Job market’s changing; can government adapt?

by Brian Flemming

Government is often a slow-moving beast, stubbornly resistant to change. That’s why “sunset laws” are sometimes imposed by legislatures: sunset laws ensure programs don’t live beyond their useful lives.

For decades, many government programs have struggled with the seemingly insoluble problem of “job creation”. At Canada’s federal level, well-meaning politicians and bureaucrats have set up one alphabet soup agency after another to deal with double-digit (un)employment. From Trudeau’s DREE to Harper’s ACOA, billions have been poured into regional “job creation”.

Party leaders’ debates prior to yesterday’s New Brunswick elections, for example, featured the usual slug-fests on “job creation”. Some Massachusetts Democratic Party primaries’ ads on cable TV promise faithfully to “create jobs”.

Using the word “creation” together with “jobs” is pure political flim flam. Jobs are not “created” like Yahweh’s world in Genesis or like some great artistic masterpiece. The best governments can do is to establish an environment that gives incentives for people to hire people, or to entice high value immigrants here.

One of this region’s leading Cassandras — Brian Lee Crowley of the Atlantic Institute for Market Studies (AIMS) — climbed onto the Ottawa parapet recently to warn of a coming paradigm shift in regional development and (un)employment patterns.

In a private talk to the annual federal deputy ministers’ retreat in June, Crowley said these looming changes would give the federal government “the opportunity of a generation to put a whole new face on the role of government in this country.”
(Crowley’s remarks are at www.aims.ca/site/media/aims/ManyHands.pdf).

‘Worsening labour shortages’

Crowley’s jumping-off point was the demographic challenge that has been coming at us for decades. He correctly said this region was “about to embark on a period of severe and worsening labour shortages”, like those afflicting Alberta today.

If that is true then the Maritimes must face up to the fact that “we still have a set of policies in place that assumes the opposite, namely that we have a large pool of excess labour that needs to be more or less carried by everyone else.”

Growing labour shortages will require major changes, not only in federal (un)employment-encouraging programs, like EI and ACOA, but will cause a complete philosophical re-examination of Canada’s constitutionally-entrenched transfer payments system.

Crowley told the DMs the “fiscal imbalance between Ottawa and the provinces is a wholly fictitious and empty concept.” So, what about Stephen Harper’s famous promise to Quebec to rectify this “fiscal imbalance”?

I believe Harper will try to slide away from this commitment. The little-noticed cancellation of an autumn federal-provincial conference on the “fiscal imbalance” is Exhibit “A”. The unanswered question is: how will this move affect Harper’s chances of getting his majority in Quebec in the next election and helping Jean Charest win his next election?

Crowley said the current Canadian labour market climate called for “a major shift in federal policy from supporting consumption to investing in Canadians’ productive capacity.” Long-standing policies had to be abandoned and replaced with “private-sector productivity-enhancement investment, as well as public sector spending on genuine infrastructure investments that pass a tough cost-benefit test.”

A key stage along the road to implementing these new approaches must be a revised immigration policy. At present, high percentages of immigrants to Canada are selected on the basis of family reunification or the taking in of refugees.

Canada now has to compete more vigorously for “high value immigrants”. Canada may even have to make a deal with Mexico — home of a large pool of surplus labour — and start a guest-worker program.

Setting up a guest-worker program must take account of the emotional upheaval currently being “enjoyed” by our American cousins as Congress and the White House struggle to figure out what form their guest-worker program will take.

Meantime, the aging of Canadian, and Maritime, populations should not, Crowley said, be cause for despair. “Labour and capital are quite interchangeable” so the correct policies will encourage smaller numbers of workers to become more productive, not less so as happens under current EI rules.

Bringing the federal government’s policies, programs and priorities “in accord with today’s problems rather than yesterday’s” will, Crowley asserted, be the principal policy challenge of the next decade.

Let’s hope all those DMs were paying attention to Crowley.

To read the Commentary based on Crowley’s remarks to the Deputy Minister, click here.


Brian Flemming was Prime Minister Trudeau’s advisor on priorities and planning from 1976 to 1979. E-mail: [email protected]