Real change: Bringing Innovation to the Social Policy Agenda in Canada

Presentation to the Fédération des chambres de commerce du Québec

Fasken Martineau, 800 Victoria Square
Montreal, Quebec
September 26, 2016

I am grateful for this opportunity to be around people who are at the heart of our economic growth and who have a strong sense of social responsibility. 

I would first like to thank you for your support to our communities on both social and economic fronts—and we want to keep that momentum going.

Not so long ago, I was a newcomer to politics.

I like to compare my political career to hockey.

Politics are a team sport.

The main challenge is accepting that you don’t always have the puck.

Our success hinges entirely on trust and teamwork.

And the backdrop, in hockey as in politics, is that we have little time for reflection and we’re often required to comment on subjects that tend to be very complex.

So I deeply appreciate being able to rely along the way on professionals from all areas of our society and our economy.

I want to briefly talk about the three “As”—which apply not only to hockey, but also to working towards a better society.

There are three pillars to a three‑A society: ambition, attitude and action.

These pillars, in turn, allow us to achieve three high levels of development—sustainable development, economic development and inclusive development.

First: sustainable development.

Society has a growing interest in this area, for reasons that are fairly clear when we consider the speed at which our population is changing and the importance Canadian families place on the quality of their environment.

Politicians often get accused of having a four‑year outlook.

I can assure you that we see far beyond our current term, and we are implementing measures that will serve generations to come.

Then: economic development.

This is the basis of our ability to develop our society. The success of our sustainable and inclusive development depends on the health of our economy and our ability to create jobs, sell our products in foreign markets, and stimulate economic growth.

Lastly: inclusive development.

Inclusive development benefits all of our families and ensures that everyone has an equal chance at success in life.

Let’s be clear: we hope our society leaves no one “on the bench”—speaking of hockey.

Inclusion

I’d like to talk a bit about our vision of inclusion.

Such a vision may seem a little abstract, but it has concrete implications.

I’m thinking here of how economic and political processes can elicit feelings of exclusion among the public as regards, among other things, the effects of free trade, the perceived ability of governments to work for the betterment of all, and involvement in the major development challenges facing our society.

When we see how feelings of social exclusion—sometimes legitimate, sometimes imagined—harm political processes, I think it’s important to recognize the value of inclusion, not only for social reasons, but also for reasons of economic and sustainable development.

Canadians ascribe considerable value to processes, because the process in itself, in a democracy, has something good to offer them.

People also know that when a process works well and is inclusive, respectful and representative of diverse interests and opinions, it leads to better results.

So ambition drives attitude and action as well—the other two As.

Now, in university, I learned that GDP can be defined as a function of the variables A, K and L.

Innovation

L represents labour, specifically labour quantity, quality and duration.

K represents private and public infrastructure.

But I’d like to focus on what I consider to be the most mysterious element: A.

A is often defined by economists as technological innovation.

But there’s more than technological innovation; there’s also social innovation, market quality, and the ability to trade and exchange with other countries.

So A includes social innovation.

I’d like to give you a taste of how the government can improve the A of social innovation.

I will talk about two components that are coming up more and more in the consultations I have the opportunity to attend.

First is the partnership component, another concept of inclusion, whereby modern mechanisms of social finance and the reduction of social, private and political risk are the subject of collaborative efforts in a federation as diverse as Canada’s.

It’s important to keep in mind the political risk.

National public policies can easily be stalled or even completely stopped if political risk is poorly managed at a national level.

In addition to the partnership component, there is the synergy component: we can combine the strengths of society as a whole by harnessing the synergy of what defines quality of life for our families.

Every family has unique circumstances.

The common denominator is the importance that our families place on social participation, quality of transportation, opportunity for their children to go to a good school, quality of daycare, quality of their physical environment, accessibility of public places, feeling of physical safety, and feeling of financial security.

All of these elements come together and support each other in the lives of our families, and it’s important for the Government to take them into account when it comes to innovating socially.

That’s what “looking for synergies” really means.

Our government has a global vision of the development of Canadian society.

Let me give you a few examples.

We have restored the age of eligibility for the Old Age Security pension to 65.

