The Canadian federal election is almost here (Monday, October 19). Information from Elections Canada on where and how to vote can be found here. At this point, the parties have laid out most of their platforms (see summary and links here), and the leaders have had several opportunities to debate each other (full replays of the first four debates can be found here, here, here, and here; to my knowledge TVA has not made a full replay of their debate available, but clips can be found here).
Next week, I will weigh in on which platform and leader I think most deserves our votes (as the editorial boards of many news outlets do). But first – as part of our discussion on policies – I want to lay out my own ‘shadow platform’: the set of policies I would like to see (or would have liked to see) proposed or at least discussed for Canada in this election.
A couple of disclaimers: First, my shadow platform won’t be fully costed. I would love to be able to do this, but I don’t have the time or the staff to do it properly. Second, and for the same reason, my shadow platform won’t be comprehensive. There will probably be some important policies or policy areas I miss, and I hope to hear about them in the comments, so that the discussion can be as comprehensive as possible.
Summary: Think big and drop the BS.
Canada is facing a combination of challenges perhaps without precedent in our history. Our economy is fragile coming out of the Great Recession of 2008-2009, and having fallen back into recession in the first half of 2015. Low oil prices are a big part of our current economic problems, but they’re not the whole story. We are suffering persistently low productivity growth and innovation. Despite our dollar losing a quarter of its value in the last year, manufacturing is not coming back the way some thought it would. Our population is aging, which means growing demands on the healthcare system and other parts of the safety net supported by a proportionally shrinking workforce. The costs of housing have been skyrocketing, and many economists think Canada is experiencing a dangerous housing bubble, which the current downturn might burst. Climate change has become a clear and present global threat; and there are early signs of a global shift in political will to combat climate change that could dramatically alter how global business is conducted and – importantly for Canada – which types of resources and technologies are in demand. Conflicts in the Middle East, Africa, and elsewhere are producing huge humanitarian crises and masses of refugees. Canada’s aboriginal communities are suffering from extreme poverty you wouldn’t normally associate with a developed country, as well as violence, poor education, and other social problems that come with poverty.
If Canada is going to face down these challenges and come out ahead, we need to be smart; we need to invest and tax efficiently; we need to be forward-thinking; we need to be ambitious; and we need to be united. This means that we need to bring evidence, nuance, honesty and persuasion back into the political arena, and we need to lose the hyper-partisan BS that has crippled our political debates over at least the last decade. What do I mean by ‘hyper-partisan BS’? I mean the debates so overrun by (often meaningless) slogans and talking points that our politicians sometimes resemble partisan robots; the non-sequitur personal attacks; the near-daily suggestion by each party that each other party’s platform would ruin the economy (the platforms aren’t all that different and the federal government has only limited control over economic growth to begin with); the micro-targeted pork-barrell fiscal policies of just about every party; the fear mongering and dog-whistle wedge politics (e.g. is the niqab really Canada’s most pressing issue right now?); the zero-purpose (other than partisanship) legislation to enforce balanced budgets (which any government who wanted to run a deficit could repeal first), to create a ‘tax lock‘ (same thing), or to create hotlines for ‘barbaric cultural practices’ (as Naheed Nenshi pointed out, this exists already: it’s called 9-1-1).
We need to be able to have adult conversations about what government can and can’t, should and shouldn’t do – conversations where, for example, taxes, free trade, privatization and nationalization, regulation and deregulation are neither automatically always good nor automatically always bad.
With this spirit, here are some specific policy proposals for Canada. I welcome rigorous and vigorous debate on any of them. Given my constraints in preparing this list (see caveats above), I see these proposals mostly as conversation starters in the policy directions I think we need to move as a country, rather than as necessarily fully implementation-ready suggestions.
Some times call for smaller government; other times call for bigger government. In the 1930s, the aftermath of the Great Depression and the Second World War provided two big reasons for the government to get bigger: we needed to boost demand to get the economy going again, and we faced a major global threat that demanded short-term action on a large scale. And grow government we did. The major boost in spending for the war effort (combined with similar efforts from our allies) is largely credited for ending the Great Depression in Canada. The challenges we face today might not be quite as severe, but they are strikingly analogous. Our economy is anemically recovering from a major recession and we face global challenges – namely food, water, and energy security in the face of population growth and climate change – that demand major coordinated efforts across countries.
