Tagged: SocialSituation

Frequently Asked Questions: End of milk quotas

Why and when were quotas established?

Milk quotas were introduced to address the structural oversupply on the EU market of the late 1970s and early 1980s that had led to the infamous milk lakes and “butter mountains”. EU dairy farmers were guaranteed a price for their milk (considerably higher than on world markets) regardless of market demand. Despite different efforts in the 1970s to slow down EU production, it continued to rise much faster than domestic demand. The system was also having a negative impact on world market prices, as the EU frequently subsidised exports on to the world market.

In July 1983, the European Commission proposed to introduce milk quotas, and this was agreed by the Council on March 31, 1984. The regime required a quota being fixed for each individual producer or purchaser, with a levy (“superlevy”) payable for those who exceed their quota. Subsequent changes have meant producers only have to pay the levy when the Member State also exceeds its national quota.

Do quotas cover all milk, such as sheep and goat’s milk?

No, only cow’s milk. Other milks represent only a tiny share of the EU milk market.

Have quotas achieved their purpose?

The system of quotas – and the threat of levy – helped to cap the expansion of EU production. The butter and skimmed milk powder “mountains”, which had exceeded 1 million tonnes, fell steadily. However, there have been other important changes to the Common Agricultural Policy which have led to a much more market-oriented sector. Successive reforms of the CAP have seen a reduction in guaranteed prices, with a range of policy tools aimed at stabilising farm revenues, notably the system of direct payments, primarily decoupled from production.

Why remove them now?

Milk quotas were originally introduced for 5 years, but the expiry date has been put back several times. The final date was decided in the 2003 CAP reform, and reconfirmed in 2008 with concrete steps to provide a “soft landing” by the end of March 2015. The primary reasons for deciding to end milk quotas was that there has been a considerable increase in consumption of dairy products in recent years, especially on the world market – projected to continue in future – while the quota regime is preventing EU producers from responding to this growing demand. For example, EU exports of dairy products to Korea have more than doubled between 2010 and 2014 from €99mn to €235mn. This corresponds to an increase in the EU’s share of Korean dairy imports from 28% to 37% over the same period. With close to €55bn, the dairy sector represents 15% of the total EU agricultural output. Milk is produced in every single EU Member State without exception in around 650 000 dairy farms. On top of that, there are about 5 400 dairy processing companies in the EU employing 300 000 people. They should be given the possibility to fully benefit from the growing global consumer demand, particularly in Asian markets.

Because the end of milk quotas represent opportunities but also concerns, successive reforms have found other, more targeted ways of helping to support more vulnerable areas, where there are strong social and economic reasons for trying to maintain dairy farming.

I am a milk producer, what does it mean for my daily work?

The end of quotas means that there is an administrative simplification in terms of monitoring daily production. However, there is also an additional requirement and responsibility to monitor market signals more closely (producer organisations and cooperatives may play a decisive role in this respect). In this sense, the Commission has set up the Milk Market Observatory in order to increase market transparency and make the sector aware of the market situation. The slowdown in EU production since the end of last year in the face of less positive market signals is a clear example of where the sector is already responding to the market.    

Does this leave dairy farmers without any protection or support?

Extreme price volatility is limited by the “safety net” instruments still available under the Common Market Organisation (public buying in of butter and skimmed milk powder and private storage aid schemes). The Commission has also the possibility to intervene in exceptional circumstances, as it was the case last year with the Russian import ban in the Baltics countries and in Finland.

As well as the system of “decoupled” CAP Direct Payments, Member States have a range of options open to them which they decide at national on regional level. Options include an additional payment for areas with natural constraints and the possibility for voluntary coupled support for certain regions or certain sectors in fragile situation. In implementing the 2013 CAP reform, 18 Member States have introduced a coupled payment for the dairy sector – worth just over €800 million in 2015.

Also, under Rural Development Programmes, Member States or regions have the flexibility to target support at specific challenges such as dairy farms in fragile areas. Possible measures available here include support for investments in physical assets, payments to areas facing natural constraints, income stabilisation tools, advisory services, incentives for innovation, but there are more. Another option includes support for establishing Producer Organisations.

As well as this financial support, the CAP provides practical and organisational support under the 2012 Milk Package*, such as clearer rules on written contracts but more importantly increased bargaining power for producer organisations.

There is also a role for Interbranch Organisations in the dairy sector. These may carry out a series of activities, including improving knowledge and transparency on production and the market; helping coordinate better the way products are placed on the market, in particular by means of research and market studies; promoting consumption; carrying out the necessary research to adjust production in favour of products more suited to market requirements, in particular with regard to product quality; and promoting innovation, etc.

Before the expiry of the Milk Package provisions in 2020, the Commission is committed to present a Report to the European Parliament and the Council before the end of 2018 on the development of the dairy market situation.

 

Aren’t we running the risk of over-producing again?

No, there is not a risk of the same sort of structural surpluses as in the past. The guaranteed price for butter and skimmed milk powder now merely serves as a safety net – such as during the 2009 dairy crisis, where it put a floor in the market. This means that producers are looking at the market when they decide how much to produce. Increased focus on added-value products (such as cheese and yoghurts) as well as on ingredients for nutritional, sports and dietary products have a strong potential in terms of growth and jobs for the EU.

What are the forecasts in terms of production at Member States and EU level?

While some Member States perceive the end of milk quotas as a source of concern, others welcome the opportunities provided by it.

The Commission’s medium-term market outlook last December forecast continued growth in exports, especially for cheese, skimmed milk powder and whey. See page 35 for more detailed prospects per Member State.

 

How has the sector evolved over the years in terms of producers and production?

