BUSINESS-GOVERNMENT RELATIONS IN A CHANGING PUBLIC OPINION ENVIRONMENT
February 7, 1985
The President Catherine R. Charlton, M.A., Chairman
Honoured guests, ladies and gentlemen: I find it interesting that every major development in life, good or bad, begins as a very simple object and, if it has any viability at all, develops into a more and more complicated structure. The outrigger canoe has become the great ocean liner, or the cruise ship of today; the canvas and wood machine which the Wright Brothers lifted a few feet off the Kitty Hawk sands has developed into the sophisticated stratosphere flyers of the 1980s. The human race itself and the complicated society in which it lives, began, I am reliably informed, as a simplified one-cell amoeba in the marshes of Africa!
To get down to the business of the day, I find in reading our speaker's background, that this law of simplicity to complexity is also true of modern public opinion research. You have heard, no doubt, of the nine tailors of Dooley Street in London, who sent a petition to King Charles II, which began: "We, the people of England....". Well, we have come a long way! Today, public opinion researchers have to be specialists in a ramified and complex business, which has, in the last thirty or forty years, separated and defined and assessed the various factors which create the attitudes of a particular universe.
Mr. Allan Gregg, our speaker today, is known for his work in investigating the links between the attitudes of opinion leaders and the general public, and the social antecedents of political behaviour. Born in Edmonton, Mr. Gregg obtained his B.A. and Master's degree in Political Science at the University of Alberta. From 1976 to 1978, Mr. Gregg developed what is claimed to be the first "in house" polling program ever conducted for a political party - the Progressive Conservative Party of Canada.
In 1979 he founded Decima Research Limited, of which he is president. His firm is now one of the largest full-service public affairs research houses in Canada. Together with Public Affairs International of Ottawa, an interlocked company, he launched, in 1980 - The Decima Quarterly Report: Public Affairs Trends. Today, Mr. Gregg is going to share with us some of his findings and conclusions resulting from his intensive study of social trends, their cause and their influence on political events.
Ladies and gentlemen, would you please welcome Mr. Allan Gregg.
Madam President, head table guests, esteemed members and guests of the Empire Club of Canada, it is a pleasure to be here with you today. While the subject I would like to discuss today focuses on new rules for business in a changed public opinion environment, it is comforting to note that some age-old truisms continue to endure in the face of change. One seems to be that almost everyone wants to go to heaven; another is that next to no one wants to ever die. While things are still far from perfect in our country, all the signals around us suggest that we are a lot closer to heaven in 1985 than we have been in many years. We appear to be in a bull market; wage demands and labour disputes have been relatively stable; with some luck on the dollar interest rates could very well continue their moderating trend; and while some sectors experience continuing difficulty and consumer spending is still somewhat sluggish, corporate balance sheets are being steadily repaired after the devastation of 19821983 and economic recovery seems a real possibility.
But when you take a step back from all this cheer, it is interesting to note just how much the posture of our federal government has been linked to the health of our business community and ergo, our economy, over recent years. In fact, few today would dispute the notion that what government does has a tremendous impact on not only our business climate but the very direction and manner in which business pursues its corporate goals.
While we acknowledge the linkage between business, government and the economy, it seems to me that fax too little thought or resources go into the understanding of why government does what it does or in many in stances why it does not do what business would like it ~' to do. Business seems to have no difficulty evaluating the impact of government initiatives or making their public pronouncements pro or con on that basis of this evaluation. But otherwise, the posture of business almost seems to reflect a belief that if government does something in businesses' interest it is because they made the "right" decision and if government does something against businesses' interests, it is because they made a "wrong" decision. This type of thinking goes back a long way and finds its sentiment in slogans that are probably familiar to us "the business of business is business"; "what's good for General Motors is good for America"; "we've got to get government off the backs of business." But these slogans and this sentiment fail to take account of the fact that in the reality of a post-industrialized North America, if business has not been able to escape government then perhaps it has even grown to need government. Presidential aspirant Gary Hart both recognized and took advantage of this reality when he told America that he was prepared "to get government off the backs of business.... when business got its hands out of government's pockets".
The most current proof of the rightness of this timeworn analysis is the massive defeat of a government that was continually seen doing things which were not in business' best interests, and the election of a government that clearly represented a more pro-business bias.
As a public opinion pollster, practising in the area of business-government relations, I must confess that I find both this analysis and the proof less than compelling. Corresponding with conventional wisdom, the evidence of public opinion polling makes it abundantly clear that the federal Progressive Conservative government received a resounding mandate for change on September 4 of last year. This same evidence, however, suggests the nature of that public mandate and the nature of the desired change were significantly different from that which many in the business community would expect or like.
We believe that the Canadian people underwent a profound change in 1982-1983. That change had been underway for almost a decade before, but the recession seemed to traumatize the Canadian people. Since the mid 1970s Canadians sensed that "something was wrong in Canada", they recognized that problems for them and the country were getting worse but refused to view these problems as anything but aberrations.
