A New Agenda for Canada
The Empire Club of Canada Addresses (Toronto, Canada), 6 Apr 1992, p. 464-484
McKenna, The Hon. Frank, Speaker
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A joint meeting of The Empire Club of Canada and The Canadian Club of Toronto. A discussion of education, the economy and our environment. A move towards thinking about these issues globally; competing internationally; opening trading relationships; undertaking more innovation and research and development; making quality; enhancing our environment; redirecting our resources; striving for excellence in learning. Under the heading "Education, Training and Literacy" the following topics are discussed: the negative relationship between the amount of money spent, and the results; the shortage of scientists and engineers wihtin the next 5 to 10 years; the increase in lawyers and MBAs; encouraging math and science skills, especially in women; developing teacher skills; empowering teachers; improving the drop-out rate; tackling illiteracy; some innovations in New Brunswick; some statistics from the business community and the service sector; responding to changes; improving private sector training, especially in the areas of new technologies, communications and leadership skills. Under the heading "Economic Competitiveness" the speaker discusses: the current status and history or Canada's economic state; warnings from the Canadian Manufacturers' Association; new ways, approaches and priorities to move forward in international trade; new program in industry and research communities; a decline in the importance of natural resources to our economy; some examples of investment in research and development; adding value; changes in small business; securing new foreign markets; problems with labour; government costs; how to streamline; legislation; improving our capacity to change quickly and competitively. The discussion about the environment includes: making the protection of the environment a top priority; current interests and government activity; taking a global perspective; hopes for the future.
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6 Apr 1992
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The Hon. Frank McKenna, Premier of New Brunswick
Introduction: Roland Lutes
President, The Canadian Club of Toronto

The topic of today's address is A New Agenda For Canada.

An agenda is an order of approach. There are several reasons why it might be important to review Canada's priorities at this point in time. Our economic difficulties may appear to be short term but the solutions to those problems have long-term implications. And by this I am referring to five:

First: Free trade--both within Canada and internationally

Second: Public debt and public sector service delivery

Third: Education of our young people

Fourth: The welfare trap and how we change to get rid of the trap

Fifth: Health care costs and how we define and manage the system

Tied to our economic fortunes are our political fortunes. We have some tough choices to make in the next short while that clearly will have long-term implications.

Our speaker today is a politician that doesn't sound like one. He is one of a new breed, almost a new species. To use a maritime expression to describe him--he calls a spade a shovel. He is very up front and very candid. In addition, he has proven himself to be a good manager. Like private sector managers these days, be has made significant changes in the way government does business. The credit rating of New Brunswick is now the same as it is for Ontario and Alberta.

Our speaker was first elected to the New Brunswick legislature in 1982. He became premier in 1987 and is now serving his second term as premier.

Ladies and gentlemen, it is with a great deal of pride and pleasure that I introduce the Premier of New Brunswick--the Honourable Frank McKenna.

Frank McKenna:

The title of my address this afternoon is A New Agenda for Canada.

Quite an ambitious title. But I have two reasons for making it. Firstly, I believe we should always strive to extend our reach beyond our immediate grasp because, as Henry David Thoreau once said: "In the long run, men hit only what they aim at. Therefore, though they should fail immediately, they had better aim at something high."

And if I am aiming high today, it is because I believe that this great country of ours--this country we so often take for granted--deserves no less from its citizens and its leaders.

My second reason is that I believe the time has come in Canada to start looking through the other end of the telescope. At the moment, Canadians from coast to coast are focussing their attention inwards, and are intensely preoccupied with constitutional matters.

I believe it is essential that we address our constitutional concerns--and that we do so in a flexible and accommodating manner. However, I am deeply concerned that if we don't start looking at how other countries are playing the game, we will be left throwing in the bullpen while the rest of the world plays out the ninth inning.

So I want to talk today about the three Es--not a triple E Senate--but Education, the Economy and our Environment. I believe, ladies and gentlemen, that we must start thinking globally on all of these issues. We must start being more competitive; more open in our trading relationships; undertake more innovation and research and development; make quality a hallmark of everything we do; protect and enhance our environment before it is too late; redirect our resources where they can help the greatest number of those in need; and, above all, strive for excellence throughout the spectrum of learning.

