Building the Canada We Want

Heather Ferguson, Director, Development and Alumni Relations, Faculty of Nursing, University of Toronto and Director, The Empire Club of Canada; Jessica Dexter, OAC Student, Member of the Student Council, North Toronto Collegiate Institute; Reverend Dr. John S. Niles, Rector, Victoria Park United Church; Bill Laidlaw, President, Parkelaw Inc. and Immediate Past President, The Empire Club of Canada; Frances Lankin, President and CEO, United Way of Greater Toronto; The Hon. Jim Peterson, Member of Parliament, Willowdale; Catherine S. Swift, President, CEO and Chair of the Board, Canadian Federation of Independent Business and Director, The Empire Club of Canada; Elyse Allan, President and CEO, Toronto Board of Trade; David Pecaut, President and CEO, iFormation Group; and Mathew Teitelbaum, Director and CEO, Art Gallery of Ontario.

March 6, 2003

comma, A period, Charles," when he addressed us about the issue of bank mergers in November, 1998.

I am delighted to tell you that Mr. Baillie and I have a number of things in common.

We both bank at the TD Bank. He, however, has been Chairman of the Board of TD Bank Financial Group since 1998, a year after he was appointed Chief Executive Officer and three years after he was named President.

And 1964 was a big year for both of us. I graduated from high school and that was the year Mr. Baillie earned his MBA from the Harvard Business School and started his career at TD.

It's a career rich with innovation and leadership, from establishing TD's U.S.A. division to overseeing the purchase of Waterhouse Securities, which today is one of the world's largest brokers for the self-directed investor.

And of course, it was on Mr. Baillie's watch that TD acquired CT Financial three years ago, resulting in the new retail banking division, TD Canada Trust--where we both bank, remember.

I am tempted to--but will not--list his host of directorships or honorary chairmanships and degrees.

But let me note that we also have the Art Gallery of Ontario in common. I love to roam the gallery and Mr. Baillie is President of the AGO Board of Trustees.

Another big year for both of us was 2002. I had my newest book published. Mr. Baillie, meanwhile, was awarded the coveted CEO of the Year award by the Canadian Public Relations Society and the Visionary award from the Office for Partnership for Advanced Studies. The same year, he hosted the TD forum on Canada's standard of living bringing together the best and brightest from Canada's business, labour and academic communities to explore how Canada can exceed the U.S. standard of living in the next 15 years.

And that's typical of Charlie Baillie, a man who throughout his career has been actively engaged in public-policy issues.

So it's with sincere pleasure that I invite Charlie Baillie to address us again, this time about building the Canada we want.

Charles Baillie

Introduction by Bart Mindszenthy

It's "A. Charles Baillie" on the formal notices, but it's Charlie Baillie to his associates and friends. And let the record show that fn the 1998-99 book of Empire Club speeches, there is a listing for "Baillie,

Ladies and gentlemen, thank you for inviting me to join you today. I thought I might start by talking about my grandchildren. No you don't need to rush for the doors; I didn't bring photographs. But when I think of the future of Canada, of the kind of country we want it to be, I think in terms of the country our children and grandchildren will inherit. l believe we have a responsibility to create a country where all children, regardless of the circumstances of their birth, will have a fighting chance to live healthy and fulfilling lives.

Normally, grandparents tell their grandchildren how difficult life was when they were young, but in many ways, young people today face greater challenges than we did. Paul Valery expressed it well: "The trouble with our times is that the future is not what it used to be."

When I joined the labour market in the 1960s, the national unemployment rate was under 4 per cent. At that time, Canada was in the midst of a wave of prosperity that lifted our standard of living from 72 per cent of the Americans' after the Second World War to almost 90 per cent by the late 1970s. The Canadian dollar was worth US$1.08. That's right, it is hard to remember, but there was a time when our dollar was worth more than the American. Government budgets were generally balanced and public debt was low. The cost of a university education was relatively little and class sizes were small.

Contrast that with Canada today. The national unemployment rate surged to above 11 per cent in the 1990s and is now 7.4 per cent. Our standard of living is 85 per cent of that of the United States, up from its low of 81 per cent in 1997. Total public-sector debt was 100 per cent of GDP in 1990 and is now 70 per cent. After a decade of restraint, government budgets are, once again, generally in balance.

University tuition costs have increased at an average of 9 per cent a year in the last 10 years and class sizes have exploded. The competition for access to top Canadian universities is fiercer than ever before--and not just because of the double-cohort. High school graduates need marks well into the '80s if not '90s for the right to sit in huge amphitheatres. Many of us would not have made

the cut. The dollar? That is a subject that is too depressing to broach.

