A Work and Opportunity Agenda for Canada Brian Lee Crowley and Sean Speer September 2018 A Macdonald-Laurier Institute Publication Board of Directors Richard Fadden Former National Security Advisor to the Prime Minister, CHAIR Ottawa Pierre Casgrain Brian Flemming Director and Corporate Secretary, International lawyer, writer, and policy advisor, Halifax Casgrain & Company Limited, Montreal Robert Fulford VICE-CHAIR Former Editor of Saturday Night magazine, Laura Jones columnist with the National Post, Ottawa Executive Vice-President of the Canadian Federation Wayne Gudbranson of Independent Business, Vancouver CEO, Branham Group Inc., Ottawa MANAGING DIRECTOR Calvin Helin Brian Lee Crowley, Ottawa Aboriginal author and entrepreneur, Vancouver SECRETARY Peter John Nicholson Vaughn MacLellan Inaugural President, Council of Canadian Academies, DLA Piper (Canada) LLP, Toronto Annapolis Royal TREASURER Hon. Jim Peterson Martin MacKinnon Former federal cabinet minister, CFO, Black Bull Resources Inc., Halifax Counsel at Fasken Martineau, Toronto DIRECTORS Barry Sookman Blaine Favel Senior Partner, McCarthy Tétrault, Toronto Executive Chairman, One Earth Oil and Gas, Calgary Jacquelyn Thayer Scott Jayson Myers Past President and Professor, Cape Breton University, Chief Executive Officer, Sydney Jayson Myers Public Affairs Inc., Aberfoyle Rob Wildeboer Dan Nowlan Executive Chairman, Martinrea International Inc., Vice Chair, Investment Banking, National Bank Vaughan Financial, Toronto Vijay Sappani Co-Founder and Chief Strategy Officer, Research Advisory Board TerrAscend, Mississauga Veso Sobot Janet Ajzenstat Director of Corporate Affairs, IPEX Group of Professor Emeritus of Politics, McMaster University Companies, Toronto Brian Ferguson Professor, Health Care Economics, University of Guelph Jack Granatstein Advisory Council Historian and former head of the Canadian War Museum Patrick James John Beck Dornsife Dean’s Professor, President and CEO, Aecon Enterprises Inc., Toronto University of Southern California Erin Chutter Rainer Knopff Executive Chair, Global Energy Metals Corporation Professor Emeritus of Politics, University of Calgary Vancouver Larry Martin Navjeet (Bob) Dhillon Principal, Dr. Larry Martin and Associates and Partner, President and CEO, Mainstreet Equity Corp., Calgary Agri-Food Management Excellence, Inc. Jim Dinning Christopher Sands Former Treasurer of Alberta, Calgary Senior Research Professor, Johns Hopkins University David Emerson William Watson Corporate Director, Vancouver Associate Professor of Economics, McGill University Table of Contents Executive Summary ............................................................................................................... 4 Sommaire ................................................................................................................................... 6 Board of Directors Richard Fadden Introduction .............................................................................................................................. 8 Former National Security Advisor to the Prime Minister, CHAIR Ottawa Section 1 – A High Tax, High Transfer Agenda ............................................................ 9 Pierre Casgrain Brian Flemming Director and Corporate Secretary, International lawyer, writer, and policy advisor, Halifax “Soak the rich”: A growing tax burden for high-income earners..................10 Casgrain & Company Limited, Montreal Robert Fulford VICE-CHAIR Former Editor of Saturday Night magazine, Guaranteed Annual Income: A deeply mistaken policy ................................... 13 Laura Jones columnist with the National Post, Ottawa Executive Vice-President of the Canadian Federation Wayne Gudbranson Section 2 – A Work and Opportunity Agenda ........................................................... 21 of Independent Business, Vancouver CEO, Branham Group Inc., Ottawa Lessons from the “redemptive decade”: Canada’s experience with MANAGING DIRECTOR Calvin Helin Brian Lee Crowley, Ottawa Aboriginal author and entrepreneur, Vancouver economic and fiscal reform ...................................................................................... 23 SECRETARY Peter John Nicholson Vaughn MacLellan Inaugural President, Council of Canadian Academies, The contours of a work and opportunity agenda ..............................................27 DLA Piper (Canada) LLP, Toronto Annapolis Royal Conclusion ...............................................................................................................................42 TREASURER Hon. Jim Peterson Martin MacKinnon Former federal cabinet minister, About the Authors................................................................................................................44 CFO, Black Bull Resources Inc., Halifax Counsel at Fasken Martineau, Toronto DIRECTORS Barry Sookman References ...............................................................................................................................45 Blaine Favel Senior Partner, McCarthy Tétrault, Toronto Executive Chairman, One Earth Oil and Gas, Calgary Jacquelyn Thayer Scott Endnotes .................................................................................................................................. 