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IanStewartFestschrift book Page 2 Monday September 12 2011 1 07 PM. New Directions for Intelligent,Government in Canada. Papers in Honour of Ian Stewart,Editors Fred Gorbet and Andrew Sharpe. Centre for the Study of Living Standards,710 151 Slater Street. Ottawa Ontario K1P 5H3,info csls ca,Copyright 2011. All rights reserved,ISBN 978 0 9877849 0 2, This is an open access book and its articles are freely distributed under the terms.
of the Creative Commons Attribution Non commercial License which permits use. distribution and reproduction in any medium provided the original work is prop. erly cited the use is non commercial and is otherwise in compliance with the. Design by Hodges Publications Cover design by Kelvin Hodges. Bound and printed in Canada by The Printing Center. IanStewartFestschrift book Page i Monday September 12 2011 1 07 PM. Table of Contents,Acknowledgments iii,New Directions for Intelligent Government 1. in Canada An Introduction,Andrew Sharpe,Ian Stewart in his Own Words 19. Ian Stewart with preface by Fred Gorbet,The Evolution of Canadian Monetary Policy 49. Successful Ideas Through Natural Selection,Christopher Ragan. Public Policy for the Canadian Financial 81,System From Porter to the Present.
and Beyond,David Dodge,What Is Credible Fiscal Policy 101. The Canadian Experience 1983 2010,The View of a Former Practitioner. C Scott Clark, New Directions for Intelligent Government in Canada i. IanStewartFestschrift book Page ii Monday September 12 2011 1 07 PM. Why Did Unemployment Disappear 127,from Official Macro Economic Policy. Discourse in Canada,Lars Osberg,Rethinking Tax Transfer Policy 163.
for 21st Century Canada,Robin Boadway,Reflections on the Role of Optimal 205. Design in the Tax Policy Process,Stanley L Winer,Income Support in the Canadian Federation 211. International and Interprovincial,Comparisons and Future Directions. Pierre Fortin,Idle Speculation Prefunding the Boomers 227. Frail Elderly Care and Legitimizing a,Carbon Tax,John Richards.
Health Care is a Knowledge Industry 249,and Should Be More So. Michael Wolfson,How Can Subjective Well being Be 283. John F Helliwell,Good Data and Intelligent Government 305. Munir A Sheikh,Personal Reflections on the State 337. of Public Policy Analysis in Canada,Don Drummond,The Way Ahead A Framework for Discussion 353.
Working Paper Government of Canada,Biographical Sketches of Contributors 395. ii New Directions for Intelligent Government in Canada. IanStewartFestschrift book Page iii Monday September 12 2011 1 07 PM. Acknowledgments, THE EDITORS WOULD LIKE TO THANK the large number of individuals who. have contributed to this volume These include of course the 12 contributors. to the volume the discussants from the authors workshop held April 20 21. 2011 in Ottawa Gordon Betcherman Michael Cleland Ivan Fellegi Paul. Jenkins Judith Maxwell Alan Nymark Stephen Richardson Russell Robin. son Nick Rowe Tim Sargent Mario Seccareccia and Hugh Segal the staff. of the Centre for the Study of Living Standards who assisted with both the. festschrift authors workshop and dinner organization and copyediting. Ricardo de Avillez Elspeth Hazell Eric Johnson and Chris Ross desktop. publisher Kelvin Hodges and Mike Datson from the Printing Centre. The editors would also like to thank a number of funders who prefer to. remain unacknowledged,Fred Gorbet,Andrew Sharpe,September 11 2011. Ottawa Ontario, New Directions for Intelligent Government in Canada iii. IanStewartFestschrift book Page iv Monday September 12 2011 1 07 PM. iv New Directions for Intelligent Government in Canada. IanStewartFestschrift book Page 1 Monday September 12 2011 1 07 PM. New Directions for,Intelligent Government in,Canada An Introduction.