As in most agricultural sectors – and most sectors of the economy – there has been a gradual decline in the number of dairy farmers around the EU in the past 30 years (-6% a year on average). Average herd sizes have tended to increase, and improvements in genetics and feed efficiency have helped increase the average yield per cow. However, the situation widely varies from Member State to Member State: milk specialised farms in the EU-15* have a milk yield of some 7 300 kg/cow for an average herd of 54 cows, while in the EU-10** the average yield is 5 700 kg/cow for an average herd of 19 cows and in the EU-2*** the average yield is 3 400 kg/cow for an average herd of 5 cows. (This compares with average herd sizes of 115 cows in the USA, 258 cows in Australia and 413 cows in New Zealand.) In addition to this consolidation, we have seen dairy farmers working more closely together through cooperatives. The overall level of production has remained relatively stable, limited by the quota regime. However, the greater market orientation has seen a greater shift towards more added-value products, especially for exports. For example, EU cheese production from 2003 to 2013 increased by 26%, while the volume of exports rose by 69%. The share of ingredients is also significantly increasing notably targeting new nutritional needs linked to modern living habits and evolving demography.

One of the other crucial elements has been the additional investments provided by EU Rural Development funding, in particular for individual farm modernisation projects, but also on other investments. Figures for the 2007-2013, show that EU funding for farm modernisation amounted to 1.8 billion EUR, which was matched by 1.4bn EUR of national/regional public funds, and nearly 7.4 bn EUR of private investment – such that a total of more than 10.6bn EUR was spent on dairy modernisation over the period.

* Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, United Kingdom.

** Czech Republic, Estonia, Cyprus, Latvia,Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia

*** Bulgaria, Romania

Will it create greater price volatility for milk?

Volatility is a normal characteristic of agricultural markets. The European dairy sector is now following a market-orientated policy, which means that, following the ending of milk quotas, production should be based on market needs and opportunities. Where possible, supply and demand should be adjusted to meet those needs and opportunities.

The EU is the most important milk producer in the world and a major player which, with or without quotas, is connected with the dynamics world market. So while experience show quotas cannot prevent crisis, they certainly do impede our farmers to follow market signals and take advantage of market opportunities.

The role for the public authorities is limited to safety net measures. Public intervention remains available if prices drop below a reference level.

Underlying demand growth has not been affected by the latest market downturn – population growth, rising incomes and changing dietary preferences are all positive demand drivers. So, there is good reason to be optimistic about the future

Will this mean that consumer prices get cheaper?

Past experience shows that there is not always a correlation between what the farmer gets paid and what the consumer pays. For example, the significant increase in the farm gate price during the first half of 2014 (+13% for the EU) was generally transmitted to consumer prices for both milk and cheese, but with significant differences between Member States – Germany +8.4%, France +0.8%. By contrast, the generalised decrease in producer prices in the second half of 2014 did not prevent a further increase in consumer prices in most Member States, although to a small extent.

Changes in producer & consumer prices, 2014 relative to the same period of 2013 (in %)

Producer Prices

 

Consumer Prices

Jan-Jun 2014

Jul-Dec 2014

Jan-Jun 2014

Jul-Dec 2014

EU

+12.6%

-7.7%

+3.2%

+1.5%

Germany

+15.3%

-11.7%

+8.4%

+4.0%

France

+12.1%

-0.6%

+0.8%

+0.6%

Poland

+14.9%

-9.6%

+3.4%

+1.1%

UK

+13.2%

-2.4%

+1.6%

-0.5%

Source: DG AGRI Short-term market outlook

STATE OF THE NATION ADDRESS BY HIS EXCELLENCY LT. GEN. SERETSE KHAMA IAN KHAMA,

STATE OF THE NATION ADDRESS BY HIS EXCELLENCY LT. GEN. SERET…

13/11/14

1. Madam Speaker, before we begin may I request that we observe a moment of silence for those of our citizens who have departed from us during the past year. Thank you. 2. Honourable Members, it is my pleasure to once more present an updated assessment of how Government intends to move Botswana forward by seizing opportunities to secure our future. 3. As this is the first session of the 11th Parliament, let me preface my remarks by welcoming the newly elected members of this Assembly. Let me further congratulate you Madam Speaker on your own election.

STATE OF THE NATION ADDRESS BY HIS EXCELLENCY LT. GEN. SERETSE KHAMA IAN KHAMA, PRESIDENT OF THE REPUBLIC OF BOTSWANA, TO THE FIRST SESSION OF THE ELEVENTH PARLIAMENT – “MOVING BOTSWANA FORWARD”

 

INTRODUCTION

 

1. Madam Speaker, before we begin may I request that we observe a moment of silence for those of our citizens who have departed from us during the past year. Thank you.

 

2. Honourable Members, it is my pleasure to once more present an updated assessment of how Government intends to move Botswana forward by seizing opportunities to secure our future.

 

3. As this is the first session of the 11th Parliament, let me preface my remarks by welcoming the newly elected members of this Assembly.  Let me further congratulate you Madam Speaker on your own election.

 

4. Today’s gathering is an outcome of our 11th consecutive general election. As is our tradition, the ballot was conducted in a peaceful, free and fair manner. For this we can once more thank Batswana in general, as well as the Independent Electoral Commission (IEC) and other individuals and organisations that helped to ensure the poll’s success.

 

5. In any democracy elections are the means to the greater end of forming a Government capable of translating the popular will into public service delivery. We who have the honour of sitting in this House are accountable to the hundreds of thousands who entrusted us with their votes. Although divided in their choices, the voters were united by a shared desire for a better future. It is, therefore, our responsibility to ensure that together we deliver that future by at all times putting the national interest before our own.

 

6. Last month my party, the Botswana Democratic Party, was re‐elected on the basis of a detailed manifesto that promised to secure our common future by building on our past achievements. Today, before this House I reaffirm our commitment to honour that pledge.

