Ottawa has been widely criticized for a sluggish response to the events of Sept. 11. While the recent bill on terrorism sparked positive reviews, the rush and admitted lack of preparedness surrounding it is worrying. Many reasons can be cited for this sluggishness, but key among them is that for too long Ottawa has neglected the core functions of what a national government ought to do.
Before Sept. 11, the most important cabinet posts in Ottawa were thought to be Finance, Health, Industry and Human Resources Development and, perhaps, Foreign Affairs. This is where the major contenders for leadership of the Liberal party were found, though Foreign Affairs has in the past been viewed as a political capstone rather than a stepping stone.
After Sept. 11, the ranking shifted — Health, Industry and Human Resources were bumped by Defence, Justice, Solicitor General and Immigration. The spotlight on these core national functions reveals that they have been suffering what might at best be called benign neglect.
It is no secret Canada long has been a target and a base for actual and suspected terrorists. CSIS briefings have become ever more clear, and specific, on the risks Canada faces — 350 individuals and 50 organizations have been on their target list. If these warnings are not enough, as early as 1999 the infamous Ahmed Ressam case laid bare Canada’s national security vulnerabilities. And benign neglect is too friendly a term to describe the treatment of our military over the past few decades.
This lack of focus is analogous to the situation large, private-sector firms find themselves in when they stray outside their core competencies to get in on the next big thing. When senior management’s attention is diverted, too often core competencies — often the source of revenue needed to pursue the next big thing — suffer a similar neglect, and profits suffer.
Such firms can return to profitability by using a number of different strategies. One is to split the company into core units, each with its own autonomous management team, as Canadian Pacific has recently done. Other firms opt for a higher risk strategy of shifting their core competency to the new product or service line. A third, and more common strategy is to return to basics. Moore Corp. is a recent example of a company returning to its core competencies.
Ottawa could pursue a version of the first strategy by shuffling its key cabinet ministers into its core areas. Defence would be a stepping stone portfolio like health, rather than the tombstone portfolio it has unfortunately become. Having a key minister at the helm matters, as the current Minister of Foreign Affairs has demonstrated in recent weeks. But the federal government is ultimately ruled by a single Prime Minister from a single party. It is easy to envision Ottawa straying, as it has in the past, in the face of political or public pressure. Benign neglect of national security is too easy when Canadians have health care on their minds.
Shifting entirely out of national security is not tenable, as there is no replacement for our federal government in these matters, and relying more than we already do on the United States would compromise our identity as a nation.
Ottawa should therefore go back to basics. This means scaling down or eliminating its presence in non-core areas. The easiest big-ticket areas would include health care, post-secondary education, welfare and labour market programs — all provincial areas of responsibility where provinces do most of the heavy lifting. Other possibilities are unemployment insurance and the child tax benefit.
On health, post-secondary education and welfare, Ottawa should eliminate transfers to the provinces, and allow provinces to raise their own taxes to fund these programs. Equalization would ensure adequate revenue for all provinces. Ottawa should also fulfill the obligation it made in 1995 to get out of labour market programs — including the 40% of unemployment insurance spending that is not insurance against unemployment. Devolving unemployment insurance and the child tax benefit programs to the provinces would require a bit more spadework. Giving unemployment insurance to the provinces might require a constitutional amendment. But devolution of the program holds out the potential of removing its regional inequities — and unemployment insurance cash flows have provided an excuse to Ottawa to worsen these inequities. Provincializing the program would also allow provinces to better align their unemployment insurance and labour market programs. As for the child tax benefit, it is better thought of as Ottawa’s contribution to provincial welfare schemes — with the attendant overlap. Besides, many provinces have their own child tax credits. Provincial child benefits that are integrated with provincial welfare programs makes sense.
A back-to-basics approach would give national security the attention it deserves — both at this time of heightened concern, and in the future. If Finance, Foreign Affairs, Defence, Justice, Solicitor General and Immigration had been properly treated as the core competencies of our federal government before Sept. 11, it is hard to imagine our response would have been so sluggish. After all, there would probably have been leadership ambitions on the line.