An economy that puts people first
A grassroots-driven, bottom up approach to economic development which places citizens at the helm is the only way forward now.
The fruits of our present corporate-led and financialized economy have been spread highly unevenly and with no regard for fairness. Huge numbers of younger Canadians have been relegated to the margins of our economy and, with the onset of artificial intelligence and automation, that trend is likely to be further pronounced in coming years. CV21 believes we must free ourselves of the shackles of this narrow approach to economic development and opportunity, and replace it with one based on participation. A twenty-first century approach to the economy emphasizes the bonds of community, comprehensive democratic planning, and greater worker and consumer autonomy, all in the service of more lasting, equitable and sustainable outcomes.
The problem
The present government’s efforts to salvage our free trade-driven and continentalist economy by employing more of the same are destined to failure. For the past forty-five years, if not longer, we drank at the <Market Knows Best> saloon, imbibing the spirits of the hidden hand of the free market. Our federal government, through its tax and regulatory policies, embraced the mantras of competition and efficiency with enthusiasm and zeal. We shunned any notion of planning or industrial policy. Our present PM wrote a doctoral thesis entitled: The Dynamic Advantage of Competition. But what do we see now when we look around ourselves?
The big banks, telecom oligopolists, oil and gas behemoths, grocers, agricultural fertilizer companies, the airlines, and several giant mining concerns are all engaged in inward looking practices and profit maximization. Aside from its tendency towards massive market concentration and pricing power, the other striking characteristic of the Canadian commercial landscape is the infirmity of our firms. The median age of the top fifteen largest publicly traded Canadian firms is 122 years; the corresponding number for the US is 45 years. Many have failed to invest in infrastructure, equipment or worker training but instead have chosen to return their precious capital to shareholders. At the same time, they have taken advantage of corporate locational incentives, privatization of public assets, outsourcing, dubious public-private partnerships, offshoring, and ‘creative’ taxation arrangements.
We have hit a fork in the road though now as our formerly unchallenged access to the US market has been constrained and tariffs presently exist on Canadian steel, aluminum, copper, softwood lumber and wood products, and certain non-CUSMA compliant auto parts and finished vehicles. The inertia and complacency of our commercial sector, historically promoted by Liberal, Conservative and NDP governments, has created a two-tier economy, with many of our fellow Canadians barely getting by. As the squeeze is on, the large corporations have increasingly gone into self-preservation mode and your basic costs of living are going up; your mortgage or rental payments have increased; the cost of automobile ownership has grown; and, the value of your self-directed retirement funds have become increasingly volatile. Our old line parties are now leaning on carbon-based energy plays and the fiction that further trade liberalization between the provinces will suddenly free up $200 billion in lost income. If anything, as the Canadian Centre for Policy Alternatives has noted, it is more likely ‘to further reduce provincial capacity to regulate in areas like environmental protection, health and safety in the workplace and predatory behaviors against consumers.’ In reality, it isn’t by copying our neighbor to the south with its reliance on corporate-determined strategies and the growth in financial indebtedness which this entails, that we will get out of the mess we are in. The poverty of imagination that has gripped our political parties for the past forty years has landed us where we are now.
“To govern public life, trade and commerce in ways which advance human flourishing, instead of undermining it, we need to strengthen our moral imagination…and creat(e) a shared vision of a more democratic, vibrant and fair economy. “
Denise Hearn & Vass Bednar, How Companies Capture Markets and Harm Canadians 2024
Our solution
CV 21 proposes a two-part response, the central focus of which must be the well-being of ordinary citizens and local communities.
We need to harness Community Wealth Building as a key tool for economic development.
This starts from a place of allocating credit in the economy according to community, social and environmental goals. It is about democratizing finance, harnessing local assets and bringing decision-making back to the people and communities affected. CV21 believes public banks, credit unions, targeted public pension investments and new community investment vehicles should allocate finance in a way that guarantees that it will stay in the local community.
In practice, this means cooperatives, small businesses, worker-owned companies, social enterprises, community land trusts, neighborhood corporations, and municipal enterprises, all building knowledge, assets, local multiplier effects, and community power, from the ground up. We are talking about a model in service of the real economy, of individuals and families, and of the public interest. It puts the accent on savings and re-investment not just consumption, and develops smart policies in relation to land use, affordable housing and public transit.
There is an important shift in emphasis here. These institutions don’t just function in some kind of anonymous marketplace; in addition to fulfilling their financial vocation, they help to construct the social and economic landscape in which people live, with a significant emphasis on reciprocity and mutual support.
A hallmark of this approach is that the local governments and innovative community vehicles created serve as “anchor institutions” using procurement policies to stimulate local investment and economic activity, develop local multipliers, promote employment based on living wages, and end financial leakage and extraction.
Finally, this new economic approach emphasizes local democratic control, a much greater degree of community planning and crowdsourcing, and the use of participatory budgeting among other things.
Secondly, we need a massively expanded focus on Industrial Policy. This is a task of the Federal government with the input of provincial governments and citizens.
At the national level, a very robust industrial policy devoted to clean energy and the economy of tomorrow to ensure we position Canada to play to its natural endowments and to the strengths, talents and evolving skill sets of its people.
Secondly, we need to build out massive new public infrastructure, likely in the form of a new east-west electricity grid and other renewable energy projects, multi-modal transportation infrastructure for the movement of people and freight, high speed rail and, lastly, other smart, sustainable infrastructure that enhances our collective quality of life and helps us adapt to an increasingly volatile climate system.
Industrial and economic planning must be a chief focus of government going forward in Canada. Planning is not a dirty word as so many apostles of free enterprise have labelled it for the past forty years. Large companies plan their industrial, technical, personnel and procurement activities on a constant basis. Many of our most successful peer competitor countries have detailed plans on how to grow their productive capacities, technological innovations, and gross societal wealth, with China being a striking example. Our decades-long, willful, hands-off approach has landed us in the dire predicament in which we find ourselves today - the old-line parties will only tinker at the margins when we need more radical change now.
Orchestrated industrial planning with family supporting jobs as a central objective is what we urgently need in Canada. CV21 envisages a future based on community ownership and equity, reinvestment and the long-term retention of capital, and the formation of training, apprenticeship, and reskilling policies designed to guarantee sustainable futures in the low carbon footprint industries and sectors of tomorrow for all Canadian families and individuals alike.
Finally Canada Vision 21 proposes banning all lobbying by for-profit corporations and companies and their respective industry associations under the terms of the Lobbying Act. Lobbying would still be permitted by not-for-profit entities, non-governmental organizations, charities, educational institutions, relief organizations, and other entities having a public interest purpose. This would have the added virtue of reducing the degree of regulatory (or agency) capture which is currently perceived by many as a worrying trend in our politics and public administration. This measure is needed to restore the citizen’s voice within government in twenty-first century Canada.