NOTES FOR AN ADDRESS AT THE SANDS HOTEL

REGINA, SASKATCHEWAN

OCTOBER 15, 1998

Introduction

I am delighted to be here today to speak with you about an important opportunity for Canada to improve the social and health policies that mean so much to all Canadians. All governments of Canada are currently involved in negotiations on how to improve Canada's social union. They are trying to design the best approach for helping governments to help Canadians.

What we are calling the "social union", most Canadians know through their direct experiences in their communities. Over the years, we have learned to take for granted that, wherever we live in Canada, quality health care would be available when we got sick, young people could count on a first rate education, we would get the help we needed if we lost our jobs or if bad times hit, and pensions and benefits would be available to secure our quality of life when we got old. These programs and services are the social union.

The notion of "social union" is intended to focus attention on the pan-Canadian aspects of these programs and services, and on the importance of ensuring that all Canadians, wherever they live or move in Canada, have equal opportunity and access to programs that meet their basic needs.

Perhaps most important, the concept of "social union" captures our commitment to one another, our understanding that we are stronger together, that when Canadians in one part of Canada are in need, Canadians from all parts of the country are willing to help.

The current negotiations are tackling some difficult issues but it is important to keep in mind that we already have one of the best social systems in the world.

It is to ensure that we can improve this quality of life that all governments are committed to succeeding in these negotiations.

The negotiations were launched by Prime Minister Jean Chrétien and Canada's premiers at the First Ministers’ Meeting on December 11-12, 1997. At that time, first ministers agreed that each jurisdiction would appoint a minister to negotiate a new social partnership to help improve decision making and delivery of social and health policy.

The co-chairs for the process are Berny Wiens, the Minister of Intergovernmental Affairs of Saskatchewan, and Anne McLellan, the chair of the federal Cabinet Committee on Social Union. All governments are participating. Ministers have met several times, most recently on October 2, in Edmonton, where all acknowledged significant progress and a good deal of common ground.

The ministers are supported by a group of officials who meet more frequently, also co-chaired by Saskatchewan and the Government of Canada. How appropriate that Saskatchewan continues to play a lead role in the evolution of Canada's social union!

While this may seem like a long process, these issues are important for Canada and for all Canadians and we must take the time necessary to get it right, the time necessary to succeed.

We have tried not to allow the process to become political. This is why all governments have agreed not to negotiate through the media where, too often, positions become rigid and exaggerated and the focus is on power and conflict. These negotiations are -- and must be -- focussed on what is right for Canadians.

Today, I would like to give you some sense of our current social union, why we believe we must improve it and what your governments are trying to achieve through the negotiations.

As I said, most of us take for granted the benefits we receive through Canada's social policies and programs. In fact, the network of programs that assures our quality of life is relatively new, built largely since the Second World War, with memories of the Depression still fresh. Elderly benefits, pensions, employment insurance, student loans for higher education and medicare were built over the last fifty years, by all governments, through dialogue, debate, sometimes disagreement, and accommodation. More recently, and in the same spirit, Canada's governments have implemented the National Child Benefit to provide assistance to low-income families with children - to ensure that Canada's children get the best possible start in life. The government of Canada also negotiated new labour market agreements with the provinces and territories to help unemployed Canadians find and keep new employment. These policies and programs reflect our shared values, our commitment to work, family, community and mutual aid. They reflect our diversity. And they reflect the unique advantages of our federal system.

And how have we achieved this? The history of the social union is, in my view, a remarkable story of creativity and mutual respect. It is a story of the commitment of generations of Canadians to caring for one another and to accommodating our differences as we pursue our common purpose. Most impressive has been our ability simultaneously to achieve Canada-wide initiatives while enhancing the freedom of provinces to act for their residents.

