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Sean Speer: I was wrong about Canada’s state capacity


When the New York Times ran a feature encouraging its writers to admit things they got wrong, we were equally intrigued and annoyed. What a great idea — why didn’t we think of that?! That’s exactly the spirit we want to encourage at The Hub. We know we won’t be right about everything, but we want to admit it when we get something wrong and we want to figure out why we were off base. So, this week, we’ll be borrowing the Times’ idea and running essays from our writers and staff about the things we got wrong. Please, enjoy our blunders.

The idea of “state capacity” has attracted considerable intellectual and political attention in recent years. It started with a blog post in early 2020 by leading public intellectual Tyler Cowen about what he called “state-capacity libertarianism” to describe a policy framework for a limited yet effective government to provide basic public goods and solve for market failures. His influential essay has since spawned dozens of articles, commentaries, and papers on the topic. 

State capacity broadly refers to a government’s functional ability to carry out its market-supporting activities in an efficient and effective manner. The key insight here is that while debates about the proper size and scope of government are highly important, we ought to dedicate similar energy and attention to questions of state capacity and competency. 

Cowen’s chief contribution was to catalyse a renewed intellectual movement focused on “better or worse government” rather than merely “bigger or smaller government.” The timing couldn’t have been more apposite. His essay was published mere months before the COVID-19 pandemic. 

The pandemic experience brought the ensuing conceptual debate about state capacity into practical focus. It necessarily put governments in Canada and elsewhere around the world to the test. The results were mixed, to say the least. 

Prior to the pandemic, it was something of an axiom that Canada is home to strong public institutions, a professional public service, and high-quality public administration. It has, in other words, high levels of state capacity. 

I subscribed to this view. I’ve even authored and co-authored articles, papers, and newspaper columns in favour of a larger role for government in supporting science and technology and industrial development. It may be a reach to say that I was fully wrong. But in hindsight I now concede that my analysis probably overstated Canada’s state capacity. 

The pandemic exposed that our governments are slower and more sclerotic than many of us fully understood. It turns out that Canada has a state capacity problem. 

Start with the federal government. The pandemic revealed that Ottawa’s state capacity has been hollowed out in recent decades. It still proved capable of creating new cash transfer programs like the Canada Emergency Relief Benefit and distributing cheques to households with minimal scrutiny or oversight, but otherwise the federal capacity for procurement, logistics, and service delivery was shockingly weak. The federal government has effectively been reduced to a revenue collection entity that exists to transfer dollars to seniors, families with children, First Nations, and other levels of government. 

This state capacity weakness manifested itself in a long list of federal pandemic failures, including its confusing and often contradictory public health diktats, its initial vaccine procurement (including a bizarre contract with a Chinese state-owned enterprise), and the $25 million spent on the ArriveCan app. 

The post-pandemic period has similarly been marked by high-profile cases of government failure. The most obvious example is the country’s passport backlog which has led to lengthy delays, long line-ups at Service Canada offices, and canceled summer vacations. 

This case is particularly salient because it is so basic. How can a government that cannot issue passports on a timely basis reasonably expect to reduce poverty by 50 percent in 2030 or engineer an energy transition by 2050 or fulfill any other major policy ambition over the coming years? 

The provinces aren’t much better. Their collective failure to reform their health-care systems prior to the pandemic in spite of mounting evidence of limited capacity and poor outcomes was a major factor behind the country’s lengthy and stringent lockdowns. The risk of hospitals collapsing essentially held us held hostage for more than two years. 

This point cannot be overstated: we now know that children suffered long-term learning loss and others forewent diagnostic tests, surgeries, and treatments in large part because a generation of provincial bureaucrats, politicians, and special interests chose to protect the failed health-care status quo. 

These recent examples raise legitimate questions about our governments’ ability to deliver on their core functions and responsibilities. Lines of people in front of their local Passport Canada offices with lawn chairs like they’re waiting for a concert or playoff tickets is a powerful rebuttal to the common narrative about Canada’s world-class state capacity. 

It’s important to emphasize that these observations are neither partisan nor necessarily arguments in favour of a smaller government. Governmental failings have been broadly distributed on the Left and Right and, in any case, research tells us that the correlation between state capacity and size of government is imprecise. Denmark, Finland, and Israel have governments that are similarly sized or even bigger and yet seem able to deliver more effective and expeditious public services than we can. 

The factors behind our state capacity weaknesses are complex and would doubtless be the subject of ideological and political debate. The Left would ostensibly argue that it’s a consequence of so-called “austerity” including previous rounds of privatization and spending cuts. The Right would instead point to Public Choice explanations including institutionalized risk aversion, perverse incentives, and union-protected mediocrity that undermine effective and efficient collective action. 

The key point here though is that the pandemic exposed that Canadians shouldn’t be self-congratulatory about our country’s state capacity to deliver on whatever we collectively ask of it through our politics. 

Which brings me to my mea culpa. My research in recent years on innovation policy has highlighted the rise of the intangible economy (which has been described as the shift from an “economy of things” to an “economy of thoughts”) and its unique characteristics and properties including its geopolitical and strategic consequences. This has led me to rethink the role of the state to support science and technology and cultivate sectors, sub-sectors, and technologies that may have high-value, strategic upside for the Canadian economy. 

