At last, the immediate working group

Canada: We suck at productivity, but we're #1 at reinventing wheels

Honestly I’d rather not make fun of Anita Anand, but there she is

I’ve decided I actually kind of like late-stage Justin Trudeau. He’s quite Zen.

In 2023 he tried to get mileage out of a cabinet shuffle. That didn’t work. This spring he spent a month pre-announcing his budget. That didn’t help either. One conclusion you could draw from a year like that is that stunts don’t help. To my surprise, that seems to be the conclusion Trudeau has drawn.

After the lousy June by-election result in Toronto-St. Paul’s, a few people listlessly suggested some other changes. Maybe Trudeau could quit. Or fire Chrystia Freeland. Or fire Katie Telford. Or bring Mark Carney into cabinet. Or cancel the carbon tax.

So far he’s done none of the above. This is pretty close to matching the advice I’d have given him. Freeland or Telford would be replaced by somebody who learned everything they know about politics from Freeland and Telford. Carney — well, he’s not getting into federal politics, is he? Surely by now we can admit to ourselves that he’s Lucy with the football. But if he did, and Trudeau was still the leader, Carney would promptly start sounding like every other cabinet minister. So it would hardly be worth the effort.

The government we have is the only government Justin Trudeau wants to provide. It falls now to voters to decide whether it should continue. Or rather, it will fall to voters next year, if Jagmeet Singh’s support for the Liberals holds. The sum of Liberal hopes is that between now and next year, something will come up. As strategies go, it has the virtue of simplicity.

It must be easier to be Max Valiquette these days than he expected when he moved to Ottawa. “What’s the plan, Max?” “Four hundred more sleeps until election day! That’s the plan!”

While they wait for the election, the Liberals must occasionally govern. I was struck by remarks from one of them the other day in Halifax.

Anita Anand promised to fix Canada’s lagging productivity. The Treasury Board president was in Halifax for the cabinet retreat. She told reporters: “I am immediately striking a working group on productivity. We know that Canada has strong economic markers. A triple-A credit rating; the lowest net debt to GDP ratio in the G7; historically low unemployment. At the same time, we know there is more to do on GDP per capita, or productivity. So I will be launching a working group to study productivity in the public and private sectors. This will happen very soon, within the next few weeks.”

Questioned later by reporters, Anand’s staff said they didn’t yet know who’ll be in this group.

Now, if I were to write a list of cabinet ministers whom I see as “part of the problem,” Anand’s name would not be on it. But I’m sorry she got sent out to deliver this message. It’s hard to imagine a topic that’s been studied more thoroughly in Canada than productivity.

Here’s Carolyn Rogers from the Bank of Canada, on the Bank’s Instagram account, summarizing her widely-noted March speech on productivity that led, I’m quite certain, to Anand’s working-group announcement. Perhaps Anand should put Rogers in charge of the working group and announce that Rogers already reported, five months ago.

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Or put David Dodge in charge. He reported in June. One way to enhance productivity, after all, is not to pointlessly redo work once it’s been done. Here’s the report from Dodge, a former deputy minister at Finance, former Bank of Canada governor, and a guy the Trudeau Liberals loved when he was saying in 2015 that low interest rates made it smart for governments to pay for infrastructure investments with debt.

He’s less easy to please these days, and with his notional co-authors from Bennett Jones’s public policy group — John Baird! Eddie Goldenberg! Christy Clark! Indira Samarasekera! John Manley! Top that, hypothetical Anand-appointed working group! — he says that what’s needed to get Canada back into the productivity game is the sort of thing that hasn’t lately been on offer:

“A strategy that is laser-focused on productivity growth… must give direction, predictability, consistency and coherence to the actions of government, and thus provide clear signals to investors. Investments in energy and resource infrastructure, as well as in research and development (R&D) and innovation, require a consistent policy framework that extends well beyond any political cycle. Details of that framework will evolve, in particular to respond to global developments, but there must be solid medium-term policy principles and anchors.”

Where else could a government look for pointers, if it suddenly took an interest in productivity after it had already been in office longer than Brian Mulroney was? Well, perhaps somebody in Anand’s office could browse the 39 issues of The Canadian Productivity Review, which was published for nine years by the Economic Analysis Division of Statistics Canada. This information is likely to be stale-dated, it’s true, because there has been no new publication in the series since 2015. I’m trying to remember what happened in 2015 that would bring a decade-long interest in understanding Canada’s productivity to a halt. I’m sure there must have been something.

Of course, here I’m exaggerating for effect. Concern about lagging productivity in Canada substantially predated the launch of Statcan’s productivity review, and the Trudeau government was already showing glimpses of fitful interest in the issue before last week. Chrystia Freeland’s own recent budgets have contained isolated expressions of concern over the issue.

In the 2021 budget, the concern was muted. “Working to reduce Canada’s productivity gap with the U.S. by just one tenth could raise real GDP by 3 per cent over the next two decades,” the budget document stated. This was alarm by implication: failing to reduce the gap would not have the desired result.

By the 2022 budget, the alarm was louder. Productivity, with “innovation,” was dubbed “the Achilles heel of the Canadian economy.” This vulnerability “is a well-known Canadian problem—and an insidious one,” the budget stated. “It is time for Canada to tackle it.” So, presumably before late summer 2024.

Unfortunately, the measures proposed by this very government to fix the problem — a national infrastructure assessment, the Canada Digital Adoption Program, the Canada Innovation Corporation — have been cancelled or delayed. On this note in particular, I’m glad for a chance to acknowledge, belatedly, the excellent work of the Globe’s Chris Hannay, who spent months tracking down the feds’ reasons for deep-sixing the Canada Digital Adoption Program. Turns out they in no way resembled the reasons the feds claimed! I have subscribers who get cross with me when I accuse politicians of lying, so let’s just say the Trudeau government doubled its productivity on this file by having both (a) a real reason why something happened; and (b) an extra reason that they publicized because it sounded better.

I honestly think one of the best things the government of Canada could do to improve its long-term economic management would be to send a cabinet minister out to explain, in public, to a row of cameras, precisely how the $4-billion Canada Digital Adoption Program was conceived, executed, and cancelled. I know this is absurd fantasy, but I’m afraid that if a government would never consider doing this, then I can’t muster much enthusiasm for what they’d do instead.

While the CDAP program was still sort-of operating, I was one of the very few reporters in the country who wrote about it, and what I heard from the businesses it was designed to help was that it was confusing, stuffed with absurd incentives, and that it felt like some kind of weird punishment.

And then I read Carolyn Rogers’ big speech from March, and I note that her analysis of Canada’s productivity challenge includes the following:

“Another challenge for companies may be a lack of policy certainty. In some cases, incentives or regulatory approaches can change from year to year. We have also heard from companies that are naturally wary of a regulatory approval process that can be both lengthy and unpredictable.”

In other words: If you find yourself announcing for the hundredth time that this time, you’re going to fix a problem — well, maybe you’re the problem.