Thus, I believe that Canada’s current situation calls for significantly more government investment, which should probably come from a combination of sizable spending increases, modest targeted tax increases, short-term deficits, and re-allocation of existing spending to increase efficiency. Here are some specific proposals.
Short-term stimulus spending, but bigger and for longer than the Liberals propose. The Liberals are right that now is a good time to take on modest deficits to invest in updating Canada’s ailing infrastructure and to make other major capital investments. Our economy is sluggish, interest rates are at historic lows, and our productivity is stubbornly low. But, as some (e.g. Andrew Coyne of The National Post) have pointed out, the $10 billion deficits the Liberals propose (of which they will actually spend only a fraction on capital investments) are so small relative to the size of the Canadian economy that they are unlikely to have much of an impact. What’s more, the rationale for deficit spending goes beyond stimulating the economy; it is not imprudent nor is it unfair to future generations to pay for capital investments (which deliver benefits over a long time period) with deficit spending (which is paid back over a long time period). Thus, I think the next government should increase spending significantly more.
How much do I think the government should spend on this stimulus? I can’t responsibly suggest an exact number without a full costing, but something in the ballpark of 2% of GDP (~$40 billion/year), which was the target stimulus size agreed upon by the G20 in 2008, might be a good place to start the conversation. This would put Canada’s federal spending at around 14.5% of GDP, which is about the same as it was in 2011-2012, less than the spending level under Chrétien in the later years, and well below the 24.4% of GDP spent by the Mulroney government. And the tax increases suggested below would cover much of this, such that there might not need to be huge deficits. This said, the size of Canada’s infrastructure deficit (some estimates place it as high as $123 billion) and R&D deficit (Canadian businesses spend about 1% of GDP on R&D, compared to ~2% in the U.S. and ~2.5% in Japan, Korea, and Scandinavian countries – all productivity leaders), coupled with the relatively poor fiscal positions of the provincial governments, may demand a spending influx even larger than 2% of GDP.
Where should this extra money be spent? We should focus on areas with high return on investment: infrastructure, research and development (R&D), and education. Updating roads, bridges and public transit should be a priority. With R&D spending, the key will be to stimulate investment and innovation without distorting competition or picking winners. This would also be a great opportunity to invest in Canada’s clean technology sector so that we can get out ahead of the inevitable shift in demand towards clean technologies.
To this end, I suggest the federal government launch a large competitive grant program for clean energy, energy-efficiency, water-efficiency, and agricultural efficiency research and development. These types of innovations are certain to be in huge demand globally in the coming decades, and will likely also be needed in Canada as we transition to a sustainable economy. Having a competitive grants program instead of long-term subsidies to individual companies will preserve the atmosphere of competition that drives innovation and helps to prevent market distortions or entrenched lobby interests in first-generation technologies that are often quickly obsoleted (like we see with corn biofuels in the U.S., for example).
Restore the long-form census. Good information is an important ingredient in good policymaking, and the long-form census was one of the most useful sources of information we had for planning social and other types of policies. The decision by the Harper government to eliminate the long-form census has already proved costly for research and planning at several levels of government and business. Restoring the long-form census should be a no-brainer (and is supported by the Liberals, NDP and Greens).
Launch a federal task force on boosting productivity and innovation. It is clear that Canada has a productivity and innovation problem, but solutions (other than spend more on R&D) are not as obvious. Former Research in Motion CEO Jim Balsilie wrote an op-ed recently in The Globe and Mail pointing out that there is a lack of communication between Canadian tech companies and the federal government, which might have to do with the fact that Canadian tech companies do very little lobbying compared to their American counterparts. Therefore, it might be worth putting together a government task force, which would include leaders in Canada’s innovation economy, to draft recommendations for government policy changes to better support innovation in Canada.
