulated labor markets. Similarly, the essential in a world where the pace increase in part-time work arrange- jobs, not waiting for the traditional ones to return. of technological change is relentless. ments offered more flexible employ- The Internet 4.0 will transform again ment options but increased wage dis- There neither is, nor should there how we work, what we produce at persion. As well, many countries have be, one approach that is best suited work, and where we work and yet we reduced the generosity of their benefit for every country, but there is much are barely embarking on Public Educa- systems, often as part of restoring fis- to learn from others about how we tion 2.0 in Canada. cal balance, and relied more heavily might make our systems better. From on less progressive taxes. The OECD But change is needed in more than a Canadian perspective, while we bottom line: “the single most impor- education for Canadian workers to have done relatively well compared tant driver has been greater inequality prosper in the decades ahead. Skilled to the United States and many other in wages and salaries.” workers need skilled jobs, and we countries in terms of income equality need them here in Canada. This will in rapidly changing circumstances, learly, other factors have also require more entrepreneurship to cre- this is no reason for complacency. been advanced to explain in- ate the growing and striving firms creasing income inequality, What emerges clearly and that create these jobs. It will also de- C mand more innovation so that we particularly globalization. While the strongly is that a strong OECD research downplays its role in are continually moving up the value increasing income equality, others public education system, added curve in every sector and in- such as Nobel Prize winner Michael managed for outcomes, dustry. In a profoundly changing and Spence believe otherwise, particularly rewarding excellence and knowledge-intensive global economy, the hollowing out of manufacturing productivity and innovation go hand- willing to innovate, is essential in-hand with competitive, high wage in response to low wage-huge scale in a world where the pace competition from emerging econo- economies. of technological change is mies. Others point to weaker produc- For governments, the issue is less about tivity growth, lower intergenerational relentless. The Internet 4.0 will their size and more about their effi- income mobility, reduced private transform again how we work, ciency; more about whether they will sector union presence and changes what we produce at work, and better target social safety nets; more in executive compensation policies where we work and yet we are about whether they will reshape en- and benchmarks. Analytic findings barely embarking on Public titlement programs such as pensions are mixed, but ongoing research and to make them inter-generationally shared experiences across the OECD Education 2.0 in Canada. sustainable; and, more about whether countries should help in shedding they will make the reforms and invest- more light on movements in income ments in public education needed to inequality. The rise in natural resource prices not improve both employment opportu- nities and income equality. In short, One space to watch carefully is policy only helped Canadian income growth good government and good govern- reforms in the Nordic countries. In- but also cushioned the income effect deed, recent innovations in Sweden ment policy still matter, greatly. on less skilled workers. Nevertheless, are fascinating. The Swedes embrace high income countries like Canada fiscal balance, corporate income taxes Contributing Writer Kevin Lynch is need to worry about middle class hol- that are lower than the US, a strong Vice Chair, BMO Financial Group, and public education system, government lowing out as wages bifurcate between former Clerk of the Privy Council and efficiency rather than government skilled jobs producing high-value- Secretary to the Cabinet. size, innovation as a driver of com- added products and services with Karen Miske is Senior Adviser, BMO petitiveness, and reforms to the social good wages, and low skilled jobs pro- Financial Group. safety net. In Denmark, the govern- ducing standardized, low-value-added ment understands how technologi- goods and services with middling cal change is continually changing wages at best.

September/October 2013 30

Premier Alison Redford and the mayor of High River, Emile Blokland, survey damage to the southern Alberta town on June 22, after extensive flooding from the Highwood River. (Chris Schwarz/Office of the Premier). Flickr photo

was in New York, having finished What We Saw at an address to the Foreign Policy I Association, and was at my hotel preparing for my return flight to Al- berta. It was another normal day in the Floods: Albertan my life as premier of Alberta. Then the phone calls and emails started coming from my staff back home: southern Resiliency and Alberta was being hit by an enormous amount of rain and there was exten- sive flooding. People all across the Canadian Solidarity southern part of the province were being ordered to leave their homes. I Alison Redford had to return home as quickly as pos- sible. It was bad. Very bad. As an Albertan, Alison Redford wasn’t in need of a lesson My plane landed in Calgary in the ear- on the awesome power of nature. And witnessing the toll of ly morning hours of June 21. By this point, it was being reported that some the disastrous floods that struck the province in June is not 100,000 Albertans had been forced to an experience she hopes to repeat as premier or private citi- leave their homes in High River, Cal- gary and surrounding communities. zen. But the floods also revealed the breathtaking resiliency Disaster had struck and it was only go- of her fellow Albertans and the selfless generosity of Cana- ing to get worse: the flood waters were dians in the province and elsewhere who gave their time, making their way down to Medicine Hat, Lethbridge and other communi- expertise and donations toward the recovery effort. In the ties that had little time to prepare. face of such devastation, communities across the province Straight from the airport, I went to and the country rose to the occasion. As premier of Alberta, the Emergency Operations Center in Calgary for a de-brief and a quick Redford has implemented a range of pre-emptive and miti- night-time survey of some of the af- gation policies to do the same. fected parts of Calgary. I have to tell

Policy 31 you: standing on a bridge in the dark In the early days of the flood, two things stood out above the with all the power out out, listening rest: The scale of the disaster was nothing like we had ever to the roar of the rapidly rising river, was terrifying. experienced before, and the Alberta government would have to mount an unprecedented response. After a couple of hours of restless sleep, I was back out in my constituency of Calgary-Elbow to visit with residents evacuated to the Centre Street Church rible wildfire that destroyed much of any way they could. Hutterite women evacuation center and to thank the Slave Lake in 2011, we learned valu- cooked meals in evacuation centers. many volunteers who were support- able lessons from that tragedy in The government was inundated with ing them. terms of how to undertake a massive, phone calls, emails and Facebook coordinated disaster-relief effort in posts requesting information on how I made the decision to get to the af- the face of a terrible natural disaster. people could volunteer, donate mon- fected areas as quickly as I could to And we applied those lessons from ey or otherwise contribute to the re- see the impact first hand and to en- day one in our flood response to en- building. Albertans used Twitter and sure proper resources were going into sure that what we were doing met the Facebook to advertise empty rooms in the recovery and rebuilding process. needs of Albertans both quickly and their homes that could house evacu- The next few days were a whirlwind properly. Even before the flood waters ees; or empty barns that could shel- of stops at evacuation centres all over had receded from the worst-hit areas ter flooded-out livestock. People took southern Alberta to meet with dis- of southern Alberta, we had moved tractors down flooded streets and res- placed families. I also met with local the government into recovery mode, cued those who were stranded in their officials to ensure they had the re- and immediately began the rebuild- vehicles. Everywhere I went, I heard sources they needed. And I wanted to ing efforts that we now know will take “ordinary hero” stories that filled thank the volunteers, local and pro- many years. me with pride for who were are as vincial officials and staff, health care The second thing that struck me and Albertans. professionals, members of the mili- will stay with me forever is the over- tary and all who selflessly offered their whelming strength and resolve of Al- nd Canadians rallied to sup- time to assist those in need. bertans coupled with the incredible port our province in so many In the early days of the flood, two generosity of Canadians. A ways: Red Cross volunteers things stood out above the rest: The Yes, there was tragedy and sadness and from Newfoundland, social workers scale of the disaster was nothing like anxiety and destruction. There were a from Guelph, public health workers we had ever experienced before, and lot of hugs and a lot of tears. It wasn’t from all across the Prairies who came the Alberta government would have easy to tour High River just a few days to support our citizens, the tremen- to mount an unprecedented response. after the floods – my mom grew up dous amount of personal and corpo- We quickly established a ministerial there, and I have lots of very happy rate donations to the Red Cross… it task force headed by Municipal Affairs memories of the town. To see the ut- was amazing. I have never been more Minister Doug Griffiths so that deci- ter devastation was heartbreaking. grateful and proud to be a part of the sions could be expedited. Within days Canadian community than I was in But there was also hope and love and of the disaster, the government allo- the days following the flooding. cated an initial $1 billion in disaster generosity. Neighbours, families and recovery funding to affected commu- communities rallied to support those I was also grateful for the tremendous nities and families, which included a in need. In High River, I talked with leadership shown by other levels of deposit of $50 million into the bank a group of people who drove all the government. Mayors and local of- account of the Town of High River. way from Edmonton to volunteer ficials in affected communities were We provided tens of thousands of pre- loaded debit cards for displaced Al- bertans and in the first five days they were available, more than $48 million had been distributed to affected fami- lies. Initial payments of up to $10,000 were made to Albertans to help them rebuild their homes and their lives. Temporary neighbourhoods were established to provide longer-term housing to those displaced. And we said that First Nations families in Al- berta would get the same support as anyone else, regardless of jurisdiction.