Andrew Sharpe,Centre for the Study of Living Standards. T HE TRADITIONAL BIG GOVERNMENT SMALL GOVERNMENT DEBATES. are ideological rather than content driven We do not necessarily need. more government but we do need more intelligent government that is a. government that recognizes there is a legitimate role for the state in social. and economic policy and focuses on how to best play that role in a way that is. effective without stifling innovation creativity and private initiative. Whether it is government programming ie new spending programs versus. targeted tax expenditures or regulation ie how much affecting who what. sanctions there are choices to be made but in all of these areas the role that. governments play should be informed by solid analysis. In his work as a public servant Ian Stewart brought this analytical focus to. the role of the state The editors believe that we need more of this approach as. we move forward to deal with the challenges ahead On the occasion of Ian s. 80th birthday we have commissioned a number of leading Canadian econo. New Directions for Intelligent Government in Canada 1. IanStewartFestschrift book Page 2 Monday September 12 2011 1 07 PM. mists and former senior policy makers to contribute to this festschrift by. addressing specific public policy issues and the role of an intelligent govern. ment in addressing these concerns, The two editors of this volume have worked closely with Ian during differ. ent time periods and in different capacities In both cases Ian has served a men. tor role He hired Fred Gorbet right out of graduate school in 1968 and Fred. worked with Ian at the Bank of Canada Energy Mines and Resources the. Privy Council Office and Finance Andrew Sharpe s association with Ian dates. from the early 1990s With the demise of the Economic Council of Canada in. 1992 a vacuum in the supply of applied economic research in this country was. created The establishment of the Centre for the Study of Living Standards in. 1995 was orchestrated by Andrew Ian and David Slater Ian assumed the posi. tion of Chair a role he still holds 16 years later. Structure of the Volume, The papers in the volume are organized into four sections based on subject. areas macro economic policy including financial sector policy tax policy. social and health care policy and general public policy The volume also con. tains a biographical essay by our honouree Ian Stewart on his extraordinary. professional career We have also reprinted The Way Ahead likely the most. important document that Ian crafted during his years as a senior policy maker. in the federal government The purpose of this introduction is to provide a. synthesis or distillation of the incredible richness of the policy analysis con. tained in the 12 chapters produced by a stellar cast of leading academic econ. omists with an interest in public policy and public policy practitioners at the. highest level The list of contributors includes four Deputy or Associate Dep. uty Ministers of Finance not counting Ian two Chief or Assistant Chief Stat. isticians and four Past Presidents of the Canadian Economics Association. The Contribution of Ian Stewart to Public Policy, Born in 1931 Ian spent his early years on Toronto Island where his father. was superintendant of the water filtration plant He attended the University of. Toronto Schools UTS excelling in both academics and athletics After grad. 2 New Directions for Intelligent Government in Canada. IanStewartFestschrift book Page 3 Monday September 12 2011 1 07 PM. uation he followed family tradition and enrolled at Queen s University in 1949. where he studied honours economics and politics Not surprisingly given. Queen s long association with the public service in Ottawa Ian was exposed to. scholars who had been part of the Ottawa economic policy community such as. Bill Mackintosh Ian graduated in 1953 with the economics medal and. remained at Queen s to do his M A in economics which he completed in. 1954 Based on his outstanding academic record as well as his athletic prowess. and leadership ability he was awarded a Rhodes Scholarship to Oxford Uni. Ian returned to Canada in 1956 and gained employment teaching economics. at Queen s University By 1959 he came to the realization that a professional. career in economics required a PhD He enrolled in the doctoral program at. Cornell University in Ithaca New York where he specialized in econometric. modeling then an emerging field advancing with the IT revolution In 1962. he accepted a position in the Department of Economics at Dartmouth Univer. sity in Hanover New Hampshire After obtaining his PhD degree in 1965. with a thesis that built a quarterly model of the Canadian economy his. thoughts turned to the possibility of returning to Canada Fortunately the. Bank of Canada was recruiting and was particularly interested in Ian s skills. and experience in building econometric models an art then it its infancy Ian. accepted the offer, In 1966 Ian started his Ottawa career assuming responsibility in the.
