Kell Petersen

Gray Cameron

Feb. 8, 1999

By Fax and Mail

Charles Perrin, Director

Strategic Services & External Relations

British Columbia/Yukon Territory Region

Human Resources Development Canada

15th Floor, 300 West Georgia St.

Vancouver BC  V6B 6G3 

Dear Mr. Perrin:

 RE: P&A’s offer to HRDC

 Thank you for our Jan. 28, 1999 meeting in the company of Mardy Duncan and Jim Hawkey.  The background to the meeting was our address to HRDC of issues we have identified within HRDC (and provincially shared) policies and programs aimed at assisting business and industry.   

Our initiative is based on our ongoing analysis of the strategic issues facing British Columbia and the Canadian economy and experience with HRDC and provincially shared programs in the corporate sector, including Community Futures, the Business Development Bank and the Province of BC.  In addition, a recently finalized strategic analysis for a BC municipality has strengthened our analysis and increased our concern.  

We appreciated the opportunity to discuss some of the issues in the perspective of BC’s situation as well as in the wider perspective of the Canadian economy and community at large. 

We emphasize that we regard you, Mardy Duncan and Jim Hawkey as well versed in the discussed issues.  Any recapitulation of elementary knowledge and discussion of social, socio-psychiatric and economic behavior or other country’s structural challenges is merely intended to provide a basis for dialogue. 

We also recognize the difficulty to define P&A’s perspective, offer, and approach in the context of the economy, international parallels, and current HRDC and government programs in just two hours.  Nevertheless, we hope that the meeting and this and previous letters provides insight into P&A’s outlook and approach to solving the issues.  

The following provides a brief outline of the reasons we are addressing the issues and offering our services to HRDC.  

Community development, social satisfaction, quality of life, and the tax base depends on and varies directly with the level of sustainable economic production and the distribution of real income and social satisfaction in the community. 

Our economic wealth generating and wealth distribution system depends on two interrelated fundamentals:   

1.      a competitive sustainable business and industrial sector which combines our resources into economic production - distributing wealth and securing the tax base through (better paid) employment.   

2.      a government sector that provides the service that the pricing mechanism and private sector fails to provide, as well as those services which the community in good democratic order has decided should be provided by government. (Not to say that government service must always be excluded from the pricing mechanism.) 

In the interrelationship between business and government, business combines resources in pursuit of profit and in order to satisfy its interest groups.  The government sets the framework for industry and the community at large.

The community must assume that the government will analyze and detect issues in the pricing mechanism and industrial sector and address them to industry - and intervene if necessary - before the issues become acute, causing job losses, socio-economic problems and social discontent.  

For example, the problem in the forest sector was that industry failed to identify the economic and market shifts and ecological issues.  During the good times, the system failed to encourage long-term investment, adding value, and using fewer resources.  During the bad times, it stimulated industry to expect government assistance and bailouts.  

It is reasonable to say that government did not provide the service the pricing mechanism and private sector failed to provide.  

The government failed to analyze and detect the problems in the industry, including issues in the government’s own policies.  Both industry and government seems to have been unaware of the real depth of the market, financial, organizational and ecological issues facing the industry.  

It is not realistic to believe that industry will take an overall community responsibility for these issues.  Therefore, we need government to analyze and monitor shifts in the economy and marketplace and to identify issues facing all sectors and individual industries important to a local economy.  

That includes issues such as industry investment into consumer and market research, education and training.  Without continuing research, the community loses the ability to profit from the increase in knowledge that is available.  The community depends on industry to invest in research of new ideas, to find new uses for knowledge resources and technology, and to find new ways of doing things that adds value and promotes sustainability.  These issues are particularly important to BC. 

What level of government has the mandate and responsibility to analyze, detect and address issues in industrial sectors on a national, provincial or local level?  Which level of government has the mandate to identify and address issues in the regional and local economy – such as in Prince Rupert - before the problems become acute.    

Our municipal government has an administrative function that is limited to infrastructure planning. It is significant that local governments have no economic, social and ecological mandate and responsibility.  

The powers of economic development and responsibility to allocate resources to a sector of the economy or a specific problem area are shared between the federal and provincial governments, as our constitution states: government is committed to … “ furthering economic development to reduce disparity in opportunities”.   

HRDC has a unique mandate in the Canadian economy; allowing HRDC to participate on all levels in the Canadian economy, and in the local community economic development process, directly or in cooperation with the provincial government.  

