How Inclusion Can Fuel Canada’s Economic Transformation

Paul Gallant Tuesday, September 08, 2015

The overeducated taxi driver with unrecognized foreign credentials has become an unavoidable Canadian stereotype. (And a true one: immigrants account for about half of our taxi drivers and 20.2 percent of these foreign-born drivers have a bachelor’s degree or better, according to a 2012 study.) And now our app-enabled world has ushered in the likes of Uber to wreak havoc on their consolation-prize jobs. Nobody said that connecting the talents of Canadians to the demands of the 21^st century economy would be easy.

Many countries wrestling with how to match the right people with the right jobs regardless of race, national or ethnic origin, colour, religion, gender, age, sexual orientation or ability. But with a unique history that has pushed Aboriginal people to the fringes and an aggressively multicultural society that draws on people from different cultures and educational backgrounds, Canada faces unique challenges as it approaches its 150^th anniversary. And it’s not just our population, which is aging and diversifying. Though natural resources like oil and minerals will likely maintain their status as the foundation of our economy for a while yet, three out of five of the fastest growing Canadian exports over the last decade were services exports. The evolving nature of work itself—with some jobs being replaced by technology, while others turn into contract-based gigs without benefits or long-term stability—is redefining what success looks like.

“A lot of the changes are connected to the globalization of Canada’s economy,” says Sunil Johal, policy director at the Mowat Centre public policy think tank at the University of Toronto. “Free trade accelerates specialization and Canada is specializing in certain areas, so sectors like manufacturing tend to get outsourced and offloaded to other countries. As well, the ubiquity of new technology companies across borders makes it harder for any individual country to say, ‘Come here because we are very open to technology and the sharing economy.’ That has significant implications for Canada.”

Canada must develop new mechanisms for inclusion, not solely to ensure its population is engaged and fulfilled. Like many developed countries with declining birth rates, Canada needs to leverage all the talent it can to maintain its competitive edge and prosperity.

“We have the opportunity to really become the incubator country,” says Michael Bach, founder and CEO of the Canadian Centre for Diversity and Inclusion. “People come to Canada because it is an inclusive culture compared to other nations around the world. If we promote that environment where people can succeed regardless of the things that make them unique—and in fact because of the things that make them unique—that ultimately benefits every employer in this country.”

Yet Canada’s youth unemployment rate has remained high for decades, usually more than doubling the rate for those 25 and older, which has implications not only for the future of individual young people, but for crime and generational advancement. Aboriginal youth, both on and off reserve, face even higher unemployment levels, although the statistics are much rosier for First Nations people who completed higher levels of education. Despite the advances women have made toward salary equality, they remain relative rarities in senior management and on boards. Even as Canada has increasingly targeted more highly skilled immigrants, about 156,000 economic permanent residents in 2014, it has often failed to efficiently recognize their overseas credentials and integrate them into the labour force. Immigrants with higher education earned little more than those with less education immediately following landing, though they eventually pulled ahead after five to 10 years in Canada. Ten years is a long time to wait.

“I think Canada is moving slower than we could be,” says Shannon MacDonald, Chief Inclusion Officer at Deloitte Canada. “We’re still a bit timid to exercise the diversity of talent we have. We’ve been successful at building certain stages of inclusion. The university system is great. Large corporate hiring is good. Government has done a good job. But we’re a little bit stuck on ‘It’s the right thing to do.’ That’s great, but I think it’s also the economically sound thing to do.”

Irvin Studin, editor-in-chief of Global Brief magazine and president of the Institute for 21st Century Questions, says Canada has been successful in balancing an English-speaking majority against a French-speaking minority, but needs to strike a new bargain that treats Aboriginal people as co-equals. “You might even go as far as to mainstream a lot of Aboriginal languages, many of which are dying, none of which are promoted. We’d send our kids to learn Ojibway along with Hindi and Mandarin, Cree alongside of Spanish and Russian. You can grow up in Toronto, particularly the 905 belt, and almost never touch on the Aboriginal fact, not knowing this is Aboriginal land, not knowing any Aboriginal people, even though multiculturalism is central,” says Studin.