Research Department at the Bank of Canada for the development of the RDX. econometric model of the Canadian economy There he assembled a stellar. team of economists including Harold Shapiro later President of Princeton. University and Michael Spence later a Nobel laureate in economics and of. course Fred Gorbet and John Helliwell The work on the RDX model at the. Bank of Canada represented a pioneering attempt to quantify the macroeco. nomic effects of various economic policy scenarios and Ian s leadership in this. area was a major contribution to public policy in Canada. In 1972 Ian joined the Planning Branch of the Treasury Board Secretariat. as a Director The mandate of the Planning Branch was to apply greater eco. nomic rationality to the allocation of resources among departments a chal. lenging task in a political environment At that time energy was beginning to. New Directions for Intelligent Government in Canada 3. IanStewartFestschrift book Page 4 Monday September 12 2011 1 07 PM. emerge as a key policy area and Ian developed an intense interest in this issue. In 1973 he was seconded to the Department of Energy Mines and Resources. EMR The turbulent oil markets of the 1970s placed many strains on the. economy and the federation and Ian s highly honed analytical skills were. applied to the preparation of many memoranda to cabinet on energy policy. during this period, In 1975 Michael Pitfield Clerk of the Privy Council Office PCO. recruited Ian to be Secretary of the Cabinet Committee on Economic Policy. These were turbulent economic times with inflation accelerating To deal. with this situation the government in October 1975 imposed wage and price. controls for a three year period The direction for economic policy after con. trols ended became a key concern To address this issue Ian with the close. assistance of Fred Gorbet drafted the document The Way Ahead which laid. out new policy directions for intelligent government focused not on care. lessly and blindly unwinding government interventions but on replacing. direct interventions with structural policies that would make the economy. more efficient One of the key messages of The Way Ahead is that failure to. design intelligent and effective policies may lead to social outcomes that may. require more direct intervention by governments at some risk to personal. liberty The experience of wage and price controls represented an example of. this and the publication sought to learn from that experience in the future. design of government policies The Government of Canada officially released. the document in 1976 It represents an excellent example of Ian s analytical. approach to policy development and captures and articulates very well the eco. nomic choices facing the nation in the late 1970s It is reprinted in the appen. dix of this volume with Prime Minister Trudeau s comments. In 1978 Prime Minister Trudeau offered Ian the opportunity to choose his. next assignment Given his keen interest in energy policy he chose EMR. where he was appointed Deputy Minister With the quadrupling of oil prices. in 1979 energy policy assumed even more importance Ian was at the heart of. the intense federal provincial and international negotiations on energy issues. dealing directly on a regular basis with the newly elected Prime Minister Joe. 4 New Directions for Intelligent Government in Canada. IanStewartFestschrift book Page 5 Monday September 12 2011 1 07 PM. In 1980 with the return of Prime Minister Trudeau to power Ian was. appointed Deputy Minister of Finance where he was responsible for three. budgets Certainly the best known and most controversial was the November. 1981 budget which curtailed a number of tax expenditure and tax avoidance. schemes to both improve fiscal balance and to incorporate greater equity into. the tax system Particularly in the context of the rapidly worsening recession. the tax measures met with substantial resistance and the budget encountered a. hostile reception forcing the government to rescind some of them Future. Deputy Ministers of Finance learned greatly from this experience Ian s last. budget in June 1982 introduced the 6 and 5 program to limit wage increases. in the public sector The program contributed to a moderation in wage. demands and hence wage expectations in both the public and private sectors. In November 1982 after nearly three stressful years in the most important. New Directions for Intelligent Government in Canada Papers in Honour of Ian Stewart Edited by Fred Gorbet and Andrew Sharpe IanStewartFestschrift book Page 1 Monday September 12 2011 1 07 PM

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