ISSUES

A distrust of government

Reliance on business grows stronger

CHRIS WOOD January 1 1990
ISSUES

A distrust of government

Reliance on business grows stronger

CHRIS WOOD January 1 1990

A distrust of government

ISSUES

Reliance on business grows stronger

It stopped short of alarm. Nor were most of the Canadians surveyed for the annual Maclean’s/Decima poll dissatisfied with their economic position after seven years of the longest-running economic boom since the Second World War. Still, there was an unmistakable unease across the nation. Even as memories of the painful recession of 1981 and 1982 continued to fade, a clear majority of those polled predicted that Canada would again be tipped into an economic downturn in the opening months of the new decade. And, despite the optimism that most expressed about their personal economic outlook, the numbers of those who were pessimistic were higher than at any time since 1985. Observed Decima’s chairman, Allan Gregg: “Economic anxiety is growing.”

So, unexpectedly, is the evidence that Canadians are setting aside what historians and political scientists have regarded for decades as a deeply rooted national characteristic: their

reliance on government to protect the livelihoods of ordinary citizens. An earlier indication of that perception emerged last July, when Maclean ’s reported that Canadians responding to an earlier Decima poll actually expressed more distrust of government than did Americans. Now, that trend has emerged even more clearly.

Decima’s researchers asked Canadians whom they depended on most “to look after your best economic interests: government, business or unions?” Fifty per cent of those polled replied “business.” Only 25 per cent answered “government.” Another 15 per cent said “unions,” and 10 per cent expressed no opinion. That outcome almost reversed the findings of a similar question that the Maclean ’s/Decima

poll asked five years ago, when 49 per cent of respondents put their trust in government— compared with 32 per cent who placed their confidence in business.

And the result left some experts groping to reassess their traditional analysis of Canada’s political culture. “The size of the swing puzzles me,” acknowledged John Wilson, a political scientist at the University of Waterloo in Ontario and director of the Centre for Election Studies in that city. He added, “We do not have a free-enterprise, look-after-yourself—in a word, 'American'—view of ourselves up here.” But other observers traced the apparent change to causes that ranged from the sweeping rejection of socialism in Eastern Europe to Finance Minister Michael Wilson’s frequently repeated assertion that Canada’s large federal budget deficit constrains Ottawa’s scope for intervening in the economy. And Decima’s Gregg remarked that Canadians are far from giving business a blank cheque to

Opinions on the Canada-U.S. Free Trade Agreement, before the fact and, in 1989, under the FTA:

direct their lives. Said Gregg: “Rather than people being enamored of business, it is people being really disillusioned with government.”

In fact, Gregg said that Canadians see little to distinguish between the actions of government and the interests of industry. “Unfettered free enterprise has caused social dislocations that have people very scared,” he said. At the same time, he said that the business sector has failed to respond positively to the public’s new confidence in its economic leadership. Said Gregg: “The private sector has not taken this mandate of public confidence and acted responsibly. If anything, they have acted irresponsibly.”

That conclusion may give the country’s political leaders cause for reflection. So will some other priorities of the electorate revealed by the Maclean ’s/Decima survey. For one thing, Canadians who were asked to identify the most important issue facing the country were more likely to name the environment than any other issue. Eighteen per cent cited it as the leading issue now, compared with only two per cent in 1987; 29 per cent predicted that it would dominate the 1990s.

The second most-cited issue: the federal government’s proposed new Goods and Services Tax, named by 15 per cent as the top issue. Prime Minister Brian Mulroney has already acknowledged that the GST is “very unpopular.” Until recently, the Conservative government had been confident about its ability to take control of environmental problems. But this month, federal officials conceded that a sweeping new environmental law, promised by year’s end, would not be ready until March.

On the bright side for the Tories, only a handful of respondents (seven per cent) named free trade as the nation’s most important issue, compared with 42 per cent in 1988. On the other hand, when asked to judge whether the year-old agreement has, on balance, created or cost jobs in Canada, most respondents said that free trade has destroyed more jobs than it has produced.

