Canada needs a true economic union

Posted on February 13, 2015 in Policy Context – Opinion/Commentary – Ontario Premier Kathleen Wynne proposes a pan-Canadian economic union that starts with an infrastructure partnership.
Feb 12 2015.   By: Kathleen Wynne

On Sunday, Canadians will celebrate the 50th anniversary of our country’s flag.

We might also take a moment to reflect on another great and much more far-reaching accomplishment of our country’s centennial decade: the creation of Canada’s social union.

Half a century ago, our country’s leaders — Lester Pearson in Ottawa, Jean Lesage in Quebec City, John Robarts at Queen’s Park and their colleagues in legislatures across Canada — came together in an unprecedented way. In a few short years, they created national medicare, the Canada and Quebec Pension Plans, and the huge expansion in post-secondary education.

In true partnership, they transformed Canada. The social union they built may not be perfect, but it has served us well. It helped fuel the last 50 years of progress. And it has made Canada the envy of the world.

I propose that today’s generation of leaders — in all parties and all legislatures — take inspiration from those giants of the 1960s. Just as they built a partnership to address the contemporary realities of their day, we need to do the same to help Canada meet the transformative challenges of today’s world: globalization, the rise of new economic superpowers, the accelerating revolution in technology, and climate change.

The response 50 years ago was the social union. The response in 2015 must be a true economic union in Canada.

If our country is to succeed in this constantly changing, hypercompetitive new world, all our governments need to be pulling in the same direction. Some key elements of the economic union must be:

The reduction of interprovincial barriers that hamper and infringe on trade within Canada.

The establishment of a strategic, long-term national approach to training that helps ensure Canadians in every region have the skills they need to prosper in the workforce of today and tomorrow.

The creation of a pan-Canadian energy strategy to encourage economic development and help us make the most of our resources. And as part of that strategy: a co-ordinated plan to reduce greenhouse gases, ensuring that our economic growth is sustainable.

The most urgently needed element of the economic union is a long-term pan-Canadian infrastructure strategy.

As a nation — all orders of government combined — we are investing annually between three and 3.5 per cent of our GDP in infrastructure. The government of Ontario, for example is investing some $130 billion in transit, roads and other infrastructure over the next 10 years. Other provinces are doing likewise.

The problem is, that’s barely enough to maintain the infrastructure we have, let alone make the kind of transformative investments we need to stay competitive in the global economy. To do that as a country, we would up the ante to closer to five per cent of GDP every year.

Other nations — Canada’s competitors — are making those kinds of infrastructure investments. They understand that smart investments help create jobs, long-term growth and responsible, sustainable development.

In the modern age, we will only get as far as our infrastructure will take us — both literally and figuratively. Provinces and municipalities can’t carry that load alone. We simply do not have the means. And existing federal infrastructure programs are not sufficient to meet the scope of the investments that are required to truly move us forward.

That’s why I am proposing a new Canadian infrastructure partnership — a collaboration that has an explicit target of investing 5 per cent of our GDP in infrastructure renewal. We will need the federal government to be fully engaged — far more than it is now. The infrastructure partnership could take the form of a new dedicated transfer, along the lines of current transfers for health and education. Or it could be a new financing mechanism that enables the federal government — working with the provinces — to go to markets for large capital loans, all the while running operational surpluses.

The mechanism is not what is important.

What is important is that our federal government and our provincial governments come together to tackle this challenge. To get on with building a true economic union for all Canadians.

In the coming weeks, I’ll be making this case to my fellow premiers and other Canadians. And, in this federal election year, I’ll be challenging the leaders of all the national parties to come on-board.

Each generation of a country’s leaders is called on to renew the promise and vision of a great nation. Pearson, Lesage, Roberts, Tommy Douglas and others heeded that call half a century ago, and our country is all the richer for it. The issue is: Does our generation of leaders have the right stuff to build the next stage of our history?

Kathleen Wynne is the premier of Ontario.

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