Multiculturalism itself may be a key to freeing us from our colonial past, where important decisions were made elsewhere. “In Ontario, the manufacturing belt has been diminished the past 20 years, but medium- and small-business enterprises (SMEs) have boomed as a result of immigration and the entrepreneurial spirit of the changing population,” says Studin. “The new Canadian population from about the 1970s onwards doesn’t have the same attachment to the territory, the networks and history of natural resources. [They’re more inclined]… to use their professional talents, their particular cultural instincts and skill sets to create new types of companies, particularly in the service sector.”

Smart inclusion strategies will benefit individuals, companies and society as a whole. Community Benefits Agreements, for example, can bring together public- and private-sector partners to create employment and training opportunities in disadvantaged areas. For the Eglinton Crosstown transit line, which will pass through several of Toronto’s priority neighbourhoods, the partners have committed to creating a plan to provide jobs, apprenticeships and supplier contracts to locals during the life of the multi-year project. The agreement recognizes the ongoing need our economy will have for tradespeople in the construction industry and ensures “communities that are hosting the transit facilities realize not just the transportation benefits of the infrastructure, but also receive social and economic benefits from the investment that is being made,” states Metrolinx, which is leading the project.

“Torontonians are very aware of the differences between downtown and the inner suburbs in terms of poverty, access to opportunity, access to transit and general quality of life,” says Pedro Barata, vice president of communications and public affairs at United Way Toronto and York Region. “In order for neighbourhoods and populations to move ahead in our city, we have to acknowledge that not everybody’s starting from the same starting point.”

Changing fundamental structures of the workplace can also capitalize on diversity and inclusion, perhaps much better than straightforward hiring strategies. A company that provides flexible hours that acknowledge a life outside the workplace, for example, will not only create more opportunities for women to take leadership roles and for people with disabilities to build a career, but will also accommodate a wider variety of cultural expectations.

“If we get away from this chained-to-your-desk face-time culture and embrace a results-oriented work environment, employees can maintain the relationships that are important to them and be more engaged in the work they do,” says Bach. Some companies are doing away with performance reviews and salary negotiations in order to eliminate arbitrary judgments and biases that result, in their most extreme form, with bosses rewarding like-minded golden boys.

None of these strategies are without risk. But then, the modern economy is based upon on turning risk into reward, whether it’s profit, a healthier planet, a more ebullient society—or hopefully all of the above.

“Our current leaders were taught 30 years ago, when it was more about structure and hierarchy, command and control, how to get things done,” says MacDonald. “Now it should be more about challenging concepts, bringing together ideas, disruption, innovation and things that create a lot of uncertainty. I think a leader of today needs to be able to cope with uncertainty and have a lot of courage.”

An interview with Irvin Studin

President of the Institute for 21st Century Questions and editor-in-chief and Publisher of Global Brief magazine, Irvin Studin was the first-ever candidate chosen for the Canadian government’s Recruitment of Policy Leaders program. We talked to the author of The Strategic Constitution—Understanding Canadian Power in the World about inclusion strategies and their part in Canada’s changing economy.

Yonge Street Media: How much has Canada’s economy evolved over its history?
Irvin Studin: Transformation of the economy over 150 years has been radical, from the mercantilist model to largely a natural resourced-based model and now increasingly service-based model, with still an important natural resources footprint. There are, of course, regional differences that reflect global economics and the make-up of the population. In Ontario, the manufacturing belt has been diminished the past 20 years, but medium- and small-business enterprises (SMEs) have boomed as a result of immigration and the entrepreneurial spirit of the changing population.

Can we continue to rely on natural resources as the foundation of the Canadian economy?
It’s likely sustainable and lucrative for Canada in the foreseeable future. We can talk about environmental impacts, of course. Natural resources have shrunk as a proportion of our economy because our population has diversified considerably, education levels have gone higher, tastes and preferences have changed and, of course, global competition has changed. But natural resources remain very important. The next big game in international affairs over this century will most probably be the Arctic. Canada is competing with a number of countries for territorial and economic zone recognition. The hydrocarbon resources in the Arctic alone are gigantic and, whatever one thinks about the impacts, we’re going to be part of that game.

