The decade between the launch of Policy magazine and today has seen the consequences of revolutionary change — technological, geopolitical, social, economic and scientific — unleashed at the turn of the millennium play out in disruptions across politics, public health, energy, employment and the rise of propaganda. Intrepid Policy contributors Kevin Lynch and Paul Deegan connect all the dots for us.

Kevin Lynch and Paul Deegan

Given that the two of us were banned by Russian President Vladimir Putin last year, for reasons known only to some apparatchik at the Russian Embassy, we thought it would be appropriate to begin this look back over the past decade and peer ahead by quoting another Vladimir – Lenin in this case – “There are decades where nothing happens; and there are weeks where decades happen.”

As we look back over the past decade, there are a number of events that shaped Canada and the world, and they will likely continue to test and challenge us over the next 10 years. As the late American humourist Art Buchwald once wrote, “Whether it’s the best of times or the worst of times, it’s the only time we’ve got.” 

The January 6, 2021 siege of the US Capitol, the very symbol of American democracy, was shocking, but it was not an aberration. Canadians came to learn this with the so-called Freedom Convoy, as did the French with Mouvement des gilets jaunes, the Brits with violent pro-Brexit mobs, countries around the world with frenzied anti-mask and anti-vaxxer protests, and, most recently, the Brazilians with pro-Bolsonaro forces storming their Congress.

Who or what is to blame for this? It would be too easy to pin it all on Donald Trump, although he is a dangerous demagogue who has been fanning the flames of extremism with false tales of a stolen election to delegitimize both the winner and the democratic process itself. There is also no question that he incited the insurrection and violence that occurred on January 6th. But there are two major contributing factors behind the rise of this new iteration of populism.

Big tech has failed miserably in addressing the dangerous disinformation carried on their own platforms. Self-regulation has not worked, and it should never have been expected to work, but we were too jazzed by all the technological innovation to care.

First, adherents of bizarre conspiracy theories are linked together by social media, and the Big Tech companies seem to be doing next to nothing about it. In a recent Wall Street Journal op-ed, US President Joe Biden spelled out the problem, “We need Big Tech companies to take responsibility for the content they spread,” he wrote. “That’s why I’ve long said we must fundamentally reform Section 230 of the Communications Decency Act, which protects tech companies from legal responsibility for content posted on their sites.”

Biden is spot on. Big tech has failed miserably in addressing the dangerous disinformation carried on their own platforms. Self-regulation has not worked, and it should never have been expected to work, but we were too jazzed by all the technological innovation to care.

Second, globalization and technological change have left far too many people around the world behind. We live in a world of haves – the well-educated knowledge workers – and the have nots, meaning everybody else. As income and opportunity gaps are growing, so too is despair among those with a middling education and analog skills in today’s digital world.

A minimum wage job simply doesn’t cut it in terms of eking out anything close to a middle-class existence these days. Canada, and every Western democracy for that matter, has to come to grips with wealth and income divides that are rising sharply and rapidly. Education and re-skilling have to be top priorities for policymakers as trade and technology changes the nature and location of jobs. If we fail to bring the disaffected and disenfranchised into the economic and political mainstream, social cohesion will erode to the breaking point.

We also have to buttress our political, economic and social institutions. Institutions matter. Freely elected parliaments, independent judiciaries and courts, non-partisan public services, free press, robust civil society are all important bulwarks against demagogues. In his new book The Age of the Strongman, Financial Times columnist Gideon Rachman argues: “Durable political systems ultimately rely on institutions, not individuals.”

The pandemic exposed problems in global supply chains, which pushed up the prices of everything from used cars to microchips. Worker shortages put upward pressure on wages and costs. Massive fiscal stimulus from governments was added to the massive liquidity stimulus provided by central bankers. The inevitable result of too much money chasing too few goods was inflation. And the slower central banks were to respond, the more persistent and entrenched inflation became. Whether at the fuel pump or the grocery store check-out, we’ve all learned that the mantra of central bankers — that inflation was “transitory” — was painfully wrong.

After a year of rate hikes, central bankers have now begun to quell inflation. Going forward, the alignment of fiscal and monetary policy will be key to how quickly inflation is unwound. That said, the salad days of cheap money and ultra-low interest rates are over, and there will be structural consequences. Canada’s deeply indebted housing sector is vulnerable, as low-interest mortgages come up for renewal at much higher rates. Capital will also be harder to attract for firms that have no reasonable prospect of generating free cash flow. Government debt will be much more costly and this will be particularly painful for governments like Canada that have unwisely doubled their debt. And central bankers, the oracles of the last decade, are the public villains of today.

Canada has a growth problem. For most of the period since 2008, Canada has muddled along with middling growth. That’s a far cry from the prior half-century, when we enjoyed the robust growth that built today’s economic and social infrastructure. With rising interest rates and soaring public debt levels, low productivity and weak innovation, massive public infrastructure deficits, a health care system that is teetering at the brink, the challenges before us are complex and difficult. Painful choices have to be made. We cannot cut our way to stronger growth, we cannot borrow our way to better productivity, and we cannot inflate ourselves out of this trap.