Experts on federalism agree that Canadian provinces enjoy greater freedom to act on behalf of their residents than do the U.S. states, the German Länder and the Swiss cantons. While all federations have a federal spending power, recent research by Professor Ronald Watts of Queen's University shows that provinces are less dependent on federal transfers and face fewer conditions for them than is the case in other federations. Moreover, opting out with financial compensation is an accepted practice only in Canada.

Canada's Constitution and our federal system have provided provinces the freedom to develop programs to respond to the needs and aspirations of their residents, and this freedom has allowed provinces to adapt their programs to changing circumstances. Our federal system has ensured that Canada's diversity is a source of innovation and strength. Many of the programs that all Canadians have come to value were originally developed in a province. Our federal system has allowed governments to learn from each other, and to ensure that all Canadians could benefit from the innovations of any one province. This was how medicare and the National Child Benefit were developed, for example. In both cases, Saskatchewan played a lead role.

While all industrial societies developed new programs after the war, few, if any, achieved what we have built. In a 1997 survey by the British Economist Intelligence Unit, for example, Canada was ranked fourth in the world for the health of its population and second for its medical practices. According to the Institute for Management Development, Canada’s workforce was rated as the most skilled among 53 countries, and the second most competitive out of 46 countries. Four of our largest cities are ranked among the top 10 of 118 cities for quality of life, according to a study by the Corporate Resources Group of Geneva. Other countries come to us to learn about health care, pensions and other social programs.

Still, our social union has its shortcomings and we cannot afford to be complacent. While we have avoided the increasingly deep divide between rich and poor that challenges the U.S., we are falling behind some European countries on measures of income inequality and child poverty. This is why the National Child Benefit is a priority for all Canada's governments. We must continue to work together to improve.

This commitment to improve is particularly important now because Canada, like all countries in the world, faces tremendous challenges. As the baby boomers begin to enter the retirement years, our aging population will put real strains on our pension, health care and social systems. Within 20 years, the number of Canadians over 65 will increase by 50%, and with no change in the system, in about 30 years, fully one third of the federal budget would have been spent on seniors’ pensions. Federal and provincial governments, after consultations with Canadians, have already taken steps to secure the Canada Pension Plan.

We must do more, in particular to secure our system of medicare for the future. Seniors currently consume 39% of Canada’s health resources. With no change to our current health care system, seniors alone will represent 78% of Canada’s health resources by 2030. Furthermore, new developments in medical technology and pharmaceuticals are transforming our health system. We must adapt our approach to the new realities, both the challenges and the opportunities.

With globalization and the emerging information economy, we will need more than ever before a literate, technologically skilled and mobile labour force. Our social programs must adapt to the changing labour market and new directions in the nature and organization of work. Our youth are entering a labour market that is very different from the one we knew. We must equip our youth with the skills and information they need, and the freedom to pursue opportunities wherever they arise. We must ensure for all Canadians access to learning and unfettered mobility. And we have to do more for Canadian children to ensure that they are ready to learn and have the fair start necessary to participate fully in Canada's economic and social opportunities. Each Canadian must have access to the opportunities afforded by all of Canada.

Globalization and the emerging information economy have also increased interdependence among and within all countries. It is no longer possible to draw sharp lines between the economy and society. And increasingly, what one government does affect others. Governments cannot act as though they exist in watertight compartments.

It will take a stronger partnership to meet these challenges and we must achieve this without jeopardizing the important accomplishments of all governments over the past few years in coming to grips with their deficits. All governments have had to take tough measures to balance their budgets and thereby increase our flexibility for the future and our resiliency in the face of global forces. This has put a premium on efficiency, on making sure that governments do not duplicate one another, that we share risks and resources and that we learn from one another. In short, that we work together better for Canadians.

Given the value we attach to our social and health programs, given their contribution to our quality of life, and given the challenges before us, governments must work together to set out the basis for an even stronger partnership - a new social union framework.

