Education: The Door to Prosperity

The Dean of MIT's Sloan School of Management, Lester Thurow, in a recent Toronto address argued that the traditional way in which individuals prosper, businesses become successful, and countries generate a high standard of living for their citizens is changing rapidly.

Perhaps Arthur Koestler said it best when he suggested that the future is not what it used to be. He might have added that it never was!

The four strategic variables that have always produced prosperity are capital, technology, natural resources, and the skills (or education) of the work force. These variables, in various combinations, along with good management, create economic success.

But, according to Thurow, three of these strategic variables--capital, technology and natural resources--are highly mobile. Canada's historical treasure chest--its natural resources--represents an ever diminishing component of wealth creation. According to Thurow: "In the 21st century, nobody is going to be rich based on natural resources, which creates a problem in North America."

Tomorrow's only strategic asset, Thurow argues, is the education of the work force--not just the people who'll invent new products--but the ones who run the process technologies or deliver the services. In short, educated workers are synonymous with success.

For a country no longer able to live off its natural resources and required to live off its wits, the Canadian educational system may not be good enough. Pre-university education in this country soaks up $26 billion a year; and yet the country's dropout rate is slightly more than 30 per cent. What other public institution in this country is allowed to continue operating with a 30-per-cent failure rate? Put another way, Canada's participation rate of 17-year-olds in formal education is behind that of Japan, Germany, the U.S. and Sweden.

I have a favourite allegory. Every morning a gazelle awakens. She knows that to save her life, she will have to run faster than the fastest lion. Every morning a lion awakens. He knows that to escape starvation, he will have to be faster than the slowest gazelle. It makes no difference whether Canada is the gazelle or the lion; when the sun rises, the race begins.

What steps should Canadians be taking to remain competitive in the global marketplace? In the area of educational reform, can Canadians--and, in particular, their political leaders--afford not to be aggressively proactive? As Will Rogers once said: "Even if you're on the right track, you'll get run over if you just sit there."

The Federal Government is facing the challenge head-on of how Canada can return to a high-skills, high-wage economy. In this regard, the government is facing a number of important issues. How can Canada avoid having insufficient skilled labour to fuel economic growth? What steps can be taken to keep Canada exporting more products and fewer jobs?

The Empire Club is privileged to have as its guest speaker today the Honourable Pierre Cadieux, Minister of State for Youth. M. Cadieux recently launched a five-year Stay-In-School program to address the issue of the large number of Canadian teenagers who quit high school each year.

The program is premised on a partnership between business and government. Canadian business leaders are encouraged to lend a helping hand--rather than a hand-out--to the future business leaders of Canada. Together, the public and private sectors can work to deal with the troublesome dropout problem. As partners, they can help discredit the view expressed by Mark Twain when he said: "I have never let my schooling interfere with my education."

In addition to being Minister of State for Youth, M. Cadieux is Minister of State for Fitness and Amateur Sport, and Deputy House Leader. He has also served as Solicitor General, Minister of Indian Affairs and Northern Development, and Minister of Labour. He has been a Member of Parliament since 1984.

In connection with his Amateur Sport portfolio, M. Cadieux will be taking all Canadians' hopes and prayers with him to Albertville, France, in the next few weeks in support of our Canadian Olympic team.

Ladies and gentlemen, I ask you to welcome the Honourable Pierre Cadieux.

Pierre Cadieux:

I'm honoured by the invitation of The Empire Club which has, throughout this century, been on the leading edge of public policy issues in this country. It is indicative of the times in which we live, and the importance of this forum, that the Prime Minister spoke to joint meetings of The Empire and Canadian Clubs twice last year about the unity and prosperity of Canada.

My message is about education--specifically staying in school--as the key component in Canada's competitiveness and prosperity. Education is equally the key to Canadians understanding their history, and each other. If we understand our past, and the nature of our country, we enhance our chances of remaining together in the future.

I want to talk to you today both as parents, leaders in your community, and as executives, leaders in the business community. I want to discuss the issue of Canada's youth leaving school, and the importance to our country of their finishing school.

As Egerton Ryerson, Ontario's first superintendent of education, said in our Confederation Year of 1867: "Education is a public good, ignorance is a public evil."

A century and a quarter later we are dealing with the "public evil" of a dropout rate of 30 per cent, one of the highest, if not the highest, in the industrialized world.