By 1982, Canadians had never been more dissatisfied with their own personal circumstances or the condition of the country. Yet they continued to cling to their traditional beliefs that the problems they were witnessing around them were solvable and they remained unshakably optimistic about the future. In fact, the recession simply heightened and exaggerated that sense that "something was wrong". But unlike earlier times when this "sense" simply caused Canadians passive discomfort and complaint, the trauma of the recession caused Canadians to change their attitudes and their behaviour in a very fundamental way.
... the trauma of the recession caused Canadians to change their attitudes and their behaviour in a very fundamental way...
This change was abundantly clear in consumer borrowing, savings and spending patterns, but was even evident in much more far-reaching ways. Faced with a set of circumstances that contradicted both their optimism and their traditional beliefs, Canadians undertook a wholesale re-evaluation of what was and what was not an appropriate course of action for them as individuals, and the country as a nation, to take in the future. And the conclusion they reached was that the old ways of doing things simply were not working. Many even went further and concluded that in the future new solutions and new behaviours would be required to face new challenges. In essence, Canadians came to acknowledge that we had entered a new era and that simply "doing better that which we had already done before" was a prescription for stagnation.
We saw evidence of this "re-think" again and again in our data. In a country that had been historically characterized for its pragmatic appreciation of government intervention into the business and private sector, we saw a population ascribing direct liabilities to this form of government initiative. As concern about unemployment increased, support for government spending to create direct public works jobs or to assist financially ailing industry as a means of job support dropped dramatically. And in a nation that had always displayed deference to the country's major institutions as the principal solver of individual problems, we saw a population emerge from the recession with a renewed sense of personal powerfulness and individualism.
What appears to have happened is that this wholesale re-evaluation of our traditional approach to problem-solving produced a new public definition of the proper role for business, government and the individual. Increasingly, we witnessed a population that was prepared to turn away from government and towards business as the primary initiator of macro-economic solutions for the country's problems. Having arrived at this conclusion however, they still wondered whether business could or would provide these solutions on their own. Rather than viewing government with no role therefore, the public began to demand a new role for government - as a facilitator or catalyst to these largely private sector initiatives. And at the same time, Canadians were saying that they themselves were prepared to assume a larger role in problem-solving and that they would be far more wary of traditional authority and the solutions put forward by traditional decisionmakers.
Against this background, it is not surprising that an opposition party which had been constantly attacking prevailing government solutions and which adopted a more individualistic and pro-business posture would find favour with the public. Similarly, it is also not surprising that a governing party which had given birth and presided over prevailing solutions would appear to be an apologist for the status quo and therefore nonviable as a future problem-solver.
... Canadians never lost faith in our country, our system ofgovernment or our institutions ... They lost faith in those who were running our country
For many, the manifestation of this trend, with its supporting evidence in the United States and Britain,, was interpreted as a global swing to the right, of which Canada was simply a part. Analysis of the facts, however, suggests that nothing could be further from the truth. Even though our evidence suggests that Canadian public opinion has gone through some dramatic changes in recent years, it also shows that Canadians, never lost faith in our country, our system of government or our institutions. What they did lose faith in and began to question was the way our country, our government and our institutions were being run. More precisely, they lost faith in those who were running our country, government and institutions and who continued to tell them that we had "no option" but to do things as we always have done, in the face of the publicly-based conclusion that the old rules simply no longer worked. They arrived at that conclusion not on the basis of ideological commitment, but on the same basis that Canadians have always based their conclusions - on pragmatism. For the average Canadian the calculation was simple - the old way of doing things could no longer work because they had seen problems grow worse and more complex, as the old solutions were being prescribed.
So when Canadians demanded change, they called for a change not to the system, but to the way the system works - a change in process. What has happened is that in rejecting the old rules, the Canadian public has adopted a conservative, pro-business agenda as their own. They believe something must be done to control our spiralling deficit; that business must be given a larger role in the country's economic affairs; that investment is a necessary prerequisite of job creation; that initiative and entrepreneurship is to be valued and encouraged. They had bought these as goals. But they still are an awfully long way from buying the conservative, pro-business means of achieving these goals.
Because you see, Canadians do not take it for granted that a decision that is in businesses' best interest is the "right" decision or a decision that is not in businesses' best interest is the "wrong" decision. Like so many in the business community, Canadians also want to go to heaven but they do not want to die. They,believe that a decision that is in their best interest is a correct decision and one that is not, is a wrong decision - and in many instances, they do not accept that their interests are coincident with businesses' interests.
We see this tendency again and again in our public opinion data. Canadians want to see the deficit controlled because they recognize that in reducing their own deficit, benefits have accrued to them directly. They also have come to realize that servicing the debt affects their taxes and therefore must be reduced. But because their frame-of-reference for relating to the deficit is largely personal, they tend to view it as simply a management problem. In fact, only nine per cent of Canadians view increased taxes or reduced social services as a preferred option for reducing the deficit, over the elimination of waste and inefficiency, the sale of unprofitable crown corporations or the reduction of incentives to business. As a consequence, they do not acknowledge the tough options government faces as options at all. In fact, almost sixty per cent today say that it is the average Canadian and not government, business or labour that is being asked to shoulder a disproportionate amount of responsibility in reducing the deficit.
