5th Annual Board Voice Society of BC

ConferenceThe Interaction of Social and Economic Policy

Presented by:Janet AustinCEO, YWCA Metro VancouverNovember 28, 2014

Context

• Economic & social policy: enabling and remedial

• Canada’s constitutional division of responsibilities

• The current reality

• Universal early learning & care – our best option

• Navigating political culture in the modern world

Government Action• Remedial policies:

– address directly unfair, unjust or other harmful social situations, e.g. poverty, inequality

– Often seen as social in nature

• Enabling policies:– look to create opportunities, e.g. infrastructure

– often economic in orientation

• Good policies have both positive social & economic outcomes

Some history

Early Canadian Enabling Policies

• Transcontinental railway: – the physical infrastructure for nationhood

– new settlers were necessary, economically & politically

• Immigration policy: – Reached beyond the Anglo-Saxon sources of

new settlers to Eastern Europe

Federal Remedial Policies

• Old Age Pension, 1927 – 50% contribution to provincial plans

• Annual appropriations, 1930 – 39, to aid provinces struggling to pay relief

• 1940’s constitutional amendment to allow Unemployment Insurance

Provincial Remedial/Enabling Policies

• Saskatchewan hospital & medical insurance• Many provinces consolidated school districts & built

universities in the 50’s & 60’s

Federal/Provincial Collaboration

• Cost-sharing agreements:

– Hospital Insurance Act, 1957

– Canada Assistance Plan (CAP), 1966

– The Medical Care Act (1968) replaced by Canada Health Act (1984) – federal support for provincial plans

– Federal/Provincial Social Housing Agreements

• On-going federal/provincial “interface problems”

Enabling Change Through Economic Policy

• Since mid-80’s, federal focus has been economic policy:– Globalization & free trade– FTA, NAFTA & successor agreements

• Mid-90’s fiscal crisis brought major cutbacks in transfer payments (health & education)

• “Fiscal management” dominant focus

“Social, Political & Economic Challenges of the 21st Century

It is indisputable - the modern world is technologically, culturally, politically & economically intertwined

Challenges for BC today

• Child poverty - 20.6%

• Child vulnerability - 33 %

• First Nations population fastest growing but lags

• Family formation

• smaller families, low birth rate,

• immigration, migration

• Rising inequality

• increased health & social problems

• educational attainment & skills development

• Best educated generation of women, but underemployed

• Social policy reflects post-war paradigm

Challenges for leadership & governance

• Entrenched/polarized political culture

• Complexity/centralization

• Economics dictates politics

• Technology an enabler & a disruptor

Family policy doesn’t reflect the modern family …

"The generation raising young kids today is squeezed for time at home … for income because of the high cost of housing & … for services like child care that would help them balance earning a living with raising a family."

Paul Kershaw: UBC HELP, Generation Squeeze

“The cost of work/life conflict among employees with pre-school-age children costs the Canadian business community in excess of $4.0 billion.”

Warren Beach: Former CFO Sierra Systems

Cost of Child Vulnerability

• 0-6 most sensitive for brain development

• 30% of BC children are vulnerable vs. 10% biological rate

• Middle-class problem

• Cost of child vulnerability = 20% GDP growth/60 years

• 10X provincial debt

BCBC Outlook 2010, Clyde Hertzman & Paul Kershaw

UBC, H.E.L.P.

Technology

• Accelerating technological change– 47% of US jobs are at high risk of automation within a

decade or two

– computers challenge human labour (bank layoffs, Watson – Jeopardy)

• Lousy & lovely jobs– growth in “cognitive” occupations– hollowing out middle income routine jobs– more competition for less skilled jobs

Preparing for jobs that don’t yet exist yet, not those that are disappearing

“Skills matter. America has a skills problem. So do many other countries. Rising inequality is a sign of this problem.”

James Heckman, Schools, Skills & Synapses

“A major refocus of policy is required to understand the life

cycle of skill & health formation & the importance of the early years

in creating inequality … & in producing skills for the

workforce.”

James Heckman: Schools, Skills & Synapses

What we know …

Investment in early childhood & reforms to family policy are key to our social, economic & political future:

Reflecting the modern family

Skills development & educational attainment

Enabling women to participate fully in the labour force

Aging population

The decline of the West, the rise of the Rest

…versus what we do

Canada is last among 14 OECD countries in spending on early learning & care (OECD, 2006)

Spends $45K/senior >65 vs. $12K/person < 45

Canada’s Distinct Society

• In 1997, Quebec introduced the first universal childcare program in Canada:o Social & economico Remedial & enabling

• All provincial program spending per capita, 2013-2014:o Quebec - $7911o Saskatchewan - $11,977o Alberta - $10, 919

