Quebec group pushes for new way to measure economy to reflect social, environmental factors

A diverse group of Quebec leaders in business, labour and other sectors is urging policy makers to look past gross domestic product as a measure of well-being and adopt a broader view of prosperity, as Canada confronts unprecedented health and environmental crises.

Heads of the Conseil du patronat and the Fédération des chambres de commerce, two of Quebec’s biggest business groups, are joining leaders from 16 other organizations in calling for a rethink of living-standard metrics. They say gross domestic product and job creation are no longer enough on their own to properly represent the development and progress of a society in a rapidly changing world.

Members of this group, known as the G15+ collective, have assembled their own set of 51 economic, social and environmental indicators they say more accurately measure well-being in Quebec. They say while other countries, such as New Zealand and Scotland, are well ahead in making such indicators available to their political decision makers, the collective’s own project is the farthest anyone has pushed this idea in Canada.

“Governments follow different indicators [on things like] inequalities, environment. It’s not that they don’t have anything but it’s just that it’s in silos. There’s no comprehensive approach,” said Mia Homsy, head of the public-policy research group Institut du Québec and a co-leader of the initiative. “What we realize more and more these days, especially with the effects of the pandemic and the environment, is that it’s all interdependent.”

Political leaders have relied on GDP, which is the total value of all goods and services produced in an economy, as their main guidepost for policy making since the 1940s. The measure is widely considered to be reliable, timely, internationally comparable and highly relevant to public finances.

But as critics have long pointed out, the indicator also has its limits, including an inability to account for environmental impact. Some have set about searching for alternative societal yardsticks. Economist John Helliwell at the University of British Columbia, for one, has spent years researching ways of developing models that track happiness and well-being.

Now, that largely academic thinking is working its way into the mainstream. The Organization for Economic Co-operation and Development, the International Monetary Fund and the United Nations have all done work on incorporating quality-of-life measurements into public policy. Last year, Canada’s Department of Finance produced its own 34-page report on the issue.

Titled Toward a Quality of Life Strategy for Canada, the Finance Department document was created in part, it says, “to seek input into a new approach the government is developing to define and measure success and make better use of data and evidence to improve its decision-making.” The report says the COVID-19 pandemic has demonstrated that what matters most to Canadians is not always easily measured or described in economic or financial terms.

Ottawa’s move in this direction is “a very significant step,” said François Delorme, a G15+ member and former senior economist with the federal government who now teaches at the Université de Sherbooke. He said various government departments and agencies are involved in developing this new approach, including Statistics Canada and the Privy Council.

“It takes a lot of co-ordination and they are going there, but very slowly,” Mr. Delorme said. He added that he and other members of the G15+ collective have met with various government officials on this issue. “Given that we have done the exercise, I think they will probably feel the support that they have to go faster and forward.”

Mr. Delorme said he believes that in five years there will be a new set of indicators in use at the federal and provincial levels, backed by official statistical agencies.

In the meantime, the collective will work to update and expand its own 51 indicators. The group’s leaders have said this is the first time actors as diverse as the David Suzuki Foundation, the Conseil du patronat and the FTQ labour union are working together on common benchmarks to evaluate Quebec’s well-being.

Among the group’s key findings: The economic integration of immigrants in Quebec improved significantly between 2015 and 2019 as more of them found jobs, narrowing their unemployment rate gap with the broader working-age population. But over the same time, the gap in average weekly pay between men and women grew.

The group’s environmental findings include that the number of poor air-quality days fell by 34 per cent in Quebec over five years through the end of 2019. On the flip side, greenhouse gas emissions increased by 6.5 per cent over this period.

Whether in terms of per capita income, productivity, capital investment, job insecurity, the dynamism of new business creation or public debt, Quebec’s economic indicators have generally improved in recent years, according to the group. But several economic trends suggest the need for corrective action, the group found, including the stagnation of secondary and postsecondary graduation rates.

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