 

7. In as much as we recognise that a government of and by the people is not an event but a process; this administration shall continue to engage Batswana across the country about their concerns through various fora and media, from the venerable realm of dikgotla to the digital world of interactive online communication. It was as a result of wide-ranging consultation that our manifesto was predicated on what we understood to be our citizens’ core aspirations. These include achieving:

 

• Job creation for sustainable livelihoods and income generation;

• Food security through continued agricultural renewal;

• Expanded access to land and housing ownership;

• Access to world-class quality education that caters to current and future needs;

• Citizen, including youth, economic empowerment;

• Dignity for all through the eradication of poverty;

• Zero tolerance for corruption in all of its manifestations;

• Elimination of mother-to-child transmission of HIV; and

• Government reform that leverages on the application of new technologies. 

 

8. Each of these commitments is based on realistic analysis of where our country is and needs to go in order to meet the reasonable expectations of its people, while improving our global standing in an ever more competitive world. Taken together they are consistent with our broader vision of achieving inclusive sustainable development that upholds the dignity of all.

 

ECONOMIC OUTLOOK

 

9. Madam Speaker, owing to the prudent economic and financial management by my Government, the country was able to survive the 2008/09 global financial crisis and economic recession with minimum impact on the domestic economy. We were able to save jobs in both the public service and private sector, as well as continued to provide essential public services to our people.

 

10. Having successfully weathered the storm of the economic downturn, we can look forward to better days ahead, with economic growth buttressed by reduced inflation. These positive trends should allow us to revive some of our postponed projects, along with outstanding issues affecting the conditions of service among public employees. Our optimism is in part based on forecasts of continued, albeit still fragile, global economic recovery, with worldwide output projected to grow by 3.3% in 2014 and 3.8% in 2015.

 

11. Turning to the domestic economy, the gross domestic product (GDP) at current prices stood at P124 billion in 2013 and it is projected to expand to P136.5 billion in 2014. In real terms, the GDP grew by 5.8% in 2013, and is projected to grow by 5.2% in the current year, driven by both the mining and non-mining sectors.   Within the non-mining sector, retail and hospitality industries, as well as agriculture are experiencing growth.

 

12. Average national inflation continued to decline from 8.5% in 2011 to 7.5% in 2012 to 5.9% in 2013 and further to 4.5% in September 2014, which is well within the Bank of Botswana objective range of 3 to 6%. This positive trend gives us confidence in our ability to maintain a low inflation environment, which is necessary for domestic enterprises to compete in the global market.

 

13. In terms of our fiscal management, Government succeeded in restoring a balanced budget during 2012/13 financial year, after four years of budget deficits. For the 2013/14 financial year we were able to collect P 48.9 billion, up from the P 41.7 billion received in 2012/13, while total expenditures and net lending for 2013/14 amounted to P 41.73 billion. This resulted in a budget surplus of P7.2 billion, largely due to the good performance of the mineral sector. For 2014/15 a budget surplus of P1.3 billion is currently projected. These savings will allow us to reduce our debt burden and rebuild our financial reserves.

 

14. To sustain a positive balance sheet will, however, require expanded revenues. Here I can report that we were able to collect P48.9 billion in the 2013-14 financial year, up from the P41.7 billion received in 2012-13. The 2013/14 outturn for expenditure and net lending was P41.7 billion.

 

EMPLOYMENT

 

15.  Madam Speaker, to be meaningful to Batswana, economic growth has to be accompanied by expanded employment, which is why our manifesto listed job creation at the top of our aspirations. To reiterate what I said in my own message to the voters, of all our campaign promises tackling unemployment is the most important one. While there has been some progress in recent years, current estimates put unemployment among those 18 and above at just over 17%. Although this reflects a modest reduction since 2007, it has been insufficient to absorb all those seeking employment, especially among our talented youth. We can and shall do more.

 

16. Our Economic Diversification Drive (EDD) is a key instrument for job creation. Since its 2010 inception, EDD has been facilitating employment generating business opportunities by promoting the consumption of local products. While our immediate focus has been leveraging public procurement in support of domestic industries, as we move forward our emphasis will shift to developing greater internal capacity for export-led growth, while continuing to value local goods and services.

 

17.  So far a total of P13.3 billion worth of goods and services were recorded since the inception of the initiative. Out of this figure, the value of local manufacturers and service providers (EDD purchases) amounted to P590.5 million for 2010/2011, P1.8 billion for 2011/2012 and 2012/2013 and P2.3 billion for 2013/2014. Over one thousand enterprises have so far been registered under the EDD Programme, which has contributed to the employment of 28,000 Batswana.

 

18. We have already begun implementing our EDD Medium to Long Term Strategy, to develop sustainable sectors for economic growth and diversification. A leading example is the Leather Sub-sector Strategy, which is focused on the establishment of a Leather Park in Lobatse at a total cost of about P225 million. Government has agreed to finance the park’s primary infrastructure, a Common Effluent Treatment Plant, estimated to cost P102 million, while other components of the project will be financed through private sector investment.

 

19. Government had also budgeted over P20 million to provide temporary assistance for over 12 months to support 34 textile companies, employing 2,912 workers.

 

20. While the nurturing of SMMEs, support for existing industries and value addition remain critical in our achievement of job creation, we further anticipate that over the next few years local formal sector employment will be generated with the emergence of new economic opportunities through the synergies generated by the development growth nodes or clusters across the country.

 

21. In the Chobe region, for example, we anticipate an expansion of opportunities in tourism, construction, transport services and agriculture resulting from the construction of the road and rail bridge at Kazangula and phase one of the water pipeline to Pandamatenga, along with associated infrastructure. It is estimated that when completed these two mega-projects will create over 9000 permanent jobs.

