Author: Maryscott Greenwood, CEO, Canadian American Business Council
The Canadian Century? Time to Lace Up for the Big Game – Policy Magazine
Two decades into the 21st century, we are enduring an age of disruption.
The new millennium has so far been a series of economic, political and public health concussions, which, along with creative destruction in the tech sector, have created widespread anxiety, and for some, a profound public distrust in institutions.
Governments are straining to provide basic services. The private sector is regaining its footing after the chaos of the pandemic, but remains constrained by contemporary realities, not the least of which is the first labour shortage in decades.
In Europe, a dictator who controls vast energy resources is bent on crushing a nation that normally furnishes significant shipments of food to the world. In the West, we are seeing the result at fuel pumps and grocery store cash registers, and ever more dismaying images on newscasts.
Global supply chains remain stretched and sclerotic. Inflation, has returned with gusto, reaching levels not seen in forty years. And while many among us have decided the pandemic is over, the coronavirus appears to have other ideas.
Understandably, people are anxious. Indeed, public grievances are so powerful that catering to them, rather than appealing to strengths and charting a positive course, has proven too great a temptation for some politicians to resist.
Certainly, all of these disruptive forces are at work in Canada. But this may also be Canada’s time to lead. As Premier John Horgan of British Columbia put it recently: “In a time of disruption, that’s when innovation begins.”
As an avowed bilateralist from Washington,D.C., I could not agree more. Canada has remarkable, unique qualities at which the rest of the world marvels.
“We are at a moment in history when Canada can and should flex its inherent advantages. Doing so would increase Canada’s prestige and influence in Washington, and contribute to the good of the democracy-led, rules-based international order.”
Let me start with what Canada, fortunately, does not have.
At least in part because of its massive inflows of immigration over decades, but also because of its foundational history, Canada’s politics are not as fundamentally riven by racial issues in the way America’s are.
As a result, Canada does not have as many powerful, nativist, anti-immigration forces whipsawing government policy. Canada does not have viciously fought constitutional battles unfolding in a politicized high court. Settled law in Canada actually does seem to mean settled law.
Canada has neither unfettered dark campaign money nor two-year terms for lawmakers, which effectively guarantee an endless election campaign. It is difficult to legislate effectively when you’re constantly worried about fundraising or fighting off primary challenges from within your own political party.
Gerrymandering, which tends to entrench extremism in America’s political structure, often thwarting the will of a more moderate majority, disappeared in Canada decades ago. The country’s electoral boundaries census-based, implemented not by self-interested politicians, but rather the Chief Electoral Officer.
And Canada has a much higher degree of social solidarity than its southern neighbour. Look at masking, vaccination uptake and distancing during the pandemic. Canadians found it just as annoying as everyone else, but mostly cooperated. There was some politicization of pandemic restrictions, but the per capita mortality statistics speak for themselves, with the US having nearly 275 deaths per 100,000 and Canada at fewer than 93 deaths per 100,000, according to data from Johns Hopkins.
We are at a moment in history when Canada can and should flex its inherent advantages. Doing so would increase Canada’s prestige and influence in Washington, and contribute to the good of the democracy-led, rules-based international order.
Canadians helped pioneer free trade. There was a convulsive debate in 1988, and an election was fought over it, and then it was done. It is now a political non-issue. (which is no small feat when you compare attitudes toward trade on the US side of the border).
Canada in fact went on to sign multiple bilateral and multilateral trade agreements: With Europe, with Pacific nations, with Israel, and even a modernized deal with its North American neighbours. Today, Canada has trade agreements with 51 countries, repre- senting 1.5 billion consumers.
Oddly, though, Canada has a harder time embracing business itself. There is a view among various officials in Canada (with a few notable exceptions) that the population needs to be protected from business – as opposed to being uplifted by its innovation, drive and ambition. Never mind the fact that private enterprise creates the tax base to fund government programs and the direct prosperity that NGOs, charitable organizations and everyday people rely on.
Now would be a good time for Canada to begin treating the private sector as a true partner, rather than some- thing to be distrusted and regulated into submission. In our modern, mar- ket-based economy, it is business, reacting to social issues and demand, that provides solutions.
We need to acknowledge that the massive capital investments necessary to make energy production sustainable and feasible in a time of changing climate must come in large measure from the private sector. Government can help make that happen, by clearing obstacles to industrial-scale infrastructure development. Canada needs LNG export facilities, large carbon capture hubs, and more pipelines.