Other responses offered revealing insights into the different moods of Canadians in the various regions across the country—and into the attitudes of differing age, income, religion and education groups. Quebec respondents, for one thing, were less pessimistic than their Ontario neighbors about the likelihood of a recession; British Columbians were the most seized by the importance of the environment; and respondents in Atlantic Canada and Ontario considered the GST to be a bigger issue than pollution. National unity was considered to be the country’s most pressing challenge only

among those 65 and over; among those aged under 25, the subject was hardly mentioned.

But the most striking finding remains the dramatic rejection of government, among those polled, as the best protector of their economic well-being. That attitude was evident in every part of Canada: in none of the country’s five regions did more respondents say that they trusted government to look out for their interests than business. Observed Donna Campbell, for one, a Red Deer, Alta., housewife whose husband is president of a company that supplies parts to the oil industry: “I am increasingly cynical about government and any ability it has to make people’s lives

What is the most important issue facing Canada today? And in the 1990s? ISSUES 1985 1986 1987 1988 1989 1990s ENVIRONMENT GST INFLATION/ECONOMY DEFICIT/GOVERNMENT NATIONAL UNITY FREE TRADE ABORTION EMPLOYMENT 'not cited by a significant number of poll respondents

better.” Quebec respondents were most likely to trust business (60 per cent, compared with the national average of 50 per cent) and least likely to trust unions (11 per cent, compared with the national average of 15 per cent). And those polled in Atlantic Canada voiced the greatest faith in government (34 per cent, compared with the national figure of 25 per cent—and compared with the 38 per cent in that region who placed their trust in business).

Only in British Columbia did the number of people who said that they turned to unions to look after their interests (22 per cent) approach the number of those looking to government (23 per cent). The number of British Columbians

looking to business (42 per cent) was the second smallest of any region—compared with 38 per cent in Atlantic Canada. Observed Henry Odegaard, 49, a heating engineer at the Prince George Regional Hospital in central British Columbia and a member of the provincial Hospital Employees Union: “Most companies pay their workers as little as possible. And in British Columbia, the government is not neutral, it’s antiworker. Without unions, we would not have our present standard of living.”

At the same time, it was clear that among some groups in every province, reliance on government remains strong. Respondents whose household incomes were below $10,000 a year and those with only an elementaryschool education were more likely to trust government than business to look after their interests. So, too, were respondents approaching retirement, between the ages of 55 and 64. By contrast, the reliance on business to look after economic interests was greatest among those 25 to 29 years old. And, in general, people’s confidence in business increased with education and income.

g For his part, Thomas d’Aquino, president of ¡¿i the Ottawa-based Business Council on National I Issues—which represents the chief executive s officers of 150 large Canadian corporations— § said that he welcomed the apparent shift of 1 focus of Canadians’ economic aspirations from “ the public to the private sector. And he offered a handful of possible reasons for the change. “I think what’s happening is part of a global trend,” d’Aquino told Maclean’s, drawing attention to the fact that, in such diverse countries as Poland and Australia, Socialist governments have embraced market-driven economic principles.

In addition, he noted, Canadians emerged in 1982 from a sharp recession that underscored the weaknesses of such interventionist economic policies as the National Energy Program. Since then, declared d’Aquino, “Canada has had in the last seven years the highest growth record in the industrial world, with the exception of Japan. At the same time, we are being told that Canada is moving—faster in rhetoric than fact—to a market economy.”

Many Canadians, d’Aquino added, have concluded from that experience that business is a more reliable architect of prosperity than is government.

But Havi Echenberg, executive director of the 1,180-member Ottawabased National Anti-Poverty Organization, said that the new confidence in business may have a more insidious basis. She added: “I find those results personally depressing. It doesn’t surprise me that people trust government less. The fact is, this is not a government that has said, ‘We will look after your economic interests.’ This government has abdicated its responsibility in the economic realm. It has said, ‘Don’t rely on us.’ And we haven’t.”

