In a six-week series of interviews, Canadians with a variety of experiences discuss the major challenges our country is facing and how best to address them. This instalment deals with increasing the innovativeness of our economy.
Kevin Lynch, vice-chair of Bank of Montreal, was interviewed on July 2 by Adam Kahane, chairman, North America, of Reos Partners.
Kahane: What concerns you about what's going on in Canada right now?
Lynch: The primary forces of change today are not Canadian; they're global. Canada thrives or is less successful depending on how well it understands the world around it. When it understands it, it does quite well. When it doesn't understand it, it does poorly.
It is really important to our success that we make sure that we are not parochial in our mindset. All politics are local, but in a globalized world, the definition of local needs to be broadened.
Kahane: What is an example of how we need to broaden our perspective?
Lynch: At the moment, our trade relations are largely patterned on the last 40 years, not on the future. So 90 per cent of our trade is with the OECD [Organisation for Economic Co-operation and Development] countries and only 10 per cent with the emerging world. But if you look at where globalization is taking economic growth, all of the growth is in the emerging world.
Part of our future success is going to have to be diversifying where we do business. Today, a company may have offices in Montreal and Boston. To succeed, that company may need to have offices in Montreal, Johannesburg, and Mumbai instead. Likewise, since WWII, our leading universities have built relationships with those in the U.K. and the United States. Now, we are going to have to do so with Brazil and China.
Kahane: What will it take to shift the national narrative?
Lynch: Most people will take the status quo unless either there's a force for change or they are enticed to change. Who wouldn't? It's human nature. So I either have to scare you, because if we don't do this, the world will fall apart, or I have to entice you and engage you in a realistic dialogue. It takes a pretty astute sense of leadership to figure out how to engage in that discussion.
Kahane: Are there instances when we were able to overcome the status quo? If so, what made these efforts successful?
Lynch: The Free Trade Agreement [with the United States] was a spectacular pivot by Canadian citizens and taxpayers. Likewise, in the mid-90s, we made a big fiscal pivot. It stands out as being pretty abrupt and aggressive, and frankly it turned out brilliantly. But it wasn't our typical incremental change; it was a big change.
Public opinion polling wasn't in favour of either plan. At the time, if you asked somebody, "Do you want to fundamentally change all of our trade agreements with the biggest country in the world?" most said "No."
These pivots succeeded because of leadership – not just from government but also from the business community and others. Especially in the case of the Free Trade Agreement, Canadians could see business people, academics, and others honestly debating. It required enormous leadership to convince the average Canadian that, in a balance of risks and opportunities, the Agreement was actually on the positive side
Kahane: Are the conditions ripe for large-scale change to occur in Canada now?
Lynch: It's easier to convince people to do big things if there's collective trust in those proposing the changes. Polling research in western countries shows that, over the last 20 years, trust throughout society is way down.
Kahane: Are you confident in our ability to make the needed changes?
Lynch: We have an ambition challenge in Canada. I'm not sure my generation is ambitious enough. We can do much better in the world than we think we can.
Some of the younger Canadians think that they can beat anybody if they study hard, work hard, and are innovative and clever enough. We have to be sufficiently ambitious to keep those kids in Canada, so they can start their social profit enterprises and companies here, teach here, run for political office here. If we're not ambitious enough, they'll go somewhere else, because they want to make a difference.
Possible Canadas is a project created by Reos Partners, the J.W. McConnell Family Foundation and a diverse coalition of philanthropic and community organizations. For longer versions of these interviews, or to join the conversation, visit possiblecanadas.ca.