 

22. Additional emerging labour intensive opportunities are already being generated in our urban areas, as reflected in Selebi-Phikwe’s development as a metallurgical hub, the continued growth of Gaborone as a global diamond as well as regional technical services centre, and Francistown’s growth as a nexus for trade and transport. We further anticipate additional jobs through synergies generated by new mining activities, the continued expansion of commercial agriculture and the development of Trans-Kgalagadi road and potential rail corridor.

 

COMPETITIVENESS    

 

23. A key to unlocking these job creation opportunities will be increasing our global competitiveness. To improve our competitiveness ranking in the area of goods market efficiency we have tightened our market monitoring for greater efficiency in the provision of goods and services, while the Competition Authority is reviewing mergers and potential cartel activity involving both local and foreign companies.

 

24. Madam Speaker, job creation is inevitably linked to investment. In this respect the latest FDI Intelligence report indicates that Global Greenfield FDI showed signs of recovery, increasing by an estimated 11% from 2012 to 2013. The increase in local investment has been even greater, with UNCTAD’s 2014 World Investment report showing Botswana having grown by 27% in 2013.

 

25.  The Botswana International Trade Centre (BITC) continues to promote our country as a competitive location for investment, making business contacts and generating leads. During the 2013-2014 financial year, BITC helped realise a total combined investment capital of just over 1 billion pula, of which P 642 million was from foreign direct investment (FDI) and P449 million came from new domestic investments. In 2012/13, BITC further recorded P1.9 billion worth of goods and services exported into the region and beyond, of which P738 million was attributable to financial and international business services by the financial services cluster.

 

26. Botswana was ranked number one in the 2014 Baseline Profitability Index, surpassing Hong Kong as a location for medium to long term returns on investment. In essence the Index suggests that investors can expect to do well here once they have established themselves in our market.

 

27. Government is, furthermore, working to limit the number of licenses and permits, while allowing mixed land use zoning, adopting risk based approach for Environmental Impact Assessments and Management Plans, and decentralising the management of electricity connections.

 

28.  Government has also embarked on a National Work Ethic programme to promote productivity. So far, 254 facilitators have been assessed to implement the programme, which commenced in May 2014.

 

29. The drafting of a Bill which will provide the legal framework for the establishment of Special Economic Zones and the Special Economic Zone Authority is being finalized.

 

30. The Rural Development Council (RDC) has been upgraded as the national consultative body to promote and coordinate the implementation of rural development policies and programmes. As a result community based projects such as the Zutshwa Salt Project and the Mogobane Irrigation Scheme, to mention some, have been resuscitated.

 

CITIZEN EMPOWERMENT

 

31. Madam Speaker, it is pleasing to note that to date, CEDA has funded 5,462 enterprises with a total value of nearly P8.55 billion, in the process creating over 48,935 thousand jobs.  During the 2013/14 financial year, CEDA assisted 151 new enterprises with a total monetary value of P152 million, collectively generating 1042 new jobs.

 

32. Since its inception, LEA has also facilitated the creation of 4995 new jobs, including 568 in the ongoing financial year. The Authority has further trained a total of 9,317 entrepreneurs. In an effort to inculcate an entrepreneurial culture, LEA embarked upon the Entrepreneurship Awareness Workshops among secondary school leavers, vocational trainees and prison inmates; over 26,000 of whom have been trained.

 

33. Madam Speaker, through the Botswana Bureau of Standards (BOBS), we have encouraged our small and medium enterprises to implement quality assurance activities within their businesses. Progress has been made in certification of goods especially in the building and construction industry. To further ensure that prescribed goods entering our borders comply with domestic standards, a BOBS office has been opened at the Tlokweng Border.

 

RULE OF LAW

 

34. Madam Speaker, adherence to the rule of law remains a cornerstone to our national development. It is thus encouraging that independent comparative surveys, as well as domestic polling, consistently place us among the best in the world as well as first in Africa in terms of our upholding the rule of law while ensuring the safety and security of all our citizens. These surveys include:

 

• 2014 Ibrahim Index of African Governance, where we ranked first in the category of safety and security;

• World Justice Project’s 2014 Rule of Law Index, where we were ranked 25th in the world as well as first in Africa;

• 2014 Global Peace Index where we were at 36th place, ranking above half of European countries surveyed;

• 2014 Legatum Index for Governance and Rule of Law, where we were ranked 28th in the world; and

• 2013 Global Democracy Index, where besides ranking 35 out of 167 countries we achieved a near perfect score in the area of civil liberties.

 

35.  In light of such reputable findings it is unfortunate to say the least that some individuals, working through foreign as well as domestic media, including rumour mongering on social media, have attempted to instil the perception of Batswana living in fear. This is in an apparent effort to undermine this country’s longstanding and shared record of peace, order and good Government.

 

36. While the mass circulation of false and malicious reports intended to incite undue alarm may be aimed at promoting the political agenda of some, it is at the collective cost of tarnishing the image of the country as a whole. It is also a threat to the economy we all must depend upon for our livelihoods. Such disinformation should therefore be rejected with contempt by all peace-loving Batswana. All citizens, residents and potential visitors to Botswana can be confident that this Government will continue to both abide and uphold the rule of law without fear or favour.

 

37. Let me, nonetheless, also observe that we have not, and shall not, allow past achievements or international accolades to breed complacency as we recognise that, here as elsewhere, criminal activity is constantly evolving and increasingly sophisticated. We therefore remain determined to pursue a zero tolerance approach to all forms of criminal activity, including corruption.

 

38. To counter emerging domestic and trans-national challenges the Police Service has deployed integrated law enforcement strategies to combat all forms of criminality and anti-social behaviour. This has involved an ongoing redirection of resources to deal with violent and intrusive, cross border and cyber based criminal activities.