Work with the provinces to develop a National Energy Strategy. Canada’s oilsands industry depends on interprovincial infrastructure to get access to global markets; the effect of oil prices on our currency has significant impacts on other sectors of the economy; and there are lots of environmental and social externalities (i.e. costs to society that are not factored directly into the polluter’s bottom line) involved with the oilsands. Similar statements could be made about natural gas, and to some extent even wind and hydro. These are all reasons for Canada to have a national strategy for managing its energy resources. The provincial governments recognize this and have already drafted an interprovincial agreement on a strategy. The federal government should be at the table.
Phase out fossil fuel subsidies, and gradually phase out long-term subsidies to specific businesses in general, to the greatest extent possible. As we have seen this week with the Trans-Pacifc Partnership (TPP), governments sometimes have to subsidize a particular sector of the economy in order to shield it from shocks that would otherwise have deep and rapid effects on livelihoods (in the case of the TPP, the dairy farmers are being compensated for their loss of market share to new foreign competition). But these kinds of subsidies are distortive to the economy in the long-term. In particular, they can exacerbate the problem of stranded capital when an industry is overcapitalized or in permanent decline. This is a common occurrence in fisheries, for example, where governments often subsidize fishers to allow them to stay in a fishery even after it collapses due to overfishing. Subsidies can also exacerbate the market distortions created by environmental externalities (fisheries are a good example of this as well). These kind of harmful subsidies are prominent in the Canadian energy sector (the IMF estimates that they amount to $34 billion/year, which includes the uncompensated costs to society of pollution and health impacts) and should be gradually phased out (which would include implementing taxes on the pollution; see Environment below).
Introduce a tax on sugary drinks and other processed foods. For the same reason that pollution should be taxed to compensate society for its imposed costs (through environmental damage and health effects), some processed foods (e.g. sugary drinks) associated with obesity and related health problems (heart disease, diabetes, certain cancers, etc.) should be taxed too. Obesity costs the Canadian economy $4.3 billion per year. Levying a small tax on sugary drinks and other processed foods would likely generate significant revenue, and would likely have a positive impact on health outcomes and healthcare costs. Many health experts have called for this type of policy, and a sugary drink tax has actually been adopted recently in Mexico with early signs pointing to success.
Reverse Harper’s two-point cut to the GST. Raising sales taxes isn’t necessarily popular (which is why no party is proposing it to my knowledge), but sales taxes are some of the least economically distortive taxes, and Harper’s two-point GST cut costs the treasury $14 billion per year, despite the fact that individual consumers would likely struggle to notice the difference. Given the huge infrastructure, R&D, and healthcare deficits Canada faces, we need the revenue and there are few better places – economically speaking – from which to get it than the GST.
Close tax loopholes for corporations and individuals. All three parties have, at one point or other, promised to do this, though it is somewhat unclear how much revenue can be gained. Regardless, tax loopholes are (practically by definition) things we should seek to eliminate.
Reverse Harper’s inefficient boutique tax cuts. This includes, but is not limited to, the expanded tax-free savings account (TFSA) limits, the Universal Childcare Benefit (UCCB) (but see Childcare below) and income splitting. I don’t hugely object to any of these tax credits, but at a time when efficient government financial management is at a premium, these measures fail the sniff test (as I and many others have argued previously).
If necessary, modestly raise income taxes on top 1% or estate taxes. This is an area where I would benefit from being able to fully cost my proposals. Increasing spending to the level I foresee us needing in the near future in Canada, without creating an unsustainable fiscal situation, will clearly require some additional revenues. If the additional revenues from the proposed measures above are sufficient, then I don’t see a need to raise personal income taxes at this point. However, if an additional revenue source is needed, modestly raising income taxes on high-income earners (incomes > $200K/year) or on estates (see paper here explaining the case for estate taxes to reduce inequality) are likely two of the most promising avenues remaining.
The Globe and Mail‘s Report on Business recently had some other interesting suggestions for ways to boost the Canadian economy, which can be found here.