The dollar aside, we have many real strengths on which to build for the future. We have a strong economy that last year outgrew all other Group of Seven nations and created more than 500,000 jobs. We have eliminated our national and most of our provincial deficits. The fed-eral government is tackling the issue of making Canada a more competitive tax regime. The National Health Accord is a step in the right direction towards improving the qual-ity and accessibility of our health-care system. Perhaps most important of all, we have greater confidence in ourselves as a nation.

I cannot guess whether this will still be true of the Canada our children and grandchildren will inherit. None of us can predict the future with any more accuracy than we can guess by how much the Maple Leafs will beat the Sabres tonight.

As Sam Goldwyn so memorably stated: "I never prophecy, especially about the future." What we can reasonably predict is that the rate of change will continue to accelerate, that knowledge work will become ever more important, and that increasing globalization will heighten international competition for the world's brightest and best. As a proud Canadian, I would like Canada to be a leading contender in that particular contest.

What can we do today to ensure that we are? What can we do so that our grandchildren will be able to perform well in this more open world of rapid change? How do we entice our most talented young people to remain working and living in this country? In other words, how can we ensure that they will be just as proud, if not prouder, to be Canadian?

I would like to suggest some answers within the frame-work of some of the recommendations that emerged from the TD Forum on Canada's standard of living last October. Forty leaders representing varied constituencies recommended that we address strengthening our fiscal and social framework, human capital, smart social policy, redefining Canada's external relationships, and leadership and attitudes.

Today I will focus on just three of those areas: our fiscal and social framework, human capital, and leadership and attitudes.

Fiscal and Social Framework

Our fiscal and social framework tops my list because of the more negative statistics I mentioned earlier. I am concerned that unless we take action now, our children's and grandchildren's legacy will be burdened by excessive debt and taxes and that this will limit their opportunities.

A decade of following the good Canadian ethic of restraint has rewarded us with a healthier economy than we have enjoyed for a very long time, but it has also left us with the challenge of tackling many neglected issues. Like bears coming out of hibernation, we are naturally in a hurry to make up for our period of starvation.

To Finance Minister John Manley's credit, his recent budget addresses some of the country's most pressing needs without taking us back into deficit. As we learned, to our huge cost in the 1990s, the piper eventually has to be paid. From the mid-1970s to the mid-1980s my generation enjoyed $1.12 of goods and services for every dollar of tax sent to Ottawa. In the last fiscal year we received just 73 cents of goods and services for each dollar of taxes we sent to Ottawa. The rest went to servicing the national debt created to pay for the largesse of 20 and 30 years ago.

Our grandchildren will still be paying throughout their working lives for the services that were underfunded by my generation and the baby boomers. The Canada Pension Plan is one. Our children and grandchildren will pay more in premiums than they will ever take out. Health care is another. The cost of health care for a person 65 or

older is more than five times the cost for people under that age. People over 65 make up 12.5 per cent of the population today and the number will swell to 18.7 per cent in 2020. As a result, our children will pay even more for health services as the baby-boom generation ages.

There are several actions we can take to reduce the burden of this financial legacy. One is to reduce the debt to less than 30 per cent of GDP federally and 15 per cent provincially. A second is to continue the tax reductions that have already been made so that there are greater incentives to have an education, work, save and invest. A third is to make health care more efficient rather than using increased budgets simply to protect the status quo. A fourth solution is that we should not rush to address all our social problems at once. We must focus on smarter spending rather than simply more spending.

Ultimately, however, the only way we shall create a positive future for our grandchildren is by increasing our standard of living. Future generations will then be able to make quality-of-life choices from a position of prosperity. I have challenged the country before and I challenge it again. Let us increase our standard of living so that it is greater than that of the United States in 15 years--now 13. Time flies. Let us make the pie bigger so that future generations will have the financial latitude to make choices as to the quality of life they want. As a legislator in the Michigan State House once said: "There comes a time to put principles aside and just do what's right."

Young people today are not looking for gifts from us. They have great confidence in themselves and in our nation--but we owe it to them to reduce the financial burdens we have imposed.

Human Capital

My second area of focus is human capital, the key differentiator for organizations and countries alike. In an ideal future, every one of our citizens would make a positive contribution to society. To achieve this goal we shall need to address the pressing issues we face today in education, in integrating immigrants and in creating healthy cities.

Canada's wealth of natural resources will always be an important asset, but as we have known for a long time, it's not what you have, but what you do with it that matters. Knowledge and new ways to use it are what count in an environment where everything is becoming more competitive. Businesses and countries compete for capital and talent. Charities compete for funds. Universities compete for the brightest academics, the most brilliant researchers and the smartest students.