 

39. Whilst total recorded crime excluding road traffic violations rose by 4.7% during the year 2013, significant reductions were, however, registered in respect of violent and intrusive crimes.  Offences in this category, which included burglary, store breaking, robbery, house breaking, threats to kill, murder, rape, motor vehicle and stock theft, declined by 15.4%.

 

40. Road traffic management poses an additional policing challenge. Analysis of road accidents shows a youth bias, expressed in reckless driving, often aggravated by the influence of alcohol. As a result of the increase in the intensity of road policing initiatives, the number of detected road traffic offences rose by 32.4%, while there was a corresponding decrease in the number of fatal road accidents by 2.6%.

 

41. Madam Speaker, the Department of Prisons and Rehabilitation continues to improve security in the prisons and rehabilitation of offenders. While overcrowding has been a problem in some of the Prison institutions, there has been substantial reduction in congestion since 2008. In June 2014 there were 3824 offenders held in prisons, which was 13% below the authorised holding capacity.

 

42. Madam Speaker, the internal and external challenges of today’s constantly changing security landscape, call for a structurally aligned, strategically focused and adequately resourced, as well as highly trained and motivated, defence force. The BDF will thus continue to evolve its structures and strategies to defend the nation, while continuing to provide assistance to other law enforcement agencies in combating crime, including poaching.

 

ACCESS TO JUSTICE

 

43. Madam Speaker, as was most recently demonstrated in the Judgments of the High Court and the Court of Appeal upholding the constitutionality of the Standing Orders of this very House, our Judiciary continues to independently and effectively deliver on its constitutional mandate of settling disputes, both large and small, without fear or favour.  This Government will, as always, respect decisions of the Courts and expects all citizens to do the same.  Equally, we must all display tolerance and recognize everyone’s right to approach the Courts for the resolution of any legal issue no matter how strongly we may disagree.

 

44. To improve everyday access to justice several special court projects like the stock theft, maintenance, traffic, small claims and most recently corruption court have been put in place so as to speed up and improve the case disposal rates, while promoting greater access to justice by simplifying court rules and processes to make them more user friendly.  In addition a Court Annexed Mediation will be in place by the end of the current financial year.  This f

Para uma União da Inovação mais forte, coesa e aberta – Working for a Strong, Cohesive and Open Innovation Union

Comissão europeia

[Só faz fé o texto proferido]

José Manuel Durão Barroso

Presidente da Comissão Europeia

Para uma União da Inovação mais forte, coesa e aberta – Working for a Strong, Cohesive and Open Innovation Union

O futuro da Europa é a ciência

Lisboa, 6 outubro 2014

Sua Excelência o Senhor Presidente da República,

Senhora Secretária de Estado,

Senhora Presidente do Conselho de Administração da Fundação Champalimaud, cara Dra. Leonor Beleza,

Senhora Comissária, Dear Máire Geoghegan-Quinn,

Senhor Comissário indigitado, meu caro Eng. Carlos Moedas,

Minhas Senhoras e meus Senhores,

Ilustres convidados,

Caros amigos,

Tenho muito prazer em estar aqui hoje convosco para vos falar do papel da ciência no futuro da Europa. Gostaria de começar por agradecer à Senhora Presidente da Fundação Champalimaud, Dra. Leonor Beleza, por nos acolher nesta impressionante sede de uma instituição que em relativamente pouco tempo já ganhou reconhecimento nacional e internacional pelo seu trabalho ao serviço da ciência. Quero de modo muito especial agradecer ao Senhor Presidente da República pela honra que nos dá ao ter dito sim quando o convidei para presidir à abertura desta conferência.

De fato, não poderíamos ter escolhido um sítio melhor do que Lisboa para realizar a conferência. A sensibilidade para a descoberta e para a abertura a novos horizontes faz parte do ADN de Portugal!

E as novas gerações têm honrado esse legado, como foi brilhantemente demonstrado pelos jovens João Pedro Estácio Gaspar Gonçalves de Araújo, Mariana de Pinho Garcia e Matilde Gonçalves Moreira da Silva, que há menos de duas semanas foram reconhecidos entre os melhores jovens cientistas da Europa por ocasião do 26.º Concurso da União Europeia para Jovens Cientistas realizado em Varsóvia.

E também não teria sido possível escolher melhor sítio que a Fundação Champalimaud, que não só é um centro de excelência em investigação sobre a saúde, como também uma instituição muito empenhada em divulgar a educação científica junto do público em Portugal. A atitude dos cidadãos em relação à ciência é, sem dúvida, um aspeto crucial que importa ter em consideração. O progresso científico deve ser devidamente explicado para poder ser bem recebido, em vez de ser encarado, com muitas vezes acontece, com injustiçadas dúvidas ou até perniciosas resistências.

Esta conferência não poderia ocorrer em melhor altura, pois é precisamente nesta semana que se procede a entrega dos Prémios Nobel, que se iniciou esta manhã com o Prémio Nobel da Medicina de 2014 – cujos vencedores, como já foi dito, foram John O’Keefe, May-Britt Moser e Edvard Moser, que felicito muito sinceramente. E é com grande orgulho que o faço, pois estes últimos dois neurocientistas, apesar de trabalharem na Noruega, foram ambos bolseiros do Conselho Europeu de Investigação (ERC).

Quero também agradecer muito a presença entre nós do Prémio Nobel da Física, Serge Haroche, que participará logo a seguir numa das mesas redondas, e a todos os outros eminentes cientistas, empresários e membros da sociedade civil que quiseram juntar-se a nós nestes dois dias de importantes reflexões.