We may also have to take down some of the barriers that interfere with our ability to compete: such as high wages and overhead costs. And we must move quickly to halt the escalating costs of social programs. We must refocus them and make better use of our resources, so we can really target child poverty and so the most needy among us may continue to be supported.

If we do not, then access to our generous social programs--the programs that make us different from our neighbours to the south--is in danger of being eroded.

We must start changing our thinking about the things we do--and about the way in which we do them. If we do not, ladies and gentlemen, then I submit that the 21st century will assuredly not belong to Canada.

Firstly then, let's take a look at what has gone wrong in education--at why we need a new agenda for Canada that includes excellence throughout the spectrum of education, learning and training.

Education, Training and Literacy

Despite being one of the highest spenders on education in the industrialized world, Canada has one of the worst dropout rates, and the highest levels of illiteracy. As well, we have one of the shortest school years and our students are not competitive.

I know people are critical of comparisons with the Japanese, particularly with regard to education. But they are not the only ones with whom we should compare ourselves.

Few countries spend more on education than Canada. Yet on the recent international assessment of educational progress, released in the U.S. in February, Canada's l3-year-olds placed ninth out of 20 nations in a comparison of math and science skills--behind students from Korea, Taiwan, Switzerland, Hungary, the former Soviet Union, France, Italy and Israel. Japan, Germany and some other countries did not participate in the test.

Unfortunately, our students fare worse as they get older. The 1988 second international study of achievement, in which 23 countries participated, ranked Canadian Grade 5 students in sixth place. But by Grade 12, they had plummeted to 22nd place. It distresses me profoundly when I learn that in--for example, biology and physics--90 per cent of Canadian schools ranked below the worst school of the leading country in the survey. How does it make you feel?

In the year 303 B.C., Diogenes said: "The foundation of every state is the education of its youth." Over two thousand years later, I believe it is time we started to take serious note.

As Canada searches for a secure place within a new global economy, we must start placing greater emphasis on educating our people and preparing them for a new world; a world in which shrinking financial resources mean we must make the best possible use of our education dollar.

Our only natural tool today is education and training. Our only strategic asset--in the 21st century--will be the skills of our work force.

And although Canada is expected to face a severe shortage of scientists and engineers within the next five to 10 years, we continue to turn out lawyers and MBAs. In fact, Canada has 20 times as many lawyers, per capita, as Japan. Conversely, Japan has four times as many engineers, per capita, as Canada.

We all know that the nations that train engineers will prevail over those that train lawyers. But we keep right on training more lawyers, despite the fact that no country has ever sued its way to prosperity. Despite the fact that we face a shortage of some 45,000 engineers by the year 2000, and despite the fact, that, in a few short years, Bell Northern Research--one company alone--should be able to hire all the electrical engineers that Canadian universities now produce.

Does Canada need a new education agenda?

I cannot overstate the importance we must attach to math, science and literacy skills. Canada is one of the very few advanced societies without national examinations or even provincial ones, and I believe the time has come to introduce standardized testing.

We must also encourage more young women to take math and science; make the use of computers an everyday skill for school children, just like reading; reduce our totally unacceptable level of school drop-outs.

I realize that we already ask a lot of our teachers. But perhaps we have been asking them to do the wrong things. And perhaps we need to start at the beginning and reform the programs that prepare teachers. We might, for example, require science teachers to have a first degree in science; ensure that those who teach at the junior high or high school level have a sequential BEd which follows a first degree in their particular area of specialization, rather than the integrated four-year BEd.

We must also empower teachers by giving them more autonomy, by providing incentives and by rewarding excellence. We must also ease teachers' burdens in other ways. Studies have shown that there is no direct correlation between increased levels of funding to the formal education system and student achievement. So perhaps our money would be better spent on making sure each and every child comes to school ready and able to learn; by ensuring pregnant women and their infants receive adequate nutrition; stepping up pre-school screening; enhancing early intervention programs; providing special programs for the learning disabled and for gifted children; improving integration; and providing mentoring and peer tutoring.

By concentrating on these areas, we can identify difficulties before they become real problems--problems that require costly remedial treatment, and place a huge burden on teachers.

