Guest Column; Business must practise what it preaches

The Canadian business community faces a crisis of confidence in our credibility with the general public. Too many Canadians believe that we, the business community, do not operate in a manner that benefits their individual interests and the interests of Canada as a whole.

Consider the following: Ten years ago, according to Decima Research, 27% of Canadians thought business leaders were unprincipled. As of March, 1990, that figure had risen to 45%. Ten years ago, 18% believed business leaders were incompetent. At the start of this decade, 37% of Canadians felt that way.

As for public perception about where business priorities lie, 91% of all Canadians believe corporate leaders are more concerned with money than with people, up 10 percentage points from 1980.

Finally, last year another poll revealed that close to half of all Canadians agreed that companies were not above saying something untrue simply to make a sale.

Obviously, just because 91% think business leaders put dollars above individuals does not mean that 91% of our business leaders do so. But that’s really not the point. The point is that people think we do. And the unfortunate reality is, that through our actions and attitudes we sometimes aid and abet these perceptions unwittingly.

A case in point is the topic of competitiveness.

Numerous corporate leaders and business associations deliver speeches and position papers on the subject all the time and I suspect many Canadians have at least a passing awareness of the issue. How important they consider the issue and how believable they consider those who promote it is another matter. Canadians are told, for instance, that Canada needs to do more research and development, train its workers better, implement the latest technologies, develop more efficient production processes, and so forth. They also hear business say that to enhance its own competitive position, it needs to rely more on the disciplining force of the marketplace and less on government intervention and protection.

This latter message — the folly of protectionism — has received especially strong support from advocates of free trade with the U.S., such as the Business Council on National Issues, the Conseil du Patronet du Quebec and the Canadian Federation of Independent Business.

While I support these arguments, many Canadians have a problem when we read about business leaders who on the one hand pay lip service to the idea of open competition, while on the other hand take advantage of all sorts of government subsidies, handouts and bailouts — the very things that hamper innovation, dampen the urge to compete, and prolong and reward inefficiency. For example, in the early 1980s a number of Canadian firms abused the federal government’s $3.2-billion program — known as scientific research tax credits — to fund questionable research projects.

How can we expect the public to take the importance of research and development seriously — to take just one facet of the competitiveness issue — when some of the companies and individuals that should be among its most ardent supporters so blatantly abused the mechanisms created to nurture and support it?

Or on a broader scale, how can we expect the public to view the business community in general as credible proponents of any aspect of competitiveness — from market enterprise to fiscal restraint — when in 1989 Canadian business collected nearly $32 billion in both direct and indirect subsidies? In the short term, subsidies can play an important role in stimulating investment in promising areas of economic activity. But in the longer term, they shift economic resources toward less efficient and less productive enterprises, and raise expectations of success that are seldom satisfied. Couple that with the continued willingness of many businesses to accept subsidies, and is it any wonder that people can be suspicious of the private sector when it talks about competitiveness?