hile I am extremely proud Premier Alison Redford answers reporters questions in Calgary with Prime Minister Stephen Harper and of the way the Alberta gov- Calgary Mayor Naheed Nenshi after the three of them took an aerial tour of the Calgary and Southern W ernment handled the ter- Alberta areas affected by massive flooding. (Chris Schwarz/Office of the Premier). Flickr photo

September/October 2013 32

Cougar Creek, in the town of Canmore, west of Calgary, was a raging torrent that toppled houses and destroyed a section of the TransCanada Highway in its wake. (Chris Schwarz/Government of Alberta). Flickr photo

rock solid pillars of support for their that showed the tremendous progress tance. And an expert panel has been citizens. Calgary Mayor Naheed Nen- made on many fronts, including more established to look at community mit- shi was a tireless worker for his city. than 8,000 applications processed un- igation options. der the Disaster Recovery Program, Prime Minister Stephen Harper and We are working with communities with 1,400 payments made already of many federal ministers were on scene to ensure that there are appropriate in Alberta quickly – to survey the nearly $7 million. More than 830 ki- lometers of flood-damaged provincial mitigation measures in place to guard damage, and to offer support. roads have already been repaired. The against a future “one-in-a-hundred- years” flood. We are working with the Canadians rallied to support herculean effort of Albertans to ac- complish this much, this quickly, has real estate sector to provide informa- our province in so many ways: been inspiring. tion on floodways to prospective buy- Red Cross volunteers from ers. A “DRP notice” will be placed on But we still have much more to do. title for those homeowners who ac- Newfoundland, social workers Some 2,700 Albertans were still out from Guelph, public health cess Disaster Recovery Program fund- of their homes and living in tempo- ing but remain in the floodway, as workers from all across the rary neighborhoods, in hotels or with well as for those in the flood fringe friends and family at the end of Au- Prairies who came to support who access DRP funding but do not gust. And there is still a tremendous our citizens, the tremendous undertake the minimum mitigation amount of work that needs to be measures. amount of personal and done in High River as home inspec- corporate donations to the tions continue and determinations These were not easy decisions to Red Cross… it was amazing. I are made as to whether homes can be make. But they are the right decisions have never been more grateful repaired and remediated. for Alberta and Albertans. and proud to be a part of the We have made policy decisions to The floods of 2013 have changed Canadian community than I mitigate the effects of future floods. Alberta – and Albertans – forever. Homeowners currently living in the But with the support of each other was in the days following the floodway in impacted communities and from all of Canada, we will get flooding. are being offered a buyout. If they through this, stronger than ever. We stay, they will not qualify for future are resilient. We are strong. We are Al- disaster support. Albertans living in bertans. the flood fringe will be required to In late August, my government pro- mitigate against future flood damage Alison Redford is Premier of Alberta. vided a status report on the flood in order to receive future disaster assis-

Policy 33

Premier Christy Clark announces her new cabinet in Vancouver on June 7,after winning the British Columbia election, confounding the pollsters, who got it wrong. Again. Flickr photo

n the wake of the British Colum- bia and Alberta elections, as well Getting it Right: I as the 2011 federal election, criti- cism of election polling has been ram- pant. That criticism, as well as the The Art and Science doomsaying for the future of polling and commercial market research is, to of Competent Polling my mind, largely unwarranted. Indeed, for all their criticism of poll- sters, the pundits are still reluctant to Martin Goldfarb prognosticate without using a poll as a crutch. The same people who criticize In the past two years, a parade of high-profile, breath- the pollsters for getting it wrong have takingly inaccurate pre-election polls has brought doubt themselves been getting it wrong. Media polling, political party poll- and derision to the public opinion surveying industry as ing and commercial research all have a whole. In polling, as in so many things, you get what their legitimate and distinctive roles you pay for. Some pollsters have traded the brand-build- and goals, summarized as follows: ing lure of the spotlight for cheap techniques swallowed s -EDIA#REATENEWS s 0OLITICALPARTY2IDINGPROJEC- whole by media who don’t know enough about the field tion and, more importantly, to question what they’re being promised in the quest for persuasion, a game-changing headline. Meanwhile, serious polling is s #OMMERCIAL-ARKETASSESSMENT alive and well in the hands of practitioners who know that and persuasion. Media polling problems of the kind the science, well executed, is sound and that the art is the that were apparent in those three key exciting part. elections have been generalized to the

September/October 2013 34 Let’s begin with election polling. For the most part, polls that Validity is a whole separate issue. are cited as being inaccurate reflect an inappropriate use of Both questionnaire design and inap- propriate questions influence results. polling techniques to project voter intentions and the number How and in what order attitudinal of seats each party could win. questions are included in the poll can affect results. For instance, if you ask industry. Media polls need improve- sample appropriate for political poll- a series of questions about who could ment; however, the scientific under- ing, the techniques used must ensure best manage the economy or on a spe- pinnings of public opinion research that those with landlines only, cell cific issue such as whether one agrees continue to produce excellent results phones only, ethnic voters, those with or disagrees with a proposed pipeline in political party and commercial limited English are all included. The project, and follow that series of atti- research. science of polling is sound, providing tudinal questions with a voter prefer- Let’s begin with election polling. For a truly random sample is selected. ence question, the result of the voter the most part, polls that are cited as The techniques used are driven by preference question can be affected by being inaccurate reflect an inappropri- costs; more robust techniques cost the attitudinal questions. ate use of polling techniques to proj- more. The media who retained the Understanding that anxiety is part of ect voter intentions and the number pollsters to do these polls are not pre- the election ethos and dealing with it of seats each party could win. pared to pay what is required to do in questionnaire design may mean the For a study to be useful, it must be proper polling. In some cases, media difference between a validly project- both reliable and valid. Reliability outlets don’t pay anything, as poll- able poll and one that is not. In every and validity are well defined by the sters use the earned media coverage to election there is the fear of the un- research website Explorable.com: “Re- build their brands. known. For example, in B.C. the anxi- liability, in simple terms, describes the The impact of robocalls, on-line pan- ety or fear of the NDP may be a rea- repeatability and consistency of a test. els, and people who refuse to answer son to vote for the other parties. This Validity defines the strength of the fi- must be considered when assessing re- has been the case in B.C. since Social nal results and whether they can be liability. The issues include: Credit was the default choice to stop regarded as accurately describing the s $O THOSE WHO ANSWER REmECT THE “the socialist hordes.” The Liberals, real world.” first under Gordon Campbell and now intentions of those who do not under Christy Clark, have become the A reliable study presupposes a ran- answer? dom sample – that is, any member of party of the anti-socialist coalition. s 7HEN USING PANELS DOES THE FACT Or if one party is making promises a population has an equal and ran- that respondents are self-selected, dom chance of being selected to par- that create anxieties amongst a large generally rewarded and generally swath of the population, even though ticipate. It is random sampling that PERCENTAGEricher, younger OF POPULAR and more VOTE com BRITISH- COLUMBIA ELECTION 2013 ensures reliability; based on the prem- many people may be sympathetic to fortable in English or French skew that party, they may, in the end, de- ise that surveys provide accurate mea- results? surement and a census is not required cide to vote against that party – and s 7HENUSINGROBOCALLS HOWISRAN- every time you need to determine often that decision takes place at the what the population thinks. domness within a household as- last moment. Thus, in B.C., the “10 sured? How can respondents cor- second Socreds” have become “10 sec- To ensure a true random rect a wrong answer? ond Liberals”. sample appropriate for political polling, the PERCENTAGE OF POPULAR VOTE – B.C. PROVINCIAL ELECTION 2013 techniques used must ensure that those with landlines 50 only, cell phones only, ethnic voters, those with limited 46.0% 40 44.1% English are all included. The OF VOTE PROJECTED 39.7% OF VOTE science of polling is sound, 37.7% REALIZED providing a truly random 30 OF VOTE REALIZED OF VOTE sample is selected. PROJECTED 20