We should aim, in Canada, to have the best school-retention rate and the best school system in the world.

On the question of literacy, as you probably know, one in five Canadians is functionally illiterate. And there is a direct correlation between level of schooling and employment. A majority of Canadian firms report that illiteracy is emerging as a major problem among their work force.

Those Canadians that lack literacy skills often hide in jobs with low skill-level requirements and low wages. But the nature of work is changing--and the demand for skills is increasing.

That, combined with the fact that many companies now require job candidates to pass a literacy test, means more and more Canadians who are unable to do everyday tasks--the tasks that you and I take for granted--are going to find it harder and harder to be self-sufficient. Not only does this cost society billions of dollars in income assistance and unemployment benefits, it is a deeply distressing and unacceptable waste of human talent.

In New Brunswick we are doing some innovative things in literacy. In partnership with business and industry, we are helping initiate community-based programs. We are taking them out to the people who need them, where they need them: out to fish plants, the factories and the church basements. We are committed to stamping out illiteracy in New Brunswick and we are mustering all the forces we can to combat it.

I have seen example after example, in New Brunswick, of people who left school in Grade 6 or even earlier. People who have grasped the opportunity when it has come their way. People with enormous courage, who have enrolled in literacy training--and can now get a job, support their families, do their own banking, read to their children and lead truly independent lives.

But if illiteracy is causing enormous problems in terms of Canadian productivity, it is not the only cause. The face of work in Canada is rapidly changing, demanding new and higher level skills. And our education system must be able to adapt to prepare people for those changes.

Education for education's sake is a worthy deal--as far as it goes. But as we approach the 21st century, we had better go further than that, because--let there be no doubt--Canada's ability to compete depends in large measure on the skills and knowledge of its work force.

I read an interesting article recently by a U.S. educator, which reviewed the changing face of work in the United States. Canada's experience, of course, has tended to mirror that of the U.S.

At the beginning of this century, by far the greatest proportion of Canada's work force was employed in agriculture: approximately 45 per cent. Today, however, that figure is closer to six per cent. Why the huge drop? Because agriculture automated. And as it automated, we increased productivity. So agriculture is still a central force in our economy, but it is not the cornerstone of our work force.

The share of employment in other goods producing industries--mainly manufacturing and mining--was low at the beginning of this century, but peaked near 40 per cent in 1951. However, it has been on a downward trend ever since, and today, only around 25 per cent of Canadian workers are employed in production and manufacturing.

Why the big drop? Again--because production and manufacturing automated. As we automated, unskilled workers were no longer an economic commodity. That left fewer, but much more highly skilled workers in the industry.

As an example, when the president of a Quebec bakery decided last year to make his operation more technologically advanced, he also found it meant switching from low-skilled to high-skilled labour--and a work force of 100 instead of 350.

Let's look at the service sector. At the turn of the century, approximately 22 per cent of Canada's work force was employed in the service sector. Thirty years ago, it was 47 per cent. Today it is about 71 per cent. In fact, between 1980 and 1989, the service sector accounted for 94 per cent of all the growth in employment in Canada.

Now we all know about the skills that will be needed in the high-tech end of the service sector. But some say that many of those service sector jobs will be at the lower end of the scale: in the fast food restaurants and in the shopping malls. It's true that people won't stop eating hamburgers or buying T-shirts, but the demand for skilled people in those fields will still increase. Why? Because the service sector is automating--just like agriculture and manufacturing did.

Some of you are bankers, so I am sure you know that approximately 40 per cent of all consumer banking transactions are done using automated banking machines. But if I asked you what percentage they were used for 10 years ago, you would say: "None--they didn't exist 10 years ago."

The number of cashiers and tellers has not decreased during the decade, that is because banks have taken on additional business and opened numerous new branches. So the traditional jobs are still there. But many of them require new skills for day-today servicing of those ABMs and there is also a growing need for highly skilled workers to do the technical servicing.

Do we have enough highly skilled technicians in Canada to cope with the increasing demand for these and other new, technological innovations? I read in The Globe and Mail last Thursday that we'll soon be able to do our banking by touchtone telephone. Credit card companies may soon simply be saying: "Don't leave home!"