A Comissão Europeia tem vindo a colocar a ciência, a investigação e a inovação no centro da agenda europeia. Para construir uma Europa forte, unida e aberta neste domínio, a Comissão tem desempenhado um importante papel procurando soluções para os problemas, estabelecendo pontes e promovendo os nossos princípios fundamentais.

A ciência, a investigação e a inovação são áreas a que tenho dedicado especial atenção desde o início do meu mandato de dez anos como Presidente da Comissão Europeia. Os alicerces foram criados ao longo dos anos: desde a criação do Instituto Europeu de Inovação e Tecnologia (EIT) e do altamente reputado Conselho Europeu de Investigação – European Research Council -, à participação da Europa em grandes projetos científicos como por exemplo – um dos maiores em curso no mundo – o Reator Termonuclear Experimental Internacional (ITER), cujos progressos constatei pessoalmente durante a visita que efetuei em julho a Cadarache, em França, na sede do projeto.

A razão pela qual dedico uma atenção especial a este setor está relacionada com a grande esperança na ciência, na grande confiança que tenho nas capacidades da mente humana e numa sociedade criativa para solucionar os seus problemas. O mundo está a mudar drasticamente, a uma velocidade nunca vista. Acredito que muitas das soluções, na Europa e fora dela, virão de novos estudos científicos e das novas tecnologias. Gostaria de ver a Europa a liderar esse esforço a nível global, o que será determinante para o futuro bem-estar e a prosperidade das nossas sociedades e para a influência europeia a nível global.

A verdade é que foi possível, mesmo em momentos de grandes dificuldades financeiras, colocar a investigação no centro da estratégia para o crescimento e para o emprego – a Estratégia Europa 2020: com o objetivo de criar condições favoráveis à inovação; promover o dinamismo da União da Inovação; lutar por um maior investimento na inovação, na tecnologia e no papel da ciência.

Gostaria de aproveitar esta oportunidade para enaltecer o trabalho incansável e muito competente da Comissária para a Investigação, a Inovação e a Ciência, Máire Geoghegan-Quinn, em prol da obtenção de resultados concretos num setor com tão grandes ambições. Muito a ela se deve, nomeadamente na luta de persuasão de alguns Governos no sentido de nos apoiarem em relação a um orçamento mais ambicioso para a investigação.

Acredito igualmente – e tive experiência direta disso durante estes anos – na importância da competência científica independente e consistente. De facto, a Comissão Europeia é muitas vezes chamada a tomar decisões que são extremamente complexas do ponto de vista técnico e que têm profundas repercussões do ponto de vista social, e até, muitas vezes, implicações de um ponto de vista ético. E penso que essas decisões devem ser sustentadas numa abordagem científica.

Foi por essa razão que decidi criar o cargo de conselheiro científico principal do Presidente da Comissão Europeia, exercido pela Professora Anne Glover, e também criamos o Conselho Consultivo para a Ciência e Tecnologia (STAC), que nos aconselha e apoia nos domínios da ciência e da tecnologia.

Dado que o progresso da ciência levanta por vezes questões éticas, a Comissão Europeia é também aconselhada pelo Grupo Europeu de Ética para as Ciências e as Novas Tecnologias, um organismo independente, pluralista e pluridisciplinar, cujo papel se encontra já bem consolidado.

Dado que há muito a fazer quando se aceita a ideia de que a mudança é uma oportunidade de melhorar; e que as novas formas de pensar e os novos dados podem obrigar-nos a abandonar visões por vezes antiquadas do mundo e a aceitar algo de novo, dei também o meu pleno apoio a várias iniciativas prospetivas no âmbito da Comissão Europeia, desde o projeto ESPAS (European Strategy and Policy Analysis System) à criação de uma rede interna em matéria de prospetiva, que cobre também o domínio científico.

Penso que estes exercícios prospetivos são realmente necessários pois, embora a incerteza faça sempre parte da decisão política, a falta de antecipação política adequada pode e deve ser evitada. Os decisores políticos precisam de dispor de alternativas de políticas públicas bem informadas que lhes permitam tomar decisões claras e estratégicas a médio e longo prazo.

Por isso solicitei, portanto, ao meu Conselho Consultivo para a Ciência e Tecnologia (STAC) que se debruçasse sobre estas questões e que elaborasse um relatório sob o lema «O futuro da Europa é a ciência». É precisamente disso que se trata: identificar os desafios e as oportunidades que a ciência, a tecnologia e a inovação colocam à Europa e formular uma série de recomendações em três domínios diferentes, todos eles de importância primordial para os cidadãos europeus: o futuro da sua saúde, o futuro do trabalho e o futuro do ambiente.

Queria aproveitar esta oportunidade para agradecer publicamente aos membros do STAC. Sempre trabalhámos juntos, de uma forma aberta e construtiva. Sempre valorizei o seu aconselhamento e congratulo-me com o relatório que é hoje mesmo publicado na ocasião da realização da conferência.

Gostaria agora de vos explicar sucintamente o que significa uma Europa forte, unida e aberta do ponto de vista da Comissão Europeia no que se refere à ciência e à investigação.

Excellencies,

Ladies and gentlemen,

Contradicting what I call an intellectual glamour of pessimism about Europe, which unfortunately happens to be rather fashionable in some circles, we have to recognize that, when it comes to research and innovation, Europe is strong. Much stronger than what sometimes is publicly acknowledged. Europe is one of the leaders in science in the world!

We are not short of world-class researchers and innovators with the skills and ideas to drive Europe forward. And today’s audience is a perfect illustration of this. We have twice the number of science and technology graduates than in the United States; with 7% of the world’s population, we still produce roughly a third not only of the world’s GDP, but also of patents and high impact scientific publications; and despite the crisis almost all our Member States have improved their innovation performance; and we have been able to halve the innovation gap that we still have with the United States and Japan. While in science we are, in many areas, the number one in the world, in innovation we are not always in the first places.