The way to confront the colossal challenge of climate change is not to sloganeer about “leaving it in the ground.” That is unrealistic. The real-world answer is to figure out the safest, low- est-emission way to transition off fossil fuels. The private sector is working on this. The public sector is too. Neither can do it alone. But they appear to be at odds, talking past one another, mired in distrust, rather than collaborating.
Anyone who lived on planet Earth during the first year of the pandemic watched as Western pharmaceutical firms, backstopped financially by a US government determined to obtain a vaccine, got to work. The result was spectacular: the highly effective Pfizer and Moderna jabs were going into arms within a year, rather than the decade or so it usually takes. But Canada was just another customer, lining up with the rest of the world to buy doses, principally because pharmaceutical manufacturers long ago concluded Canada’s intellectual property laws are inimical to life-science innovation.
Canada needs to foster research and development, protect IP, and tolerate failures along the way, in order to be- come a destination for foreign direct investment (FDI). The announcement in April that Moderna will build a vaccine manufacturing facility in Montreal was welcome news. Let’s hope it’s a harbinger of new policies that will at- tract R&D investors and manufacturers looking to build plants. There is no good reason this sort of capital cannot land regularly in Canada.
Canada has accepted proportionally more immigrants than the United States. It can do that because there is broad public consent on the issue. Make no mistake, that is a huge Canadian advantage. Experts observe that in a time of aging populations, skilled and motivated immigrants are a priceless force multiplier.
But for all its good intentions, the Canadian immigration system moves glacially. Canada has a doctor shortage, and, increasingly a shortage of nurses, never mind the shortages in other sectors.
Canada should add a couple of zeroes to refugee and immigration targets, which is something America cannot do. And then see to it that the public service understands and is reward- ed for prompt, efficient processing of claims and applications. And, furthermore, see to it that regulatory regimes allow immigrants and refugees to use their expertise after they arrive, rather than forcing them into unskilled positions. Canada would benefit directly from the addition of such talent. Canada would also benefit reputationally in the world, all while earning admiration from its neighbor to the south.
Canada was apparently unhappily surprised at being left out of AUKUS, the US-Australia-UK security pact, which basically involves three of the so-called “Five Eyes” allies forming a private club to share nuclear submarine propulsion technology and explore cyber, quantum and artificial intelligence from a defence perspective.
It should not have been much of a surprise, though. Canada lags in defence spending, and has for many decades. It has spent below the NATO minimum, despite its repeated commitments to do more. Defence spending has not been at 2 percent of GDP since 1990.
Canada’s announcement of $40 billion over the next 20 years to beef up NORAD’s continental defence systems is a welcome step. But its intelligence contribution to Five Eyes falls short. A recent study by the Macdonald-Laurier Institute neatly sets out how Canada needs to up its game.
Unless Canada wants to merely be an honorary member of important defence and intelligence pacts, it needs to do more.
Then, Canada needs to become an alternative to China in modernizing the supply chain for the sustainable, net zero economy. This issue could be the defining one for Canada in the second millennium.
Critical minerals vital to our increasingly tech-enabled economy. Computers, mobile phones, fibre optics, semiconductors, medical and military applications, aerospace development all depend on them. They are also key ingredients in solar panels and electric vehicle batteries. We cannot transition to net zero or fight the war in Ukraine (or anywhere else) without heavy utilization of critical minerals.
“Canada should lace up for the big game. This is not the time to act like a second- or third-string quarterback, nominally ready but seldom called upon.”
But China currently handles over 80 per cent of all global critical mineral processing. The United States would be relieved if that were not the case; critical minerals are, after all, an economic and national security issue. But that would mean building its own processing facilities in a political environment where it is difficult to obtain agreement on naming a post office, let alone standing up a massive new greenfield industrial minerals processing plant. Canada, however, could.
Compared to the UK, the US and other partners, Canada’s government is stable. There are no midterm elections or insurrection hearings underway. No Brexit to cope with. No war next door.
Canada should lace up for the big game. This is not the time to act like a second- or third-string quarterback, nominally ready but seldom called upon. To do so would mean changing embedded thinking that is deeply resistant to change, but the impact would be enormous.
In this age of distrust and disruption, Canada, with its reputation in the world as a trusted partner, its vast agriculture, rich natural resources, and remarkable stores of knowledge and expertise, is perfectly positioned to lead.
If, of course, that is what Canada wants to do.
Maryscott Greenwood is CEO of the Canadian American Business Council and a partner with Crestview Strategy in Washington, DC. She previously served in the State Department as a diplomat based in Ottawa.
This article originally appeared in the September-October 2022 issue of Policy magazine and is reprinted with permission.