What about fast-food restaurants? Is it unrealistic to assume that soon you'll be able to stop at a machine, push a button to select a burger with cheese, push another to choose the toppings you want, and yet another to indicate how you want it cooked? And is it unrealistic to assume that you will then put in your money--just like a pop machine--and seconds later out will come your burger, untouched by human hand?

No-one will take your order. No-one will take your money. And no-one will prepare your food. Who will work there? Not the 16-year-olds we see now, but highly skilled technicians.

Another example. According to The Wall Street Journal the fastest growing firm in America is one that makes automatic, robotized checkout counters. So soon, instead of a check-out clerk at the grocery store unloading, pricing and packaging your groceries, a robot will do it. Why? Because the technology is rapidly outstripping the quality of the work force and the cost of American labour. So where is the check-out clerk working now? And who will service the robots?

In the information sector, changes have occurred at a much more rapid pace. It's hard to believe that PCs didn't exist in 1982. Or that the ubiquitous fax machine was unheard of--in its present form--until 1986. Now, we're looking at voice recognition from computers, voice print, language translation, and automatic spelling, grammar and punctuation correction. Will our children be adequately prepared to join a high-calibre labour force?

The skills people need today are dramatically different than they were 30 years ago. If we are not careful, we are in danger of producing a ghetto of unskilled labour. In addition to hurting our international competitiveness, that will lead to greater social polarization, greater demands on social safety nets--and higher taxes to finance them.

How well is our education and training system responding to these changes?

We must recognize that not everyone can or wants to go on to university. And given the changing face of the work place, we should initiate more co-operative education programs; introduce German-style apprenticeship programs; and work to dispel the myth that so-called blue-collar work is grimy, unrewarding and somehow lacking in status. In Germany, there's an old story that illustrates the point.

Two mothers were chatting, discussing their children. The first woman said her son was going to study medicine. "That's nice," said the second woman. "Yes," sighed the first, "too bad, though, that he couldn't get a place in the Mercedes-Benz program!"

Historically, Canada was dependent on a steady flow of skilled immigrants from Europe to fill its needs in the fields of mechanics, engineering and electronics. That flow has been drying up in recent years. In addition to improving our own apprenticeship programs, I believe we should open the doors to encourage more skilled workers to immigrate to Canada If we do not, we will never keep pace with the demand.

Canadian business and industry is surely one of the biggest stakeholders in having a top quality education system. Yet our record in private sector training is dismal. Business and industry must move now to offer constant training and retraining to its employees--in new technologies, but also in communications and leadership skills.

Economic Competitiveness

Recent reports from the World Economic Forum show Canada is falling behind the competition. Although we ranked fifth overall among the 23 OECD countries included in the 1991 world competitiveness report, we ranked a sad 17th in terms of science and technology--due primarily to our low level of investment in R and D. We ranked 16th in internationalization--due, mainly, to our lack of export market diversification. And we slipped to ninth place in terms of business confidence, one place lower than the previous year's ranking.

Let's review the history. In 1950, our manufacturing productivity level was second among the G7 countries. By 1980, we had slipped to fourth place. And by 1990, we had slipped another notch to fifth.

In the '60s and '70s, Canada had rapid growth in production efficiency--at around two per cent per year--and incomes doubled every 18 years. By the '80s, however, growth had slowed to 0.5 per cent--and by then, it was taking 35 years to double real incomes.

Last year, Canadian manufacturing productivity dropped for the third year in a row, plunging 5.3 per cent--the worst drop since the 1981-82 recession. And the overall productivity of Canadian business fell 2.5 per cent, following a decline of 0.8 per cent in 1989.

Where do the problems lie? Partly in our prices--fuelled by high labour costs and high inflation. In 1980, our average unit labour costs for manufacturing were about equal with those of the U.S. Ten years later, Canadian costs were some 40 per cent higher. And we wonder why we have difficulty selling our products both at home and abroad.

If we do not achieve faster productivity growth in the 1990s, we will be faced with cutting wages, cutting production, closing plants and laying off workers.

We must also step up our adoption of new technologies. And improve our dismal record in research and development. Scientific and technological advances impact our lives personally. But they also determine how competitive countries are. With the world changing from a resource-based economy to a knowledge-based economy, Canada is falling short of the mark.