But we cannot afford to rest on these laurels. We live in a world where scientific and technological progress is accelerating at an unprecedented pace, and where South Korea is moving further ahead, with China quickly catching us up. So we need to capitalize on our strengths and to address also some of our weaknesses.

From a European Commission’s perspective, this basically means to act as a problem-solver in an environment of scarce resources and under very challenging circumstances. This is what we have been doing over these last years.

The best illustration of this is certainly the new research programme Horizon 2020. This is a large framework programme with wide-ranging objectives from supporting excellence in science – with the European Research Council now chaired by Professor Bourguignon – to developing industrial leadership and addressing key societal challenges, allowing us to focus on the big priorities relevant to our citizens.

That said, as we are all aware, money is the crux of the matter. But despite very difficult financial conditions, we have managed to get our Member States closer to our objectives for research, with an increase of 30% through the new Horizon 2020 programme – around € 80 billion for the next seven years – which makes it today one of the most important scientific funding programmes in the world.

I have to say, to be honest with our Member States, that while in some areas they were very negative when we discussed the Multiannual Financial Programme for the next seven years regarding some expenditure, when it came to science there was, generally speaking, very good opening from our Member States considering the ambitious proposals of the Commission. And this is certainly a very important progress, compared to the situation in the past.

And because entrepreneurs, researchers, innovators cannot afford to have their energy and time drained with red tape, with Horizon 2020 red tape was sensibly reduced. All phases of the innovation cycle are now funded under a single platform.

More private investment has also been secured to address major societal challenges. Public-private partnerships are one of the key elements of Horizon 2020. The private sector has committed to invest nearly € 10 billion in Joint Technology Initiatives stimulating innovation in areas such as medicines, transport and bio-based industries. Together with EU and Member States funding, this amounts to a € 22 billion boost for growth and jobs in Europe over the next 7 years.

Another example of the European Commission acting as a problem-solver is the Risk Sharing Finance Facility that we have set up jointly with the European Investment Bank.

As you know, one of the major obstacles to getting innovation to the market is the insufficient availability of finance for new and innovative projects, particularly for SMEs. The principle of this Risk Sharing Finance Facility is that for every billion euro of European budget money, the European Investment Bank has mobilised € 12 billion in loans and over € 30 billion in final research and innovation investment. Concretely, this has led to additional resources of up to € 40 billion since 2007 for research and innovation activities, which would otherwise be left unfunded. Besides, a very substantial share of Horizon 2020 will be devoted to funding innovative SMEs which, no need to recall, form the backbone of the European economy.

And I am happy and even proud to add that after 30 years of negotiation, – because the Member States were not able to agree on a common position on that matter – we finally agreed a European-wide patent, even if there are two Member States that are outside the final agreement. This is a major step forward in our effort to deliver a more innovative-friendly business environment in Europe. We estimate that once fully implemented, this will reduce the cost by up to 80% for small and medium size business and individual researchers to register their creative ideas.

But clearly the European Commission’s actions are not enough. They are necessary but not sufficient. Our countries must also act as problem-solvers and our governments make an equal effort in research. Budgetary consolidation is certainly an essential prerequisite for sound growth and competitiveness. But investment in growth and jobs of the future are also vital. And if you want to invest in the future, you should think science, research and innovation!

Ladies and gentlemen,

A stronger Europe is also a more united Europe. And for Europe to be more united in the field of science, research and innovation, we have to address existing fragmentations, notably between academic and business worlds, between public and private sectors.

From a European Commission’s perspective this means to act as a bridge-builder and make the knowledge triangle work better in favour of new socio-economic benefits. This is what we have been doing over these last years, notably through the European Institute of Innovation and Technology (EIT) which I took the initiative to create during my first mandate and which was launched in 2008.

The EIT, and I recently visited the headquarters of the EIT in Budapest, precisely brings together the three strands of the knowledge triangle – higher education, research and innovation – and businesses, in new types of partnership, the so-called Knowledge and Innovation Communities (KICs) operating so far in three areas, but we are going to enlarge them: sustainable energy, climate change and ICT; and with a strong emphasis on entrepreneurship. Until 2020, the EIT will be expanded to new areas and five new KICs will be created, as well as its outreach capacity that will be strengthened.

By 2020, the EIT is expected to train 10.000 Master students, 10.000 PhDs and create 600 new companies, and achieve systematic impact in the way universities, research centres and companies cooperate for innovation.

The Marie Skłodowska-Curie actions are also another good example of how to bridge gaps between sectors. Horizon 2020 will allow for the funding of 65.000 researchers under the new Marie Skłodowska-Curie actions which will combine research excellence with training on entrepreneurial skills; and encourage researchers to engage with industries and other employers during their fellowship.

A more united Europe depends also on an increased mobility of researchers and on the development of pan-European infrastructures. This is, as you know, the objective of the European Research Area: to have a real single market for knowledge, research and innovation. Good progress has been made. Most of the conditions for achieving a European Research Area are in place at the European level. The completion of this objective therefore now largely depends on national reforms and on national implementation. Member States are expected to present “European Research Area (ERA) roadmaps” by mid-2015, outlining their next steps towards the implementation of a true European single market for research.

And as it is just impossible to speak of a more cohesive Europe without referring to cohesion policy, I would like to mention that, to maximise territorial and social cohesion, Smart Specialisation Strategies are being developed with the support of the European Regional development Fund as well as other relevant funds, in order to make the most of the innovation potential of each region and each country across Europe. This is what we call the “Staircase to Excellence”, allowing all Member States to attain the best level in science with the support of European funding.

