Neoliberalism’s Legacy: Lessons for Canada’s Future
Neoliberalism’s Legacy: Lessons for Canada’s Future
What Is Neoliberalism?
Neoliberalism is an economic and political approach that became prominent in the late 20th century. It emphasizes allowing businesses and markets to operate with minimal government interference. This often involves cutting taxes, privatizing public services (such as healthcare and utilities), reducing regulations on businesses, and encouraging competition. The goal is to create a more efficient economy, drive innovation, and enhance individual freedom.
While some of these ideas have yielded positive results, neoliberalism has also led to significant challenges in Canada. Let’s examine what it has achieved and where it has fallen short.
What Neoliberalism Got Right
Boosting Trade and Global Connections
Canada’s trade agreements, such as NAFTA (now CUSMA), have opened international markets for Canadian businesses. Exports now account for 31% of Canada’s GDP (World Bank, 2022), showcasing the importance of global trade.
The agriculture sector has been particularly successful, with Canadian wheat and canola being major exports globally.
Encouraging Innovation
By promoting competition, neoliberalism has pushed businesses to develop new technologies and services. For instance, Canada’s tech sectors in Toronto and Vancouver have thrived. The tech industry added over $117 billion to Canada’s economy in 2022 (Innovation, Science and Economic Development Canada, 2023).
Improving Government Efficiency
Some neoliberal principles, like reducing waste and focusing on measurable outcomes, have improved the delivery of government services. For example, online platforms like Service Canada and the Canada Revenue Agency’s digital tax tools have streamlined access to public services, with over 84% of Canadians filing their taxes online in 2021 (Government of Canada, 2022).
However, these benefits have come with significant costs, creating problems that demand attention and action.
The Problems with Neoliberalism in Canada
Growing Inequality
Neoliberal policies have exacerbated the divide between the rich and the poor. Between 1980 and 2020, the top 1% of earners in Canada saw their share of income rise from 7.4% to 13.6% (Statistics Canada, 2021). Meanwhile, real wages for the bottom 50% have stagnated, despite rising living costs.
Housing prices have skyrocketed, with the average home price increasing by 318% from 2000 to 2023 (Canadian Real Estate Association).
Erosion of Public Services
Privatization has often led to higher costs and reduced quality. In Ontario, electricity costs increased by over 70% between 2008 and 2020 following privatization efforts (Ontario Energy Board).
Concerns about the privatization of healthcare persist, with a 2022 report by the Canadian Centre for Policy Alternatives warning of unequal access to medical services if privatization continues.
Market Dominance by Large Corporations
Although neoliberalism champions competition, it has often resulted in market concentration. In telecommunications, just three companies—Rogers, Bell, and Telus—control 90% of the market, contributing to Canada having some of the highest mobile phone prices in the world (Rewheel Research, 2023).
Weakened Social Cohesion
By emphasizing individual achievement over collective well-being, neoliberalism has undermined community ties. Precarious employment has surged, with 1 in 5 Canadian workers holding temporary, part-time, or gig jobs in 2023 (Statistics Canada).
The decline of unionization, from 38% in 1981 to 27% in 2022, has further weakened workers’ bargaining power and security.
Why Canada Needs a New Approach
While neoliberalism has had its strengths, it is clear that Canada requires a more balanced and inclusive strategy. Here are some steps to move forward:
Promote Fairness and Equity
Canada must ensure that the wealthy and large corporations contribute their fair share through progressive taxation. A 2023 report by the Parliamentary Budget Office found that increasing the top marginal tax rate by 2% could generate an additional $4 billion annually for public programs.
Expanding affordable housing initiatives could address the housing crisis and reduce homelessness, which affected over 235,000 Canadians in 2022 (Canadian Observatory on Homelessness).
Strengthen Public Services
Rather than privatizing essential services, Canada should invest in improving them. Expanding public transit infrastructure, for instance, could reduce commute times and greenhouse gas emissions.
Introducing Universal Basic Income (UBI) could provide a safety net for vulnerable populations, as pilot programs in Ontario and Finland have shown promise in reducing poverty and improving mental health.
Strengthen Democratic Processes
To curb the influence of corporate interests in politics, Canada needs stricter campaign finance rules and increased transparency. For instance, banning corporate donations in elections could level the playing field.
Public consultations and digital tools can involve Canadians more directly in shaping policies, improving trust in government.
Support Workers and Communities
As technology reshapes the job market, Canada should invest in retraining programs for workers transitioning to new industries. According to the Future Skills Centre, over 42% of Canadian jobs will require significant retraining by 2035.
Encouraging cooperatives and community-led businesses can create stable jobs and strengthen local economies.
Building a Better Future for Canada
It’s time for Canada to move beyond neoliberalism and adopt a system that balances economic growth with fairness, sustainability, and community well-being. By addressing the shortcomings of neoliberalism and building on its strengths, Canada can create a brighter and more inclusive future for all its people.