Our R and D investment peaked in 1986 at 1.43 per cent of GDP. Since then we have slipped. In fact, a 1988 study by the Organization for Economic and Cultural Development found that Canada ranked a disturbing 10th of 11 countries in gross domestic expenditure on research and development, as a percentage of GDP.

The United States spent $560 per capita, while Canada spent $244. The U.S., Japan, Germany and Sweden spent more than twice what Canada spent on R and D. And we were also outspent by France, the Netherlands, the United Kingdom, Norway and Italy. Only Australia lagged behind Canada.

As well, Canada ranked ninth in the number of researchers in the labour force. Canada had 4.4 researchers per 1,000 workers; the U.S. had 7.6 and Japan had 8.4. How can we compete on that basis?

The Canadian Manufacturers' Association warns that Canada may become a technological third world country unless business, government and industry pull their weight.

It's quite clear that we have not adapted to global change nearly as much as we should do, if we hope to regain our economic competitiveness. What might some of the elements be of a new agenda?

I don't purport to have all the answers, but I do believe we should start now to look at new ways, new approaches, new priorities.

I believe, for example, that more science-driven innovation must be undertaken by industry. At the moment, industry investment in R and D is low. In Canada's manufacturing sector, only three per cent of companies do any research at all. And overall, industry investment is three-quarters of one per cent of GDP--compared with two per cent in Germany, the U.S., Sweden and Japan.

Our pulp and paper industry, for instance, spends less on research and development than its major competition--0.3 per cent of revenues in 1988, compared to one per cent in Sweden, Japan and Finland. So how can it compete on that basis?

But despite the need for industry to step up its R and D efforts, there is a strong onus on the Federal Government to support it too. For example, in 1990, the Federal Government spent $2.7 billion on R and D--but the largest chunk (53 per cent) went to Federal Government research organizations--and just 19 per cent to business.

We need new programs to help industry and our research community work together, pooling their capital and resources. Government laboratories must work more closely with business. Industry must be helped to acquire new technology. And the tax system must be revised to improve the investment tax credit for R and D, thereby encouraging small business to perform more R and D.

The Federal Government has said we should increase our R and D spending by the year 2000 to 2.5 per cent of GDP. Is this enough, given that Sweden, the U.S., Japan and Germany spent more than that back in 1988?

Fraser Mustard, President of the Canadian Institute For Advanced Research, put it succinctly when he said that natural resources are less and less able to sustain the levels of wealth to which we have become accustomed. And that we have to make our society more idea- or R and D-driven, in order to create more wealth in this country.

What makes our neglect of science and technology so poignant is the extraordinary achievements of Canadians in this field over the years. Achievements like the Nobel-Prize winning research into molecular spectroscopy by Canadian physicist Gerhard Herzberg; the development of cobalt 60 cancer therapy; a fibre-optic system for the world's first open-heart surgery that used a laser to clear clogged arteries; major breakthroughs in the fields of food science, health care, energy, building research, transportation and communications; the development of canola oil, so important for international agriculture; a technology to prevent forgery by putting an optical thin-film coating on $100 and $50 bills; the discovery of insulin; and many, many more.

Some Canadian companies like Northern Telecom, Spar Aerospace, and CAE, have a long and sustained history of R and D investment. And where Canadian industry has made heavy investments in R and D it has shown that Canada can compete and win.

And while we step up our own R and D, we must also take greater advantage of R and D performed in other countries--take it, improve on it where we can, and market it. Look at the transistor, developed in the U.S., yet marketed on a massive scale by the Japanese. Or the VCR, which was developed in Holland, but has been turned by the Japanese into an essential appliance in over 85 per cent of North American homes.

With the world shifting toward value attached to the knowledge content in products--and away from the resource or material content--our traditional reliance on exporting resources, with little processing content, does not bode well for the future. Many of the countries that are doing well internationally are resource-poor. The construction boom that is currently underway in Hong Kong, for example--amounting, I believe, to some $100 million--is ample proof of that.

