ADDRESS BY PRIME MINISTER JEAN CHRÉTIEN IN A ROUNDTABLE DISCUSSION AT THE PROGRESSIVE GOVERNANCE SUMMIT

July 12, 2003
London, United Kingdom

I am delighted to be here as part of this conference on progressive governance. I find these gatherings extremely useful. For exchanging ideas with like-minded leaders and experts - who see government as a force for good. I have been asked to reflect on my time as Prime Minister these past 10 years. To reflect on what we've done and on lessons from our experience. I will touch on four themes integral to our agenda: First, achieving fiscal sovereignty; second, shared prosperity; third, democratic integrity; finally, good global citizenship.

Fiscal Sovereignty

We cannot be progressive and realize the human purpose of the economy if we lack financial means. It is not a virtue of progressives to cling to spending that causes spiralling debt. Gaining fiscal control enables choices, and ensures resiliency when global circumstances change. Fiscal health is the foundation for sustained economic growth. But how we achieve it matters: it must be done equitably, transparently and not on the backs of the poor and the marginalized.

When I took office in 1993, Canada had seen 28 straight years of budget deficits. 37 cents of every dollar of government spending went to service charges on debt. Our debt-to-GDP ratio was 71 percent and rising. High interest, high inflation, and relatively high taxes were discouraging investment and harming quality of life.

By 1997 we managed to eliminate the federal deficit. Since then we have achieved six consecutive balanced budgets. Canada was the only G-7 country to report a surplus last year. We have cut our debt-to-GDP ratio by a third - down to 44 percent and falling. This was not achieved merely by economic growth - we paid down directly over $50 billion of public debt. This has ensured that interest rates are the lowest in 40 years. Inflation has now been low and steady for 10 years.

We beat our deficit by reviewing all programs, scaling many back. But we ensured actions were aligned with the priorities of Canadians. We exempted programs for poor kids and Aboriginal Canadians. We publicly set rolling two year targets for deficit reduction, and exceeded them every time. Equity and transparency defined the approach and ensured public confidence and support.

Our increased fiscal room permitted the largest tax reduction in our history - $100 billion over five years. Corporate and capital gains tax rates are now below the U.S. When we did cut taxes, we started with relief for low and modest income Canadians. We also made our Canada Pension Plan self-sustaining, shifting from pay-as-you-go to full funding. It is now on a sound footing for the next 50 years.

We chose a balanced approach and used a 50/50 formula: approximately 50 per cent of surplus revenues went to cutting taxes and paying off debt, and 50 per cent went to investing in people. Good social outcomes we thought a better recipe for a strong economy than more tax cuts. And indeed Canada outperformed all G-7 countries in economic growth last year. We added a record 550,000 jobs in 2002. But, most importantly, Canadians' real standard of living, measured in GDP per capita, has increased by 20 per cent since 1997.

Canada is a trading nation, more so than other major economies. Growth has slowed somewhat recently, reflecting a weaker global economy. Nonetheless, we will remain among growth leaders in G-7 again this year. The confidence of Canadians remains very high.

Fiscal discipline, then, pursued equitably and transparently, has given us sovereignty, the ability to make balanced choices. Choices which saw the economy thrive, and led Canadian businesses to invest. Provided workers with new opportunities, and saw consumers purchasing with confidence.

Beating a deficit, paying down debt and lowering taxes are attainable goals - and I think we found a progressive way to do it.

Shared Prosperity

Fiscal sovereignty is enabling us to share our prosperity. To empower citizens, invest in kids, and help foster creativity and innovation in the knowledge economy.

One of the first steps we took after beating the deficit was to establish a National Child Benefit. This program fights poverty by ensuring low-income parents who leave welfare and take a job keep their child benefits. Recently we dramatically increased the program so that every Canadian child is assured the right start.

Another major step for families has been the doubling of leave for new parents from 26 weeks to a full year. Working with provinces we have established a solid architecture of income support and child care services. The number of children living in low income families in Canada has decreased by 25 percent since 1996. And we are accelerating this rate of decrease. Active supports, empowering families and partnerships define our approach on kids.

Strengthening our universal, publicly-funded health care system has also been a priority. Our philosophy remains that access to health care must be based on need, not the size of your wallet. Canadians refuse to abandon the equity, solidarity, and efficiency of the single payer system.

Rather than scaling back medicare, our government struck a Health Accord with provinces that expands it to cover home care and catastrophic drug costs on a national basis. We are measuring results and reporting to the public. We are establishing a Health Council to report on progress and recommend future directions.

As a Third Way country, we also endorsed making the knowledge economy accessible to citizens. Over the past few years we invested massively in research and higher learning - over $11 billion. We created 2000 Research Chairs at our universities to attract top talent. We dramatically increased funding for universities across all disciplines. To support our best young minds, we created 4000 Canada Graduate Scholarships. And we made it easier for families to save for post-secondary education through a sheltered savings plan. Our Millennium Fund gives 100,000 scholarships per year to promote excellence and ensure access.

Sharing prosperity for Canadians has meant the welcoming of immigrants as citizens, to contribute to Canada, to build new lives for their families. Our policies of multiculturalism encourage newcomers to celebrate their heritage. At the same time they enjoy the rights of Canadians and have taken on the responsibilities of our society. We invest in our culture and history to ensure Canadians keep their cultural bearings. Thus, we are culturally attuned to globalization and more likely to see its opportunities than its threats.

As a trading nation this helps create a welcoming climate for foreign investment. A recent study by KPMG declared Canada to be the best place in the world right now for business investment.