The negotiations on the new framework provide an opportunity to strengthen our cooperation for the benefit of all Canadians. To do this, it will have to be consistent with the core principles of Canadian federalism:

- The Constitution Must be Respected. - Respect for the Constitution and constitutional powers and jurisdictions is a prerequisite for clarity in public policy and represents the mutual respect essential to true partnership. The framework must respect the Constitution.

- We Must Show Greater Cooperation to Meet the Needs of Canadians. - The history of the social union has shown us that we can often achieve together what no jurisdiction can achieve on its own. Given the challenges we face, cooperation among governments will become even more important. Government jurisdictions touch on each other in almost all sectors. Let me say, from a federal perspective, that the federal government simply does not have the capacity to act alone in the health sector, nor in the vast majority of social policies. Governments are now coordinating their work on behalf of children, youth and persons with disabilities through the recently created Ministerial Council on Social Policy, co-chaired by Minister Pierre Pettigrew at the federal level and my Saskatchewan colleague, Minister Berny Wiens. The framework should facilitate such cooperation.

- Government's Ability to Act Must be Preserved. - Both orders of government have legitimate and important responsibilities for social policy. A strength of our federation is that each government and each order of government can act to meet its responsibilities to its constituents. Greater cooperation should not and cannot mean that governments cannot do anything without asking permission of all others. We can strengthen our partnership without hindering our capacity to act. We can avoid what the Europeans call the "joint decision trap". The framework must preserve the capacity to act and to adapt to change.

- The Federation Must be Flexible. - The new social partnership must also take into account Canada's diversity. We derive great strength from the ability of provinces to adopt policies to address their specific characteristics. This will become even more important in the global economy where provinces will have to develop specific strategies in facing their own changing markets. We are learning how to reconcile joint action with enhanced flexibility for the provinces. We have seen this in the recent labour market agreements, which allowed provinces to choose the approach most suited to their labour market. We have seen this in the National Child Benefit, in which provinces are able to invest as appropriate to the challenges they face. A new framework must assure such flexibility.

- The Federation Must be Fair. - Canada has led the G-7 in bringing down its deficit and gaining fiscal control. It has achieved this with relatively less conflict and friction than one might rightfully expect - but not without consequences. Canadians are worried about the adequacy of funding for core programs. With the prospect of a fiscal dividend, the federal government is conscious of the challenges facing the provinces and the need to ensure that its decisions are fair and take into account those challenges. The framework must reflect a commitment to fairness and equity.

- We Must Keep Each Other Informed. - Unilateral action must be avoided. We should not take each other by surprise. Governments should inform each other before they take action that may have a significant effect on each other. We must exchange information that will help us compare our performance, assess how we are doing and learn from each other. The framework should make this routine.

- We Should Enhance Accountability to Canadians. - Canadians have a right to know who is doing what, how each government contributes to the partnership. They have a right to know how their money is being spent and what is being achieved. The framework should contribute to greater transparency and enhanced accountability.

The social union framework provides an opportunity to build a new partnership and a new balance to manage our interdependence in the service of Canadians. It should help us to eliminate wasteful duplication and reduce intergovernmental disputes. Of course, we must remember that some conflict will always be with us and may actually be necessary for real creativity and innovation. The framework should help us cooperate when this is necessary to assure the

well-being of Canadians. It should help us to avoid paralysis or the "joint decision trap". It should help us move beyond slogans and posturing to solve real problems and address real challenges. It should help us preserve the quality of life and standard of living that has made us the envy of other countries.

The test of our efforts is simple. Are Canadians better served? Are governments more transparent and accountable to Canadians? Are we in a better position to improve our health and social policies and to promote the well-being of Canadians in all parts of Canada? Have we improved mobility for Canadians? Above all, have we achieved greater equality of opportunity in Canada?

We have the opportunity to achieve the full potential of our federation for innovation, for partnership, for pursuing common goals while respecting our diversity. We have the chance to unleash the Canadian imagination. We are already succeeding on many fronts. I am optimistic that we can -- and will -- improve one of the best social unions in the world.

Check against delivery.

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