We must place more premium on adding value. It's no longer enough to be hewers of wood and drawers of water. We rely too much on selling logs and not enough on cutting them to meet the demanding specifications of foreign construction markets.

About 98 per cent of Canadian business is small business. But despite its key role in the economy, small business doesn't carry much export clout. Small manufacturers in the late '80s accounted for only three to four per cent of the dollar value of manufactured exports. They need to diversify not only products, but markets too. Right now, a high dollar, steep borrowing costs and inflation have confounded their success in penetrating foreign markets.

Unlike Canada, Germany's small business sector is a major player in export markets. Its 300,000 small and medium sized firms account for nearly 30 per cent of exports--using niche markets and stressing innovation in both products and processes. Where the Germans have the advantage is in a strong support network of government, banks, trading companies and trade associations. This provides small business with easy access to export services.

Our trade with Asian nations is 11 per cent of our total trade. Yet by the end of the decade, the Asian-Pacific rim will account for 60 per cent of the world's population. If there was ever an urgent need for Canada to stake a bigger claim to the Asian marketplace, that time is now. The developing world is home to four-fifths of the world's population. We are being short-sighted if we don't act now to capitalize on the Third World's enormous potential.

The lack of co-ordinated trade promotion on a national scale shows our overseas customers that Canada lacks a coherent trade agenda. We don't have enough companies in the game. To encourage more, we need a national export strategy--one that also addresses the needs of the small-business sector.

But if we are to secure new foreign markets, what about our own, here at home? Over the past few years, we have seen example after example of barriers between provinces impeding trade. In the Maritimes, we have taken a number of steps toward removing those barriers. And similar moves have been made among the Western provinces.

However, I remain deeply frustrated at the lack of progress made at the national level. Why, for example, can I buy a bottle of New Brunswick brewed Moosehead beer in Illinois or New York State, but I can't buy it anywhere else in Canada? It just doesn't make sense. Protecting markets has never worked in the past. It doesn't work now, and it won't work in the future.

Recently-announced intentions to move towards the removal of barriers to the sale of beer is a step in the right direction, but more is needed. Because of the lack of progress in concluding a national agreement, I am prepared, as Premier of New Brunswick, to sign a similar, bilateral trade agreement, with any other province or territory in the country.

I recently returned from a business mission to Hong Kong and Japan. I was absolutely amazed at the enormous business potential I saw. But two things in particular stand out:

In Hong Kong, it was obvious that you don't have to be resource-rich to be enormously successful. An excellent education system can more than compensate for the lack of traditional natural resources.

But what struck a responsive chord in Japan was the fierce and unrelenting commitment to quality. I believe that if Canada does not start building uncompromising quality into our production processes, our products, our services indeed everything we do--then we haven't a hope of making significant inroads into that rich market.

You're all familiar with Ed Deming, the U.S. quality guru. Well more than 40 years ago, the Japanese were listening very carefully to what he had to say. And since they introduced the Deming Award for quality in 1950, they went on--as you know--to outstrip their industrial competition. How did they do it? With superior performance, geared to quality.

I firmly believe that if Canada is to compete, we must make quality a hallmark of everything we produce. But it shouldn't stop there. Quality should follow our products in terms of service and follow-up. And we must make sure our customers are so satisfied that they keep coming back for more.

A society's work culture also has a large impact on its competitiveness. According to the international labour office in Geneva, the Koreans work 48.2 hours per week, the Japanese 46.1, the United States, 34.5, and Canada, 31.5.

In addition, due to strikes and lockouts in 1990, Canada lost 270 work days per 1,000 workers. By contrast, the United States lost 50 days, Germany lost 13 days and Japan lost 3.5 days.

Canada's competitiveness is also affected by the cost of government. Health care costs are escalating and new arrangements are needed for delivery of our health care system, to make it both effective and efficient.

And we must streamline in other areas too. For example, Ottawa now spends 36 cents of every dollar in its budget to pay interest on past debt. And last year, it cost taxpayers $585 million to operate Canadian legislatures. That is about $21 per Canadian, compared with $6 per person in the United States.

We simply must do more with less and start living within our means. In New Brunswick, for example, we reduced our cabinet by 25 per cent. We are reviewing all our programs and services, streamlining many programs and cutting out those that have lowest priority. As well, we are introducing legislation this year, to balance our ordinary account budget over a five-year cycle.

