The Need for Change

Introduction

Canada is a country made up of immigrants or children or grandchildren of immigrants. Its history is filled with the stories of people struggling to make a home, build new lives, and forge a country. It's a history Canadians can be proud of.

Much of our success as a nation comes from a tradition of opening our doors to the world. Yet, the issues surrounding immigration practices have always posed difficult problems. The benefits of immigration are sometimes poorly communicated or misunderstood. As a result, new Canadians are often blamed for any number of society's ills. This is a sorry fact that is especially true during hard times.

So how does one plot a course between a generous and economically advantageous immigration policy and the sometimes volatile emotions of a suffering public? It is a problem that calls for the wisdom of Solomon.

There's a story in which Solomon was asked this question by a child: "How can you tell a good country from a bad one?" Solomon replied, "You apply the 'gate' test. When the gates of a country are open, watch which way the people run. Do they run into the country or out of the country?"

Today's speaker, Bernard Valcourt, is Canada's Minister of Employment and Immigration. As such, you might say he's Canada's gatekeeper.

A native of New Brunswick, Mr. Valcourt practised law until he was elected to the House of Commons in 1984. He was first appointed to Cabinet in 1986 as Minister of State (Small Business and Tourism).

Since that time, he has served as Minister of Corporate Affairs, and Minister of Fisheries and Oceans. He assumed his current portfolio in April of 1991.

Today, he will be speaking about the future of immigration policy in Canada and how it will be managed. And it is fitting that he is addressing the topic here in Toronto, the city the United Nations recognizes as the most multi-cultural in the world.

Please join me in welcoming our distinguished guest.

Bernard Valcourt

Thank you for your kind remarks. As you probably know, I have been kind of busy in the last few days and weeks. The UI changes I intend to see through Parliament kept me so busy, I thought I might have to cancel this opportunity to speak with you today--what an excuse!

But then, I realized I would have been labelled a voluntary quitter--and I am not! So, here I am--and glad to be out of Ottawa.

The Empire Club has, for so many years, provided Canadians with a forum for serious dialogue on issues of great importance furthering public understanding of increasingly complex matters, and in doing so, furthering good government and good public policy. Such opportunities and platforms are of critical importance if we are to make effective public policies in a world of such complexity, one becoming so profoundly interconnected and intermeshed.

It's impossible these days to pick up a serious magazine or newspaper without coming across the words globalization, new world order, or international competitiveness, and that also has an impact on immigration. We are constantly using these words--or if not the words, the concerns--whether in government, in your chosen professions, even among friends. We are not alone. The same discussions are taking place in many Western countries.

I was at the recent World Economic Forum in Davos, Switzerland, and I was not at all surprised to hear the individuals assembled there discussing those very words.

If this is happening, and I suspect almost everywhere, it is not because governments and politicians like to indulge in rhetoric. Even though they do. It is because there are some very real changes going on in the world. It is becoming more and more connected. It is shrinking. Globalization really is occurring. And what this means is that events around the world impact directly on Canada. Similarly, decisions taken in Canada cannot be taken in isolation of these global forces.

The issue that is facing a great many governments and countries today--certainly it is facing all of the governments who are members of the OECD--is slow growth. When our incomes don't grow fast enough, we can no longer hope to sustain our standard of living, our social programs and many things we hold dear. And so, we are all searching for a way to grow faster, to enhance our prosperity and to become more competitive internationally.

Never before now has there been a greater need for greater understanding of the major issues of our age and serious debate on policy alternatives as we confront a world which is changing at an incredible speed and daily growing more complex and interdependent. And never before has there been such a critical need for all peoples to deepen their collective understanding and act in concert with each other in confronting the challenges of a new world order and a new and very different age.

On reading the remarks of your guest speaker last week, I was forcibly reminded that I would not be contributing to serious public understanding and debate unless I took the time to first address the central issue he and his colleagues have raised in the past several months. They place much of the blame for the effects of the global recession on the policies of the federal government, especially on our determination to control the deficit, to reduce inflation, further free trade with the U.S., and reform taxes. Their other major villain and scapegoat is the banks. When you are short of ideas and arguments the banks provide such a convenient target.

If this were not a year of decision for Canadians such musings could perhaps be ignored. But the choice facing Canadians later this year will largely lie between sharply different conceptions and sharply different track records in defining the role of government in the economy.

And greater public understanding of the choice we must make will determine whether Canada grows and prospers in the 21st Century or reverts back to the twists and turns, the contradictions, and explosive growth of government that characterized the 60s, 70s and early 80s, when this nation was governed by a party which could never resolve its internal divisions and contradictions on economic policy.