The government has developed a five-year, Stay-in-School initiative of nearly $300 million--you've probably seen the television spots of the kid calling from a pay phone about a job ad, and the look of frustration and dejection on his face when told a high school diploma was required. It's powerful, memorable stuff.

The Stay-in-School campaign includes three components: First, labour market programs and services for at-risk youth; second, public awareness and advertising activities; third, and this is where you come in, mobilizing stakeholders to develop and apply solutions.

We need your help. We're asking you to get involved, and it's in your economic interest to do so. No level of government alone can resolve the issue of high school dropouts or address the larger question of developing a lifelong learning culture to keep this country competitive. It must be a country-wide effort at the community level involving business and the trade union movement, as well as the education and voluntary sectors.

And we need to recall the mandate of the Ontario Department of Education on its creation by the government of Oliver Mowat in 1876, to bring the schools "into harmony with the spirit of the times." These are times of global competitiveness, and if we do not meet the test of these times, we will be left behind as a country.

We can only address the dropout issue as partners. At stake is nothing less than the performance of our youth and the prosperity of our country.

Canada's dropout rate of at least 30 per cent, to four per cent for Japan, tells you a lot of what you need to know about our competitiveness. Japan also has a school year of 240 days, as compared to about 180 days in most Canadian provinces.

As Xerox Chairman David Kearns has observed: "If the Japanese miracle has a single cause, it is the quality of the Japanese work force. No nation has a better qualified work force, and no nation has a longer or more impressive record of economic growth."

Let me give you a quick run through of the situation, and I'm sure you'll agree that the challenge is as compelling as it is clear.

Unless we reduce the rate of high school dropouts in Canada, more than one million young Canadians will leave school in this decade without finishing high school. Think about that--at the present rate of 100,000 dropouts a year, more than one million young Canadians won't finish high school in the '90s.

Think about the economic and social effects of that, as parents and as business people.

The economic impact is clear and quantifiable. Unemployed youth claim some $3 billion a year of Unemployment Insurance and social welfare benefits--programs which you pay into as employers and as private citizens. Over the course of the decade, we're looking at more than $30 billion of social assistance to high school dropouts.

That's to say nothing of the cost to industry. For example, most high school dropouts do not have the junior high school readability skills required to read training manuals. They are functional illiterates. The Conference Board of Canada has estimated the direct cost to Canadian business of illiteracy at $4 billion a year, and the indirect cost at $10 billion when industrial accidents and absenteeism are factored in.

And high school dropouts are seriously disadvantaged when it comes to training, an issue that will only increase in importance during the course of this decade.

The fact is that standards of technological literacy are increasing not decreasing. Two-thirds of Canadians now in the work force will be working in the year 2000. But most of the technology they'll be using hasn't been invented yet.

When you think about it, this is not really a surprising statement. Last year IBM celebrated the 10th anniversary of the personal computer, which, as the company said, "changed the world." But, when you go back to your office after lunch, have a look around, and you'll probably see that first generation desktop computer off in some comer gathering dust like a museum piece.

Between now and the year 2000, the proportion of new jobs requiring 17 or more years of schooling will rise to 40 per cent, compared to only 23 per cent today. And 63 per cent, or nearly two-thirds of all new jobs, will require at least 12 years of education--high school graduates. Furthermore, the average worker can expect to change careers three to five times during his or her working life. Today's young people have to be competitive, they need to be versatile, they need basic educational requirements to tackle tomorrow's working conditions.

Clearly, our youth need to be better educated, and better trained. And yet we lag, rather than lead, in training. Only three Canadian companies in 10 provide formal training for their employees.

In the World Economic Forum's annual survey on competitiveness of the 23 OECD nations, Canada ranks fifth overall but only 20th in training-near the bottom of the list.

Per-capita expenditures on training by Canadian firms are only half the level of the United States, and only one-fourth the level of Germany. That's you, I'm afraid.

The system is also failing our young people, and our business community, at both the secondary and higher level. Our educational system ranks only 11th in its responsiveness to the demands of global competition.

As Harvard University's Michael Porter points out in his recent study on Canadian competitiveness for the Business Council on National Issues: 'The level of advanced skills in Canada--critical to sustaining and upgrading sources of competitive advantage for Canadian industry--is inadequate."

Though high school dropouts are clearly the biggest challenge facing us, there are also problems with the quality and focus of higher education.