55 Jayson Myers Past President and Professor, Cape Breton University, Chief Executive Officer, Sydney Jayson Myers Public Affairs Inc., Aberfoyle Rob Wildeboer Dan Nowlan Executive Chairman, Martinrea International Inc., Vice Chair, Investment Banking, National Bank Vaughan Financial, Toronto Vijay Sappani Co-Founder and Chief Strategy Officer, Research Advisory Board TerrAscend, Mississauga Veso Sobot Janet Ajzenstat Director of Corporate Affairs, IPEX Group of Professor Emeritus of Politics, McMaster University Companies, Toronto Brian Ferguson Professor, Health Care Economics, University of Guelph Jack Granatstein Advisory Council Historian and former head of the Canadian War Museum Patrick James John Beck Dornsife Dean’s Professor, President and CEO, Aecon Enterprises Inc., Toronto University of Southern California Erin Chutter Rainer Knopff Executive Chair, Global Energy Metals Corporation Professor Emeritus of Politics, University of Calgary Vancouver Larry Martin Navjeet (Bob) Dhillon Principal, Dr. Larry Martin and Associates and Partner, President and CEO, Mainstreet Equity Corp., Calgary Agri-Food Management Excellence, Inc. Jim Dinning Christopher Sands Former Treasurer of Alberta, Calgary Senior Research Professor, Johns Hopkins University David Emerson The authors of this document have worked independently and are solely responsible for the views presented William Watson Corporate Director, Vancouver here. The opinions are not necessarily those of the Macdonald-Laurier Institute, its Directors or Supporters. Associate Professor of Economics, McGill University EXECUTIVE SUMMARY We are living in a moment of economic, social, and political disruption. The overhang of the global financial crisis and the Wall Street bailout still looms large in our politics 10 years later. The refugee crisis has provoked difficult questions about immigration policy and social cohesion. Automation, artificial intelligence, and other forms of productivity-enhancing technology have produced wide- spread concerns about the “future of work.” The attendant rise of political populism in western countries has policy-makers flummoxed and struggling to respond. One common response – including here in Canada – has been a renewed focus on income redistri- bution and new forms of welfarism including experimentation with a guaranteed annual income. The working assumption seems to be that political populism is merely an expression of income dis- parities and economic insecurities, and that raising taxes on high-income earners and redistributing the cash will solve the problem and restore political tranquility. Equity has thus come to trump growth. Fairness has been given primacy over dynamism. And un- conditional cash payments are viewed as a substitute for paid work. This MLI paper argues that this policy ap- proach and its underlying thinking is wrong. Not only is a policy of higher taxes and higher government spending economically harmful Not only is a as we document in the paper, it misunder- stands and poorly serves the people it is osten- policy of higher sibly aiming to help. A high-tax, high-transfer “ taxes and higher agenda is bound to do more harm than good. government spending The truth is most people are principally con- economically harmful, cerned about work and opportunity. They it misunderstands do not want unconditional payments from government. They want to feel like they are and poorly serves the contributing. They want to be able to care for people it is ostensibly themselves and their families. They want to be needed. aiming to help.” Reconceptualizing how we think about the current economic and political challenges as a demand for work and opportunity rather than redistribution has significant policy implica- tions. It is no longer about slicing up the eco- nomic pie and instead about making it larger. It is no longer about a “zero-sum” formulation and instead about expanding opportunity for everyone. And it is no longer about advantaging cer- tain industries or valuing certain types of work over others and instead about recognizing the im- portance and dignity of all work. 4 September 2018 A pro-work and pro-opportunity agenda is both more effective, and, as we argue, a more compas- sionate response to