Last week, I discussed the first of three actions that are needed in order to create a well-being society, according to the World Health Organization’s Geneva Charter for Wellbeing: Valuing, respecting and nurturing nature. This week, I turn to the second: Design an equitable economy that serves human development within planetary and local ecological boundaries.
In the face of growing disquiet that our current economic system massively harms Earth’s natural systems while creating excessive inequality and insecurity for many, there is growing interest in the idea of an economy that puts people and planet first. While long the focus of the work of ecological economics, such an approach to economics has been marginalized and largely ignored in mainstream economics, business operations and government policy until recently.
Instead, neo-liberal economics has become the orthodoxy, especially since the era of Margaret Thatcher and Ronald Reagan. Neo-liberal economics enshrines selfishness and greed as the driving forces of the economy, and material wealth, gross domestic product growth and shareholder profit as the goals of a society where the economy is the centre of concern.
Impacts on people’s health and social well-being and on the environment that sustains them, whether locally or globally, are of secondary concern. In fact, they are considered “externalities” and largely excluded from consideration “for no better reason than because we have made no provision for them in our economic models,” ecological economist Herman Daly noted.
This leads to a fantasy economy, in which GDP can grow both by selling tobacco and treating illnesses caused by tobacco; where profit can be made both by ignoring pollution regulations and by cleaning up the mess afterward; where growth can continue even though we already exceed the limits of Earth’s natural systems; where the rich get richer while the poor have a decreasing share of wealth and income.
But if we make money by making people sick or even killing them, by damaging or destroying communities or undermining Earth’s natural systems that underpin our existence, in what conceivable way can we be said to have profited? How has our well-being been improved?
Happily, a growing number of key institutions recognize the limitations of the current model. Of particular interest are recent developments at the United Nations and among some national governments, perhaps including in Canada (the jury is still out on that). Here, I will deal with recent UN reports. Next week, I will discuss national developments in Canada and elsewhere.
In a September 2021 speech introducing his report, Our Common Agenda, to the UN’s General Assembly, UN Secretary General Antonio Guterres said: “GDP fails to account for the incalculable social and environmental damage that may be caused by the pursuit of profit.” The report itself went further, saying: “Absurdly, GDP rises when there is overfishing, cutting of forests or burning of fossil fuels. We are destroying nature, but we count it as an increase in wealth.”
Guterres also called for a new way to measure progress, one that values “the life and well-being of the many over short-term profit for the few.” A UN Environment Program report from February 2021, Making Peace with Nature, goes further, spelling out some of the ways in which we need to redesign the economy.
This redesign includes incorporating full natural capital accounting, so when we deplete Earth’s natural resources we count it as an economic loss, not a gain. That is one part of switching to measuring “inclusive wealth,” which is “the sum of produced, natural, human and social capital” — real wealth means increasing all these forms of capital at the same time.
Other key steps include governments moving “away from environmentally harmful subsidies”; ensuring “investments in sustainable development are financially attractive”; taxing harmful things, such as resource use and waste, rather than socially beneficial things such as production and labour.
These and related social measures spelled out by the WHO, such as decent and secure work, fair trade and inclusive social protection systems, are the basis for creating a well-being economy and society.
It is a clear call to put people and planet before profit and to redefine what business we are in as a society — it must be the economy of the future.
thancock@uvic.ca
Dr. Trevor Hancock is a retired professor and senior scholar at the University of Victoria’s School of Public Health and Social Policy.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