he polling techniques used in 10 the studies that most famously T got it wrong did not appear to employ random samples of the whole 0 population and therefore they were B.C. NDP B.C. LIBERAL not appropriate for the outcomes Source: ThreeHundredEight.com promised. To ensure a true random

Policy SEAT PROJECTIONS BRITISH COLUMBIA ELECTION 2013

B.C. NDP B.C. LIBERAL

48 SEATS 34 SEATS 35 SEATS 49 SEATS PROJECTED REALIZED PROJECTED REALIZED PERCENTAGE OF POPULAR VOTE BRITISH COLUMBIA ELECTION 2013

50

46.0% 40 44.1% OF VOTE PROJECTED 39.7% OF VOTE 37.7% REALIZED 30 OF VOTE REALIZED OF VOTE PROJECTED 20

10

0 B.C. NDP B.C. LIBERAL

SEAT PROJECTIONS BRITISH COLUMBIA ELECTION 2013

35 The polls in B.C. certainly missed SEAT PROJECTIONS – B.C. PROVINCIAL ELECTION 2013 that. ThreeHundredEight.com, an ag- gregate poll-of-polls website, project- PERCENTAGE B.C. OF NDP POPULAR VOTE ALBERTAB.C. ELECTIONLIBERAL 2012 ed the NDP winning 46 per cent of the vote on May 16, with the Liberals at 37.7 per cent, the Greens at 7.8 per cent, and the Conservatives at 5.2. per cent. ThreeHundredEight.com pro- jected an NDP majority government with 48 seats, to 35 for the Liberals and one independent.

PERCENTAGE OF POPULAR VOTE ALBERTA ELECTION 2012 The popular vote and seat projections couldn’t have been more wrong. The Liberals obtained 44.1 per cent of 50 the vote against 39.7 per cent for the NDP, 8.1 per cent for the Greens and 48 SEATS 34 SEATS 35 SEATS 49 SEATS only 4.8 per cent for the Conserva- 40 PROJECTED REALIZED PROJECTED REALIZED44.0% tives. Premier Clark formed a major- OF VOTE ity government with 49 seats to 34 for 38.4% Source: ThreeHundredEight.com REALIZED the NDP. 30 OF VOTE 34.3% 35.8% As the website’s Eric Grenier wrote on PROJECTED OF VOTE OF VOTE his blog: “As in the Alberta election, PERCENTAGE OF POPULARREALIZED VOTE – ALBERTAPROJECTED PROVINCIAL ELECTION 2012 the polls showed the opposite of what 5020 actually occurred.” In the Alberta election of April 2012, 4010 44.0% ThreeHundredEight.com projected the OF VOTE Wildrose with 38.4 per cent of the 38.4% REALIZED vote to 35.8 per cent for the Progres- 300 OF VOTE 34.3% 35.8% sive Conservatives, 11.4 per cent for PROJECTED ALBERTA WILDROSEOF VOTE OF VOTEALBERTA PC the NDP and 11.4 per cent for the REALIZED PROJECTED Liberals. The website’s seat projection 20 was 43 seats for Wildrose, 39 for the PCs, and five for the NDP. Again, both projections couldn’t have 10 SEAT PROJECTIONS ALBERTA ELECTION 2012 been more wrong. The PCs under Ali- son Redford won 44 per cent of the 0 vote against 34.3 per cent for Wil- drose under Danielle Smith. The Lib- ALBERTA WILDROSE ALBERTA PC erals won 9.9 per cent of the vote and Source: ThreeHundredEight.com the NDP took 9.8 per cent. Redford’s winning margin of nearly 10 points SEAT PROJECTIONS – ALBERTA PROVINCIAL ELECTION 2012 translated into a big majority govern- SEAT PROJECTIONS ALBERTA ELECTION 2012 ment, with 61 PCs, 17 Wildrose, five ALBERTA WILDROSE ALBERTA PC Liberals and four NDP in the Alberta legislature. As Grenier wrote at the time: “Every public poll released in the last week of the campaign gave Wildrose a lead, at times a sizable one.” The public polls for the media failed to capture Redford’s surge in the clos- ALBERTA WILDROSE ALBERTA PC ing 10 days of the campaign, just as they failed to capture Clark’s momen- tum shift in the closing period of the B.C. election. Both were better cam- paigners, and better messengers, than 43 SEATS 17 SEATS 39 SEATS 61 SEATS their opponents. Campaigns matter. PROJECTED REALIZED PROJECTED REALIZED They really do.

Source: ThreeHundredEight.com It also happened that both Redford and Clark knew they were winning,

September/October 2013

43 SEATS 17 SEATS 39 SEATS 61 SEATS PROJECTED REALIZED PROJECTED REALIZED 36 ways right in projecting the number of seats. Things happen that interfere with their models. The challenge is to build the most robust model possible which takes insight, diligence, experi- ence and, not least, money.