But if governments must start living within their means, what about Canadians themselves? The bankers among you will know that the average Canadian household has a consumer debt equal to 75 per cent of its annual income. That is quite a load. We must stop being a nation of borrowers.

If, instead, we become a nation of savers, our businesses will be able to borrow at lower interest rates, fuelling expansion and new job creation. Consumer debt, however, borrows from tomorrow's standard of living for today's gratification.

The world is changing and we are not changing fast enough to keep pace. If we do not act quickly to boost productivity, adopt new technologies, be more efficient, undertake more R and D and secure new markets, then our economy will surely suffer in the years ahead. It will also suffer if we do not heed the call to understand our environment.


Aldous Huxley once said:

Such prosperity as we have known it up to the present, is the consequence of rapidly spending the planet's irreplaceable capital.

Ensuring our environmental future is not further compromised must continue to be a top priority. More and more hard evidence is emerging of the problems we face on a global scale.

Serious damage has been done to the earth's ozone layer by chemicals such as those used in refrigeration, air conditioning and sterilization of medical equipment. The resulting environmental impact could be dramatic in the future in terms of human health, as well as that of animals and plants.

At both federal and provincial levels, Canada is moving to support an international phase-out of ozone depleting substances. For our part, New Brunswick will implement regulations this year as part of our clean air strategy.

But even were we able to stop all such chemical uses immediately, on a worldwide basis, the environment and public health hangover our society has created for itself--by weakening the ozone layer--may last for decades, if not centuries.

A preventative approach is needed above all else, or we will never be able to afford the cost of environmental cleanup. We need a meaningful commitment by all players in the economy to the concept of sustainable development. And I see signs of that emerging.

As Jacob Bronowski puts it: "Man masters nature not by force, but by understanding."

The national packaging protocol, for example, adopted by all governments and the packaging industry, will see a 50-percent reduction of packaging waste by the year 2000. We need a lot more of that kind of action.

In New Brunswick, we are putting in place a new deposit-refund system on all soft drink and alcoholic beverage containers. This will encourage consumers to buy refillable containers--providing more environmental benefits than recyclables.

This shows how economic factors can help build environmental protection. In the future, the same sort of system could be applied to old tires and car batteries, working to the benefit of all Canadians.

In the next few months, New Brunswick's Round table on Environment and the Economy will be presenting its recommendations. They will receive very serious attention.

New Brunswick's industries are developing new waste reduction systems and innovators are developing resource recovery technologies, aimed at turning waste into new raw materials. As well, environmental consulting firms are selling their expertise in international markets. And new environmental cleanup systems are being developed in response to local problems.

It is in all of our interests to encourage this kind of environmental entrepreneurship throughout the country. Not only will our environmental quality improve, we will also be able to market our expertise abroad--as part of the rapidly expanding knowledge industry of the future.

Ladies and gentlemen, we must take a global perspective in Canada, if Canada is to be a global player.

Let us commit ourselves to a new agenda for Canada. A Canada that maintains its traditional values of generosity, of tolerance and of peace-making. But a Canada that aims much higher still:

A Canada that values its people--by giving them the level of skills and the breadth and depth of knowledge that will stand them in good stead as they face the challenges of a new century;

A Canada that does not borrow the earth from its children--because over the long term, Canada will be shaped by the decisions that shape its environment;

And finally, let us aim for a Canada that is productive and prosperous.

It is my hope that with a new agenda, the people of Canada--and their leaders--will create a new synergy, bringing Canada to its rightful place in the new world economic order.

The appreciation of the meeting was expressed by John F. Bankes, President of The Empire Club of Canada.

For the winter is past,
The rain is over and gone;
The flowers appear on the earth;
The time of the song of the birds has come,
And the voice of the turtle is heard in our land.
--Song of Solomon

My name is John Bankes. As President of The Empire Club of Canada (and as a lawyer and MBA) I am pleased to thank our speaker.

In the words of the British poet and dramatist T.S. Eliot: "April is the cruellest month." Indeed it is. The thought of writing cheques at this time of year for income tax does little to quiet one's soul.