Our analysis addresses the importance for the community that HRDC refine policies and programs aimed at assisting business and industry.  

The principal issues

 The central issue in our discussion, is the effect that the shift to a more open, knowledge and technology-driven, global economy will continue to have on social satisfaction and quality of life in BC.  The resource and manufacturing sector is no longer fuelling the economy and tax base with lower-educated better-paid jobs.

As discussed, BC communities will increasingly need more federal assistance, better coordination between all agencies in the assistance process, and an ongoing refinement of programs in recognition of the global economic and market shifts.  

The gap between jobs available and people with the skills to fill them will be the dominating factor for the socio-economic standard in the future - not employment statistics.  Recognising the “bell curve” reality, the community will have to concern itself with more than merely the development of well-educated well-paid jobs. The quality of life for the well-educated and social establishment will also depend on the economy’s ability to secure lower-educated well-paid jobs.

 HRDC has a major roll in this area.

 The role of government institutions

 Community development ultimately depends on economic production occurring in the local community.  Most agree that the economic production of a competitive and sustainable industry that generates well-paid jobs is the best way of generating and distributing wealth and securing social satisfaction.  Experience over the past fifty years shows that the alternate method of distributing wealth via tax transfers and individual and corporate welfare is not sustainable. 

Therefore the question of the government’s role and function in the market and pricing mechanism will be an increasingly important issue.

The Government’s most important function in a rapidly shifting knowledge-driven marketplace is to: analyze and address the market, financial, organizational and environmental issues, and facilitate co-operation before problems in the pricing mechanism and private sector become acute; showing up in financial statements and job losses.

Our analysis is that HRDC has a key role to fill in identifying and addressing the strategic issues facing the industrial sector and in facilitating solutions in order to secure social satisfaction at the community level.  

Further, the success and cost effectiveness of decentralization of programs will depend on the central organization providing the local organization with the support necessary to solve issues in the local economy and marketplace.  Further that the central organization has the information necessary to support the local organization before problems become acute.   

We have identified a need for HRDC to assist local organizations to develop better analysis, planning and control/accountability tools.    

The Need for Better Strategic Audit and Analysis  

Government programs will have to change from the post and Cold War policies and reactive approach - reacting to the ‘mill’ closing down, and focusing on carrying the communities over short recessions.  The community needs the government to take a progressive approach where government identifies and addresses strategic issues and discusses solutions with industry.

 It will not be sustainable in the future to allow issues such as in the BC forest sector to remain unsolved for more than twenty years  - and be allowed to escalate into socio-economic and environmental adversity. 

P&A’s offer

We will continue to offer our experience and expertise to assist in refining HRDC’s methods and systems involving assistance to industry and community development.   

We would also be pleased to discuss other areas where HRDC feels that P&A’s skills could be utilized – such as in program analysis, specific business or community cases, in strategic reviews of assistance, support, or co-ordination with other agencies. 

Obviously, from the outside we lack knowledge of HRDC’s concern and focus. Therefore, based on issues we have previously identified, we have suggested some specific areas where our skills may be applied.   

We have already offered an initial analysis of a ‘region’ (size and location to be determined by HRDC).  The purpose of the initial analysis being primarily to:  

a)      document the identified issues and develop an information platform for long term improvement and development of methods and systems for assistance to industry and community development

b)      provide information that could be utilized for short-term improvements while waiting for the long-term changes and development to be implemented and take affect.  

In our Jan. 28 meeting we discussed an analysis of an assistance case to business involving HRDC and other agencies.  The purpose would be as in:  a) and b) above.  

Another alternative would be to utilize our knowledge and ongoing analysis of the conditions and current government programs to develop a discussion paper on the issues facing community and business development in BC.   

 The purpose would be to provide an information platform for discussion and further analysis. This offers a smaller scale project that would allow HRDC to assess P&A’s abilities while securing another perspective and information that would be useful for future planning and program development. 

With over twenty years in experience in Strategic economic, market, and organizational, audit, analysis, and implementation of solutions, we feel that P&A has a lot to contribute to HRDC, Community Futures, or other related programs.   

Again, thank you for the meeting and opportunity for discussion in Vancouver.  We would appreciate hearing from you at your earliest convenience.   

Sincerely,  

Gray Cameron                                      Kell Petersen

cc:  Marty Duncan