We have always seen the benefits of tolerance to our social harmony. We are now appreciating how openness and diversity are creating vibrant, dynamic, creative communities, cities that work and are culturally rich.

Vancouver, British Columbia is one such city: multicultural, buzzing with energy, well planned. It was my pleasure to be in Prague last week when Vancouver was awarded the honour of hosting the 2010 Winter Olympics. Canadians will put on a great event that affirms the values of the Olympics and provides a distinct Canadian flavour.

Investing with partners in modern infrastructure in cities and communities is ensuring our citizens have access to top quality amenities. This includes major efforts on water and housing for Aboriginal Canadians, and on programs for the homeless.

Sharing prosperity broadly, not leaving people out, making strategic investments, is ensuring our communities are good places to live, work, play and invest. It makes people feel good and feel proud of their country to see these things happening.

Democratic Integrity

The success of governments cannot be judged merely by the soundness of their books and programs. More is needed. Trust in government, the sense that we are on the side of ordinary citizens, is essential if societies are to function well.

Declining voter participation and cynicism that we are unduly influenced by the powerful concern us all. Too many citizens think government is unresponsive to evolving social values. These perceptions are a problem.

In Canada we decided to tackle them head on: we just passed a Bill that changes political financing forever. Corporations and unions can no longer contribute to national parties. There will be a limited exemption of $1000 per year at the local level. The private funding formerly given to parties will be replaced by public financing. We are removing the perception that large political donations buy influence.

We are committed to restoring pride in public service. We introduced a Bill to allow for flexibility in recruitment and retention to ensure we attract people who provide integrity. We are instilling a culture of transparency, performance measurement, and results reporting across all departments.

We are adopting citizen-centred approaches to services and using new technologies to make them easily available. We take pride in the fact that Accenture has ranked Canada the number one country in the world in the provision of services on-line.

I would also place under the heading of democratic integrity responsiveness to evolving social values. Progressive governments must be forward-looking, willing to face up to controversy rather than just hoping tough issues go away. We introduced legislation to modernize penalties for the possession of small amounts of marijuana. We are eliminating the possibility that young people will have a criminal record shadowing them in their lives. Instead, we will discourage marijuana use with fines.

Another step we are taking is to extend the principle of equality in our Charter of Rights and Freedoms by legally recognizing the union of same sex couples. One of only three jurisdictions in the world doing so. We will also affirm the right of religious groups to sanctify marriage as they define it. This was not a conscious part of our agenda. But the courts pushed the issue. And a majority of Canadians seems ready to follow. So we decided as a government we must respond.

Election financing, public service renewal, respect for evolving social values, all of these we see as aspects of revitalizing faith in government. Many commentators have called our current agenda "bold" - I see it as responsible, responsive, and progressive.

Good Global Citizenship

Canada has always supported multi-lateral approaches to global problems. The major challenges of our time include poverty, environmental degradation, infectious disease, regional conflicts, organized crime, and terrorism. These cannot be addressed by nations acting alone, however powerful. Harnessing globalization for the betterment of people through expanded trade and smarter development also demand coordination through multilateral organizations.

In recent years we have taken a lead role in advocating at the UN an international agenda of collective action focussed on security of individuals and human rights. Canadians understand that when people at risk are made safe and secure in their own countries, we are all made more safe and secure.

We led the effort on the Ottawa Convention banning anti-personnel mines. We also took the lead on the International Criminal Court to ensure that perpetrators of atrocities are put on notice -- they will be held to account by the international community. We remain deeply committed to our role in conflict avoidance and peacekeeping.

Canada acted with firmness in the war on terrorism, participating in the military effort in Afghanistan and committing resources to peacekeeping and reconstruction.

We made the decision not to participate in the war in Iraq. But we have nonetheless joined in the effort to stabilize and rebuild a functioning society there.

Canada will double its overseas development assistance over the next number of years. We championed the NEPAD for Africa at the G-8 meeting in Kananaskis.

We also decided to unilaterally eliminate tariffs and quotas on almost all products from Least Developed Countries. We continue to call on others to eliminate the agricultural subsidies and other barriers that stop poor countries from trading their way out of poverty.

Despite vigorous opposition from parts of the Canadian business community and the fact that we are neighbours of the US, we ratified the Kyoto Protocol We believe that coordinated collective action is the only way to address this environmental problem.

Our environmental obligations to the global community must also include conserving our own wild spaces and bio-diversity. This is why at last year's World Summit on Sustainable Development, we committed to conserving vast new territories, creating 10 new parks and five new marine conservation areas. We essentially completed our national park system.

Consistent with our belief in human security and in response to the collective failures in Somalia, Rwanda, and Srebrenica, Canada established in September 2000 the International Commission on Intervention and State Sovereignty at the UN Millennium Summit in New York. The time has come to reflect seriously on the Commission's proposal to redefine sovereignty as "the responsibility to protect". We also must to reflect on the way forward. For the United Nations community has to develop a coherent approach to cases where states are unable or unwilling to protect their citizens from brutal harm. Canada is prepared to do its part to move this debate forward.

I have always believed that good global citizenship is essential to serving the interests of one's own citizens. But it is also an expression of our idealism and common concern for humanity.

Conclusion

This, then, represents a Canadian recipe for progressive governance over the past decade, Canada's version of "the Third Way": fiscal sovereignty; shared prosperity; democratic integrity; and good global citizenship. I like to call it "the Canadian Way". While historians may end up viewing it differently, I think it has been working. Thank you.

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