Introduce a revenue-neutral carbon tax. The principle is simple: put a price on carbon pollution – which damages the environment and economy – and recycle the revenues to reduce income taxes. The policy has been very successful in B.C. at reducing emissions without negatively impacting the economy, and is called for by a near unanimous chorus of experts on both the left and right. It’s true that Canada already has several different carbon pricing mechanisms at the provincial level (some of which are the carbon-tax’s inefficient cousin, cap-and-trade), which would be disrupted by a national carbon tax; but the cost of this disruption does not outweigh the benefits of cross-country adoption of the better carbon pricing policy and of the leveling of the playing field across different provinces.
Un-do the Harper government cuts to science funding, elimination of National Roundtable on the Environment and the Economy, changes to Navigable Waters Protection Act, Fisheries Act, Species at Risk Act, etc. The Harper government has made unprecedented cuts to environmental science and environmental legislation during its years in office and these should be reversed.
Foreign Policy, Military & Veterans
Ratify Trans-Pacific Partnership. As The Globe and Mail Editorial Board articulates well, the Trans-Pacific Partnership isn’t perfect, but it is a good deal for Canada on balance, and it would be very costly for us to be left out of it.
Extend ISIS mission for 6 months, and make renewal afterwards contingent on specific targets and ways to measure success. I am sympathetic to the government’s argument that it is important to stand with our allies in the fight against one of the world’s greatest evils (ISIS), but I’m also sympathetic to the opposition argument that our air campaign against ISIS suffers from a lack of clear objectives, timelines, and measures of success. Therefore, I would renew our mission for an additional 6 months (as of the election) and notify Canada’s allies that our continuing the mission after this time would be contingent on there being clear objectives, timelines, and measures of success.
Improve support for veterans. This is not an area of expertise for me, so I can’t responsibly offer too many details, but what I’ve been reading these last few years suggests that important Veterans Affairs services are being compromised by funding cuts, and this is wrong. To those who have suffered debilitating injuries fighting for our country we owe nothing but respect and the highest standard of care. Anything less would be a disgrace and a dishonor to their service.
Senate reform. The Senate clearly has a problem, but the Constitution is also clear (as recently re-affirmed by the Supreme Court) that abolishing the Senate, setting term limits for senators, or making senators elected requires the Constitution to be amended (an arduous process that requires eventual consent from the provinces). Therefore, Trudeau’s plan – to make all Senators non-partisan and appointed on recommendation from an arms-length panel – is probably the best feasible option in the short-term. In the long-term, it might be worth calling provincial leaders together for a summit on Senate reform to see what more substantive reforms – if any – might be palatable enough to pass.
Repeal the Fair Elections Act. This is a no-brainer. The Fair Elections Act was denounced by just about every expert as a democracy-eroding vehicle for Conservative party advantage. It must be repealed. Full stop.
Give Commissioner of Elections power to compel testimony. This is the one thing the Commissioner of Elections, Yves Côté, asked be included in the Conservatives’ election reforms (because not having that power made investigations all but impossible to conduct when faced with uncooperative party members, such as several Conservatives in the robocalls investigation allegedly). The more protected our elections are from fraud and voter suppression, the better.
Restore the per-vote subsidy, and proportionally reduce private election spending caps. As the U.S. is learning the hard way, big money in politics creates big problems. Canada – even under the Conservatives – has relatively low limits on private campaign contributions, but, at $1500 per-person-per-year, they are still too high. The democratic ideal is one person-one vote. Thus, I believe we should try to keep donation limits low enough that most Canadians can afford them. I don’t think many Canadians can afford to donate $1500 every year to political parties (I know I can’t). The per-vote subsidy also had problems (mainly, it cost public money and gave the incumbents an advantage), but as a model for funding political campaigns it was much closer to achieving the one person-one vote ideal, and therefore should be brought back.
Introduce fixed campaign periods. Before the Harper government brought in fixed election dates, the party in power could manipulate the timing of an election undemocratically to its own advantage. The Conservatives were right to eliminate this option (though they did break their own law by calling the 2008 election). But as they have demonstrated this year, it is now also possible for the party in power to manipulate the length of the campaign period to its own advantage. This option should be eliminated too.
