Kahane: What keeps you up at night?
Himelfarb: The number one issue for me is inequality. Let’s think of the bottom, middle, and top of society. On the bottom, the situation with the poor isn’t worsening, but it also isn’t improving and certainly not at the rate that we see in many other rich countries. Against other rich countries, we’re doing badly, and on First Nations and aboriginal issues and on child poverty, unforgivably badly.
The middle class is unquestionably stretched. Two things mask the extent of the problem. First, over the last decade, women have worked more hours than before, so many households have not actually fallen in fortune. But there are a limited number of hours in a day, so when you hit a certain point, you can’t grow any further. The second thing is petro jobs. The oil-rich provinces of Newfoundland, Saskatchewan, and Alberta have done pretty well for working-class folks, because they have relatively high-paid jobs, but this success is regionally focused. Mostly our labour market performance has been shabby, wages have not kept pace with productivity gains and only barely with inflation, and more and more Canadians, primarily but not just young Canadians, are finding themselves with precarious jobs, with no security, benefits or prospects. So you’ve got significant middle-class problems that, if unattended, are just going to get worse, but because we have all these headlines about how well we’re doing compared, say, to the US (who have the most serious inequality problems among rich countries), you can’t get any traction on it.
Then at the top, we have probably the fastest acceleration and concentration of wealth of any country. Capital always talks louder than labour—that’s why it’s called “capitalism” and not “labourism”—but now the bargaining power of capital is through the roof. So money talks louder than ever.
Kahane: What do you see as the impact of this growing inequality on our society?
Himelfarb: When the people at the top and the people at the bottom are breathing such different air, it’s hard to identify a common public interest. People at the top decide they no longer need public services, so they effectively secede from society. When the gap is extreme they also seem increasingly to believe they somehow deserve all they have. If they don’t need the services and deserve their wealth, why pay taxes? People at the bottom start to think that the game is fixed, and there’s nothing in it for them. They don’t want to vote and they don’t want to pay taxes.
Kahane: Does government have a role to play in countering these problems?
Himelfarb: We have had 30 years of an assault on government. The right’s greatest success has been to equate government with inefficiency and corruption and to identify the main problem as the size of government. Is the problem climate change? No, the problem is the size of government. Is the problem inequality? No, the problem is the size of government. And the solution is to make government smaller. That’s a conjurer’s trick! That’s a distraction! And it has worked profoundly.
For example, when the federal government cut GST, nobody pushed back; nobody asked what the costs would be. The government cut the tax by 2 cents, which is $14 billion a year. Where was the leadership from the universities, for example, saying, “Wait a second, we could use that”? Some municipal leaders did say that but no one was listening.
The biggest impact of this austerity movement is that it stunts the political imagination; it makes it feel like nothing’s possible collectively. Each of us is on our own. So I see not only this invisible, incremental, hard-to-talk-about growth in inequality, but also the loss of the collective capacity to do anything about it.
Kahane: How do we restore our trust in our collective capacity?
Himelfarb: One of my favourite comments from Thomas Piketty (author of Capital in the Twenty-First Century) is, “Capitalism and markets should be the slave of democracy and not the opposite.” Democracy is vital to our economy and to our fixing our problems. So we have to renew the democratic process. We have to close the gap between governed and governors and give people a sense that they own the future. We need to have the kind of debates that help you start defining paths forward. We’re not having those right now.
I believe that leadership matters. Leaders must engage people by saying, “I want you to be part of this process. But don’t tell me what you personally need—we’ll get there. Instead, ask yourself, ‘What does Canada need?’” The question remains, can we create a democracy that allows people to rise above their personal preferences in this way?
Kahane: But doesn’t our weakened trust in one another make it harder for us to act collectively?
Himelfarb: One of the reasons why our institutions, including our political institutions, are so important is that, as former Prime Minister Trudeau observed, Canada is an act of defiance. Canada makes no sense: We are dispersed geographically; we have a terrible climate; we have two official languages and many non-official; we have no revolutionary moment that binds us; we are a country of immigrants; we are a country of great regional diversity. For these reasons, we have to work at being Canada. And when we lose trust in our government and in each other, it weakens us.
I know it’s massively arrogant to say this, but I believe the world needs Canada to succeed. We are an experiment that says, you can have and value profound diversity and still find common purpose when you need it. You can build the capacity to share and trust across these differences.
Kahane: Was achieving that sense of common purpose part of what inspired you to dedicate your life to public service?
Himelfarb: I loved my time in public service, was proud to be in the federal government. There was and is a lot wrong, a lot that needs still to be fixed—but that’s true of all our institutions, public and private and in between; all have to adjust to the information age and changing global realities. And no doubt government and public service have to reduce the level of bureaucracy—a function of the industrial age—and figure out how more fully to engage and empower citizens. But I have also seen government achieve fine things. During the four years I was Clerk, the federal government said “no” to Iraq, said “yes” to Kyoto, changed our electoral financing act to bring in more public funding and take out union and corporate donations, tried to limit the influence of money in our politics, said “yes” to same-sex marriage, increased national child benefits and support to Canadians with disabilities, invested in universities and science, expanded the park system and protected wilderness areas, signed the Kelowna accord to redefine our relationship with aboriginal people, and signed with all provinces and territories a 10-year health accord. There are many problems in all of this—imperfect designs, failure in some cases to deliver on the promises—but a lot of good.
Kahane: So you certainly didn’t leave with the feeling that government couldn’t do anything.
Himelfarb: I left with the feeling that it’s there to be had. But as they say, we get the government we demand, and I might add the future we are willing to fight—and pay—for.