This is the same Liberal party that today provides no evidence that they have reconciled the extreme views of their left and right factions, and from day to day one has no certainty which will prevail. The age we now live in demands a consistent and coherent view and its steady and measured application.

The pressures of globalization and technology, which are speeding the degree of integration of all peoples around the world, making each of us the other's neighbour, are also posing equally formidable challenges of both adjustment and governance. In particular, the very process of governing ourselves in the public and private sectors so that we can collectively pursue widely shared goals in the most effective way has to be our over-riding preoccupation if effective decisions are to be achieved.

This means that how we set goals throughout our society to frame the issues and define the ends we seek and how we inform ourselves to make choices together in terms of our goals and the means for their achievement must become an up-front, top-of-the-agenda, concern and focus.

When we meet together to choose our collective path we have to constantly be reminded that no single thing on earth stands in isolation from every other single thing. One cannot consider education, or more broadly learning, or competitiveness issues, or labour market measures, or immigration and refugee policies, or foreign policies, or social policies, or land-use policies, or whatever without attempting to fully understand how each and all relates to the other.

We have to think holistically or systemically and plan and act increasingly so, for the real world is not readily divisible into abstract and unlinked parts with impermeable boundaries. And yet daily there are enormous pressures pushing us in the opposite direction. The reality today in all western democracies, even while we are deluged with information, is an ever-present danger that decisions of major importance will be considered in isolation or be taken on partial or incomplete information or on questionable assumptions, leading to ineffective measures, at least, or really costly and damaging results.

Our world is mirrored to us in 10-second clips, or in catchy headlines, which more often than not trivialize rather than explain. Achieving any single goal, be it creating more jobs or lowering inflation, cannot be achieved by single government actions, catering alone to the cries for government to act when real solutions demand comprehensive approaches and the full partnership of all individuals and sectors.

The door is too wide open for the appeals of demagogues, and there is too great a readiness to accept their simplistic reasoning and solutions, denying the interdependence of all things, the underlying causes, and the fact that there are no quick fixes or simple approaches.

Today I join you as a member of a government that since the outset of our mandate has deliberately resisted such pressures, and has a tangible track record to prove it. We are a government that has consistently pursued comprehensive approaches, searching out underlying causes and fearlessly dealing with them.

We have placed on the national agenda and have resolved or made progress on a host of major issues that other governments repeatedly feared to even raise, much less confront. Let me quote the noted Quebec economist Pierre Fortin, who certainly is no apologist for my party, in a report in last week's Globe and Mail:

"Canadians will be very grateful to the federal Conservative Party for its actions and policies in office--20 years from now."

That's the verdict from economist Pierre Fortin who writes that the Conservatives, despite their errors, have succeeded in putting the brakes on a disastrously ballooning public debt inherited from the Trudeau Liberals.

"This required ... exemplary discipline and courage. Never since Confederation have we seen a government apply such a string of tax increases and spending cuts through two complete mandates. The Conservatives have, for the moment, saved federal finances from the abyss."

This is only one part of the story. Federal expenditures grew in every single year over the 15 years of the Trudeau-Chretien era by 14 per cent a year. Today, we have limited that growth to four per cent a year and now the federal government's operating budget is in surplus, and has been for the last five years.

From a deficit position in the operating budget of $16.1 billion in 1984-85, we have reached a surplus of over $12 billion for this fiscal year. In fact, we have accumulated an operating surplus of $25 billion since 1987-88.

Do you realize what this means? This is money that could--and should--have gone into long-term investments and, instead, is being used to pay the interest on our public debt. If it were not for the interest payment on our national debt, we would have a net surplus this year of $12 billion to invest in infrastructure, education, training, as well as medical, technological and scientific research--whether applied or fundamental--not to mention the continued vitality of our social programs.

Instead, 30 cents out of every tax dollar we levy goes to paying down the consequences of the irresponsibilities of 20 years ago, and that's a fact. I can't change it; we can't change it. We can't wish it away. It's the reality, it's there.

Yesterday, I was in the House of Commons and I couldn't believe it--even for a little guy like myself from Atlantic Canada--to see this guy on the other side standing up and accusing us of having doubled the national debt of Canada. Yes, the national debt has doubled, but what he didn't add is that compound interest on the national debt--which was there in 84-85--is larger than the total amount of the debt at the time.

The absolute necessity of the resolute deficit reduction actions that we have taken was further confirmed by the C. D. Howe workshop report released this week, which warned of the dire consequences if all governments in Canada continue to allow the public debt to escalate. The gravity of the problem has now led both major opposition parties--the Liberals and NDP to change their rhetoric and at least acknowledge that there is a problem with a growing public debt.

