September 17, 2019

The Big Idea Most People Missed in the MacKinnon Report

mackinnon report

As appeared in the Calgary Herald

The MacKinnon report on Alberta’s finances released last week is exactly what this province needs in terms of cold, harsh reality. Our problem has been spending. Our economic success led to complacency—in spending and in results. Now, given that we are no longer the “rich kid,” as Finance Minister Travis Toews rightly remarked, Alberta’s future prosperity hinges on getting our financial house in order and demanding that the outcomes of our health, education and social sector investments yield same or better results than our peer provinces.

The excessive spending in many areas is easy to see in the report. But what stood out for me was the exciting notions of long-termism, innovation and competitiveness that have been too absent in the dialogue of Alberta.

It will not serve our province to do less, we must instead do better. That’s the path to shared prosperity. Business knows this.

Innovation is how we build an adaptable province that can roll with change, and it’s part of how we chart a course to building Alberta’s future on purpose, rather than just stumbling into it.

While businesses survive and thrive through innovation—and all us of enjoy the advances of technology in our lives—one of the key challenges is getting government and policy to keep up with innovation and refine how it does business in the 21st century. What might happen if government and its hard-working public servants were empowered to be innovative and help drive shared prosperity?

Over and over the MacKinnon report calls for innovative new ideas: in how we transform health care and deliver services. Innovations in our education system. Innovations in procurement. Innovations in policy. There are at least 11 different kinds of innovation specifically discussed.

One innovative policy idea is particularly exciting: a Nexus-style pass to fast-track business through regulatory burden. For the Nexus traveller program, frequent travellers take some time to apply and undergo background checks and scrutiny. If approved, they get certified as “trusted.” That means they get to breeze through airport security and customs with a minimum amount of screening.

If a traveller abuses this privilege—for example, by bringing back extra goods and not declaring them — the penalties are stiff and can result in lifetime bans. There are regular random checks and if you violate the terms, you are, as they say, up the creek without a paddle.

Overnight, Alberta could change its position as one of the most burdensome places to get approvals and permits in Canada to one of the fastest. Our attractiveness would benefit and it could mean more jobs and more investment.

Implementing a business approvals Nexus-type program would enable trusted companies to apply based on background checks, previous performance and commitments to performance in the future. As long as they continue to hold themselves to the highest standards, follow all regulations and pass all routine spot inspections/checks, their projects should be approved as quickly as the Nexus travellers get through security. Many Alberta companies have been doing business here for 100 years or more, and yet we’ve buried them under seven stories of paperwork to do things they’ve done thousands of times before.

For example, many facilities in Alberta need their permits renewed every five years. This means filling out a bunch of paperwork, even for a power station or gas line that has been operating without incident for decades. The timeline for these re-approvals has gone from weeks to months, and now routinely stretches to nine months or more.

Our aspiration should be to reduce the re-approval timeline to one day. Why not automatic re-approval? If nothing material has changed, and the facility is operating safely and within regulation: approved.

Now, we have regulations for good reason: they keep us safe and weed out bad actors. With Nexus-style innovation for business, we can focus our attention and enforcement on the highest risk areas, new entrants and those with bad track records.

Some will say that companies could abuse this pass to cut corners or skirt rules. While that could happen, it would be a terrible business decision. Breaking rules or cutting corners would put you in the penalty box for a long time, and Canadians know you can’t win any games from the penalty box.

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