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A tortoise and a hare standing still on a racetrack
Business and economics

Economist's view: Inertia plagues Canada's progress

It’s not about people, political movements or political parties, complacency is the biggest issue facing Canada today, our economist opines

One of the things that troubles me in my role as chief economist and author of this column is that we as a society know the problems we face, we’ve written about them at length and we may even have solutions at hand; but nothing changes.  This problem, inertia, is endemic. 

We know Canada has been struggling with productivity for years, we know the country is not building enough homes and we know that there is too much red tape. I’ve personally put forth many options for fixing this issue, so have many, many others. But here we sit, still lagging in productivity and still behind the 8-ball in housing starts.

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I do not believe in magical thinking. These problems, some decades old, are not going to be easy to fix, and will take significant investment – both in time and resources. One person or political party does not have the vision or ability fix this issue alone either. Left, right, centre each have their defenders and each have their upsides, but none can fight inertia alone.  

Having trouble with this reality has me thinking that the true enemy of productivity and progress in Canada today is not a person, a political movement or anything like that. The enemy is complacency. To fight this, we need to always be fighting inertia, which always creeps its way in, especially when decisions are made and implemented horizontally.  

Decentralize decision-making, thus improving agency 

First off, centralizing policymaking within prime mister or premier offices creates inertia by stripping away the expertise and authority from ministers and departments. Experts, far more qualified than top officials in their niche, end up waiting on decisions or approval from less-qualified and overburdened centralized decisions makers. We would instead want to decentralize and delegate, which is profoundly empowering to administrations and public service. 

Political messaging, it is all politicians can do?  

These decisions makers often spend most of their time on political messaging, with decision-making taking a backseat that then bolsters inertia. All this energy could instead be spent on implementing public policy. We announce targets, policies and even tax changes without significant planning beforehand. Messaging might get you elected, but once in office, politicians should either broaden their public policy skills or rely more heavily on their administration. I have worked in the public sector, and I have seen this messaging culture creeping into the bureaucracy – which means significant time spent defending political stances rather than advising politicians on public policy.  

This focus on messaging has oversimplified the public political debate and it’s not doing us any favours. It’s unfortunate, but we are getting closer and closer to our southern neighbour’s style of politics: Eternal debate over compromise. Polarization over compromise..  

Time would be better spent reaching common grounds, implementing solutions and subsequently revising and improving these solutions, ultimately the cornerstone of progress. Although we might not agree politically, it is clear that eternal debate is not bringing significant progress for policymaking in the United States.  

Incremental improvements rather than up-against-the-wall changes 

A culture of continuous improvement must be championed. Our current governing mode is to ignore issues until they become insurmountable and only steer the ship when it is on a crash course. I would argue this is linked to the bandwidth issues of centralized decision makers. Regardless, the sequence of dropped balls in the recent years should make us reconsider. COVID support was generous, yet it took a while to scale it down, increasing costs to bear for future generations. The inflow of non-permanent residents behind this historical population growth started in late 2022, yet we only started addressing it in early 2024. Housing prices have been problematic for at least a decade, yet we seldom have tried to improve the situation. Only now do we talk about reducing permit delays, changes in zonings, and all that jazz.  

Accountability, accountability, accountability 

Saying it three times might make it appear. Grand promises are worthless if we do not follow-up or report on them. They can contribute to popular cynicism. There is currently no shortage of ambition or promises, far from it. There is, however, a shortage of deliverables or projects done either on time or on budget. I understand that many things are out of our control, but shouldn’t we be better at predicting delays and cost increases? After all, we do have information on previous projects, that can serve as a basis for future planning.  

Politicians, for some reason, seem to think that significant change will happen the moment they are in power. Just like I will not find the hidden parking spot that went unnoticed by everyone else, changing a premier or a prime minister will not instantly impact all education and health institutions. It shows a clear lack of humility.  

We also have strong organizations whose sole responsibility is accountability. Think of the Auditor General at the federal or provincial levels or the Parliamentary Budget Officer. The current trend seems to favour a messaging war between politicians and these organizations. Political parties are better equipped for this, as messaging is unfortunately their main focus as discussed above. So, when there’s a war and the scales are weighted against objective accountability what happens? The public loses trust and any historian will tell you where that story ends up.  

We should give our accountability-focused institutions more bite, more power to push back against the flavour-of-the-month political messaging. Institutions need check and balances. Without them, we’ll always be victim to inertia.