In fact, Gregg said that other re-

search conducted by Decima indicates that Canadians have indeed abandoned their traditional confidence in governments to spark economic activity and protect livelihoods—a pattern that gave the country such symbols of public enterprise as the Canadian National Railway as well as such enduring economic white elephants as the perennially money-losing Sydney Steel Corp. Noted Gregg: “People have never had less faith in government than they do now.” Despite that, he said that he doubts Canadians have embraced the bottom-line priorities of the marketplace wholeheartedly. Declared Gregg: “People are saying,

‘Look at the economic dislocations that the market is causing.’ ”

As a result, he said that Canadians would in the future demand that governments act more forcefully to rein in the excesses of the marketplace— notably in such areas as the environment, employment benefits and consumer protection. Canadians, he said, are saying to government, “We don’t want you to run the railroad, but we sure want you to set the rules and guarantee public safety.” In that regard, Red Deer’s Campbell declared:

“There has to be a system of checks and balances. The nature of business is to make money, and you can’t expect a corporation to have a conscience. Government must step in to set guidelines for environmental and social standards.”

But, for the present, most Canadians say that they are “satisfied” or “very satisfied” with their economic situation. On average, 73

per cent of respondents— and more than two-thirds in every region—were content with their situation; 26 per cent said that they were not content. Tempering that positive balance, however, was the fact that the number of discontented respondents has risen from 16 per cent one year ago and now is at a level not seen since 1986. Half of the respondents from households earning incomes of $10,000 to $14,999 and fully 55 per cent of those with household incomes below $10,000 described themselves as content with their situation. And among those

poll respondents whose household incomes were above $45,000, 87 per cent of respondents declared that they were satisfied or very satisfied.

Meanwhile, 77 per cent of married respondents said that their economic situation was satisfactory, but among common-law respondents that figure fell to 57 per cent. Stephen Johnson, 33, a courier driver in Vancouver who

lives with bicycle-courier Kirstin Vandenberg, 20, and reported a household income of between $35,000 and $40,000 a year, offered one theory about that divergence. Said Johnson: “I think married people might have more of a ‘We’re a team, we’re in this together’

ECONOMIC SATISFACTION Are you satisfied with your present economic situation? 1985 1986 1987 1988 1989 SATISFIED 73 74 78 83 73 DISSATISFIED 27 26 21 16 26 What about your future economic prospects? OPTIMISTIC 79 84 85 86 80 PESSIMISTIC 19 16 15 13 19

feeling. Common-law couples always have that idea of independence in the back of their minds. It makes you a little bit restless. Then you want that extra financial security, just in case.” Further evidence of Canadians’ mounting state of financial jitters appeared when respondents were asked to rate their future economic prospects. Although 80 per cent of those polled described their outlook as “optimistic” or

“very optimistic,” that figure was low er than in any year since 1985. Students were the most optimistic; respondents who had only some highschool education were least.

And the generally positive assessment of personal prospects was at variance with the widely gloomy forecasts that the respondents offered for the economy at large. No fewer than 58 per cent of those polled predicted that the economy was heading into a “mild” or “severe” recession. By contrast, only 17 per cent predicted economic improvement. Regionally, the pessimism was greatest in Ontario, where 64 per cent of those polled forecast a recession. The country’s least pessimistic region was Quebec: only 52 per cent of Quebecers said that they saw a downturn coming, and respondents from that province were ^ almost twice as likely as those in E Ontario to forecast an economic img provement. One reason for the difference between the neighboring prov1 inces, said Jacques Garon, director of I research for the Montreal-based Conseil de patronat du Québec (Quebec Employers Council), may be that, while Ontario’s booming economy has pushed up many living costs, notably housing prices, “In Quebec, things are more stable.”

But among economists, there was a growing consensus that the pessimistic outlook expressed by most of the Canadians polled may prove to be prescient. In Ottawa, Michael McCracken, president of the private economic forecasting company Informetrica Ltd., said

that his company is predicting, at best, one-per-cent economic growth in Canada in 1990. But McCracken acknowledged that any one of several factors—including a slowdown in the U.S. economy, a federal tax increase and business and consumer uncertainty over the effects of the GST and other policies— could lower that figure to below zero. If that economic contraction continued for more than two quarters, it would constitute a recession. Declared McCracken: “I could see us slipping into a recession that would be much more prolonged and deeper

than the conventional wisdom forecasts.”