Our children already have a much greater capacity to access knowledge through modern communications than we ever had at our local library. I can only begin to imagine the quantum leap that our grandchildren will take. Access to information, however, is not the key issue. The key issue is their capacity to use the available knowledge to their own and Canada's advantage.

Smart, innovative thinkers come from an education system that gives them the skills and the confidence to compete with the best. Budgetary cutbacks have challenged our educational institutions to deliver more with less. The results, in the vernacular, have not been pretty. From kindergarten to post-secondary schools, problems abound. The most recent example came in the results of Ontario's new grade-10 literacy test. The results show that 63 per cent of students of English as a Second Language, 60 per cent of special education students, and 56 per cent of students in the non-university stream, failed. These students are all at risk of dropping out or failing to graduate. To compound the problem there are fewer guidance counsellors, special education teachers, English as a Second Language programs and school psychologists to give these students the extra help they need.

Many schools have taken music and the arts off the required curriculum, subjects that can broaden children's minds and encourage different ways of thinking--as Learning through the Arts, a Royal Conservatory program that TD sponsors, so clearly demonstrates. Physical education and after-school sports programs are also being cut in the face of an epidemic of obesity in children.

This is not the legacy our children and grandchildren should have. Let us take action now to make sure that more children at all stages of their development have access to the best. We cannot start too soon. A child's first five years are the prime time for his or her intellectual, verbal, physical, social, and emotional development. This is when the die is cast that will determine how well children fare at school and how well they fit into society. It is when we can help them prepare for a lifetime of learning. It is only common sense then, that if we want a society with the maximum number of productive individuals, that all children, regardless of their social circumstances, should have the same opportunity for an early childhood education. Let us leave them that legacy.

As in health care, this is not about maintaining the status quo. We need to find new and better ways to give future generations the best start through early childhood education, the best exposure to mathematics, literacy, the sciences and the arts from kindergarten through grade 12, and greater access to post-secondary institutions.

My bias as Chancellor of Queen's University may be in evidence, but I am particularly concerned that our most talented young people should be educated superbly. Many of them will go on to lead companies, pursue research, and head not-for profit organizations, which will provide jobs for Canadians from all walks of life. Let us ensure that they are equipped to meet the challenges they will undoubtedly face.

Let us also encourage schools from primary to post-secondary to teach our children to manage and live with change. Let them encourage risk taking so that more of the bright ideas generated now are acted upon and made concrete. We begin with distinct advantages. Thomas Friedman's observation is equally applicable to Canada: "The freedom of thought and the multiple cultural and political perspectives we offer in our public schools are what nurture a critical mind. And it is a critical mind that is the root of innovation, scientific inquiry and entrepreneurship."

However, we risk setting up innovation as a modern-day idol that we worship from afar. But people have been thinking in innovative ways since they first walked the earth. How else would humankind have survived and thrived? Let us remove the mystique around innovation, weave it through the curriculum and make it a competitive Canadian competency.

We also need to help young people break the vicious cycle of no experience, no job--no job, no experience. The unemployment rate for youth is 12 per cent--double that of adults. An example of the kind of private-sector, not-for-profit initiative we need is Career Edge. The organization offers internships to recent graduates of high school, college and university. My company is pleased to be a participant and we are committed to increasing the number of interns we employ. I urge more companies to take part in this innovative program to help today's youth kick-start their careers. That's an action you can take now.

Immigration

We cannot talk about human capital without addressing the fact that a growing proportion of our future population will be new Canadians. This is the only way our population will grow. Woodrow Wilson used to say that he not only used all the brains he had, but all the brains he could borrow. This should be our mantra as a country. One of the ways to increase our standard of living is to focus on helping immigrants become productive citizens more rapidly.

We need to make it easier for them to put their training and skills to work faster--for their own more successful adaptation, and for the benefit of all Canadians. We need to work on simpler ways to help them close the gaps in professional requirements and avoid a wasteful and expensive re-qualification process. In a country that celebrates diversity as a defining quality we owe it to ourselves and to future generations to make that effort. In addition, we need better coordination between the three levels of government to ensure that the funding process accurately reflects immigrant settlement patterns.

Ninety per cent of immigrants come to live in Canada's four largest cities, and the Greater Toronto Area receives almost half of them. The current funding process does not reflect these facts.