The problem isn't with enrolment--Canada has the second highest university enrolment rate in the world. It isn't with funding--Canada spends more per capita than any country in the world, excepting only Sweden. The problem isn't money. The problem is results.

We're not, for example, turning out enough scientists and engineers. According to one estimate, Canada will be at least 25,000 engineers short of its needs by the year 2000. Clearly, we cannot maintain and expand our own infrastructure, much less participate in major international projects, unless we have the people to do the job.

It was precisely to encourage young people to enter these disciplines that the Federal Government, and specifically the Prime Minister, in 1988 created the Canada Scholarships in Science and Technology, which fund the undergraduate studies of 2,500 young Canadians in each year of university.

At least half the scholarships must be awarded to women, to encourage their entry into fields in which they are still under represented. In the current academic year, the fourth year of the program, a full complement of 10,000 Canada Scholars is attending university. The cost of the entire program is $80 million over the first five years. It is arguably the single best investment we could make in the future of our country.

We've also created 14 university Centres of Excellence, with nearly $250 million of funding, which are intended to enhance our national base in research and development. And we have, as a government, also created an R-and-D-friendly tax regime, recognized world-wide as one of the most attractive to companies looking at doing R and D here.

But our most urgent need is to address the question of high school dropouts. They are among the most at-risk of our young people. They are the ones most likely to be living below the poverty line, living in dysfunctional homes, often leaving home, and sometimes living as single parents. The odds are against them in life almost before they start out.

High school dropouts earn, on average, $55 a week less than persons with high school diplomas. That's nearly $3,000 a year. Over the 50-year working span of a 15-year-old dropout, he or she can expect to earn about $150,000 less than a high school graduate. And that's in today's dollars.

Not only will high school dropouts earn less, they will work less. There is a direct correlation between educational attainment and employment opportunities.

In 1990, the unemployment rate for youth with only elementary education was nearly 25 per cent, more than double the 12-per-cent rate of high school graduates, and three times the 8.4-per-cent rate for those with some form of post-secondary education. Not only are Canada's youth at risk, so is Canada's competitive position.

Only Germany, among the G-7 nations, is more trade reliant than Canada. We trade twice as much on a per-capita basis as Japan. And our share of world trade is slipping--since 1985 it has declined from 5.1 per cent to 4.2 per cent, the steepest decline of any of the G7 countries.

While our share of world trade is slipping our reliance on resource trade is increasing. From 1978 to 1989, Canada's share of world resource trade virtually doubled, from five per cent to 9.5 per cent. But our share of world non-resource-based industries has declined by half, from 3.4 per cent to 1.7 per cent over the same period.

It's been said that for the first 100 years of Confederation, we lived off our resources, and since then we've Wed off our credit. But now we must rely on our brains.

While there are other components of comparative advantage, none is more important than education. As a country, we're just not there anymore.

Professor Porter of Harvard identifies knowledge or education as one condition of national competitive advantage. But the others, human and physical resources, capital and infrastructure, all come down to education.

Our human resources--our work force--are only as competitive and productive as the quality of their education

and training. Our capital--our investments--give back to us what we put into them. And that includes upgrading our infrastructure. Canada's research and development is at the bottom of the G7, some 1.3 per cent of output, nowhere near where we need to be to remain competitive.

This is not some Darwinian notion of the survival of the fittest, but if our work force isn't productive, if our resources and services aren't competitively priced, if our standards or quality aren't the best, then people aren't going to buy Canadian simply because they think we're nice.

So the question is, what are we doing about education in Canada? And some would ask, what is the Federal Government doing in education at all?

The Federal Government already spends $11 billion a year in education transfers to the provinces. That gives us a responsibility, as well as a role, in education. However, we will continue, as we have done in the past, to work closely with the provinces when dealing with matters of education.

There are those, and not only in my own province of Quebec, who point out that education is an exclusive provincial jurisdiction. But the issue isn't merely one of authority, it is equally one of how we measure up as a country.

It is of no interest to the Europeans or Japanese whether education in Canada is a federal or provincial jurisdiction. They are interested in the quality of our goods and services, and education has everything to do with that.

In the Speech from the Throne last May, we set out three Canadian goals worth attaining to promote a learning culture in this decade: to reduce adult illiteracy by half by the year 2000; to achieve a 90-per-cent high school graduation rate or equivalency; and to double the number of science and engineering graduates.