he number of dependent vari- ables has increased in the last T few years. In the past, tradi- tional media had influence. Today the mainstream media are one of many information sources and for many people, not the most important or the most trusted. Social media – Face- book, Twitter, advertising campaigns, positive and negative – all have an im- pact as well. Voter intention models must take into account a potpourri of variables in as- sessing how people might vote in a context where up to 20 per cent make up their minds at the last second. Analysis requires sophisticated model- Premier Alison Redford during the 2012 Alberta campaign, in which she stormed from behind Alberta Wild Rose to win yet another majority for Alberta’s PC Party. Flickr photo ing rather than prima facie reporting of results. Good models are both time consuming and expensive to develop because their own pollsters told them tention to ridings and ensures repre- and are continuously refined between so. And the difference between them sentation across the country or prov- and during elections. and the media polls is simple – both ince, but also in key ridings. Analysis Greg Lyle for Redford and Dimitri of swing ridings is core to a project- A well designed questionnaire and Pantazopoulos for Clark were in the able seat count. Of course, having a a vigorous random sample are not field every night, interviewing voters large enough sample by riding is ex- enough. As part of statistical model- by telephone, not on the Internet. pensive. Key ridings have to be cho- ing (and therefore also of question- naire design) it is necessary to design a People’s fears and anxieties in an sen with care and may include special series of filter questions to determine election have a great deal to do with interest ridings – e.g. ridings that have who is most likely to vote, who is not whom they end up voting for. Ques- a skew in the population like a uni- likely to vote and use all these sources tions need to take fears into account, versity riding, star candidate ridings, of data into a predictor model. While and they do not easily do so. This re- swing ridings and ridings that never change, and bellweather ridings. predictor models have existed for a quires sophisticated design and analy- long time, the polls that got it wrong These ridings need unique analysis sis, too often lacking in media polls. in Alberta and B.C. did not appear to and these results need to be built into In previous work, we found that in employ one. a model that will predict seats. When some circumstances roughly 20 per all is said and done no pollster is al- And with these polls the media got cent of voters make up their mind in what they paid for. Their objective is the polling station. There is a differ- to create excitement in the election or ence between voter stated intentions When all is said and done no pollster is always right a race – a reason to read or to watch or and voter behaviour. How often and to listen but they rarely spend enough in how many different ways is vot- in projecting the number of money to purchase high quality pre- ing intention asked? Three or four seats. Things happen that dictive polls. And, they often lack the permutations are required to be able interfere with their models. expertise to understand what they’ve to project seat count. And even then, bought and what its limitations are. surprises can and still do happen. The challenge is to build the most robust model possible Commercial buyers of research for the Creating fear of one’s opponents most part are qualified, capable pro- makes it more difficult for pollsters which takes insight, diligence, fessionals who focus on research stan- to predict voting intentions. If an ad experience and, not least, dards. Often the media buyers are not. hits a nerve that is a truism or induces money. Journalists need to understand more people to think that the gist of the than the basics about market research ad’s intention is in fact accurate, then and of statistics. the ad will influence voting booth There is an old expression: if you want behaviour. publicity, buy it. Publicity can be dan- A well designed election poll pays at- gerous, especially if it’s free. Many

Policy 37 pollsters who conducted media polls Commercial buyers of research for the most part are qualified, were looking for free publicity and in capable professionals who focus on research standards. Often the process took risks that didn’t pan out. They cut corners and engaged the media buyers are not. Journalists need to understand in methodologies that they ought to more than the basics about market research and of statistics. have known would not give the me- dia outlets what they need. Driven by their desire for publicity, and the desire to become part of a headline story, the pollsters have themselves The art of political polling is mostly search. The buyers of research are become media personalities. about creating affinity. In a national professionals in that they have an un- poll, a swing going from 36 per cent derstanding of the social sciences and The science of polling is not in ques- support to 39-40 per cent is the dif- statistics, often with academic back- tion. Research conducted correctly ference between a minority and a ma- grounds in the behavioural sciences. – that is reliable and valid – works. jority government, as we saw in 2011. Publishing sample size and margin of Market research is not the same as That’s what pollsters who poll for po- error does not mean the research is political polling. Events in business litical parties are supposed to do. As well done and, if it is not, the results rarely take place in a specific time and my mentor Senator Keith Davey said, will not be what the media and the place as they do in an election. As in over and over again, “You find out pollsters have promised. party research, commercial research is how people vote on election night for fundamentally interested in persua- I believe there are times when journal- free. Help me persuade them to vote sion – who, where and how. For the ists try to influence voter behaviour by for us.” attempting to create a wave in favour most part, the issues are different and In 1974, Prime Minister Trudeau told of one party or another through poll- the techniques are tailored to the mar- me not to tell him that people didn’t ing with questions that are designed ket requirements. Commercial tech- want bilingualism or French on their to produce a particular result. This, niques include product approval, ad cereal boxes. What he said was that to my mind, is inappropriate and not testing, product launch, price elastic- your task is to tell me how to convince an ethical way of using polls as public ity and brand development and mea- Canadians that bilingualism is an ap- information. surement. And for intelligent market- propriate strategy. We conducted a se- ers, the stakes are too high for them Creating news – commissioning a poll ries of ethnographic studies across the to forgo effective market research be- on a Canadian election for Canadian country and we learned that we could cause some pollsters failed to deliver consumption is fundamentally differ- convince much of the population to on what they’d promised. ent than reporting on an election here accept bilingualism through multicul- or elsewhere. If you are creating news turalism. The strategy that was imple- Martin Goldfarb is Chairman of there is a responsibility to ensure you mented was to support ethnic media Goldfarb Intelligence Marketing, a are right. outlets all across the country and they Toronto-based public opinion research By allowing themselves to compro- supported the concept of bilingualism and marketing firm. During the Trudeau mise on polling standards, journal- through multiculturalism. Who in the years, he was the principal pollster ists have compromised their credibil- country today challenges bilingual- for the Liberal Party of Canada. He is ity and have done themselves a great ism? It is official government policy. the co-author, with Howard Aster, of disservice. Similarly, at a time when This is what pollsters are supposed to Affinity: Beyond Branding. “do-it-yourself” research techniques do; not just find out what the whim are proliferating, these pollsters of the day is but also to transform fun- [email protected] have provided more ammunition for damental ideas into implementable those who dismiss market research policy. For me, the science was pretty professionals. standard, the art was exciting. The ability to read the public mood and olitical parties spend hundreds then act on it was what made polling of thousands of dollars on elec- exciting. P tion polling. And polls done for political parties are not often wrong. arely does commercial research Party pollsters look for patterns of be- require plus or minus two or haviour and often ethnographic re- R three per cent accuracy in de- search results in innovative policy or cision making. Market share is data advertising campaigns. driven, not polling driven. Decisions are often made on qualitative re- Polling for a political party is funda- search where sample size is irrelevant mentally not trying to predict the but where patterns of response are vote but is geared to determining how relevant. to lock in the “undecideds” and how to persuade the three to four per cent No car company would develop a new of the population whose persuasion model where the costs are $2 billion can result in massive victory. plus and not do effective market re-

September/October 2013 38

Toronto Mayor Rob Ford, whose alleged drug use and choice of social companions preoccupied media for weeks earlier this year. Shutterstock photo

t’s finally happened. I have joined The Sorry State of Our the Canadian mainstream and am I starting to believe that most of our politicians are motivated by greed and power, whatever their images may Political Morality present to the contrary. Too easily af- ter gaining power, they lose their mor- Patrick Gossage al compass. I crossed this threshold on Monday, October 15, 2012. That day, Ontario’s “Premier Dad”, the upstand- At the provincial level in Ontario, at the municipal level in ing Dalton McGuinty, announced he Ontario and Quebec, and certainly at the federal level, Ca- was leaving the Premier’s office and proroguing the legislature. His concil- nadian politics recently has been a parade of nasty disclo- iatory, province-building record was sures, stunning revelations and gobsmacking plot twists. in tatters after a year of deep scandals, highlighted by the outrageous waste From the gas plants cover-up to the crack cocaine video to of tax payers’ dollars in cancelling two the Senate expense scandal to the resignation marches of half-built gas plants during the last election to ensure the victory of one mayor after mayor, calling it a crisis of political morality Liberal candidate – as dismal a piece of would seem an understatement. Veteran political observ- political expediency as has been seen er and longtime Pierre Trudeau adviser Patrick Gossage for many years anywhere in Canada. That, and the government’s down and surmises that the insulation and isolation of long-term dirty battle with the very teachers’ power contribute to the moral disorientation behind the unions who had underwritten earlier electoral success, had started to leave headlines. a bad taste in many of our mouths about the political ethics of our pre- mier. But his proroguing the legisla-

Policy 39 ture and cutting off democratic debate during a period when the government was under siege was the crassest move of all. I watched the self-righteous performance of McGuinty, a man I had believed in and helped, with a sense of deep betrayal. Like many Ontarians I had bought into his style of leadership – caring, father-like, honest to a fault, entirely dedicated to family concerns about education and health care.

