Canada’s greatest risk is that we are not taking risks

Canada’s window of opportunity to strengthen and reinvent our economy will slam shut unless we fix a political culture averse to taking the risks necessary to propel us ahead

Net zero by 2050.

Zero plastic waste by 2030.

100 million people by 2100 with zero economic strain, service backlogs or civil strife.

Zero chance.

Canadians are growing accustomed to hearing lofty, long-term policy aspirations from political leaders. But, at an alarming rate, Canadians are also growing accustomed to being let down. Worse still for our political climate, they’re beginning to understand these pronouncements not as concrete targets or even worthwhile aspirations, but as nothing more than cynical, empty rhetoric.

Targets notwithstanding, Canada remains a top-10 emitter in the world per capita, and only nine per cent of our plastic waste is recycled. Immigration, which should be a monumental natural strength for our economy, is limited by shortages in housing, transit and health-care capacity.

These issues share a common “horizon risk” problem: they require fresh, long-term thinking to fix. Unfortunately, many of our leaders have demonstrated a distinct capacity for setting soaring targets. But let’s be clear: it is in marshalling resources, rallying public support and actually getting the job done that leadership is tested and revealed. Setting the target and issuing the press release is not the real work.

This problem is exacerbated by our small-ball politics. It’s been more than 20 years since a federal party has captured more than 40 per cent of the popular vote. In a first-past-the-post system with a fragmented information landscape, political parties aren’t inclined to swing for the fences, intent as they are on stitching together the smallest possible winning coalition. As a result, long-term policy ambition is ignored in favour of the quick (partisan) win.

Today, there is no greater example of this than the affordability crisis facing Canadians. Poll after poll confirms that people’s top priorities all relate to the immediate challenges of the rising cost of living. In response, our politicians have predictably narrowed their horizons. To their mind, the political calculus suggests one solution: respond only to those issues that can be addressed with short-term fixes.

They could not be more wrong.

It’s in times of great upheaval and change that developing and advocating for both short- and long-term political visions that carry considerable risk are actually most important and most palatable. The reason why is simple: it is precisely when the country’s back is up against the wall that the public is most open to giving policy-makers the latitude necessary to make things right.
In other words, the window of opportunity to take informed risks is right here, right now.

In her insightful new book, Mission Economy: A Moonshot Guide to Changing Capitalism, University College London Prof. Mariana Mazzucato asserts, “Policy is not just about ‘intervening’. It is about shaping a different future: co-creating markets and value, not just ‘fixing’ markets or redistributing value. It’s about taking risks, not only ‘de-risking’. And it must not be about levelling the playing field but about tilting it towards the kind of economy we want.”

This might be counterintuitive for a political class that has learned the wrong lessons from policy failures of the past: trying new things gets you in trouble, so the safer option is to not try new things. But it must be understood that the most immediate and potentially costliest risk facing Canada today is that we are not taking any policy risks at all.

Not in R&D, where we rank a pitiful 26th of OECD countries on R&D intensity, or in infrastructure, in which independent reporting estimates we have a deficit of somewhere between $110 and $270 billion. Not in tackling climate change and investing in green innovation, where we consistently fail to meet our international policy targets and have yet to fully articulate the aggressive policies needed to secure long-term environmental and economic benefits.

And not, overall, in the vision of any of our main political parties, which have failed to provide a coherent long-term plan for the future of our economy and the sustained well-being of our fellow citizens. None of these existential challenges will be fixed with new spending alone. All of them will require new thinking, and a willingness to take risks.

It’s time we recognize that myopia and risk aversion got us here in the first place, and that we will not meet the moment by tinkering at the margins of policy and programs. Our future prosperity demands that we embrace and reward risk in our policy debates, and that we do so now, before the window shuts for good.