This April, the concerns for many Canadians go beyond meeting our annual tax obligations. This year, with the country gripped in the throes of heated constitutional and economic debates, many constituencies and interest groups in Canada are seeking immediate solutions and redress for their particular introspective problems.

These are important problems. But what gives many Canadians cause for concern is that, in this blizzard of single-issue confrontation, many of our political leaders seem to have that deer-caught-in-the-headlights look in their eyes. They have lost sight of the key issues and policy reforms that stand the best chance of solving many of our nation's problems.

Premier McKenna, these are the same key issues that you addressed in your thoughtful and optimistic remarks today:

• the reform of the education system
• the liberalization of inter-provincial trade barriers
• the development of a changed work ethic
• the obligation on the part of governments and individuals to live within their means
• the necessity to think globally
• the need to take a more aggressive and competitive stance in trade and investment
• the merits of focusing on innovation and R and D, and making quality a hallmark of everything we produce
• a better understanding of the devastation being wrought on the world's environment

To save this nation, we need Premier McKenna's kind of clear thinking and straight talk. Unless Canadians continue to focus on these critical issues, then the 21st century will assuredly not belong to Canada.

On this, the first day of the 1992 professional baseball season, I am reminded of the scene from the movie Bull Durham where a veteran minor-league manager tries to impart the secrets of the game to his struggling young ball players. "This is a simple game," he says. "You throw the ball. You hit the ball. You catch the ball. You got it?" If only it were that easy. The constant struggle, with its attendant drama, to execute those basic instructions is what draws millions of people each year to ballparks across North America.

Similarly, the resolution of this country's problems is not a "simple game." However, as Canadians glance at the lineup card of political leaders, it is comforting that we have clear-thinking individuals like Premier McKenna on the roster.

I began with a brief reference to taxes. Let me conclude on the same note.

Swiss folklore holds that people are driven mad each spring by a hot wind that blows in from the south, melting the Alpine snows. The Swiss call it the Fohn. If the Fohn has a counterpart in Canada, it

is undoubtedly the hot air emanating from Ottawa and the provincial capitals where legislation to change the nation's tax laws is once again being debated.

Premier McKenna, Ontarians watched with great interest your budget presented in the New Brunswick legislature on Tuesday of last week. The highlights from the budget included:

• no new taxes
• no major program cuts
• a reduction in "sin" taxes, including tax cuts announced for gasoline, tobacco and wine
• government rationalization and the elimination of civil service jobs through attrition and early retirement

Premier McKenna, please accept our congratulations on an austere budget that involved some belt-tightening and some tough calls. We Ontarians hope that these same messages are heard and appreciated by Queen's Park.

Premier McKenna, thank you for your remarks to this joint meeting of the Canadian and Empire Clubs. We look forward to your returning to our lectern in the not too distant future.

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A New Agenda for Canada

A joint meeting of The Empire Club of Canada and The Canadian Club of Toronto. A discussion of education, the economy and our environment. A move towards thinking about these issues globally; competing internationally; opening trading relationships; undertaking more innovation and research and development; making quality; enhancing our environment; redirecting our resources; striving for excellence in learning. Under the heading "Education, Training and Literacy" the following topics are discussed: the negative relationship between the amount of money spent, and the results; the shortage of scientists and engineers wihtin the next 5 to 10 years; the increase in lawyers and MBAs; encouraging math and science skills, especially in women; developing teacher skills; empowering teachers; improving the drop-out rate; tackling illiteracy; some innovations in New Brunswick; some statistics from the business community and the service sector; responding to changes; improving private sector training, especially in the areas of new technologies, communications and leadership skills. Under the heading "Economic Competitiveness" the speaker discusses: the current status and history or Canada's economic state; warnings from the Canadian Manufacturers' Association; new ways, approaches and priorities to move forward in international trade; new program in industry and research communities; a decline in the importance of natural resources to our economy; some examples of investment in research and development; adding value; changes in small business; securing new foreign markets; problems with labour; government costs; how to streamline; legislation; improving our capacity to change quickly and competitively. The discussion about the environment includes: making the protection of the environment a top priority; current interests and government activity; taking a global perspective; hopes for the future.