The Opening Policy Window
Happy Friday! Today, I discuss how the window for bold policy is currently wider than it has been in years and share some different pieces that begin to question some policy shibboleths and that pitch new ideas and directions for Canadian policy.
Photo by Ian Taylor on Unsplash
The nature of policy work is often incremental, and the opportunities for bold reimaginings don’t happen often. Making big changes in direction requires a confluence of factors. This is something John Kingdon identified through work on the Multiple Streams Approach. You not only need to have a well-understood problem, but you also need to have identified solutions and the political will to be forthcoming at the right time. Having all three is rare and contributes to what I wrote about last month on Canada’s policy paradox.
Yet, right now, the window for change seems to be opening. The threat to Canada’s sovereignty is the precipitating factor. Trump’s overturning of the law and norms of conduct, as well as his blatant threats and manipulation, have completely altered the geopolitical and economic reality that Canada has taken for granted for decades. The need to respond to this moment is pressing.
That is recasting old problems, such as Canada’s productivity and innovation challenges, into a new light. As a result, thinkers and policy entrepreneurs are pitching different ideas to respond — some of which represent major breaks with past Canadian policy.
What remains to be seen is whether there is the political will for real change. We obviously have a new Prime Minister and a partial turnover of ministers and staff. That kind of churn in decision-makers creates some space for new ideas. However, many key people remain the same, and the crucial question is whether existing paradigms, habits, and methods of doing business are going to prevail over a recognition of how much the ground is shifting beneath us.
For those of us in the wider policy community, I think it is essential for us to emphasize in different forums and networks that this is a moment of turmoil, threat, and opportunity.
I’ve made the case many times before that we need to be better at both articulating a bolder vision for the future and articulating in more detail how to realize that. That was the case even before Trump’s election, given that we faced a range of intertwined and vicious challenges. The change from the United States as a dependable ally to the United States as a real threat and potential enemy only brings that into starker relief.
We are seeing more and more work proposing new approaches to these challenges. That needs to continue. We need new thinking. What got us here won’t get us there.
But we also now need to do the work to coalesce that new thinking into a coherent agenda capable of influencing policy change and creating the political will to get it done.
That is the next big challenge.
Reading Recommendations
Time for CARPA? In this piece, Alex Usher, a long-time critic of the idea of a Canadian DARPA-like body, revisits the logic for one in our current circumstances. In the past, he had been in the camp that argued that an advanced research agency would not have an economy-wide productivity impact and that we needed different types of institutions to address our issues, which the ill-fated Canadian Innovation Corporation was meant to solve.
But, as Usher argues:
one big thing has changed in the meantime; namely, that Cheeto Jesus, the malignant narcissist, is once again President of the United States, and he seems to be homing in on the idea that Canada should play Zelensky to his Putin. And what that means is suddenly Canada is going to be in the market for a whole lot of new and non-American defence equipment.
This changes the calculation for a CARPA. I was of the view, too, that the lack of major procurement from the Canadian military and government would mean that innovation developed through it would end up, like so much else, getting commercialized by foreign firms. But if we are looking to stop buying American and quickly start looking for Canadian defence innovation, then this logic is upended. Usher acknowledges, and I agree, that there is still no guarantee a CARPA will be a success and that we lack other aspects of what makes DARPA as successful as it is. But still, the need to question old assumptions and revisit them in light of new developments is clear.
And if you think that Usher is exaggerating Trump’s desire to play Putin, this post from the Globe and Mail’s Senior International Correspondent is worth reading:
Do note, too, that Trump said that while sitting next to the Secretary General of NATO, who was not as vocal in Canada’s defence as you would want in the circumstances.
How to have a (trade)wartime effort — Armine Yalnizyan, on a CBC podcast, discussed what is needed to put Canada on what is essentially a wartime footing, including through new versions of Victory Bonds to raise the revenue to reorient our economy to deal with the fallout of tariffs. Yalnizyan made the case that we urgently need to redesign EI to make it recession-ready and protect workers from the fallout that is coming. She also brought a dose of reality as well to how realistic reducing interprovincial trade barriers and trade diversification will be to make up losses from US trade.
Yalnizyan also made a call for guardrails on investment to protect the Canadian economy from US takeover - something the government has actually moved on. On March 5th, then Innovation, Science and Industry Minister François-Philippe Champagne announced amendments to the Guidelines on the National Security Review of Investments, effective immediately, that allow the government to consider “the potential of the investment to undermine Canada’s economic security.” Given events, the government felt that Canadian businesses were potentially “susceptible to opportunistic or predatory investment behaviour by non-Canadians” and the new guidelines will help guard against that. The concept of using the Investment Canada Act to block US takeovers of Canadian businesses on national security grounds would have been unthinkable only a few months ago.
No more Mr. Nice Canada. Time for us to break global trade rules, too — This piece by Mark Lawson questions the value of Canada continuing to obey WTO rules in our current moment of crisis. He argues that:
In today’s context, federal and provincial governments should insist that their officials deliver policy options that mirror Ontario’s past efforts, ignoring WTO rules. The intent in this case would be to create the conditions in which Canadian companies and their employees can survive this period of trade disruption.
These could include measures such as time-limited investment tax credits aimed solely at Canadian-headquartered companies to target and encourage investment, resisting Canadian content requirements, and barring Chinese and American companies from applying. On the consumer side, Lawson suggests incentives or tax credits to buy Canadian in the sectors most heavily impacted by US tariffs.
Cory Doctorow has made a similar case for stopping upholding US tech companies' IP. He has argued, “What’s standing in the way of a Canadian industrial policy that focuses on raiding the sky-high margins of American monopolists with third-party add-ons, mods, and jailbreaks?”
Canada should tear up [IP] laws—and not impose tariffs on American goods. That way, Canadians can still buy cheap American goods, and then they can save billions of dollars every year on the consumables, parts, software, and service for those goods.
This is hurting American big business where it hurts—in the ongoing rents it extracts from Canadians through IP laws like Bill C-11 (the law that bans jailbreaking). Canada could become a global high-tech export powerhouse, selling “complementary” goods that disenshittify all the worst practices of U.S. tech monopolists, from car parts to insulin pumps.
Taking these steps would be a major departure from past policies. Abandoning, even partially, the rules-based trading system potentially opens the door to a might-make-right world of trade. But then, that is what we’re seeing already.
If we follow rules that our chief opponent and threat ignores at will we essentially end up fighting with one hand behind our back. That leaves the door open for more harm than just ignoring the rules.
The Opportunity Cost of Policy Fragmentation — In this piece, Kyle Briggs looks at whether Canada is well-positioned to reverse the brain drain and get real value from attracting American scientists here. The short of it is no, with disconnects at various levels, from funding of research through lack of procurement of technology to universities already in crisis. For Kyle:
This should be a wakeup call, a clear signal that our inability to achieve alignment across the innovation pipeline comes at enormous cost, both in the form of direct lost technological opportunities and in the form of missed opportunities like this one.
As I have been making the case today about how policy windows are opening, Kyle believes that “there has never been a better time to push for this sort of quick alignment” and that we need to “Use this momentum to push for the change that needs to happen, so that we can capitalize on the opportunities before us.”
Whether it aligning the mission and mandate of universities and research to be able to realize opportunities, going back to first principles on ideas previously discarded, such as CARPA, introducing Victory Bonds to fund the realignment of our economy, or ripping up trade rules, the policy debate is going in new directions. We need these kinds of ideas and even more. And then we need to make sure we don’t revert to a managerial response that misreads the moment. The window may be opening but now we need to actually climb through it.
