ENVISIONING QUEBEC IN 10 YEARS.

Montréal, 26.02.15

Envisioning Quebec in 10 years:  Joint conferences Harvard club of Quebec and Cirano.

‘Are we boiling in our own water?’, Henry Mintzberg.

We were ill prepared to face the first challenges of this century. The costs of lost opportunities have proven steep enough. The next 10 years might just be critical in terms of making the right choices for our society. How should we respond to new forces and what needs to be done by 2025 to remain a prosperous society?

THE FIRST 15 YEARS

On 01.01.2000, the end of millennial was wildly celebrated. The last decade had seen communism retreating, democracy spreading and an unprecedented consumption boom erupting. Neo conservatives had succeeded in pulling back vast swaths of regulation, notably and ominously, in financial services. Telecom and dot-com companies were flourishing and peaking. In Quebec, the Bouchard government had managed the rare feat of a 0-deficit in 1999, taking advantage of favorable economic winds. All in all there was much optimism to be seen on the horizon as few urgent issues loomed and king consumer felt good.

Yet, this view would prove to be an astonishing misreading of the challenges that would come to mark the first decade of the new century.   We engineered not one but two financial crises in a single decade (2001, 2008), unleashing the dark forces of greed and speculation, the seeds of which were sowed in the 90’s. Two crises is a telltale sign that things have somehow, somewhere, gone astray, throwing us out of balance. The rise of China, confirmed by their entry into the WTO in 2001, was sending plenty of warning signs of incoming competitive shocks in manufacturing. Indeed a very hungry tiger was let loose. Distracted or blinded by turbulence in financial markets, governments and companies misread the economic impact of China on local investments, labor and growth rates. But just as we finally came to figure out the scale and true nature of the China challenge, the 2008 financial crisis hit us hard. Debt skyrocketed and growth plummeted, opening troubling financial gaps for a string of countries, states and provinces around the globe. In a mere decade we managed to paint ourselves in a corner. We suddenly discovered we had outsourced our best growth options to China at a critical moment.

So, how have we collectively fared in these past 15 years, in Quebec? In a nutshell, the economy roughly grew by 45% between 1999 and 2014, while government expenses grew by 110%. Our best industrial clusters have dimmed under global competition and new waves of innovation, often for lack of vision.   Manufacturing took a hit of about 300,000 jobs. The Plan Nord was essentially played as a political card at the top of the commodity cycle. Montreal sputtered under poor leadership. We have lately taken to ride the new digital economy, but we are at the tail end of it, 10 years behind the leading nations. We have thus missed yet another key opportunity to leap forward.

A new reality is now painfully sinking in: high debt, diminishing growth prospects, and declining resources for the essential mission of government, namely the 4 pillars of education, health, infrastructure and the economy. Rather unfortunately, a long history (20 years) of rationing budgets in these four areas has had the perverse effect of dampening any instinct of excellence and new visions. Still, the government has proved the most effective pick pocket with a flurry of taxes under crafty guises. We moreover lack unanimity of purpose in the province, split by fiercely opposing constitutional views, just like a persistent family feud in the middle of a storm. We have not been good at anticipating and preparing for new waves of changes. Actors of change have not played their roles and leaders have disappointed. As of 2015, we are still searching for a new deficit 0. We are back to 1999, but in a far less comfortable situation.

In his last book, ‘Rebalancing Society’, Dr. Mintzberg was cannily asking ‘Are we boiling in our own water?’.  The environment has been moving faster than what our institutions have shown able to adapt. We resist and accommodate ourselves to the rising temperature. Are we set in for a quiet and persistent decline for the next 10 years? Or will we find the inner resources to reverse the trend of the past 15 years?

THE NEXT 10 YEARS

We are now standing a mere ten years before the close of the first quarter of century, 2025.   How might we expect to end it and under what possible shape will our society be left with? Can we collectively craft the outline of the possible journey ahead and our destination?   Challenges will abound. More business as usual is unlikely to comfort the next generation. For the first time ever, the active population from 15-64 actually declined in Quebec last year. The ageing of the population has thus officially begun, quietly. Climate changes will surely bring further surprises ahead. The forces of globalization and the digital economy will continue to blow as hard as ever. There will be new opportunities and threats to remain a prosperous society, but nothing is written in stone.   Nations and cities rise and fall on their capacities to renew themselves when a new era comes in.

In 2015, the Harvard Club of Quebec and the Cirano Institute will be presenting 4 conferences to address some of the major issues and priorities affecting the future of Quebec within a time frame of 10 years. What do we want to secure and what needs to be accomplished? Where will leadership come from? We aim to create a forum for discussions and new ideas, reaching out to outstanding researchers and field practitioners. We will bring external voices, notably from Harvard University, and expert opinions to address 4 critical topics: the management of our economy, the revival of Montreal, the modern challenges to governments, and the dilemmas of health & demography.

Our website: http://harvard.cirano.qc.ca/

Please join the debate!

André Du Sault, MPA Harvard.