Decline of the Downtown Elite?

Fortune favours those who recognize major shifts in society ahead of others and act on them. No wonder there is an army of pundits and prognosticators who promote their version of the next big thing. The stakes can be very high. In Canada, we have only to think of Blackberry underestimating the importance of consumer applications for smartphones, or Future Shop not adjusting quickly enough to online shopping for electronic appliances.

To the litany of famous “missed boats,” Darrell Bricker and John Ibbitson add the Liberal Party of Canada. The Big Shift: The Seismic Change in Canadian Politics, Business and Culture and What It Means for Our Future is a lively and highly readable account of how the May 2011 federal election marks a “fracture in time” that signals profound changes in the geography of political alliances due to demographic change. Because the Liberals failed to recognize the way in which these new alliances could be formed, the party suffered an ignominious defeat.

But that is only the beginning of this story. Bricker, a well-known pollster, and Ibbitson, of The Globe and Mail fame, believe the Liberals will face oblivion if they resist the big shift. Conversely, they think the Conservatives are well positioned to be the new natural governing party because the shift is fundamentally in the direction of conservative policies. Lest the big “L” liberal reader write off this volume as a triumphalist history of the future, I should clarify that the authors allow for an alternative scenario in which a progressive alliance (led more likely by the NDP than by the Liberals) might take power. On balance, however, the book does not see much prospect for a centre-left alliance being able to overwhelm the Conservatives in the foreseeable future, and the authors are fine with that.

Bricker and Ibbitson are just barely able to avoid gloating about the Liberals’ demise but they certainly do not hold back in their rebuke of the “Laurentians”—referring not to the mountain chain in Southern Quebec but rather to a group of people who are identified by this shorthand.

I confess to a feeling of inadequacy as I read the early chapters because I did not know who the Laurentians were. That the authors did not clearly define this group made me feel worse. Are they so well known that a definition was unnecessary, even condescending to the reader?

We are given occasional hints as to the identity of this group, including references to “professors,” “the media” and “elites … [who are] ensconced in their leafy downtown enclaves—Toronto’s Annex, Ottawa’s Glebe, Montreal’s Outremont.” My best effort at defining the Laurentians is that they are the people who refuse to recognize the big shift. In other words, the Laurentians are those who disagree with Bricker and Ibbitson. But who exactly are they? Every time I came across an example of Laurentianism, I found myself wondering if I knew anyone with that affliction (readers of the LRC should be squirming in their seats even if they have not been outed as such).

The authors do name names and I will leave the curious reader to find out who these people are by purchasing the book. That these folk have disagreements with the authors on particular points is obvious, but do they really have a common identity that is usefully summed up by the authors’ coinage?

Bricker and Ibbitson give a nod to the historic contributions of Laurentians, but one gets the distinct impression that “Laurentian” is basically a term of abuse and derision, like “luddite” or “fundamentalist.” Woe betide the person who believes

The good news is that the number of people in positions of real influence who hold the above views as sacrosanct is probably very small. While there are versions of the above that social democrats, liberals and conservatives can subscribe to, the totality of the Laurentian consensus as described by Bricker and Ibbitson is surely a caricature.

There is nothing wrong with the use of a straw man to elucidate an argument, but the undue emphasis on why the Laurentians are wrong detracts from what should have been the most interesting part of the book, which is advertised in the subtitle as “the seismic change in Canadian politics, business and culture and what it means for our future.”

There is certainly a lot on the implications for politics, but mostly in the narrow sense of electoral politics, that is the mathematics of winning coalitions and the political alliances to form such coalitions. There is rather less insight about how the new Canadian polity—driven in large part (according to the authors) by new Canadians from Asia—will affect the country’s economic future. Yes, they believe in balanced budgets and do not like crime, but what else? What will this newly powerful electorate mean for trade, investment, infrastructure development, the environment and productivity—the issues that will in fact determine our future?

Bricker and Ibbitson do well to remind us that the wave of immigration over the last decade—largely from India, China and other Asian countries—has changed Canada for the better. That the Conservatives have successfully connected with this population to create a winning electoral coalition is indeed a “big shift” in Canadian politics, and a testament to the party’s strategists.

Having voters of Asian ethnicity on the winning team, however, will not in itself reorient Canada to look west, much less turn “Ontario from a European, Atlantic province into an Asian, Pacific province.” To be sure, the large Asian Canadian population is an important marker of Canada’s ties across the Pacific, and I certainly hope Canada becomes more “Asian” in its orientation—but that will require a bigger shift than the one that Bricker and Ibbitson have described, and it will certainly require more than suburban and rural Ontario voters teaming up with westerners to win an election.

According to an Asia Pacific Foundation of Canada poll, only 13 percent of Canadians consider Canada as part of the Asia-Pacific region. Support for an Asia-Pacific identity is stronger in the West, but even in British Columbia the figure rises to only 33 percent. Canadians are five times as likely to see themselves as part of the Americas and nearly four times as likely to identify with the North Atlantic. If a big shift has taken place so that “a country that was once part of the Atlantic world is becoming part of the Pacific world,” most Canadians would not know it.