I watched the self-righteous perfor- mance of McGuinty, a man I had be- lieved in and helped, with a sense of deep betrayal. Like many Ontarians I had bought into his style of leadership – caring, father-like, honest to a fault, entirely dedicated to family concerns about education and health care. But I started to see a different McGuinty in the election whose strategy of claim- ing his government had slayed the recession strained credibility. Critics dubbed the campaign bus the “brag- ging bus”. Robin Sears called the end- Protesters gathered to protest the alleged election fraud committed by the Conservatives in the last less boasting a textbook case of “arro- Canadian federal election Mar 31, 2012 in Toronto, Ontario. Shutterstock photo gance in power.” After winning only a minority, Liberal bragging soon of partisanship, said it was only out third majority and forced by the re- turned to shamefaced denial over to “destroy” the government and re- cession to stop spending and start dramatic examples of out of control fused to admit any wrongdoing in the cutting? Or does the remarkable inat- spending on air ambulances, e-health, wholesale destruction of e-mails that tention he showed, even denial of the and of course the cancelled gas plants might have cast light on his office’s obvious shortcomings of his govern- and the cover up of their true cost. role in the affair. I practically choked ment, demonstrate that, as with every In all this McGuinty acted as if he pos- on McGuinty’s final proud statement politician, the absolute power prestige sessed the divine right of a king – a on quitting as an MPP: “I leave poli- of office after so many years isolated sense that he had and continued to tics with my idealism intact…”! him from indigestible realities? improve the lives of Ontarians, and It is axiomatic that the longer I would argue that longevity in power that nothing was amiss. and stronger your enjoyment in our system almost guarantees a be- lief that the leader can do no wrong n his only real public appearance of power the weaker your and is above the moral and ethical since resigning his seat – his sec- moral compass – and, the demands placed on ordinary people. I ond appearance before the all- stronger your belief in your This syndrome, and I’ve witnessed it party legislative committee probing infallibility. often, is exacerbated by the first wave the gas plants fiasco – he remained of loyal aides leaving and new staff blind to his tarnished legacy. An ap- being brought in who are far more palled Christie Blatchford wrote in likely to cater to the leader, less likely the National Post: “If possible, Mc- to speak truth to power. It is axiom- Guinty the private citizen is more atic that the longer and stronger your arrogant, less forthcoming and more What happened to this family man enjoyment of power the weaker your hypocritical than the politician Mc- from a fine line of Ottawa politicians? moral compass – and, the stronger Guinty.” He accused the committee Was he rankled by being denied a your belief in your infallibility.

September/October 2013 40 eanwhile, the Charbonneau I believe that most leaders over time lose their moral Commission into Quebec’s construction industry has authority, even as I suspect they don’t know it. The same M isolation that leads to moral disorientation precludes any exposed a shocking degree of collu- sion and corruption at the municipal awareness that it’s happening. level, where donations to political par- ties were directly linked to contracts. In Montreal, Mayor Gérald Tremblay resigned last November in the wake of testimony at the commission. Barely impossible to believe the PM did not No politician suffered seriously from six months later, his interim succes- know about the personal cheque the millions misspent and misused in sor, Michael Applebaum, was arrested Wright wrote to Duffy so he could to the sponsorship scandal. And there is and charged with 14 counts of corrup- repay the $90,000 he owed the Senate no public recourse for the clearly par- tion on two real estate deals in his bor- on ineligible expenses. A preliminary tisan (and misleading) million- dollar ough. He has pleaded not guilty. The report from the RCMP in July indicat- advertising campaigns of the current former chair of the city’s executive ed Wright’s lawyers told them three federal government, or for unauthor- committee, Frank Zampino, has been other members of PMO senior staff ized misspending surrounding the charged with fraud, conspiracy and were aware of the cheque. G8 summit in Muskoka in 2010. The breach of trust. Appearing before the summit was held in the riding of Tony commission, he said that it was okay Certainly the ability of political as dis- Clement, then-industry minister and to accept gifts provided they didn’t in- tinct from business leaders to escape now president of the Treasury Board, fluence decisions. No wonder that at anything beyond the voters’ retribu- responsible, ironically, for how tax Montreal City Hall, the question con- tion is notable in these and so many dollars are spent. cerning officials isn’t who was on the examples of profligacy, partisan influ- take, but who wasn’t. Public servants ence peddling, misuse of tax payers’ This is what makes the public so cyni- were widely plied with hockey tickets, dollars for partisan purposes, and lack cal. In fact I believe that most leaders cases of wine and even winter trips of accountability. over time lose their moral authority, on the yacht of construction magnate The private sector generally is forced even as I suspect they don’t know it. Tony Accurso. Not to be outdone by by the market and regulators to act The same isolation that leads to moral Montreal, the neighbouring suburb more ethically. Both exercise tight disorientation precludes any aware- of Laval has also lost two mayors in constraints on how private businesses ness that it’s happening. In the re- recent months. The first, Gilles Vail- (especially publicly traded ones) spend cent parade of Canadian politics, the lancourt, has been charged with gang- their revenues and there are strict syndrome would seem epidemic. At a sterism. His replacement Alexandre ethical standards expected of heav- time when we’re all compelled to re- Duplessis, resigned after being solic- ily scrutinized business leaders. Even flect on the moral power of a Nelson ited by a prostitute. in terms of accountability to share- Mandela, we are increasingly alien- And in Toronto, where civic politics holders. If a corporation cancelled its ated by the moral laxity of our own used to be taken seriously, the Ford AGM, as Harper prorogued Parliament politicians. brothers have turned City Hall into a to avoid defeat in 2008, there would gong show. The credulity -stretching be serious consequences. And when Patrick Gossage is the founder and now least that can be said is that Mayor there is fraudulent or improper use of chair of Media Profile, a Toronto-based Rob Ford has had his picture taken funds, those responsible are brought Communications consulting and public with some of the wrong people. before a court of law or the securities affairs company. Previously he was press regulator, facts are established and the secretary to Prime Minister Trudeau So what is the current state of politi- from 1979 to 1983 and later head of the cal morality in Ottawa? The Senate guilty punished. A CEO of a publicly traded company is responsible to his Public Affairs Division of the Canadian expense scandal now, as is breath- Embassy in Washington. lessly reported, “reaches right into board and answerable to his share- the Prime Minister’s Office” with holders on an annual basis. patrick.gossage@mediaprofile.com the $90,000 buyout of Senator Mike Duffy’s ill-gotten benefits. The RCMP ot so in the public sector. sees criminal code violations, poten- Of course, public servants tially involving double-dipping, as N have been fined or jailed as well as ineligible travel and per diem they were in the sponsorship scandal. expense claims. The auditor-general And the RCMP may yet charge Duffy, has been called in. Deloitte has done a and maybe even the generous former report for the Senate Board of Internal PMO chief of staff, Nigel Wright, who Economy. Nowhere in any of this has bailed him out. But nobody will ever Stephen Harper accepted any respon- take responsibility for, let alone be sibility for behavior by senators he held accountable for, the $600 mil- appointed himself, or by the conduct lion and counting in cancelling two of his own office and his former chief gas plants to get one Liberal elected in of staff, Nigel Wright. It seems almost the last Ontario provincial election.

