Morneau advisers urge sweeping changes to cope with looming tech disruption

Following its earlier report urging an increase of immigration levels to 450,000 per year, the Barton Commission suddenly recognizes technological disruption and its impact on the labour force – [Canada] “can no longer rely on the old formula for economic growth, which emphasized investments in machinery and equipment, and population growth.”

Ironic, to say the least.

The earlier recommendation of increased immigration would have benefited from analysis of the possible impact of technological disruption. Perhaps a revised immigration recommendation is needed?:

Canada is ill-prepared for the effects of widespread technological disruption reshaping the global economy, Finance Minister Bill Morneau’s expert panel of economic advisers are warning in a set of reports scheduled for release this week.

To prevent the country’s economic growth from falling behind that of other nations, the group is recommending a modernization of Canada’s tax and regulatory systems to make them more innovation-friendly.

In addition, it is calling for a $15-billion spending surge to retrain workers so their skills are up to speed in a rapidly shifting labour market.

The recommendations are contained in advance drafts of the latest reports from the 14-member group, formally known as the Advisory Council on Economic Growth, obtained by The Globe and Mail.

“The latest wave of recommendations is geared towards preparing our economy … to capture the opportunities and handle the disruption coming over the next decade,” said council chair Dominic Barton, global managing director of consultancy McKinsey & Co. Mr. Barton was one of several council members who spoke with The Globe about their third set of recommendations to government since the council’s formation in March, 2016.

“The world is going through a period of unprecedented change, which offers many opportunities but also brings significant volatility,” the council writes in one of the documents, received by Mr. Morneau earlier this month. “Canada must be prepared to navigate this change and volatility. It can no longer rely on the old formula for economic growth, which emphasized investments in machinery and equipment, and population growth.”

The new reports come as Mr. Morneau crafts his third budget, for release in early 2018. They likely provide a sense of policy themes under consideration given the government’s close co-operation with the council and quick action on several of its past calls. Proposals that have been adopted include the launch of an infrastructure bank, the creation of a federal entity to promote foreign investment into Canada, and changes to boost immigration levels and hasten the process for high-skilled foreigners to move here. A spokesperson for Mr. Morneau said the minister has had good discussions with the council and will carefully review its suggestions as he prepares the budget.

…The new reports focus on preparing Canadians for an economy rapidly shifting away from the production and sale of physical goods to the commercialization of digital services and intellectual property. That is being accompanied by changes in how work is done, and by whom – or by what. According to a recent McKinsey study, 45 per cent of activities performed by humans could be automated using existing technology. “Already, robots can build your car, take your lunch order, review your legal case history, sell you insurance or examine your X-rays,” reads one council report. The council says at least 10 per cent of the Canadian work force – about two million people – face job losses by 2030 and will struggle to find new jobs “unless they acquire new formal qualifications.”

The council acknowledges that federal and provincial governments are aware of the challenges and do fund training programs. Ottawa promised significant changes in the previous budget to existing agreements to transfer job-training funds to provinces and territories plus an additional $2.7-billion in related spending over six years. Federal Employment Minister Patty Hajdu said in an interview that negotiations to revise the transfers are going well and results could be announced in early 2018. The government previously responded to an earlier growth-council recommendation by setting up a new organization to study and report on Canada’s skills needs.

But council member Ilse Treurnicht, former CEO of Toronto’s MaRS Discovery District said, “much more needs to be done given the wave that’s headed our way. It will take an all-hands effort.” She added that other countries are experimenting with retraining efforts, but “it is still early in the process.”

The growth council calls for a “jolt to the system” with the creation of a “third pillar” alongside the education system and regimes for funding retirement and unemployment insurance. “The focus has to be about providing skills upgrading capabilities and opportunities for people who are in the labor market,” said council member Michael Sabia, CEO of the Caisse de dépôt et placement du Québec.

At the heart of the council’s proposed $15 billion-per-year skills funding boost would be a new $2.5-billion-per-year government fund for training employed adults. The $15-billion amount would be jointly funded by government, industry and individuals. Mr. Sabia said it was “premature” to say how costs would be split. The council also calls for the government’s employment centres to be transformed to provide not only help for the unemployed but also career and training guidance for working adults and employers. “What we’re really saying is … the country has to get on with the discussion that’s required about how are we are going to deal with this issue,” he said.

via Morneau advisers urge sweeping changes to cope with looming tech disruption – The Globe and Mail

About Andrew
Andrew blogs and tweets public policy issues, particularly the relationship between the political and bureaucratic levels, citizenship and multiculturalism. His latest book, Policy Arrogance or Innocent Bias, recounts his experience as a senior public servant in this area.

2 Responses to Morneau advisers urge sweeping changes to cope with looming tech disruption

  1. gjreid says:

    Andrew, I think you have- as in the past – pointed out a central contradiction in all this. Hypothesis One: Robotics and Artificial Intelligence imply a need for less people; and, on the other hand, the same group that recognizes the truth of Hypothesis One, recommends, strongly, importing more people. And this is to ignore the ecological, cultural, and political stresses which rapid increases in population – particularly rapid increases in heterogeneous populations – bring with them.

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