The government fully appreciates the constitutional sensitivity of initiatives touching on the provincial jurisdiction of education, but all of these Canadian goals can be achieved within the existing constitutional framework, and under the auspices of the Council of Ministers of Education.

We see the provinces and territories not only as partners in Confederation, but as partners in prosperity. We are all in this together.

And that's where you come in, as parents and business leaders. As parents, we all have a responsibility to encourage our children to remain in school.

I Your son or daughter isn't challenged or isn't engaged, isn't participating in school activities, those are early warning signals of trouble. It's not just the teacher's or the school's job to get them focused, it's yours, and it's mine. If your youngster is bored by school and thinking of quitting, it's up to you to ask the question: "When was the last time you heard someone say, 'I wish I hadn't finished high school."'

If your son or daughter's part-time job exceeds 15 hours a week, then it's becoming too full-time. There's nothing wrong with them having a few dollars in their jeans, and learning how to manage their own money, but they shouldn't confuse flipping hamburgers at a minimum wage with a rewarding life's work.

And as business leaders, we need your involvement in the Stay-in-School program. This is demonstrably in your own interest. How are you going to fill job vacancies which increasingly require Grade 12 level skills when our dropout rate is stuck on 30 per cent.

There is a whole range of activities business can do--you can add the SIS message to your advertising to raise public awareness. For example, Sears Canada added an SIS message to their Back-to-School advertising. You can also provide services directly to students. We need you and your colleagues--especially your personnel and recruiting officers to visit high schools and speak about career opportunities or act as mentors to model work experience. And finally, as leaders in your community, you can encourage your local service clubs and chambers of commerce to get involved. For example, the Boys and Girls Clubs and Esso dealers in southern Ontario are cooperating on a Canada's kids program.

Yet another example of the kind of partnership I want to encourage sees Josten's Canada Inc., Sunsweet Fundraising Inc. and TG Magazine, all represented here today, challenging young people in school to find solutions to the dropout problem through a national project contest called the 10/10 ticket.

Nothing less than a community-wide effort, throughout the Canadian community, will enable us to meet the challenge. An educated Canada will be a prosperous Canada. An educated Canada will also be a united Canada.

Mathematics, biology, physics and chemistry at the high school level open the door to accounting, medicine, engineering and, yes, rocket science. They open the door to the knowledge-based industries that will be the growth sectors of our economy. We have world leaders like Spar in aerospace, Bombardier's Canadair division in aviation, Corel in computer software and Alias in computer generated graphics. They are driven by the entrepreneurial spirit, and by brain power.

High school language skills give our children a pluralistic outlook on life, and make our country more competitive. I frankly think most Canadians have moved beyond some of the petty posturing we hear on both sides of the language issue. The 250,000 Canadian kids in French immersion are eloquent testimony to that. No one forced them into it. Their parents simply know, as Oliver Mowat observed a century ago, that "no one is the worse for knowing two languages. "

And with a sense of history and geography at the secondary school level, our youth have a better understanding of Canada and its place in the world, this country which the United Nations human development index ranks second in the world and which most of us, deep down, think of as second to none in the world.

But part of our problem in this country is that we don't know each other well enough, and we don't know our history well enough.

Let me give you a quick example.

One of the most contentious aspects of our new constitutional package, and of the previous one, is our proposal to recognize Quebec's distinctiveness within Canada.

By the way, in French, the word distinct has no connotation of superiority and Quebecers themselves would be the last to make such a claim. It means different. And Quebec is different. The language is different. The culture is different. The legal code is different.

This has been recognized in Canadian constitutional convention and law since the Quebec Act of 1774, which guaranteed the rights of Quebecers to practise, their religion, observe the French civil code, and in effect, preserve their language and culture. These rights were retained by the Constitutional Act of 1791 and again by the British North America Act of 1867.

These provisions applied in no other province. But nobody, then or since has ever suggested that they meant special status for Quebec, or for its linguistic minority.

That's what I mean when I say we need a better understanding of our past to achieve better insights into our future. By our young people staying in school, we will build a more prosperous and united Canada.

Unity and prosperity. One unlocks the door to the other. Each is really the other side of the same door. I suggest we walk through that door together, into a Canada that realizes the promise that has always been held for it.

Thank you very much.

The appreciation of the meeting was expressed by Sarah Band, Retailer, Owner of Bianco Plus and Past President of The Empire Club of Canada.