Insights from the text of the throne speech
While the commitments made in the recent Throne Speech may not ultimately lead to actionable policies and programs, they nonetheless represent the aspirations of the government of the day. To that end, the Throne Speech reveals clear and important insights about the current federal government’s worldview, namely that government action is the driver of prosperity and that entrepreneurs, businessowners and investors are a secondary after-thought.
The Throne Speech included over 6,700 words. The term “government” was mentioned 138 times, mostly referring to expanded or new programs and initiatives, which ranged from the response to the continued fight against COVID, a commitment to a national prescription drug program, investment in clean energy and related technology, and national daycare, to name but a few of the over 100 initiatives included in the Throne Speech. It’s clear the federal government intends to fundamentally reshape the Canadian economy and society more broadly coming out of the recession and COVID pandemic.
Put differently, Ottawa reiterated its vision for an expansive federal government picking economic winners (e.g. clean energy) and losers (e.g. oil and gas sector), directing investment, and borrowing to create massive new federal programs. The Trudeau government clearly sees this activist approach by government as the pathway to prosperity despite the experience of the last five years during which economic and income growth rates have slowed, private sector investment has declined, and private sector employment gains have been modest.
It’s also instructive to observe what was not included, or only sparingly mentioned, in the text of the Throne Speech. The term “entrepreneur” appeared just four times. Two were references to the development of online stores in response to COVID and the need to improve internet connectivity while the remaining two references were to the expanded Women’s Entrepreneurship Strategy and the newly created Black Entrepreneurship Program. However, there wasn’t a single reference to the central role entrepreneurs play in innovation and creating genuine prosperity.
Similarly, the term “small business” was only referenced once in the entire Throne Speech and it simply acknowledged that small businesses are the “lifeblood of their communities”. There was no mention of the risks small businessowners and entrepreneurs take to create, grow and successfully maintain their businesses and the conditions within which such activities are best undertaken.
This latter point is worth recognizing. The Throne Speech failed to meaningfully address the importance of creating a competitive, hospitable economic environment within which entrepreneurs, businessowners, investors, and workers can prosper. This de-prioritization of creating the right conditions for economic activity to occur in may help explain the government’s apparent disinterest in Canada’s falling ranking in various competitiveness reports. For example, Canada has fallen to 23rd in the World Bank’s Ease of Doing Business Report from 4th in 2007. Instead, the Throne Speech constantly referred to expanded and new programs the federal government would undertake to create jobs and prosperity directly.
The secondary, or even tertiary role envisioned for private sector businesses and entrepreneurs is perhaps best illustrated by the use of the term “investment” in the Throne Speech. Although the term appears 16 times in the speech, every reference relates to investment by government rather than the private sector save for one reference to supporting “investments in renewable energy and next-generation clean energy and technology solutions.” There is no mention of attracting general private sector investment to Canada, which is incredibly worrying given the marked decline in business investment. For instance, between 2004 and 2019 (pre-recession), business investment excluding residential construction declined by 17.3 per cent across 10 of the 15 major sectors of the Canadian economy.
Simply put, the text of the Throne Speech confirms the vision of the Trudeau government as seeing the government itself as the driver of prosperity and the private sector, including entrepreneurs, small businessowners, and investors playing a secondary role. This approach has not worked for Canada in the past five years and will not work in the future.