When asked to rate how they feel about different countries, Canadians place Asian countries far below western counterparts—a perception that does not alter significantly from west to east. China, for example, is rated warmly by only 12 percent of Canadians, and India not much better at 14 percent. These dismal numbers do not contradict the book’s assertion that the Asia Pacific is becoming more important for Canada, but it would be simplistic to assume that having citizens of Asian ethnicity will lead to a sea change in Canadian trade and foreign policy. There is a tendency in The Big Shift to a mystical hope in the future because of a winning electoral alliance that included immigrants from Asia. The reality is that deeper and more enduring ties with Asian countries will require some old-fashioned (Laurentian?) effort from governments, business and civil society: expanded diplomatic ties in the region, more emphasis on teaching about Asia and Asian languages in Canadian schools, investment by the private sector in Asia-relevant skills and leadership by the political class to challenge the many phobias that Canadians have about China and other Asian countries.

The book recounts the education of Prime Minister Stephen Harper on the importance of China for Canada, and his transformation from dragon slayer to panda hugger between 2006 and 2009. There is no question that the Canada-China relationship has strengthened dramatically in the last three years and that the Harper government is determined to build stronger ties with Asia through ministerial visits and trade agreements. But the reality is that Canada is catching up with the rest of the world in paying closer attention to China, and that the most difficult part of building stronger relations is just beginning.

The acquisition of Nexen by the Chinese National Offshore Oil Corporation is a case in point. What should have been a routine commercial transaction turned into a heated public debate about the merits of investment from a Chinese state-owned company. The deal was eventually approved, but it came with a clear statement of the Canadian government’s discomfort in dealing with state-owned enterprises.

The Big Shift is premised in large part on the economic power of Western Canada, as captured in this syllogism: “Throughout the West, robust growth is a constant. With growth comes wealth. And with wealth comes power.” Bricker and Ibbitson wax enthusiastic about the West’s “gift to Canada,” which is “to make it a country of the future, based on policies and principles that look to that future with confidence.”

In the light of recent austere provincial budgets in British Columbia and Alberta, westerners might be forgiven for being rather less sure about the golden age that is to come. Both economies are highly dependent on resource exports, which are subject to sharp price fluctuations and changing supply conditions. There is a dangerous complacency in this country about our superior performance compared to other G8 economies since the 2008 global recession. Much of our income growth has been due to terms of trade gains (higher prices for commodity exports relative to import prices) rather than productivity improvement. This will all end in tears if commodity prices take a sharp and sustained tumble. The reality is that western provinces are not much better than central Canada when it comes to productivity improvement. Indeed, the province with the lowest growth rate in labour productivity between 1996 and 2011 is none other than Alberta. To be fair, Alberta has the highest level of labour productivity in the country, but if you take out the oil and gas sector (which is very capital-intensive), labour productivity in the province falls below that of Ontario.

If anything, the foreseeable future suggests sharply lower U.S. demand for western oil and gas, which in turn means lower prices, smaller royalties and tighter budgets. The obvious solution is to find alternative markets, but the challenge of building an oil pipeline from Northern Alberta to the West Coast seems more difficult than ever. If you have any doubt about Alberta’s vulnerability, consider that the recent provincial budget projects a shortfall of nearly $20 billion in oil-related revenues over the next three years compared to estimates just a year ago, because of lower oil prices.

It would be reasonable to assume that with a western-dominated government in power in Ottawa, the chances of getting an oil pipeline to the Pacific Ocean are as good as they ever will be. Yet there is much skepticism about the pipeline coming to fruition even if the National Energy Board gives the go-ahead (as it surely will). As a result, many champions of diversified energy exports are calling on a greater level of leadership from the federal government, indeed for a pan-Canadian energy strategy that includes carbon pricing.

This sounds suspiciously like a Laurentian scheme except that it is cooked up by mostly Rocky Mountaineers (my coinage), including the Calgary-centred Energy Policy Institute of Canada. Premier Alison Redford has also called for a national energy strategy, and was able to persuade her fellow premiers to endorse the idea. To be sure, this is not a replay of the National Energy Policy, but the call is loud and clear for federal leadership on energy—beyond streamlined permitting and smart regulations—and it is coming from westerners.

Bricker and Ibbitson have skillfully turned what is a generally well-known story about the Conservative Party’s success in attracting “ethnic voters” to one that is about how the future direction of the country has been forever changed by the mobilization of those voters. The problem with this post facto interpretation is that immigrants are typically courted—by all parties—as vote banks rather than as Canadians with diverse views about the economy, the environment and society. It is not at all clear that politicians want the input of immigrants on the big policy issues of the day. I have attended too many dinners where politicians dressed in ethnic garb offer greetings in a language other than French and English, and proceed to make a speech about how important ethnic community X is to the country, with scant reference to issues that you would find in any mainstream newspaper. I think immigrants are catching on to this duplicity. The recent ethnic voter–targeting scandal in British Columbia is surprising only in that the B.C. Liberals were caught red-handed, but there is no doubt that many ethnic voters find the practice odious and will grow increasingly resistant to it.

One last quibble: for all their reliance on data to support the “conservatives rule” thesis, the authors are slippery in their appeal to history. According to Bricker and Ibbitson, “two-party, ideologically divided electorates choose conservative governments more often than progressive governments.” They cite the United States as an example, using the period from 1952 to 2012 as proof. But Democrats ruled the White House during the preceding 19 years (and will for the next four), which means the finding is very different depending on your period of reference. It is in any case dubious (and such a Laurentian conceit) to assume that Canada is a slave to American electoral patterns.

In political terms, it would be entirely correct to describe what happened in May 2011 as a “big shift,” but its effect in reorienting Canada to be more of an Asia-Pacific country was at best a “gentle nudge.” The really big shift has yet to come, and it will take more than a well-crafted electoral strategy to make that happen.