For his part, Gilles Rhéaume, director of forecasting for the Ottawa-based Conference Board of Canada—a nonprofit independent economic research agency—echoed McCracken’s assessment that the weak growth, forecast for 1990, could slip easily into a recession. If that happened, Rhéaume added, many Canadians who have seen their real disposable

incomes rise by three to five per cent a year since 1983 can expect to see their prosperity decline during the next 12 months. Indeed, Rhéaume added, “If [Finance Minister Michael]

Wilson comes out with a further tax increase in 1990, that is going to erode disposable income even further.”

At the same time, the issues that preoccupy Canadians as they enter the century’s final decade are likely to present challenges for both business and government. The environment was named as the most important issue facing the country by the largest single group of those surveyed—18 per cent. The GST was next, named by 15 per cent. The concern about the environment was in stark contrast to the past two years, when free trade dominated Canadians’ view of the national agenda, while the environment was cited by two per cent and 10 per cent of respondents in 1987 and 1988 respectively. This year, every age group up to 55 shared the heightened concern for the environment, but

young respondents expressed their interest most emphatically. One of them, Bruce Robertson, 22, a Vancouver graduate student in classics at the University of British Columbia, told Maclean’s in a follow-up interview: “We have so much information about the ozone layer, the greenhouse effect and the amount of garbage we produce. And our actions in Canada can be detrimental to the whole world. By our use of fossil fuels, for example, we create trouble for everyone.”

The emerging national preoccupation with the environment, as detected in the poll, may encourage groups that are pressing for a more active government response to pollution. Declared David Bruer, spokesman for Torontobased Pollution Probe, an environmental advocacy group: “Politicians are going to have to stop paying lip service to the environment and outline in much more detail what they mean by statements like ‘Let’s do something.’ People are finally saying, ‘Put your money where your mouth is.’ ”

But Ottawa’s McCracken noted that the cleanup may demand more money than even environmentally aware taxpayers are prepared to pay. When Informetrica researchers began to estimate the cost of cleaning up Canada’s air and water, he told Maclean’s, they quickly reached the staggering sum of $50 billion.

Only one issue challenged the environment for top ranking among those polled: nationally,

15 per cent cited Ottawa’s contentious GST as the country’s most pressing issue. The proposed federal tax on most goods and services was cited most often by those in Ontario, the Prairies and Atlantic Canada. One reason for that, said Gregg: “We have seen a huge jump in the perception that, when the government ^ acts, it is for the private sector’s benefit.” As a Z result, he added, many Canadians are suspi1

cious of the new tax without fully understanding its workings. The challenge for the Tories, Gregg concluded, is to change the impression that they act principally in the interest of business. Said Gregg: “If they can shift from saying ‘We know best how to get along with business’ to saying ‘We can best convince or force business to be socially responsible,’ then they can maintain their dominance.”

And there was a further challenge to the Conservative government contained in Canadi-

Which of these sectors best looks after your economic interests?

ans’ judgment of the one-year-old Free Trade Agreement. Since Maclean’s asked Canadians about the trade pact a year ago, many appear to have soured on it. In the current poll, 52 per cent of respondents judged free trade a “bad” or even “very bad” idea, compared with 32 per cent following the 1988 federal election. The number of those who said that they support the pact dropped in the same period to 43 per cent from 57. In fact, 55 per cent said this year that the FTA has resulted in a loss of jobs, compared with only 30 per cent who predicted a loss of employment last year.

Free trade, however, appears to rank low among the concerns of Canadians: only seven per cent of respondents said that it is the country’s most pressing issue. The same number cited the Meech Lake constitutional accord and national unity. Most of those in the final category, moreover, were among older Canadians—only two per cent of those under 25 identified unity as a leading issue. That concerned Edmonton publisher Mel Hurtig, a veteran advocate of a more assertive Canadian nationalism. Added Hurtig: “There is an abdication of participation by the young in the future of our country. They may be taking for granted something that they are in danger of losing, without even realizing it.”

But among a majority of Canadians, clearly, the millennium is approaching on a note of satisfaction, tempered with a degree of apprehension. Whatever uncertainties surround the economy and the environment, Canadians appear optimistic that, individually if not always collectively, they will prosper in the future.

CHRIS WOOD

BRIAN BETHUNE

in Toronto