Business Leadership and Public Policy Building on our Strengths

April 14, 1999

Thank you and good morning.

It gives me great pleasure today to carry on a proud tradition. The Business Council on National Issues is recognized as the most influential voice of Canada’s business leaders, and that influence is due in great measure to the priority that all of us and our predecessors have given to its work.

We all have important responsibilities to our own shareholders, customers and employees. The work we do together at the BCNI falls within those responsibilities, but also goes beyond them. Public policy plays a key role in our ability to grow our companies, but it also represents a field in which business leadership is too often lacking. The BCNI gives us a way to do something for Canada, not just through the activities of our companies, but as individuals.

The BCNI’s reputation and record owes a great deal to those who have gone before us — and especially to those who have gone before me as Chairman. To Al Flood, Ted Newall, David Culver and Alf Powis and to those who are not here today, a hearty thank you for all you have done to make the Council what it is today.

I am especially honoured to take on the responsibility of chairing the Council at what I believe is a critical time. Like Canadian Pacific, like all of our companies and like Canada’s economy, the BCNI is evolving. For many of us, the terms "Canadian chief executives" and "Canadian companies" no longer seem sufficient. Our shareholders, our customers and suppliers and our employees are increasingly spread across North America and around the world. That has an impact on the composition of the Council’s membership and on our future priorities.

Behind us lies an impressive record. We led the fight against inflation and high interest rates. We have worked tirelessly to end the scourge of repeated government deficits and the burden of debt and taxation that inevitably followed. We championed a vision of a Canada confident and competent enough to open its borders to freer trade. We have led bold initiatives to strengthen our federation. We continue to work on often thankless tasks with profound implications, from the intricacies of competition policy to the complexities of the global climate change debate.

Through it all, we have never hesitated to go where others fear to tread, not foolishly, but with careful deliberation and thorough research.

We were exploring the potential for a wide-ranging trade deal with the United States at a time when governments were still focused on narrow sectoral agreements.

When the federal deficit was still $42 billion, we said the budget could be balanced within five years. Many laughed, but in the end, we were shown to be too pessimistic.

In the depths of the recession of the early 1990s, we laid out an agenda that we said could make Canada the best performing economy in the G-7 by the end of the decade. Much of that agenda was adopted, and here we are — if not the best in all respects, second only to the United States by most measures and ahead by some.

We have accomplished much together. But what next?

Many of our greatest policy goals are now in place. Most governments, both federal and provincial, are running balanced budgets or surpluses. Inflation lies dormant and interest rates are low. Exports have moved to new highs year after year, and while the crisis in Asia has been painful for some, the overall picture remains strong. Many Canadian companies have restructured aggressively, invested heavily and emerged as clear winners in the era of free trade. And yet all is not well.

Canadian companies are increasingly global in their own investment and growth, yet Canada’s share of foreign direct investment is falling — even within the closely integrated North American economy.

Companies have invested heavily in new machinery and equipment, and their export mix is increasingly high value-added — but on the whole, they lag their United States counterparts in innovation and the adoption of leading-edge technologies.

The question of productivity has become as much political as economic and is clouded by measurement issues, but at best Canada has only begun to hold its own and at worst is heading for a precipitous decline in its global ranking.

Our export record suggests we are highly competitive, but the steady decline in the value of the Canadian dollar encourages some to be too complacent about investing in continued improvements in their products and processes.

The incomes of Canadians have grown with the economy, but their tax burden has grown even faster. Combined with the falling dollar, the result is that their standard of living is suffering even while the economy remains buoyant.

We take pride in the fact that the United Nations has ranked Canada the best place in the world to live for five years in a row. Yet we see too many of our most experienced managers and professionals — and too many of our most talented sons and daughters — leaving to seek a better life somewhere else.

These are the concerns that have prompted the BCNI to shift its focus from the big questions that have been resolved to the more elusive ones that continue to plague us. And these are the questions that the BCNI will address through the Canada Global Leadership Initiative.

You all should have received by now your copy of the project launch survey. As daunting as this document might seem, remember that it is just the beginning. It is also an important first step, and I join Tom d’Aquino in asking that all of you give it your full attention at the earliest possible date.

The survey is important not just because it will shape the work of the Council over the next 12 months, but because it is a symbol of the new direction we have taken. It moves our search for answers out of some of the more traditional realms of public policy and into that of business decision-making.

In order to fix the problems that still stand in the way of greater investment and growth in Canada, we have to be able to tell political leaders and the public what really matters to our businesses and where Canada is falling short. It is on this base that we will then build the BCNI’s agenda as we prepare to enter the 21st century.

For now, Canada is still struggling to overcome the vestiges of its past — the overhang of public debt, excessive taxation and an ingrained tradition of heavy government intervention. Despite all the progress made since the signing of the free trade deal with the United States more than a decade ago, the country has yet to cement a reputation as being the best place in North America to invest for the future.

Much remains to be done, but working together, we can and will make a difference. The BCNI gives all of us a vehicle for making Canada a better place to live and to do business, and an opportunity to create in this country a uniquely attractive home for competitive global enterprises.

As with our past struggles against deficits and inflation, progress in this quest is neither certain, nor will it be easy. It is, however, a challenge worthy of our time and our talents. It is a challenge that we will discuss at greater length as we proceed and one that I am honoured to take up as your Chairman this morning.