The federal review and approval of infrastructure projects often takes longer than the time to go from shovel in the ground to project completion. Speed matters, and foreign capital is not always patient.

Canada is a trading nation, and a growth plan should begin with strategic investments in trade — enabling infrastructure to make it easier for goods, commodities, services and people to cross our borders. We are blessed with an abundance of natural resources and a well-educated workforce, but our onerous regulatory system makes it almost impossible to build anything. Why does it take three times longer to get a construction permit in Canada compared to the United States? The federal review and approval of infrastructure projects often takes longer than the time to go from shovel in the ground to project completion. Speed matters, and foreign capital is not always patient. As a country, we need to focus on a growth and competitiveness plan to get us out of the hole we have dug for ourselves.

It needs to be easier to be an entrepreneur and innovator in Canada. Canada dropped from fourth position on the World Bank Ease of Doing Business rankings in 2006 to a dismal 23rd in 2020. We score poorly on international innovation rankings. We appear incapable of addressing interprovincial barriers, which work to keep businesses small, local and uncompetitive.

Climate change poses an existential threat to the planet, but it also presents an incredible economic opportunity. As a nation, we have to come to terms with the duality of the climate change problem: balancing the imperative to phase out of carbon with an adjustment strategy for a sector that is our biggest single export and our highest value-added sector. Demand for gas is not going to disappear for decades, and the question is “whose gas” not “whether gas”. We lack any blueprint of how to replace our carbon-based energy sector over time with something of similar “economic value” and risk a large decline in our living standards as a consequence.

Putin’s heinous, illegal invasion of Ukraine has reminded Europeans that they are too reliant on Russian energy. Prior to the invasion, Russia supplied a little less than half of European natural gas. With that supply now cut off, Europe needs to turn to reliable partners, not just for today, but for the decades to come. As the world’s fifth-largest natural gas producer, Canada has the capacity to help our European allies counter Russia’s most effective weapons system — energy.

The past decade has reminded us that we live in a highly uncertain and volatile world. The next 10 years will test us to find solutions, both at home and abroad.

The question is, do we have the political will to build LNG export terminals and pipelines? Our neighbour to the South clearly sees the economic benefit from — and geopolitical need for — expanding natural gas production and LNG exports. The US has eight LNG export terminals, with five more under construction and another 20 approved or proposed. Canada has zero, although one is under construction in Kitimat. We can’t kid ourselves that we can solve Europe’s energy crunch today, but we can get on with the job of building pipelines and LNG export terminals both on our west coast to service Asia and on our east coast, which is days closer to Europe than US Gulf ports. It would be a boon for our energy sector, and it would undermine Russia and strengthen ties with our NATO allies.

In his new book The New Map: Energy, Climate and the Clash of Nations, Daniel Yergin focuses on the impact of the sharp escalation of geopolitical tensions on energy transition strategies. With the Russian invasion of Ukraine, the spike in US-China tensions and the disruptions in global energy markets and prices, Yergin argues that energy transition strategies must now also reflect an energy security reality, or else governments will risk severe economic dislocations and the loss of public and political support for their climate change policies. As a major global energy producer, this changing security dynamic should be reason to readjust Canadian energy transition plans and export LNG for the global good.    

The fall of Berlin Wall and China’s opening to the West were great events, but we are in a far different world today. Putin has waged war everywhere from Chechnya to Georgia to Syria to Ukraine. He is a dangerous imperialist from a bygone era. So, too, is China’s Xi Jinping, who has tightened his grip on Chinese society and private enterprise in China. Under Xi, Hong Kong has slid from “rule of law” into “rule by law”, China has threatened Taiwan and vital sea lanes and engaged in “wolf warrior” and, in the case of the Two Michaels, hostage diplomacy. The federal government’s new Indo-Pacific strategy is a belated recognition of the need to pivot away from what has become a dangerously dependent trade relationship with China, but is vague on the “where to go and how to get there.”

For Canada, one obvious place to start for diversifying trading relationships is right here in our own backyard. Since NAFTA, we have concluded bilateral trade agreements in our hemisphere with Chile, Colombia, Costa Rica, Honduras, Panama and Peru. With over one billion people, the Americas are an attractive market. Fresh off the heels of the Three Amigos meeting in Mexico, Canada led in calling for a free-trade area of the Americas – an idea that was first advanced at the Miami Summit of the Americas in December 1994.

The past decade has reminded us that we live in a highly uncertain and volatile world. The next 10 years will test us to find solutions, both at home and abroad. A robust Canadian economy, strong social cohesion, and a willingness to be an effective security partner with our allies would be worthy objectives for the decade ahead. We have the capacity to do so; we just need the will.

Contributing Writer Kevin Lynch is a former Clerk of the Privy Council and former Vice Chair of BMO Financial Group.

Contributing Writer Paul Deegan is a former public affairs executive at BMO Financial Group and CN Rail and he served in the Clinton White House.