They also demonstrate no particular attachment to crown corporations as such. In fact, they see the private sector as much better managed and efficient than public sector organizations. But they do value and see many of the services provided by crown corporations as essential to their and the nation's well-being. Much more importantly for the purpose of the public debate as this issue unfolds, Canadians associate the sale of crown corporations to the private sector with the diminution or possible curtailment of these services.
What we find in fact is that while the public have been increasingly looking to the private sector as the preferred provider of jobs and the engine of economic growth, they have also been increasingly looking at the private sector. And in the last year, they have developed some severe reservations, not so much about the private sector's ability to provide these initiatives, but its very willingness to do so. Having come to the conclusion that business is best able to do these things, they expect the private sector to deliver. To date, the public have been telling us that those expectations are not being met.
Attached to this, Canadians are also questioning the worthwhileness of direct government incentives to business as a means of stimulating the growth they desire. In this regard, Canadians almost seem to appreciate the concept of paper entrepreneurship and believe that those businesses which are most able to take advantage of government incentives, are also most likely to abuse them. In fact, Canadians do not view big business as entrepreneurial at all, and consequently are focussing more and more on small business, and not all business, as the key to economic recovery.
Similarly, while Canadians now make the linkage between investment and jobs, they continue to be wary of some investment, especially from foreign sources. They see nothing intrinsically wrong with foreign capital, but question the motivation of those who may wish to invest here. In the words of one respondent on the subject of the new Investment Canada Bill, there is a hope that the act will "encourage investment and not just takeovers".
The pattern is clear. Canadians find current circumstances unacceptable and continue to believe that the problems plaguing the country are solvable. They now believe, however, that these problems will only be overcome if we adopt new approaches and ideas as solutions. As part of the new rules they seek, they also accept the basic premises and goals of the business community and new administration in Ottawa. But for the very same reason they acknowledge the need for change, they are reticent to accept the business prescriptions to achieve these goals. This unique public opinion environment therefore produces an equally unique challenge for both government and business.
For government, the ultimate choices are absurdly simple, yet the means of pursuing these choices will be excruciatingly difficult. On one hand, they can move forward, full speed ahead and damn the public opinion torpedoes. On the other hand, they could continue to muddle through, making incremental changes to the status quo. The first course would be one that would probably be preferred by the business community; the second the preferred course, if you were only looking to the polls. But in a perverse way - and this is what makes the current public opinion environment unique - neither course is politically viable for government.
... Business has even more to gain or lose in this current environment than government ...
To bull ahead pursuant to the (publicly agreed upon) conservative, pro-business agenda in the absence of more public consensus as to the means of achieving these goals, is to risk the very goodwill and public support that gives government the currency to act to mobilize public opinion in support of change and tough decisions. To support the status quo and to offer only incremental change would amount to flying in the face of the demand for change and would dash the expectations that have been deposited with the new government. All this is a very long way of saying, if you want to go to heaven, you are going to have to die.
Because the real challenge is not just to government, but also to business. Business has even more to gain or lose in this current environment than government. And what is up for grabs is not share of market or market penetration, but public opinion and existing support for business goals. Government has chosen to bridge conflicting public opinion demands by demonstrating its commitment to changing the way government works. Towards this end, they are about to embark on a consultation process with all sectors of society, the likes of which we have never witnessed before.
The reasons for this are patently clear. First, consultation corresponds with the public's belief that you must change the process of decision-making before you can substantially alter the decisions that are being made. Secondly, it gives the government the time and opportunity to raise the level of public debate and consciousness as to what options are really available in the context of the public demand for change. And thirdly, it will force other players in the system to share responsibility for decisions affecting change.
And because this government enjoys, and continues to enjoy, unprecedented support from the public, there is a very high likelihood that they will be able to pull it off. But if they do not, it will not be the publicly endorsed change in process that will be blamed. It will be the participants who fail to make the process work.
The business community has been saying for years, ', if only government listened to the private sector more, it would make better decisions. The public has bought this. We have been saying if only government would create a climate where business would prosper, then all Canadians would prosper. The public is also prepared to buy this too. But they have bought these claims not on the basis of any ideological commitment or private sector zeal. They have bought this because in their view the old rules were not working and therefore new ones are required. The burden of proof therefore has now shifted. The public wants to believe new rules will work. But because they have been traumatized by recent events, they also demand evidence before they are prepared to translate their belief in the need for new rules, into support for their implementation.
Government relations in this particular public opinion environment therefore will require a whole new posture and vocabulary. It will require that you articulate your goals in public and not in private or business terms. And it will require more not less demonstrations of public responsibility, as business and government move forward together to convince the public that what is in your interest is also in theirs. As a businessman and as a Progressive Conservative, I can only hope we are up to this challenge.
The appreciation of the audience was expressed by G. Alex Jupp, a Director of the Club.