Create a non-partisan arms-length body to run election debates. Public, accessible and fair election debates critical to the political process. This year, the Conservatives and NDP boycotted the traditional televised Consortium debates – ostensibly to expand the number and possible formats of debates, but some argued it was for political gain. Whether or not it is right for a media consortium to have a monopoly on debates, it is definitely not in the best interests of the political process to have the debate formats be so easily manipulable by the political parties. A publicly-funded arms-length body in charge of organizing debates is the best option available to ensure that debates are set up fairly and in a way that reaches the widest possible audience of voters.
Reverse funding cuts to CBC, but earmark large amount of funding for news. While I am sympathetic to arguments that the CBC needs to adapt its entertainment programming to the changing broadcasting landscape, the CBC serves a far more important function as a national broadcaster: It is the only major news outlet that is publicly owned and operated, and therefore is the least susceptible to editorial bias or meddling from ownership interests. While we don’t have many outlets as blatantly biased as the U.S.’s Fox News or MSNBC (Sun News is the most prominent exception to this), many of our private news outlets do have noticeable leans (e.g. National Post – right, Toronto Star – left) and there are occasional cases of editorial meddling (e.g. allegedly in The Globe and Mail‘s 2014 Ontario election endorsement of Tim Hudak). Maintaining a well-funded public broadcaster that is able to – at the very least – broadcast high quality, un-biased, hard-hitting news (think Rosie Barton) provides an essential service to our democracy that is well worth the cost. The Liberals, NDP, and Greens have all rightly called for restoration of funding cuts (largely executed by the Conservatives) to the CBC.
Have a national referendum on proportional representation. All three opposition parties have promised to eliminate the first-past-the-post system in federal elections, in favour of some sort of proportional representation or ranked ballots. As sympathetic as I am to the notion that it’s undemocratic for right-wing governments (or left-wing governments in Alberta) to be elected with less than 40% of the vote through vote splitting, I have to agree with the Conservatives’ counter-argument that parties shouldn’t be allowed to change the voting system without a referendum. But let’s definitely have the referendum.
Increase transfers to the provinces. Canada’s Universal Healthcare system is one of the most important and cherished institutions in our society, and a recent major advisory report – commissioned by the Harper government to find innovations to improve the healthcare system without spending any more money – came out and recommended that more money be spent (bucking their mandate). The panel authoring the report, chaired by Dr. David Naylor, warned that, “absent federal action and investment, and absent political resolve on the part of provinces and territories, Canada’s health-care systems are headed for continued slow decline in performance relative to peers.” Granted, I am not a healthcare expert, but this seems like a clear call to action.
Study and implement recommendations of the Naylor panel. The Naylor panel (referenced above) made several other recommendations that deserve careful study by whoever forms the next government.
Universal pharamcare. Mulclair argues that making pharmacare single-payer will both reduce overall drug costs (because the government will have a near-monopsony), and improve access for the most vulnerable. He’s right.
Universal affordable daycare, similar to Mulclair’s $15/day proposal. Providing affordable daycare to every parent who needs/wants it is expensive, but worth it for the following reasons: (i) Combatting poverty: Affordable childcare is essential to low-income families, especially those with single parents. (ii) Gender equality: Affordable, accessible childcare removes a barrier to some women (and some men) entering or staying in the workforce. (iii) Economics: There is an obvious economy of scale in childcare (e.g. compare the 15 parents it takes to watch 15 children at home vs. the one or two daycare workers it takes to watch them in a daycare), which means that centralized childcare probably benefits the economy overall by expanding the labour force. (iv) If there are tradeoffs, let parents choose: A recent study came out suggesting that kids in Quebec daycare had worse non-cognitive outcomes (i.e. more bad behavior, but no difference in intellectual capacity) than kids cared for at home. Even if that’s the case, parents should still be given the option of subsidized childcare. They can choose how to navigate the tradeoff for themselves in the manner that best suits their family’s needs. Now someone (say, a Liberal or Conservative) could counter this with: ‘why not just cut parents cheques, and then they can choose to stay home affordably too?’ My answer would be that this sounds great in theory, but you would probably have to spend much more in cutting cheques, relative to universal daycare, to be able to make childcare truly affordable for the poorest families, because of the economy of scale. (v) It’s not actually that expensive (e.g. it’s less expensive (~$5B) than cutting the GST by one point was (~$7B)).