The stories of many of our community leaders, who are also immigrants, powerfully demonstrate the contribution that new Canadians can make. In a new program called Passages to Canada, the Dominion Institute has created a national speakers' bureau of such leaders. They will share their experiences with school and community groups in Montreal, Toronto and Vancouver. TD Bank is proud to be a sponsor.

Cities

Talented individuals, whether immigrants or Canadian-born, will go to the most attractive location. I would like to think that our children and grandchildren will inherit flourishing cities that will be as attractive as the best in the world. I have spoken before of my concern about the deterioration of our cities and our need to invest heavily in their infrastructure. I shall not repeat those arguments now. Let me simply say that we need to move away from their current 19th-century funding base to a system that is more representative of our cities' size and contribution to Canada's economy overall.

I would also like to think that the cities our children and grandchildren inherit would have even better cultural amenities than they have today. Here in Toronto I applaud the development plans at the Art Gallery of Ontario, the Royal Ontario Museum, the National Ballet School, the Canadian Opera Company, the Royal Conservatory of Music, and Soulpepper Theatre as well as several others.

I applaud the visionaries who understand that vibrant cultural communities and arts facilities are essential to the health of our city. They attract not only artists of all types but other highly talented individuals. The aptly-named Bohemian Index shows that the stronger the artistic community, the greater the attraction for innovative, technology-based industries. This is exactly what we need to keep the spirit of innovation and creativity alive and flourishing for future generations. I won't be passing around pledge forms but let us all give these new developments the support they deserve. Let us take action now to let our cities regain their world-class stature so that the brightest and the best in the world, including our own grandchildren, will be drawn to live here. And always be cognizant of that old adage, "where there's a will, there's a relative."

Leadership and Attitude

The bold initiatives in our cultural community are tremendous examples of the leadership and attitude that we need to create a great legacy for our children and grandchildren. One of the saddest things that happens as we grow older is that by the time we have the power to effect change we have lost much of the sense of wonder that I see in my grandchildren. We lose the appetite for testing the unknown and taking risks, and the belief that anything is possible. It is often said that the young do not know enough to be prudent, so they attempt the impossible, and achieve it, generation after generation. Let us nurture that wonderful spirit--but let us also be bold in our actions.

Canada is like a 10-year-old car, running adequately today but at risk that any time soon the transmission will go. And while we are at the curb waiting for the tow-truck, other countries that have already taken the bold steps will be racing past. Do we have a political and social system that works for most people today? Yes. Will it work for our grandchildren? Possibly not. The pace of change is moving faster than we are.

We are taking steps, but they are not sufficiently audacious steps. We still have processes that had their origins in an older, less open Canada. Too much energy, effort and money are wasted in inter-governmental rivalry and inter-provincial jousting. Let us work urgently to eradicate the protectionism between provinces. Does it make sense that there are tariffs on shipments of Moosehead beer into Quebec but none when it is exported to the United States? In an era where mobility of labour is becoming more and more important, let us work to remove barriers to entry from province to province for qualified professionals. Think of the power we could have in the global economy if we were to act as one cohesive country.

We have to dream big dreams. Then we have to act on them. It will mean taking risks and taking risks means moving outside our comfort zone. We need leadership--not just from our politicians but from business, academia, labour and the not-for-profit sector. We need a clear goal. I've done my best to set one and to rally support, but we won't get anywhere without solid, active involvement from all constituents.

Each of us needs to take ownership. If every Canadian does one extraordinary thing to create the Canada we want, we achieve our goal. Our head table guests today are a living testament to the power of individuals. The Honourable Jim Peterson has devoted much of his career to the often thankless task of public service. Matthew Teitelbaum is transforming the Art Gallery of Ontario to become "the imaginative centre" of Toronto. David Pecaut, Elyse Allen and Francis Lankin are, among other things, key players in the Toronto City Summit--a group of like-minded business, academic and not-for-profit representatives who are determined to bring this city back to its former glory. I am proud to be part of their team and my company is excited to be supporting this effort.

Let us not overlook the Empire Club, its executive members and their special guests, who help stimulate debate on issues of national importance.

There are actions that every one of us can take for Canada's future, whether or not we have children or grandchildren. I personally plan to continue to raise questions and offer solutions to issues that I believe are on the minds of many Canadians. Let us invest for our children and grandchildren in education, in immigration, in our cities. Let us increase our standard of living so that our progeny can continue to enjoy the qualities of life that make Canada distinct. And let us not be afraid to show leadership and take the bold actions that will make Canada an even stronger country for the generations yet to come.

Thank you.

The appreciation of the meeting was expressed by Catherine S. Swift. President, CEO and Chair of the Board, Canadian Federation of Independent Business and Director, The Empire Club of Canada.