Policy 41

Tarir Square in Cairo during the Arab Spring of 2011, when Egyptians demanded the outster of President Hosni Mubarak. In Egypt and elsewhere in the Middle East, regime change hasn’t resulted in democracy but in sectarian strife. Wikipedia photo

e live in a sectarian age. A Shortage of Tolerance Excessive devotion to W the doctrines of a religion, sect, or group is a phenomenon of our time as it has been in previous eras In a Sectarian Age and as such, threatens peace and order both within and between states. Sectar- Thomas S. Axworthy ian violence plagues countries such as Myanmar, Nigeria, and Pakistan, but is most evident today in the Middle East. Egypt’s pro-democracy revolution has devolved into a In Egypt, Mohammed Morsi of the Muslim Brotherhood, after winning power struggle over sectarian vs. secular government. In the presidential election in 2012, did Syria, the brutal civil war is fueled by sectarian divisions not govern in an inclusive way – going so far as to appoint as governor of Lux- previously kept in check by years of autocracy. Elsewhere or a member of the hardline Islamist in the region, the same tensions play out in less spec- group associated with the terrorists who killed 58 tourists there in 1997. tacular but regular ways as the chronic grind between the Only a year after Morsi’s election, Salaf- desire for rights and democratic principles and religious ists, secularists, and Christian Copts demonstrated against the Brotherhood governance, frequently leading to civil unrest and outright in such numbers that the unrest boiled violence. At a time of disruptive change and previously over into a protest-fueled military coup whose long-term implications are still unseen power struggles, tolerance has become a scarce playing out. commodity. In the restive Middle East, it has never been In Syria, the “Arab Spring” revolt needed more. against an authoritarian regime be- came a war of Sunni versus Shia, hor- rible in itself for the citizens of that country, and exceedingly dangerous because of its potential for engulfing Lebanon, Jordan, and Iraq. Because of Syria, writes Geneive Abdo, “The Shi‘a- Sunni divide is well on its way to dis- placing the broader conflict between Muslims and the West as the primary challenge facing the Islamic societies

September/October 2013 42 of the Middle East for the foreseeable In Syria, for example, there are no good options, only least future.” bad ones. Prime Minister Harper is certainly correct that the Tolerance is defined by Andrew Mur- al-Assad regime is composed of “thugs” that have committed phy as an attitude or “a willingness to terrible crimes against their own citizens. But is the Sunni-led admit the possible validity of seem- ingly contradictory viewpoints.” It is opposition any better? a virtue based on the recognition, as Voltaire writes in his Philosophical Dic- recent years the “responsibility to pro- favoured by Muslim majorities almost tionary, that “discord is the great ill of tect” doctrine has also chipped away everywhere: in 31 of the 37 countries mankind, and tolerance is the only at the supremacy of state sovereignty where the question was asked, at least remedy for it.” Toleration, on the oth- above all. half of Muslims believed a democratic er hand, is a set of practices: it denotes, government rather than a leader with a As was seen in the months leading to according to Murphy, “forbearance strong hold is best able to address prob- the intervention in Libya, however, from imposing punitive sanctions for lems: 81 per cent of Lebanese Muslims, dissent from prevailing norms.” applying the principles of “non-inter- vention” versus the “responsibility to 66 per cent of Nigeria’s Muslims, and Tolerance, however, does not mean protect,” is rarely clear cut. In Syria, 55 per cent of Egyptian Muslims fa- that one must tolerate everything. It for example, there are no good op- vour democracy (only in Afghanistan is a practical, not an absolute, virtue tions, only least bad ones. Prime Min- and Pakistan do majorities not favour which requires balance of judgment. ister Harper is certainly correct that the democratic option). Similar results Karl Popper, in The Open Society, claims the al-Assad regime is composed of were shown for the principle of reli- that it is a paradox of tolerance “not “thugs” that have committed terrible gious freedom – Muslims generally say to tolerate the intolerant.” Unlimited crimes against their own citizens. But they are free to practice their religion, tolerance could lead to the disappear- is the Sunni-led opposition any bet- and most also believe that non-Mus- ance of tolerance if action is not taken ter? An al-Qaeda-run Syria will be no lims are free to practice their faiths. against extremists such as Hitler, who better than an Assad-run Syria. Sixty And among those who believe non- used the rules of democracy to gain per cent of Canadians, for example, Muslims are free to practice their faith, the power to end democracy. “Some disagree that Canada should supply the prevailing opinion is that this is a things are intolerable, even – or espe- Syrian rebels with military aid and it is good thing: in Turkey, for example, 78 cially – for a tolerant person,” writes likely that most western publics agree. per cent of Muslims believe they are André Comte-Sponville. Alas, in Syria, it is a Shia-Sunni fight, free to practice their faith. Fifty-eight per cent believe people of other faiths If tolerance is an individual attitude and there is no good reason that Can- ada (or anyone else) should pick one are free to do so, and of those, 89 per or virtue, subject to education, per- cent say it is a good thing. sonal persuasion, and mutual learn- religious group over another, a point ing, toleration is a set of practices that made forcefully by Derek H. Burney But support for making Sharia the of- deliberately chooses not to interfere and Fen Osler Hampson, among oth- ficial law of the land is also very strong with the conduct of others. Tolera- ers. The Harper government’s policy (99 per cent in Afghanistan, 84 per tion regimes are practical accommoda- of non-intervention in the Syrian civil cent in Pakistan, 83 per cent in Moroc- tions to achieve peaceful co-existence, war is the right one. co). In Egypt, for example, 74 per cent which may or may not have much to States who give in to the temptation say Sharia should apply to all regard- do with the advance of tolerance. In to fuel sectarian passions for their own less of faith. Sunni-Shia tensions are combating sectarianism, one needs ends do so at their peril. The Pakistani also evident: 53 per cent of Egyptian both a program to change individual Inter-Services Intelligence (ISI) orga- Sunnis, for example, say that Shias are attitudes and another to make institu- nization sponsored the fanatical Tali- not Muslims. Fifty per cent of Egyptian tional accommodation work. ban as early as 1994, as their agent in Muslims also believe that Christians Afghanistan. Today, the Taliban are are hostile to Muslims, and 35 per cent oleration regimes depend on deeply entrenched within Pakistan it- believe that Muslims are hostile to the principle of non-interven- self and threaten the integrity of the Christians. T tion, which has been a rule of very state that spawned them. he religious divides evident in international law since the Treaty of Westphalia in 1648. The Friendly Re- The Pew Forum on Religion and Pub- the Pew findings have now lations Declaration of the UN Gen- lic Life commissioned three surveys on become a political force of terri- the attitudes of today’s Muslims on a T eral Assembly in 1970, states: “No fying intensity. When the Arab Spring State or group of States has the right host of issues, many of them relevant revolt began in 2011, Iran’s Supreme to intervene, directly or indirectly, for to the theme of tolerance: “Tolerance Leader Ali Khamenei made a pan-Is- any reason whatever, in the internal and Tension: Islam and Christianity lamic appeal declaring, “It is not an is- or external affairs of any other State. in Sub-Saharan Africa” (2010), “The sue of Shia or Sunni. It is the protest of a Consequently, armed intervention World’s Muslims: Unity and Diversi- nation against oppression.” But a scant and all other forms of interference or ty” (2012), and “The World’s Muslims: two years later, Hezbollah leader Has- attempted threats against the person- Religion, Politics and Society” (2013). san Nasrallah declared to his Shia sup- ality of the state or against its politi- The most recent study in April 2013, porters (Hezbollah originally was creat- cal, economic and cultural elements, for example, released findings for ed by Iran as a Shia proxy in Lebanon), are in violation of international law.” 38,000 interviewees of Muslim belief that the Syrian war is “our battle.” This This rule is superseded, however, if the in 39 countries. declaration of Shia solidarity, in turn, Security Council decides that state ac- The results of the Pew study are mixed. led to a fatwa by the Qatar-based Sun- tions threaten peace and security. In Positive results show that democracy is ni spiritual leader, Yusef Al-Qaradawi,