Extend government-subsidized parental leave to one year and make it gender-neutral. In other words, give parents a year of government-subsidized leave, which they can divide into maternity and paternity leaves as they see fit. This is similar to what Sweden – the country that tops the global gender equality rankings – does. The logic is that making paternity and maternity leave equally accessible gives neither gender more incentive than the other to stay home; and subsidizing the leave through the government rather than through the employer lessens the disincentive to hire and promote young people they think will be likely to take a parental leave.
Education & Youth
Launch a federal commission on modernizing higher education with a mandate to facilitate debt-free job training for youth. There is no doubt that Canada has a higher-education affordability problem. Canadian youth are graduating with an average of nearly $30K in debt, and face high unemployment and underemployment to boot. An important part of creating a meritocracy of equal opportunity (which I believe to be an important democratic ideal) is having essential job training be accessible to all. While it is tempting to stop there and simply conclude that we should eliminate university tuition, the affordability of higher education is really only half of the problem; the other half is that a university education isn’t the golden ticket it was in our parents’ generation, and a lot of university graduates can’t find jobs (or can only find jobs that don’t require university education). Thus, I believe we need to take a deeper, harder look at how we can reform higher education to make it both more affordable and better matched to jobs. I would launch a Royal Commission on higher education reform with this mandate, and in the short-term as a stop-gap, I would expand grants and no-interest loan programs for low-income students, as several parties have suggested in one form or other.
Ban unpaid internships. Among the arguments against unpaid internships are that they are exploitative and that they entrench inequality (because only wealthy youth can afford to take time out of paid work to take unpaid internships). These are both compelling reasons to ban them.
Inquiry into missing and murdered indigenous women. The epidemic of missing and murdered indigenous women is a national tragedy and black eye for Canada. Even if Harper is right that you won’t uncover any new information from an inquiry on the root causes of the epidemic, buy-in and participation from First Nations is sure to be essential to any successful solution, and at the very least both buy-in and participation could be enhanced by an inquiry. Even if an inquiry accomplishes nothing else (which I doubt), it would still have been worth it.
Study and implement the recommendations of the Truth and Reconciliation Commission. Here again, I must admit that I am not an expert (on First Nations issues). However, the Truth and Reconciliation Commission (which was overseen by experts, obviously) made 94 recommendations, which can be found here, and are worth serious consideration by whoever forms the next government.
Don’t touch the Clarity Act. This is pretty straightforward. The NDP has promised to repeal the Clarity Act so that sovereignty negotiations between the Quebec and federal governments can be triggered with a 50% plus one majority in a referendum (whereas the Clarity Act requires a ‘clear majority’). This is a bad idea. The argument that allowing majority in Quebec to rule is more democratic misses the point that separation would have far-reaching impacts in Canada outside of Quebec. Therefore, if we don’t require all other provinces to approve Quebec separation in separate referenda (which is how separation would work in the U.S., for example), it’s more than reasonable to require a larger than 50% majority of Quebec voters. I personally would opt for requiring at least a 2/3 majority in Quebec (or any other province) to trigger sovereignty talks.
Pilot Programs (experimental small-scale trials with rigorous program evaluation): Guaranteed minimum income and guaranteed housing. Guaranteed minimum income (see also here) and guaranteed housing are both programs that seem radical on their faces, but actually have surprisingly broad support among experts and have had some promising trials (e.g. see here and here). The idea is that ensuring everyone has access to housing and a modest but livable minimum income pays for itself through savings in other parts of the social safety net (and of course also has a potentially huge social and ethical upside). However, because of the huge price tag both of these programs would have at the national scale, it is important for them to be subjected to further study – to assess their potential scalability – before taking steps to adopt them fully at the federal level. One option for doing this would be to subsidize pilot programs, which the federal government is actually already doing with guaranteed housing in several major cities across Canada through the “At Home/Chez Soi” project. The government should fund similar studies to field-test guaranteed minimum income.