Quebec’s Universal Low Cost Childcare Program

• Direct subsidies to:o Early childhood centreso Home childcare

• Tax benefits

• Opened to all children (0 to 4) by September 2000

• Nearly half of all pre-schoolers (2011)

Authoritative Analysis

Dr. Pierre Fortin, Professor Emeritus, University of

Quebec (Montreal):

•Past President of the Canadian Economics Association

•Fellow of the Royal Society of Canada

•Member of the Economic Council of Canada

•Recipient of the Governor-General’s Gold Medal

•Research Fellow, C.D. Howe Institute

Cost/Benefit of Quebec Program

• 70,000 more mothers held jobs (2008)

• GDP up by 1.7% ($5 billion)

• Revenue to government (Quebec & federal)

exceeded the cost

• Cost = $2,215 million (0.7% of Quebec’s GDP) in

2011-2012

Other Benefits

• Labour force participation of single mothers increased 22% (1996 to 2008)

• Single-parent families on welfare declined from 99,000 to 45,000

• Poverty rate of single-mother families declined from 36% to 22%

• Their median real after-tax income shot up by 81.3%

• New initiatives in most provinces

• Full school-day kindergarten (Ontario & BC)

• Declared inability to fund

– Recession & emphasis on tax competition

– Competition from major social programs

– Health $16.9B, Education $7.3B (2014/15 BC)

Rest of Canada – Limited Results?

• Too big? Too costly? Benefits too long-term?

• Cultural expectations for women

• Vested interests & usual suspects

• Purists versus incrementalists

• Comprehensive vision not embraced by all players

• Advocacy efforts inconsistent & not sustained

• Political suicide

Limited Results – Why?

Where to from here?

Best Policy Response

• Enabling strategy – broad agreement on human capital investment, emphasizing early learning & care:

Short-term: jobs training, higher education, family friendly early development child supports (may be targeted)

Longer-term: universal early learning/care & new family policy framework

Beneficial to child, parents, and society into the future

• Correlate with fiscal state & work incrementally to implement

.

We Need . . . Political/Cultural Shift

• From “short-term” tactical to “longer-term” strategic

• More sophisticated, less adversarial, evidence-based

• Discussion of demographic transformation & inter-generational equity & fiscal choices

• Willingness to review & reform ‘entitlement programs’

.

Complementary Challenges in Context

• Make health funding & governance more accountable & transparent – spending in context of fiscal & policy choices

• Devolve greater fiscal powers to cities

• Emphasize rapid affordable transit as part of intergenerational equity, environmental & economic growth strategy.

• Government/Non-Profit Initiative to find incentives to achieve client independence & greater efficiency in social programs

The Pay-Off …

Realize maximum human potential amid global competition.

Benefits to families & society:

• reduced school failure, illness, crime, teen pregnancy

• reduces obesity & diabetes, hypertension & heart disease, some mental illnesses, premature aging

Spectacular economic returns

The pay-off …Returns to a Unit Dollar Invested

Understanding Power

• Objectively: division of powers among levels of government

– Municipalities have no constitutional status (except as creations of the provinces) & meager financial resources

– Federal government has greater taxing power

– Provinces have constitutional power often greater than their financial resources

• Subjectively: assessing the political landscape or zeitgeist

• Built for stability

• Resists change to provide continuity & stable programs

• New options must be as good as the ones we want to

replace

• Decisions not always logical, politics not policy

• Policy change has enormous implications

• Bring solutions

Understanding Government

Influencing Decisions

• What kind of change?– Incremental, discrete, program level– Systemic, broad new initiatives

• Where does power reside?– At the Centre - PMO, PCO, Premier’s Office– Powerful ministers; not all created equal– Deputy |Ministers – “short-order cooks” – limited research

capacity/institutional memory

• Establish clear goals

• Provide specific solutions & documented benefits

• Understand government objectives & limitations

• Organize support among involved parties

• Choose your arena carefully

• Don’t define yourself/your interlocutors ideologically

• Consider incremental, self-reinforcing steps

• Look for partners; avoid making adversaries

Program Change

Systemic Change

• Major new programs/initiatives are inherently “retail” politics

• Conducted within existing political parties or issues-based advocacy groups

• Campaign 2000• Generation Squeeze, Dr. Paul Kershaw

– New parent benefits – 18 months

– High quality child care

– Flexible working hours

Some Advice

• Decide when to be an advocate & when to be an adversary

• Frame your arguments in a popular manner – not political rhetoric

• Identify prominent advocates & unlikely allies:– Justice Emmett Hall, Royal Commission on Health

Services– David Dodge & James Heckman

• Listen to criticism & adjust• Plan for complications & compromises

• What does government need?

• How can we provide it?

• When should we adapt out goals?

• How to sustain advocacy effort over the long

term?

Questions to consider

Changing lives since 1897.