But this recent claimed conversion, of sorts, of the Liberals and the NDP, including Mr. Chretien's ringing declaration on this very platform last week, I very much regret to say, are hollow, and yes, empty gestures, even deceptive and totally misleading. For the reality is that every single expenditure reduction measure proposed by the federal government since 1988 has been roundly and soundly denounced and opposed by both opposition parties in Parliament.

You simply cannot have it both ways on the debt and deficit Either you have the conviction and courage to bite the bullet and cut, and pay the political price for doing so, or you mislead Canadians into believing that you are four square for debt reduction but oppose every single measure designed to achieve this very goal.

The magnitude of the public debt shared by all governments in Canada is simply too great for any government to sustain the confidence and support of international markets while pursuing high-risk strategies of this kind. Like it or not, international markets are the ultimate test of the monetary and fiscal policies pursued by any government.

They look for hard evidence to the track record of parties in power in making their determination. And there is no question that the economic policies that we have pursued since 1984 have earned the confidence and support of international markets, and continue to do so.

The Leader of the Opposition claimed last week on this platform that our inflation target and accomplishment, bringing inflation and high interest rates to historic lows, was the most damaging of all our economic policies. This is clearly and firmly not the judgment of either international markets, major international institutions, nor respected authorities here in Canada and throughout the world.

We have also bitten the bullet in eliminating a job-destroying, export-destroying, and growth-destroying hidden manufacturers' sales tax with an open and known value added tax which today is spurring Canadian exports and increasing the competitiveness of Canadian industry, Canadian entrepreneurs--men and women from Newfoundland and Labrador to B.C.--struggling to enter and compete in these markets.

And no Canadian has been deceived by any attempt to hide or obscure this tax. Examine closely how the others dither and shift their ground repeatedly, not in their opposition to the tax, but on what precisely they would do to alter it or raise the equivalent revenues. After more than a century of struggle Canada finally has secured a formal trade agreement with the United States. Until then, Canada was the only G7 country not to have secure access to a market of at least 100 million.

The FTA represents a major breakthrough for Canada and the results are now in, as documented by the C.D. Howe Institute and other objective authorities. Our exports to the U.S. are driving our economic recovery. The prospects of NAFTA, agreed to by the three governments, will further trade liberalization and Canada's foreign policy objectives in Latin America, for NAFTA represents bold leadership in creating the world's largest regional trade alliance in our hemisphere.

We are now emerging from a global recession that no government could avoid. We have a strong foundation for real growth in place. Within my own immediate areas of responsibility--employment, unemployment and immigration--with my friend Michael Wilson on the Prosperity Initiative, and with my friend Benoit Bouchard on the social security discussion paper.

And within my own areas of responsibilities at Employment and Immigration, there are a number of key illustrations where we fearlessly and honestly confronted the "untouchables," developing pragmatic, consistent and coherent responses, and resisting the misleading and even deceptive voices of those who would have us believe that there are easy answers or quick fixes or that progress, growth and prosperity can be achieved without cost or pain.

Our prime objective has been, and continues to be, building a strong, highly skilled and internationally competitive workforce in Canada, for we can no longer rely only on natural resources in this knowledge age and global economy to sustain our prosperity. We have clearly drawn the links between the domestic labour market prosperity, and immigration.

Through the federal Prosperity Initiative, we have placed competitiveness and learning at the top of the national agenda, engaging in a highly innovative and effective information, education, and consensus building process that has truly deepened public understanding and set forth an action plan which individuals, firms, organizations, and all governments, who collectively hold the key and solution, can act individually and collectively to achieve national goals to further our long-term prosperity.

As a government, we have taken certain steps, and a principal thrust of our strategy has been shifting the UI funds from passive to active.

We often talk in Canada about our social safety net. I am from New Brunswick in Atlantic Canada. When I speak of the social safety net, I think of it as a fishing net. And when you get caught in it, you never get out. And that's what we have done with this social safety net in Canada.

I have seen a generation--if not two--of people back home who never work. Kids see their parents only working 10 weeks a year in order to qualify for Ul. As Minister of Fisheries and Oceans, I remember a seventh grader who wrote to me once.

"Monsieur Valcourt, you have no heart. My mother will now have to qualify for 12 weeks instead of 10. My mother won't be able to get her UI. No, Monsieur Valcourt, when I get to be 16, what do you think will happen to me?"

I cannot understand how people in this country can pride themselves in the social safety net which has caught my brothers and sisters, my neighbours, family and people. The net is perpetuating dependency, and not just among Atlantic Canadians--we see the culture of dependency all across Canada. The system in Canada today is providing disincentives to learning new skills. It even targets those who are not in need. That's our system.