I noticed you connected the growth of SMEs and entrepreneurial spirit to our increasingly diverse population.
Canada historically has not been an exceptionally entrepreneurial society. We were a colony to begin with, with a mercantilist economic dynamic where big decisions including business investments and government investments, particularly in natural resources, were made for us. The new Canadian population from about the 1970s onwards doesn’t have the same attachment to the territory, the networks and history of natural resources. [They’re more inclined] to use their professional talents, their particular cultural instincts and skill sets, which I’d argue has resulted in new types of companies in the service sector. That continues to be a growing share of the economic prosperity of Canada.

Do you think we’re taking full advantage of the talent we have in new Canadians?
It’s a credit to our society that we assimilate very well. Within a generation or less, everyone is a Canadian. That’s a great success. Toronto is certainly the safest big city in America. But without political or external pressure like war or crisis, we’re insulated from the world. Life is good. Is there a spirit to do great things? Canada’s obsession with our innovation deficit is a correct obsession but the diagnosis—lack of certain economic inputs, certain investments, certain institutions—is wrong. To me it’s a cultural problem that starts with our colonial past. We need to do better in the ideas world to grow companies of importance and scale.

Are there ways we can do better at unleashing the talent we have here?
Canada is an extremely inclusive society, particularly given our demographic diversity. We have great political instincts for inclusion. One school holds that those inclusion instincts have Aboriginal roots. But at the core of the Canadian political project is an accommodation between the English majority and the French minority. That type of bargain feeds into our social behaviour. There’s a majority, an Anglo-Saxon white English-speaking majority. I can say this because I’m a Russian-speaking Jewish guy. But it’s a very porous majority in terms of life prospects. That’s a great thing. What about racism and discrimination? Of course, they exist across the country, but it’s less than in most other societies. How do we unleash this talent? One way is through crisis—we don’t want that. The only other way is through leadership and example. It may only take 10 or 15 years of great political leadership to press the country in the right direction, to have a migration of mentality about what we’re capable of.

We’ve talked about new Canadians. What are some ways we can make Canada more inclusive of Aboriginal people?
Historically, the English-French bargain was a bargain of near equals. The English won the Seven Years’ War. In order to keep the losing French side part of the British North American project and not have them revolt, the British made the French an offer of protection. That manifests itself in our Constitution, our political behaviour and our social instincts. Leaving aside the referenda in Quebec, that’s evolved very successfully. English-speaking Canadians send their kids to French immersion and value French as a second language. The Aboriginal reality is different and complex. It’s the most important moral question for Canada this century. I’d suggest, leaving all the complexity aside, that the bargain that was made with French Canadians at Confederation needs to be struck with the hundreds of Aboriginal nations, a bargain that says that Aboriginals are co-equals in Canadian governance. The Aboriginals were defeated not in war but strategically: politically and through subterfuge, through the residential school system, economically and legally and, until recently, jurisprudentially. The project of the majority is to lift the defeated party into a position of co-equal status in Canada. If they’re co-equal, that changes the psychology of Aboriginal people and the psychology of the majority in respect to Aboriginal people. You might even go as far as to mainstream a lot of Aboriginal languages, many of which are dying, none of which are promoted. We’d send our kids to learn Ojibway along with Hindi and Mandarin, Cree alongside of Spanish and Russian. You can grow up in Toronto, particularly the 905 belt, and almost never touch on the Aboriginal fact, not knowing this is Aboriginal land, not knowing any Aboriginal people, even though multiculturalism is central.

I’ve been to Toronto events lately that often begin with an acknowledgement that this is Aboriginal land—gestures like that?
That’s a great start. But of course it’s highly superficial unless Canadians understand that we’re playing for keeps to fix this problem in Canadian society. It’s a century-long project.

Beyond 150: Collaboration for Change Special Feature

How Inclusion Can Fuel Canada’s Economic Transformation