Working Together for Canadians: Policy Entrepreneurship in an Era of Uncertainty

January 14, 2003

The Canadian Council of Chief Executives has established an enviable record as a vehicle for Canada’s business leaders to address collectively issues that matter to the country as a whole. The Council was formed in 1976 after a group of business leaders realized that individual efforts were no longer sufficient to ensure the adoption of sound public policy. And in 2003, as I take up the challenge of serving as your chair, I want to suggest that there has never been a more important time for Canada’s chief executives to work together.

We live in a world threatened by the prospect of further terrorist attacks and international conflict and awash in bad economic news, from Germany and Japan to Argentina and Venezuela. Amidst this pervasive uncertainty, Canada’s economic strength has been nothing short of remarkable. But even for Canada, risks abound.

I think that we as chief executives have a lot to contribute in helping our country manage these risks and maintain a healthy pace of economic growth. At the same time, I would suggest that we have our work cut out for us on two fronts.

First, on the policy front, it seems to me that the political landscape in our history has never been more dynamic, which invariably poses new challenges to us as business leaders, community members and most importantly as Canadians. At both the federal and provincial levels, we are witnessing a series of emerging changes with respective party leaderships and the need to either reinvent or reexamine policy priorities within an ever shifting political landscape. On one hand, this leaves us with the possibility of further uncertainty while on the other it offers an ever-increasing opportunity to come forward with new policy ideas and approaches. At minimum, we must be prepared to work harder than ever to advance smart policy choices that escape the traditional confrontations of federal/provincial or business/government relations and instead look for a more co-operative platform by which we can achieve longer term, sustainable solutions.

Second, the backlash against globalization, the prolonged downturn in the markets and a string of corporate scandals have impaired the credibility of both business leaders and market-based policies. If we want to maintain our ability to influence public policy, we must recognize the importance not only of restoring confidence in capital markets, but also of rebuilding public trust in the integrity of business leadership. Let me expand briefly on both these points.

In the 1990s, Canada made immense progress. First came the restructuring needed to adapt to liberalized trade, the successful battle against inflation and the elimination of deficits, along with considerable public sector downsizing, privatization and deregulation. As the tough medicine of the early 1990s took effect, Canadians then began to reap the benefits: rising real incomes, lower taxes, budget surpluses and reduction in the public debt even as more money flowed back into government programs.

Today, though, the demands for new public spending are rising, in some cases, far faster than tax revenues. The prospect of further significant tax cuts has receded from public discussion and in some circumstances there are suggestions of new or higher taxes. The need to beef up security against terrorism has reinforced the role of the state and cannot help but have an impact on the free flow of people and goods. The process of globalization itself, despite its many benefits to people around the world, remains very much on trial. Canada’s free trade agreement with the United States has not prevented repeated protectionist actions against major Canadian exports like softwood lumber and wheat. And as equity markets suffer through their worst string of losses since the Great Depression, even that bastion of free enterprise, the United States, has responded to corporate malfeasance with a barrage of new regulations.

I am certain, having endured significant sacrifices, Canadians do not want to go back to the days of big deficits, high interest rates and rising taxes. However, there are some who would argue for a return to policies that produced these very problems. Ensuring that we move forward will be a challenge. It will be even more difficult to extend the Council’s record as a policy entrepreneur, of successfully advancing bold new ideas that could have a dramatic impact in building the quality of life of Canadians over time. And that is why I think we must be prepared individually and collectively to redouble our efforts in finding the right solutions for all of us– as Canadians and as the country’s leading economic generators.

As we do so, I think it is important to recognize that we still have work to do in terms of restoring public trust in the integrity of business leadership. Each of us is already taking action within our own enterprises, and as a Council, we published a strong comprehensive statement on corporate governance last autumn. Looking forward, it will be important to build on this base and to contribute to the continuing national discussion about how best to restore investor confidence. But as we said in our statement, good governance is as much about values as it is about rules. If we are to be effective in providing leadership within our society, we have to demonstrate to Canadians that we are in fact guided by a strong moral compass.

In doing our part to rebuild and enhance public trust, I believe that we as chief executives should not limit our work to issues of corporate governance. Public trust in the political process is also on shaky ground, and I would suggest that the quality of public governance matters very much to the success of our enterprises and to the growth of our economy as well as to the health of our society. The Council has a long record of engagement on public governance, primarily related to parliamentary and constitutional reform. Today, I would suggest, we need to build on this record by making a visible contribution to strengthening Canada’s democratic institutions. Recently, I have been encouraged by talk from some of our political leaders on establishing meaningful reform to our parliamentary system. The Council must leverage this opportunity with its own ideas.

But whether we are trying to rebuild public trust in business or in government, we as business leaders must be ready to demonstrate that we have something to offer Canada beyond the profits, taxes and jobs generated by our enterprises. That’s always been true, but in an atmosphere of mistrust and cynicism, it will be important to demonstrate that we are ready to roll up our sleeves and work constructively with others to build a better future for this country.

I am committed to doing my part, and I know I can count on each of you to join me. Together, we can and will make a real difference.