This is the problem which we are facing. Some dismiss this as nothing. Let me cite you an example of how the system perpetuates dependency. In this great province of Ontario, you could have a family of four on welfare; the gross income somewhere in the neighbourhood of $18,000 a year. The reasonable alternative for a worker would be an annual income of $24,000--but being taxed back at 105 per cent. Canadians are not stupid.

I am not blaming the welfare recipient. I am not blaming those who use, and rightfully so, the Unemployment Insurance Program. I cannot blame them. I cannot even blame those who would voluntarily quit a job without just cause. I cannot because it is legal, it is the incentive.

The system today states that if you want to quit your job, l will pay you benefits. This is what we are doing in this country. And, you know, all of a sudden, because I have made a little change, l am the most wanted man in Ottawa. But I think that we should give more credit to the Canadian taxpayers than certain people want us to. That is why, as I said earlier, we will see these changes through.

When in New Brunswick, I often hear people speaking about freedom. Freedom is something which we cherish very much. Yet, how free can a person be if they cannot read? How free is one who cannot count? And how free is an individual who does not have basic skills? I then see people who get trapped on welfare and, after time, can never hope to get off. It is a safety net. When one gets caught, it is impossible to escape.

The proposed changes to UI represent one little step in the right direction of breaking this cycle of dependency. Another example was found in Minister Mazankowski's Economic Budget, where, for the first time in this country, low-income working people will get supplements under the new child benefits package. We will have an incentive for working people.

In the budget, and now, we will not reward those who quit their jobs without just cause. This is just one step in the right direction. We must move beyond dependency. We must move into a society of opportunity.

Some were offended that my government has taken a number of major steps to ensure that our immigration and refugee system continues to be fair, contributes to our prosperity, provides for family reunification and humanitarian relief while reflecting the needs and values of Canadians. Business immigrants and skilled immigrants all make a direct contribution to Canada's international competitiveness and future prosperity.

The world's scarcest resource is brainpower--human capital in the form of technical skills, scientific skills, and executive and entrepreneurial talent. The companies and countries that marshal such skills and talents most effectively will emerge as world leaders.

Human resources used to be relatively immobile. We must start to think more of human capital as part of a worldwide market for labour. We are in serious competition with other nations for this talent. Globalization of labour is good for the world, deploying human resources where they can be most productive. The challenge for the 1990s and beyond will be to develop foreign worker recruitment, immigration and visitor policies to meet the needs of international competitiveness.

After years of discussion, an intensive review, further consultation and a lot of hard work, I introduced last year to Parliament Bill C-86, the first comprehensive set of amendments to the Immigration Act since 1976, which now have been enacted into law. These amendments represent no revolution in Canadian traditions. What we have done is reorient our policies to better respond to the needs of Canada and Canadians and to ensure that the balance in the system is re-established.

We have given ourselves the tools we need as a country to manage immigration in the 1990s and pave the way for the 21st Century. In large part our traditional view of immigration saw Canada at the centre surrounded by immigrants pressing to get in. In the past, in order to regulate who and how many got in, all we had to do was control the gates: make it tougher to qualify if we wanted fewer people, and make it easier to qualify if we wanted more.

As Minister, I quickly learned that this was not an adequate view, and a new perspective, and a number of specific changes, were urgently required:

• The system could not regulate the numbers of people being admitted.

• The system did not select the best people, but those with the best access to the system.

• The system was characterized by long delays and poor service to employers searching abroad for scarce skills.

• I saw a system that did not respond to people on the basis of when they made their requests but on the basis of their luck in getting into the right lineup.

• Of most importance, l saw a system which was no longer supplying Canada adequately with the talent and abilities that we needed to become internationally competitive and to prosper.

• I saw many of the benefits that we have come to associate with immigration being eroded.

Bill C-86 was designed to correct these deficiencies, so that we can better achieve the objective originally set out in section 3 of the 1976 Immigration Act: "To foster economic growth and to promote the prosperity of Canada and its regions."

Over the next several months, and following these consultations, l intend to set out a clear and lasting direction for the immigration program.

On the road to confronting underlying realities and developing comprehensive responses, there was some diversion with the LJI issue. I think we've done the right thing.

This is not the time to hike taxes in Canada. l am ready to wager that if, in this year of choice, people look at the alternatives, they will want to reconfirm and send back a principled team of men and women to govern this country.

The appreciation of the meeting was expressed by Tony van Straubenzee, President, van Straubenzee Consulting, and a Past President, The Empire Club of Canada.