Policy 43 rorism or sectarian violence must be censored. The International Mone- tary Fund, for example, has criticized Kuwait for doing little to criminalize terrorist financing and for its loose regulatory regime on money laun- dering. The US Treasury Department has stated that both Kuwait and Qa- tar have “unfortunately become per- missive environments for extremist fundraising.” s(UMANRIGHTSMAYBETHEIDEAL BUT peaceful co-existence is a necessary step to get there. Where sectarian disputes are evident and there is not sufficient tolerance to enforce a hu- man rights regime, states should work with faith communities to Protesters in Cairo demanding the removal of President Muhamed Morsi in June 2013. The Arab Spring develop rules to ensure peaceful had become the Arab Summer. The Army’s takeover led to a brutal crackdown on Islamists and the coexistence. Muslim Brotherhood. Shutterstock photo s4HEWORLDISFULLOFDIFFERENTMODELS characterizing the Syrian conflict as an ethical base of all world religions so to protect minorities and devolve aspect of the ongoing struggle between that what unites members of differ- power – federalism, constitutional “100 million Shia” and “1.2 billion ent faiths becomes more important protection and rights, electoral sys- [Sunni] Muslims.” The Shia success in than what divides them. In this re- tems to reduce sectarian disputes, Iraq in 2006-2007 led King Abdullah II gard, the InterAction Council ini- etc. Where sectarian parties exist, of Jordan to warn Sunnis of the com- tiative of a Universal Declaration one interesting experiment is citizen ing “Shia Crescent” across the region. of Human Responsibility should be juries, randomly selected outside of Since the Arab Spring, this fear defined passed by the UN General Assembly the party framework and constituted in religious terms is now felt by many as a complementary charter to the to give non-partisan advice to the Shia and other minorities in Syria. The UN Universal Declaration of Hu- authorities. In Yemen, for example, self-perpetuating cycle of fear, reaction man Rights. The interfaith dialogue a national dialogue of 565 Yeminis and counter-reaction is one of the tru- of King Abdullah of Saudi Arabia drawn from different movements isms of international relations and it is should equally command wide and ideologies has been meeting to support. well on its way to destroying today’s write a new constitution. Middle East. s%XTREMISM OF ALL KINDS IS EASILY AC- s7HILEMOTIVATEDBYRELIGIOUSDIFFER- cessible on the Internet. UNESCO ences, the social and economic roots To combat the growth of sectarianism, should take the lead in preparing a of sectarianism cannot be ignored. we need to promote the value of toler- popular education program that pro- Programs committed to economic ance as a basis for broader toleration motes the common ethical base of and social equality are as critical to regimes on the understanding that de- all world religions and then ensure reducing extremism and violence as mocracy is about more than the ballot that ethics are promoted at least as legal guarantees. box: heavily as fanaticism. The age old s4HE (IPPOCRATIC /ATH OF hABOVE ALL strategy of education bringing about Tolerance do no harm” is an excellent argu- tolerance cannot work unless it is ment for the continued relevance of s&OCUS lRST ON RELIGIOUS LEADERS AND tried. This point is brought home by non-intervention as a general guide make the case that strong belief is a May 2013 paper, “A Review of Citi- to policy makers. Non-intervention compatible with tolerance for other zenship Education in Arab Nations,” is not an absolute. But in a sectar- people’s views. Surveys showing that written by Muhammad Faour, for a majority of Egyptian Muslim Sun- the Carnegie Middle East Centre. It ian war like Syria’s, with no good nis do not believe Shias to be fellow shows that Arab countries have set options, what would a military in- Muslims, for example, demonstrate ambitious goals for education reform tervention by outsiders achieve? the necessity to engage the religious and citizen promotion, such as intro- Prudence is a virtue that squares well leadership of that critical Muslim ducing concepts like democracy and with tolerance. country. human rights, but in practice “Arab Many issues contribute to the strife, di- s/VER TIME THE ,OCKES 3PINOZAS nations have taken very few steps to vision and uncertainty wrought by to- and Voltaires won the war of ideas make these goals a reality and to pre- day’s crises: because faith in the divine around toleration and it is necessary pare young people for the transitions is a private matter, religion should not for rights-based organizations and ahead.” be one of them. governments committed to human Toleration rights to be vigilant when standards Thomas S. Axworthy is Senior s3TATESWHICHPROMOTESECTARIANVIO- fall. Human rights are universal, not lence outside their borders should Distinguished Fellow at the Munk School relative. States must be held to the be brought before the UN Security of Global Affairs. He served as senior principles of the UN Universal Dec- Council for threatening the peace policy adviser and later principal secretary laration of Human Rights. and security of the world system. to Prime Minister Pierre Trudeau. s)TISIMPORTANTTOSTRESSTHECOMMON States which continue to finance ter- [email protected]

September/October 2013 44

Smart Grids – A Network in Transition Gary Rackliffe

While the great Canadian energy debate unfolds over the he term “smart grid” emerged extraction, transportation and environmental impacts of approximately eight to 10 T years ago, but for many people fossil fuels, the electricity sector has been quietly revolu- the term became synonymous with tionized by the introduction of smart grids. While most smart meters since these represent the primary touch point between re- people identify the term with the new smart meters they tail power customers and the smart may have in their homes, the real implications of sectoral grid. This perception was validated in the US when the largest portion of innovation are far more vast and complex. Herewith, a the Department of Energy Smart Grid tutorial on what, precisely, smart grids are and how they Investment Grants went to Advanced Metering Infrastructure projects and contribute to what has become a clean energy, Copenha- in Canada when Ontario implement- gen-leading success story. ed smart meters across the province. However, smart grid technologies extend well beyond metering to in- clude a wide range of hardware and software both in high-voltage trans- mission systems and local distribu- tion networks. The Electric Power Research Institute and the US Depart-