The goal is not to encourage people to retire at 65.

Rather, age of retirement is a personal choice.

The goal is in fact to improve the lives of seniors, particularly vulnerable, low-income seniors.

We discovered that if the policy had not been reversed, 100,000 Canadian seniors aged 65 to 66 would have fallen into poverty, increasing the poverty rate for seniors from 6% to 17%.

Also, the average middle-class senior male would have seen his income drop by 11%, and the average middle-class senior female would have seen her income drop by 32%.

The lowest 20% of income earners would have suffered 40% of the repercussions of the policy; they would have lost 35% of their incomes.

My second example is that we’re developing a national housing strategy in collaboration with the other levels of government and a range of partners and stakeholders who are ready for the Canadian government to recommit to supporting housing in Canada, for Canadian families.

It’s a strategy that uses a four-dimensional matrix.

We’re talking about a continuum of housing conditions that starts with homelessness. Next there’s shelters, halfway houses, social housing, affordable housing in terms of the rental market, affordable housing in terms of ownership, and finally the unsubsidized housing market, which is little affected by our government’s social policies.

On top of that continuum of housing conditions there is a second dimension, which is that the challenges of housing vary considerably across the country.

Essentially, the housing situation in Vancouver is quite different from that in Montreal, Windsor or Iqaluit.

The third dimension of this matrix is potential partnerships.

Again, there’s a direct link to social innovation.

Partnerships are important because the ability of the different levels of government and of partners to intervene varies from region to region.

And the second component of social innovation comes into play again: the fact that housing is closely related to the other aspects of the lives of our families: transportation, the ability to participate in the labour market, education, daycare, physical and social quality of one’s living environment.

Let me take this opportunity to mention that we will soon be establishing a new steering committee that will boost social innovation across Canada.

Developing this committee, which will consist of leaders, practitioners and experts in various disciplines, is an essential step in identifying and implementing innovative solutions to the toughest problems facing our society.

I would now like to talk about the Canada Child Benefit.

As I’ve said many times before, it is the most significant social policy innovation in a generation.

We went from six disparate measures to a monthly, tax-free payment.

We simplified our tax system, which has resulted in greater efficiency for the government and greater transparency for families.

With this benefit, we’re changing the lives of families, moving approximately 300,000 children above the poverty line, and now our child poverty rate is the lowest it has ever been.

In Quebec, it’s estimated that the Benefit will pull 60,000 children out of poverty by 2017; that’s nearly half of the children currently living in poverty.

We also recently increased the Guaranteed Income Supplement for the lowest-income single seniors.

This will considerably improve the financial security of some 900,000 seniors and will lift about 13,000 of them out of poverty.

Today, middle-class Canadians are worried that they won’t have set enough money aside for their retirement.

1.1 million families approaching retirement age are not saving enough for retirement; that’s one in four families.

Young workers in particular are facing the challenge of securing adequate retirement savings at a time when fewer can expect to work in jobs that will include a workplace pension plan.

To address this, we made a commitment to Canadians to strengthen the Canada Pension Plan in order to help them achieve their goal of a strong, secure and stable retirement.

On June 20, 2016, Minister of Finance Bill Morneau reached an historic agreement with his provincial counterparts to enhance the Canada Pension Plan.

Efficiency of a public system

Opinions differ as to how a public pension system compares to private systems and savings in terms of efficiency.

While all types of retirement savings are important, the Canada Pension Plan has the advantage of reducing financial and longevity risk for families, and at a generally lower cost.

Quito

I will conclude by saying that in three weeks I will have the privilege of representing Canada at the Habitat III United Nations conference in Quito, Ecuador.

The focus will be on the New Urban Agenda at a time when more and more of us are living in cities.

There will be excellent discussions on housing, the environment, urbanization and many other aspects of urban living.

The Canadian government has both a responsibility and an opportunity to contribute to global development.

Our responsibility is based on our ability to show other governments and countries that the society of tomorrow is an inclusive, open, responsible and respectful society.

At the same time, the quality of our international presence attracts investors and investment that will contribute to our development.

It has been a privilege to be among you today. I would be happy to answer any questions. Thank you.

 

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