As part of this work, we’ve considered the creation of new public sector organizations to better support breakthrough technologies and even grappled with the potential for a modern industrial policy. I have tried to root my analysis in a clear-eyed understanding of the limits of state action and other political economy risks. In a late 2021 paper, for instance, we argued for a new science and technology agency with a specialized staff and a high degree of autonomy so as to minimize the risks of bureaucratic inertia and political capture.  

But even with these political economy caveats (which were unfairly ignored by some critics), there’s probably an argument that my work has overestimated Canada’s state capacity. That is to say, I spent so much time worrying about the twin risks of bureaucratization and politicization that I failed to ask more basic questions like “can the government reasonably do this?”. The passport mess has provided a useful corrective. 

I stand behind most or all of my work on these topics. We do need to recommit ourselves to a more ambitious science and technology strategy and the market uncertainty of breakthrough technologies will invariably involve a role for government. But I now better appreciate how improving (or at least accounting for) the country’s state capacity is a crucial first step to greater progress on these issues. I admit that I was wrong—or at least a bit incomplete in my analysis. One consequence is I’m now probably more of an economic libertarian than I was prior to the pandemic. 

The key takeaway then is that our politics ought to dedicate more energy and attention to the question of state capacity. Our political debates need to go beyond bigger versus smaller government and address good versus bad government. Everyone should be able to ultimately agree that the former is better than the latter. 

Joanna Baron: I thought the Charter would protect our rights during the pandemic. I was wrong


When the New York Times ran a feature encouraging its writers to admit things they got wrong, we were equally intrigued and annoyed. What a great idea — why didn’t we think of that?! That’s exactly the spirit we want to encourage at The Hub. We know we won’t be right about everything, but we want to admit it when we get something wrong and we want to figure out why we were off base. So, this week, we’ll be borrowing the Times’ idea and running essays from our writers and staff about the things we got wrong. Please, enjoy our blunders.

I entered the legal profession during what was a sort of zenith of the Charter of Rights and Freedoms. During the years of the so-called Bedford trilogy (from 2013-2016),The Bedford Trilogy and the Shifting Foundations of Vertical Stare Decisis: Emancipation from Judicial Restraint?, 2020 CanLIIDocs 1958!fragment//BQCwhgziBcwMYgK4DsDWszIQewE4BUBTADwBdoByCgSgBpltTCIBFRQ3AT0otokLC4EbDtyp8BQkAGU8pAELcASgFEAMioBqAQQByAYRW1SYAEbRS2ONWpA s. 7 of the Charter—which protects the right to life, liberty, and security of the person—expanded to encompass rights to safe injection sites, medically assisted death, and brothels. The Court told us pointedly: if a single Canadian’s rights were harmed by an impugned law, that was sufficient to strike the law down as unconstitutional.

So as the contours of government response to the pandemic—vaccine passports, extended lockdowns, mandates, mandatory quarantines—came into focus in late 2020 and early 2021, I was cautiously bullish on the viability of the most serious claims under the Charter.

Of course, some restrictions on rights for valid public health objectives were understandable. But the sorts of laws that vividly and severely impacted the core liberties, even dignity, of individuals could not simply be swept under the rug of s. 1 indefinitely and justified in light of the government’s self-professed exigent circumstances. In particular, cases where the government failed to provide compassionate exemptions for its most draconian measures should be accommodated or the law struck down under the Charter.

I was wrong. In summer 2021, the Canadian Constitution Foundation along with several individuals brought an application against the government in relation to its quarantine hotel measures which required all returning travellers to isolate in an approved hotel for three days at a cost of about $2,000.Quarantine hotel court case should matter to all Canadians The applicants, all of modest means, each needed to travel outside of Canada either to care for parents suffering from terminal conditions or, in one case, care for an injured spouse.

The expense itself was crushing for these individuals. But also, the public health justification for the hotels was flimsy.‘Absurd’: Travellers stuck in quarantine hotels say process is confusing and drawn out In spring 2021, the federal government’s own expert advisory panel recommended discontinuing the hotel program, as it was unlikely to have any effect on the spread of the virus. Striking down the program seemed to clearly follow from the Charter’s guarantees if they were to have any teeth. Instead, in his decision the judge summarily dismissed the claim, deriding the matters raised as concerning “decidedly first world, economic problems.” He did not find any breach of any of the Charter rights asserted (including the right to mobility and the right to life, liberty, and security of the person).

This posture of extreme deference was the norm throughout the pandemic (even bans on a church holding drive-in services were upheld). It was predictable that governments, responding to public pressure, would overshoot the mark and act according to the precautionary principle in setting policies. Throughout the pandemic, nearly all health measures polled well. It fell to judges to hold up the principle that, as Robert Nozick says, “Individuals have rights, and there are things no person or group may make them do.”Robert Nozick: Political Philosophy,a%20right%20to%20private%20property.

A constitution is meant to demarcate acceptable from unacceptable state conduct, not act as a sort of grab bag of contingent interests. If a right is little more than one norm or interest to be weighed against others, and the government’s reasoning for its actions is deferred to across the board, the Charter is nothing but a lame duck showpiece. I thought the Charter would be a sturdy bulwark against rights intrusions throughout the pandemic. I was wrong.