Policy 45 ment of Energy have reported that Smart meters are an enabling technology. They support smart grid investments generate posi- customer engagement, enable price-based demand response tive economic benefits, and utilities are moving forward with investments programs, and provide infrastructure and data to enable at both the transmission and distribu- smarter distribution grid operations. tion levels. The challenge lies not in the maturity of these technologies but in the policies that govern cost recov- s %NHANCED GRID CONTROL SYSTEMS utility’s geographic information sys- ery for smart grid investments. and improved sensor technology tem. This model is also used for load that enable greater automation of flow analysis in planning expansions Transmission investments are gen- grid operations that improves both and maintenance work. Equally im- erally well-defined projects whose reliability and efficiency portant is a communications network costs and benefits can be directly (e.g., wide-area wireless broadband) One important aspect of these tech- determined and evaluated. Distribu- that is capable of handling the vari- nologies is how they facilitate the tion grid management projects, on ous flows of data between devices in integration of renewable generation the other hand, are more difficult. the field and the utility control cen- sources into the transmission system. For these projects, implementation ter. On the OT side, the industry is HVDC can efficiently deliver energy costs can exceed utility benefits even currently moving from a siloed com- over long distances from remotely though the combination of societal munications approach to a layered located or off-shore renewable gen- and economic benefits makes the approach where multiple applications eration. FACTS can stabilize AC trans- business case strong. For example, can leverage the same communica- mission lines to smooth the inherent investing in automated switching for tions network. storm response can reduce the time variability of wind and solar installa- On the IT side, enterprise applications utility crews spend en route to repair tions. These capabilities are essential like asset management systems, meter outages. That pays an obvious return to the long-term viability of renew- data management systems and cus- to the utility in terms of crew efficien- able power. tomer information systems all have cy, but reducing the time customers Most smart grid projects to date in something to offer the DMS. If the are without power clearly also has a North America, though, have focused DMS can access the meter data man- significant economic benefit. In the on the distribution level of the grid agement system, for example, it can case of smart meters, the benefits are and with good reason. There are far notify operators of outages and verify even more diverse. more assets on distribution grids and restorations. Enterprise-level integra- Smart meters are an enabling technol- most outages occur at a local level tion between the DMS and the cus- ogy. They support customer engage- while major blackouts remain rela- tomer information system provides ment, enable price-based demand tively rare. For utilities, distribution account information such as physical response programs, and provide infra- grid management is now a key smart addresses and meter IDs. DMS appli- structure and data to enable smarter grid investment area that can improve cations such as automated switching distribution grid operations. They system reliability and efficiency. One can also be decentralized with the ap- have been deployed for over 20 years area of particular interest lies in com- plications deployed at substations and at commercial and industrial custom- bining operational technology (OT) other points on the grid. and information technology (IT) to er sites, which typically represent 50 Investments in distribution technolo- per cent of the utility’s total load. improve the operation of the distribu- tion grid. gies are leveraging OT/IT integration, communications, and advanced ap- oday, investment in smart me- At the convergence point of OT/IT is plications to improve grid reliabil- ters continues, but utilities the distribution management system ity and efficiency. But, there are two are also investing in other as- (DMS). The DMS is what local grid other areas where utilities are making T operators use to manage the day-to- pects of smart grids to improve opera- smart grid investments – utility ana- tional effectiveness. At the transmis- day operations of their networks. Ad- lytics and distributed energy resources sion level, these include: vanced applications include: (DERs). The first harnesses the explo- sion of meter and grid data that utili- s (IGH VOLTAGE DIRECT CURRENT s /UTAGE MANAGEMENT TO IDENTIFY ties now have from smart metering, (HVDC) transmission systems for faults on the system and manage communications, and sensor invest- bulk transport of electricity over work crews’ response ments. The second includes both re- long distances with minimal losses s !UTOMATED SWITCHING TO RE CON- newables like rooftop solar and con- nect customers during storms s &LEXIBLE!#4RANSMISSION3YSTEMS ventional backup generators. Market (FACTS), which are a family of s !UTOMATED CONTROLS TO OPTIMIZE analysts forecast utility analytics as power electronics devices capable the grid in real time to improve the fastest growing smart grid tech- of improving efficiency and in- reliability, reduce losses, and im- nology area and many utilities have creasing the capacity of existing prove grid efficiency. DER pilot programs in place. lines These and other advanced distribu- There are two main segments to util- s 7IDE AREA MONITORING SYSTEMS tion grid management applications ity analytics – consumer analytics that provide real-time information rely on a detailed model of the distri- based on analyzing meter data, and on grid conditions bution grid that is extracted from the grid analytics based on meter data as

September/October 2013 46 of these elements. FORECASTED CHANGE IN EMISSIONS BY ECONOMIC SECTOR (2005-2020) Managing DERs is facilitated by a “smart grid control centre” to create 30% a virtual power plant that, from the 200 10% utility’s perspective, looks and acts just like a traditional power plant it 2005 can dispatch as part of its generation 2020 portfolio. DERs can provide “power” e) 2 150 -25% that customers use but they can also provide services to the grid to keep the system in balance. There is also 8% 22% 100 1% 5% an economic optimization compo- nent to DERs. The term transactive energy has been defined as extend- ing the same process transmission GHG Emissions (Mt CO 50 grid operators use to the distribution level where individual customers and distribution system operators manage 0 DER technologies based on economic Transportation Electricity Oil and Gas Emissions- Buildings Agriculture Waste and value and grid reliability. Intensive Trade- Others Exposed Industries While electric vehicles are still in the Source: Reality Check: The State of Climate Progress in Canada, NRTEE, 2012 early stages of adoption, they present an interesting opportunity as DERs in their own right. EVs can already be well as inputs from monitoring and maintenance based on the actual configured for “smart charging” to control systems and sensors in the health of assets, taking into account take advantage of lower utility rates. field. Consumer analytics can facili- their criticality to the system and an They may soon be used to provide tate customer engagement programs estimate of total risk of failure, as op- the same power and grid services that and predict consumer behavior in re- posed to simply performing routine other DERs like rooftop solar arrays al- sponse to demand response programs procedures at regular intervals wheth- ready do. As with all of the technolo- while grid analytics can provide situ- er actually needed or not. gies we’ve discussed, the barriers have ational awareness for storm response Utility analytics provide persistent, little to do with technical issues and and distribution optimization as well meaningful information to utility much more to do with policy barriers as provide insights for operational engineers that helps them to avoid or murky regulations. process improvements. unplanned outages, especially cata- Policy decisions and utility incen- strophic failures. It also provides a tives will drive the next wave of util- nother grid analytics appli- tool to measure the impact of mainte- ity smart grid investments. These, in cation is asset health man- nance practices and decisions, and to turn, will be based on utility cost of A agement. Utilities today are comply with regulatory requirements. implementation and cost recovery facing tighter operational and man- In that sense, they are very much cen- models, the expected reliability and agement budgets, aging infrastruc- tral to the utility both figuratively and efficiency improvements, and the so- ture, and a drain of technical exper- literally. cietal benefits of a smarter grid. tise as more utility workers qualify DERs are “edge-of-grid” technolo- for retirement. Asset health manage- Among those benefits is lower green- gies that are connected to the distri- house gas emissions. Among seven ment integrates equipment-based op- bution grid or are customer based. erational experience, manufacturing economic sectors measured by Envi- These technologies include demand ronment Canada’s Emissions Trends knowledge, maintenance and diag- response, distributed generation such Report, only the electricity industry nostics expertise with enterprise-level as solar PV and back-up generators, is expected to meet the Copenhagen information technology to enhance distributed energy storage, electric ve- target of reducing GHG emissions to the reliability and performance of grid hicle charging infrastructure, and mi- 17 per cent below 2005 levels by 2020. assets. The asset health management crogrids, which have received a sub- The electricity sector is forecasted to process includes sensors and moni- stantial amount of attention in recent surpass the Copenhagen goal, reduc- toring; the capture and management years. Microgrids can help address the ing emissions by 25 per cent by 2020. of data from disparate systems; busi- variability of renewable generation, ness intelligence functions to provide increase renewable utilization, and It’s a clean energy success story in the trending, alarming, dashboards, and also provide off-grid power for critical making. system integration; and the analyt- loads during outages. They do this us- ics and performance models to drive ing fossil generation, renewable gen- Gary Rackliffe is vice president for condition-based maintenance. This eration, fast-response energy storage Smart Grid Development at ABB North last element is particularly valuable (e.g., flywheel energy storage, battery America. in that it allows utilities to perform energy storage), or some combination

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