March 19, 2016
March 20th is world happiness day. How happy are Albertans today given the depressed economic conditions we face?
Should happiness be considered a proper measure of social progress and the goal of public policy?
Or should a new economic paradigm based on well-being be the new goal for public policy and a new economic frontier for Alberta.
This week the UN released it’s fourth annual World Happiness Report that ranks 157 countries by their happiness levels. This year Canada ranked 6th overall, falling from 5th place in 2015.
Canada’s average happiness score was 7.40 out of a maximum score of 10 happiness points (where a score of 10 means that people feel they have ‘the best possible life). The top 5 this year are Denmark (7.53), Switzerland (7.51), Iceland (7.50), Norway (7.50), and Finland (7.41). The United States came in at 13, the United Kingdom at 23, France at 32 and Italy at 50.
According to economist Jeffrey Sachs, one of the co-authors of the World Happiness Report along with Canadian economist John Helliwell (University of British Columbia), the happiness survey aims to measure “the scientific underpinnings of subjective well-being.”
I agree with Sachs and Helliwell that it is possible to orient public policy, economic development goals and budgets towards well-being rather than purely maximizing GDP and productivity. I believe it is possible to develop a broader suite of performance indicators that would incorporate metrics of the conditions of well-being of people, neighbourhoods and the land that would balance with conventional economic and financial performance measures.
Why is this important to Alberta? What opportunities exist today with Alberta in its current existential crisis as oil prices have plummeted? Is this crisis an opportunity for Alberta to chart a new course on a new economic pathway? Can well-being become the new operating principle and focus of governments?
In 2014, Alberta ranked 6th in overall life satisfaction; over 92% of Albertans report feeling satisfied or very satisfied with life, according to Statistics Canada. Alberta ranks behind #1 ranked Saskatchewan and #2 ranked PEI, with Ontario and Nunavut at the bottom in life satisfaction.
However, a more recent 2016 poll by Angus Reid of 1,530 Canadians found that only 80% of Canadians considered themselves to be either ‘very happy’ or ‘pretty happy.’ Only 80% of Albertans said they were very happy or pretty happy while 17% said they feel ‘not too happy.’ Roughly 12% of Albertans considered themselves ‘very happy” the lowest percentage in Canada other than Atlantic Canada where only 9% felt they were ‘very happy.’ Around 18% of Canadians regarded themselves as “not too happy.”
These results should be encouraging. Why? Because it seems Albertans remain bullish about life, despite a significant 61% drop in oil prices in Alberta since the high of US$98/bbl in 2013 and a sharp rise in Alberta’s unemployment rate from 4.6% in 2013 to 7.9% in February 2016.
Yet there appears to be rising anxiety and falling mental well-being as suicides are on the rise. Nothing kills happiness more than being unemployed. Statistics show that for each 1% rise in the unemployment rate, the rate of suicide increases by 0.79%. Alberta’s Medical Examiner expects suicides will increase by 30% in 2015 compared to 2014. Suicide statistics for the first six months of 2015 already counted 327 suicides compared to historical annual provincial suicide rates of 500-550. More people commit suicide in Alberta than are killed in car crashes (about 350 fatalities per year).
Since 2012 Alberta’s number of unemployed rose by 85% from 105,092 Albertans unemployed to 194,300 unemployed by February 2016. This is cause for serious concern about the mental and emotional well-being of Albertans.
Talk to folks on the streets of Edmonton and Calgary and many are stressed and anxious about their short-term future. When will prices recover? When will we get back to the glory days of $90/bbl oil? There are many grumbling about Premier Rachel Notley’s NDP government as if government is responsible for international oil markets and prices.
I believe this economic crisis presents a perfect opportunity for Albertans to step back and take stock of the new opportunities that present themselves in the eye of this economic storm. Albertans seem to come up with the best innovations during times of crisis.
In the 1930s the Great Depression left Albertan virtually bankrupt. This gave rise to the innovations of Premier Aberhart and his social credit government that led to the creation of the Alberta Treasury Branch, a genuine public bank similar to the Bank of North Dakota. Today ATB Financial is the largest public bank in North America with over $43 billion in assets. What few Albertans appreciate is that ATB is our bank, a pubic bank. Having our own public bank means we have more financial leverage than any other province. Combining ATB’s assets with our own Alberta Investment Management Corp. (AIMCo) with over $83.9 billion in investment assets, Alberta is financially asset rich. AIMCo, an Alberta crown corporation which includes the Alberta Heritage Savings Trust ($18.4 billion), is the third largest public pension fund in Canada after the Canadian Pension Plan ($282 billion) and Quebec’s Caisse de dépôt et placement du Québec (CDPQ) with $248 billion in investment assets.
The sole shareholder of both ATB Financial and AIMCo are ultimately Albertans, through the Minister of Finance of the Alberta Government.
What are the potential options for leveraging the $127 billion in combined financial assets of our most important financial asset, the envy of any other province? How could we begin to invest in the idle and unrealized human, social and natural assets of this province? How could we operate the province based on a balance-sheet approach to ensuring the highest-and-best use of these assets?
Instead of bemoaning the state of Alberta’s economy and low oil prices, it’s time for Albertans to consider new opportunities to leverage the amazing assets we are blessed with. On March 20th, perhaps we can celebrate our gifts, count our blessings, and find a path to enduring happiness.