Parliament's opportunity to rebuild a strong Canadian economy: Don Pittis

Sorry, folks. Nice as it soundedas an election promise, even a multi-billion-dollar infrastructure spending planis like a snowball tossed into Lake Superior compared to what Canada has lost because of the70 per cent plunge in the price of exported oil.

There are many ways ofcalculatingthat loss, but as Bank of Canada governor Stephen Poloz mentioned last week,one way of measuring it is by the fact that everyCanadianhas"less spending power" because of the falling loonie. And that has led to sharp inflation in the price of imported goods, including a year-on-year increase of 3.7per centin the cost of food.

As Parliament gets back to work,ithas a one-time chance to rebuild the non-resourceeconomy from the devastation caused byan overpriced Canadian dollar. Infrastructure spending is only a single weapon in its arsenal.

• Inflation in Canada ticks up to 1.6% in December on higher food prices
• Stephen Poloz says Canadians pay the price for low oil as loonie tumbles

According to most economists, there is nothing wrong with government investment in infrastructure as a strategy for making the economy stronger. It createsfiscal stimulus, effectively borrowing from the future to make the economy stronger now.

Borrow and spend

Many economistssay that with government interest rates so low, Canada can afford to borrow a bit more.

Those who havelived through a period of reckless overspending by Liberal (and Conservative) governments that had to be reined in with cuts anddownloading onto other levels of governmentmaywant to listen with at least one eartothe warnings of fiscal conservatives.

• Economy needs bigger deficit spending, David Rosenberg advises Ottawa
• 2-year plan to focus on repairs to crumbling infrastructure, minister says

Even fiscal conservatives often see value inmoderate infrastructure investment. Wisely spent, infrastructure canact as a catalyst, straightening kinks and widening bottlenecks, stimulating more economic benefit than justfiscal expansion.

But a vigorous new government must also use new thinking to create othertypes of catalysts torebuild the economy without bankruptingour children. Here are a few suggestions to get them going.

Drones and worker bees

The first is to reinvigorate the public service. Battered and demoralized by an ideology that saw public servants as useless drones feeding off the worker bees of the private sector, Canada's civil service elite needs to be returned to its former greatness, recognized assmart people whose primary interest is the welfare of Canada and Canadians.

A strong pluralistic democracy requires avigorous civil service, respected andhired on merit from among the brightest young people in the country, led by a wise and tested big-thinking reformer. Hello, Central Casting? Get me someone like Mark Carney.

The new government must use and celebrate the private sectorbut not necessarily trust it to be in charge. The former government proved that giving business toomuch of what it wants does not guarantee a good outcome, as the recent commodities crash shows. A strong Canada cannot be in thrall to the interests of multinationals, which are not always the same as our interests.

The new government must realizethatuniversally low taxes are not a panacea. Lowering taxes has a temporary effect similar to government stimulus as businesses and people spend the windfall. Despite loud complaining frombusiness and the wealthy,tax money sentabroad,used to bid up unproductive assets or for stock buybackswould be better spent to grow the economy and make a better Canada.

The government must use and celebrate the power of organized labour but not assume it always acts in the public interest. Until the mid-1970s,strong unions backed by government legislationhelped to prevent wage inequality. But unions are often more interested in the welfare of their existing members rather than the good of the entire country.

Reject the Luddites

Using legislation to encourage unionization in sectors where people are not paid a living wagecould benefit all of Canada. If fast food workers cannot afford to support their families, it is merely asign we need fewer and better-paid fast food workers. Businesses who complain should be sent to observe the industrial success of countries like Germany.

One group that should not be listened to are those who follow the Luddite objections to robotics and labour-saving innovation. China is already supplementing its enormous workforce with robots.Every effort should be made by the government to encourage companies willing to invest in plant and labour-saving machinery. There is no way we can compete in a global economy with cheap labour.

The new government must celebrate science. Whether techniques for fighting climate change or efficient ways to extract energy from the oilsands, Canada must be seen as a country on the same side as scientists, even if the government cannot promise bottomless funding.One proven way to encourage science and innovation at relatively low cost is to offer prizes for targetedgoals.

Parliamentarians must also celebrate Canadian arts and culture in all its diversity. Culture makes us rich, figuratively and literally.