The Best Policy
Date: September 1, 2010
Type: Commentary
Document:

Notwithstanding his reputation as a lynchpin of conservative economic thought, Adam Smith quietly warned of the danger of ceding to business interests authority over regulation of the public weal. That warning comes to mind in light of the recent news of the likely termination of Canadian International Development Agency (CIDA) funding of the Canadian Council for International Cooperation (CCIC).


By Peter Broder

Notwithstanding his reputation as a lynchpin of conservative economic thought, Adam Smith quietly warned of the danger of ceding to business interests authority over regulation of the public weal.  That warning comes to mind in light of the recent news of the likely termination of Canadian International Development Agency (CIDA) funding of the Canadian Council for International Cooperation (CCIC).

Though the decision not to renew its funding had not been confirmed at the timing of writing, earlier this spring CCIC began laying off staff and considering sale of some of its assets in view of the prospect of losing a significant portion of its budget.  The downsizing marked another milestone in the systematic erosion in recent years of policy capacity within Canada’s voluntary sector.

Perhaps the high water mark in recognition of the value of sector organizations in contributing to public policy was adoption in 2002, as part of the Voluntary Sector Initiative, of The Code of Good Practice on Policy Dialogue.  The code was put in place, along with similar commitments on government-sector dealings and funding practices, in part because of past instances where governments unilaterally cut support for the sector or abandoned collaborative policy-making processes.

It set out the principles and attributes of development of sound law and policy.  Underlying the specifics is the view that an effective regulatory and policy framework requires research, meaningful consultation and input from stakeholders.

Those days are long gone.  The present government seems to have no interest in or use for the Code. It sees organizations that espouse positions that don’t align with its agenda as troublesome and thinks it is better off if they are not on the landscape.

No single factor is responsible for the demise (or scaling back) of sector policy groups seen in recent years.  Beyond financial challenges, the geography and diversity of Canada pose huge difficulties for groups mandated to conduct comprehensive research and undertake inclusive policy-making processes.  Without the economies of scale and more plentiful sector funding sources available to their U.S. counterparts, it is not surprising these organizations often struggle.

As well, the common governance, staff retention and strategic planning shortcomings that affect the broad charitable sector also apply to these groups.

On the funding side, the preference of many foundation and other funders to support direct service rather than policy infrastructure, which no doubt left many of these organizations over-reliant on government grants or contracts, cannot be overlooked.  That said, a principal reason in many cases for their downfall has been calculated funding reductions by the federal government.

Often under the guise of moving money to frontline work or initiatives more in line with government priorities, this de-funding has stifled research and policy development that historically has helped generate ideas to improve, or offer an alternative to, the federal government’s approach in tackling social and economic issues.

The list of groups that have become financially unsustainable or have had to curtail their activities is lengthy.  Grassroots organizations doing advocacy, umbrella bodies and think tanks have all been targeted for cuts.  Among those who have lost funding are a number of women’s organizations, such as the Canadian Research Institute for the Advancement of Women, and international development agencies, such as Kairos, as well as groups more known for their policy and leadership work, such as the Canadian Policy Research Network, the Canadian Council for Social Development and CCIC.

Policy groups heavily funded by corporate contributions are in the ascendancy as those dependent on government funding are reduced or eliminated.  While it is sometimes said that this is a triumph of the “marketplace” and is a demonstration of the superiority of the ideas of such groups, the better view is that these ideas will have to prove themselves in practice before any triumph ought to be proclaimed.    And, in the meantime, we ought to keep Adam Smith’s warning in mind: corporate interests are not always public interests.

While eliminating the funding of these groups may serve the government’s short term fiscal and ideological objectives, losing their voices is a setback for development of sound and effective policy over the longer term.   Robust debate over alternatives in public policy may be inconvenient, but it is naïve to assume that optimal policy will be developed by narrowing the debate.  The green movement is better for the vigourous (and sometimes heated) discussion among environmentalists of the relative merits of market-based approaches and prescriptive government regulation.

During the 2008 economic crisis it became conventional wisdom that preserving confidence in the banking and financial system – no matter what the cost – would avert a depression and was a prerequisite for a speedy recovery.   So governments put a safety net in place to protect this crucial infrastructure.

For social infrastructure, the federal government seems to be taking the exact opposite tack.  It ought to look again at the economic impact of the $36 billion – $100 billion counting universities, colleges and hospitals – voluntary sector (2007 figures).  Given the sector’s size and impact, does it really believe that this is prudent?  Failures in the realm of social policy might not be as catastrophic as credit markets seizing up, but they are bound to tarnish the government associated with them.

For too many years, the legal, regulatory and policy framework that sector organizations operate within in Canada was a product of afterthought.  The Voluntary Sector Initiative and The Code of Good Practice on Policy Dialogue was an effort to change that.

The premium on Parliamentary time – exacerbated in the last few years by the constant politicking associated with minority governments – means that sector issues are frequently given less legislative attention than they merit.  In that kind of environment, it may be tempting to have ideology rather than information drive statutory initiatives.  That no doubt has short-term political advantages.   Set against this is the view, better supported by history, that well-informed policy is much more likely to accrue to the benefit both of the party in power and of the country as a whole.

Peter Broder is Executive Director of The Pemsel Case Foundation.  A version of this article was first published in LawNow magazine, and can be found at http://www.lawnow.org/ . The views expressed do not necessarily reflect those of the Foundation.