Innovation, diversity loom as key factors in Liberal budget equation

Beyond next week’s provincial pre-election budget will be an inflection point next month for the Justin Trudeau government – its second budget, more meaningful than its maiden effort because it now has sufficient advice upon which to make sufficient economic change.

Last week the federal government was armed with its best counsel yet – and we were given our best clues yet – on what it might do to build longer-term prosperity. The federal Advisory Council on Economic Growth created by Trudeau as a sign of wider consultation proposed several smart ideas that one has to think Finance Minister Bill Morneau will borrow at budget time. If not, why have it?

True enough, one idea – to delay retirement eligibility until age 67 – was politically dead on arrival within a day.

But several other concepts stood the test of the week and offer insight and opportunity in the challenging imperative of marshalling an aging workforce in a country of stubbornly stagnant productivity that faces even more technological change.

The council’s five reports recognize the need for more resilience, skills and participation. They don’t sugarcoat the inequity for women and First Nations, so there are calls for better child care, education, access to technology, capital co-operation and any disincentives to work. 

The proposals arising from the reports have a modern Liberal feel to them: evident intervention now to make less evident intervention necessary over time.

There is, for instance, a proposed mid-career FutureSkills Lab that would co-ordinate the hodgepodge of programs and initiatives in workforce transformation, mainly to inform and steward next-generation skills development.

The council suggests a “risk-free” process – legislation perhaps – for employees to pursue flexible work arrangements and to support the growth of the “gig economy” of independent contractors and side hustles.

There is a proposal to take a sector-by-sector approach to “removing growth obstacles,” namely excessive regulations or inadequate infrastructure – starting with the agriculture and food sector, which it argues has the potential to make Canada a “trusted global leader in safe, nutritious and sustainable food for the 21st century.”

If it needed any more impetus to capitalize on Donald Trump’s dissuasive immigration policies, the council suggests the Liberals further streamline entry rules to attract top talent. The proposal is embedded in a clutch of tough observations about the climate for innovation.

The council lobs several softballs to the plate as encouragement: “innovation marketplaces” where startups work with corporate and government customers to solve growth problems, a proposal to be the first customer as part of a government procurement policy and widening the pool of capital.

But its most, um, innovative ideas come in the council’s report on workforce participation – specifically, buried a bit in the appendix – and here the council gets a little out there.

It notes that gender-diverse executive teams are 15% more likely to outperform industry median financial results, but that companies are far better at recruiting than at advancing women into the executive ranks. Canada ranks poorly among Organization for Economic Co-operation and Development countries in having women on publicly traded company boards, and the council argues that retaining women throughout the “pipeline” is critical to the country’s economic success.

The council proposes a national – albeit voluntary – gender diversity challenge for business. It immediately acknowledges the danger of this becoming “a mere public relations stunt” so it suggests a truer, trackable commitment to the advancement of women: hard targets of retention and promotion, with goals determined by specific industry and sectors and plenty of attention on the initiative.

For our self-described feminist prime minister, this appended idea has to be tempting.

Kirk LaPointe is Business in Vancouver’s vice-president of audience and business development.