Finally, a stronger Europe is also an open Europe. When I had the great honour to deliver, together with my colleague, the President of the European Council, the acceptance speech of the 2012 Nobel Peace Prize awarded to the European Union in Oslo, I made a point about science and culture being at the core of our European project, precisely as a way of going beyond borders. I think it is very interesting that the idea of the European Union was, to some extent, to overcome borders and divisions and in science we know something about that. As Louis Pasteur said: “La science n’a pas de patrie.”

From a European Commission’s perspective this means to hold true to our Union founding values and principles by reaching out not only to our countries, but to all countries in the world. For example 15.000 out of the 65.000 researchers to be funded under the Marie Skłodowska-Curie actions will be non-EU researchers.

We are also promoting a dynamic science diplomacy. Horizon 2020, for example, is fully open to participation from international partner countries as shown by the agreement we recently signed with Israel. And I am happy that we have now found a solution to associate Switzerland to the Horizon 2020 programme that is one of the most important science and research funding programmes in the world.

We are also developing major dialogues on science and innovation with other world regions, notably with Africa. For instance, a year ago, we have agreed to start working towards a long-term jointly funded and co-owned research and innovation partnership with Africa, with a first focus on food and nutrition security and sustainable agriculture.

Another example is the decision taken with the United States and Canada, in May 2013, to join forces on Atlantic Ocean research, to better understand this Ocean and to promote the sustainable management of its resources.

That said, openness is not a one-way street. It has to be reciprocated. Our ongoing negotiations of Free Trade Agreements (FTAs) contribute to the establishment of a level playing field with our international partners, with the aim of ensuring, in particular, equivalent protection of intellectual property rights. We are clearly aiming at promoting win-win situations, so as to foster international research and innovation opportunities.

Ladies and gentlemen,

We have been through the worst financial, economic and social crisis since the start of European integration. This has clearly put our European model to the test. This was the biggest stress test ever in terms of European integration. Under these challenging circumstances, it was not easy to struggle to keep Europe united and open to the world, and to prepare Europe to emerge stronger and better prepared for the demands of globalisation, prepared to deal with demographic, technological and environmental challenges. A Europe ready to face the future.

In this process, the European Commission has always considered science and innovation as key strategic priorities for promoting a competitive European economy, but also a vibrant European society. We have been fully committed to create a more science and innovation-friendly environment. Because indeed “the future of Europe is science.”

And the discussions you will have later today and tomorrow on foresight will be an opportunity to highlight how much science and innovation are key to deliver on the issues which matter most for every European: health, jobs and therefore the society they live in and the economy. And there is no alternative: we have to deliver on these issues – crucially on jobs – to regain the trust of our citizens.

The reforms driven by the European Commission, and of course with our Member States, over the past five years are a solid foundation for that. Still a lot remains to be done. Science and innovation have to remain more than ever strategic priorities. But one thing I can tell you very sincerely after these ten years in the European Commission is that the European Union has demonstrated its great resilience. All those that were betting on the implosion of the euro or on the implosion of the European Union, were wrong. And one of the things that tie us together is, and should continue to be, science and the commitment to an open society where these ideas and this creativity can be kept and can be developed.

Let me conclude in Portuguese,

A título mais pessoal, quero manifestar hoje a minha satisfação por saber que a enorme responsabilidade de conduzir a ciência no futuro incumbirá ao meu compatriota e amigo, o Comissário português indigitado, Carlos Moedas. Gostaria de agradecer a sua presença hoje e estou confiante de que desenvolverá profundos esforços a favor da ciência, da investigação e da inovação. Desejo-lhe o melhor para as suas futuras funções. Para o futuro de Portugal e para o futuro da ciência na Europa!

E a todos vós desejo muito êxito nas discussões acerca do futuro da Europa e da ciência.

Muito obrigado pela vossa atenção.

Remarks by National Security Advisor Susan E. Rice Keynote Address at the Center for a New American Security Annual Conference

The White House

Office of the Press Secretary

For Immediate Release

June 11, 2014

Remarks by National Security Advisor Susan E. Rice
“The Strength of American Leadership, the Power of Collective Action”

Keynote Address at the Center for a New American Security Annual Conference
Washington, DC

As Prepared for Delivery

Thank you so much Richard for that kind welcome.  And, to my good friends and former colleagues— Michele Flournoy and Kurt Campbell— I can’t help but note how well-rested you both look.  I’m only a little bitter.  Still, I want to thank you for your stellar service to our country both from inside government and now, again, as leading thinkers on national security.

CNAS, which you founded, does a remarkable job of preparing our next generation of national security leaders.  That work is critical, because our nation needs bright, dedicated young women and men who care deeply about our world.  We need a diverse pipeline of talent ready and eager to carry forward the mantle of American leadership.  So, thank you all. 

As President Obama told West Point’s graduating class two weeks ago, the question is not whether America will lead the world in the 21st century, but how America will lead.  No other nation can match the enduring foundations of our strength.  Our military has no peer.  Our formidable economy is growing.  We are more energy independent each year.  Our vibrant and diverse population is demographically strong and productive.  We attract hopeful immigrants from all over the world.  Our unrivaled global network of alliances and partnerships makes us the one nation to which the world turns when challenges arise.  So, American leadership is and will remain central to shaping a world that is freer, more secure, more just and more prosperous.

At West Point, President Obama outlined how America will lead in a world that is more complex and more interdependent than ever before.  As we move out of a period dominated by the wars in Iraq and Afghanistan, we will lead by drawing on every element of our national power.  That power starts with our unparalleled military might, used wisely and when necessary to defend America’s core interests – the security of our citizens, our economy, and our allies.  We will lead by strengthening effective partnerships to counter an evolving terrorist threat.  We will lead by rallying coalitions and marshaling the resources of our partners to address regional and global challenges.  And, we will lead by standing firm in defense of human dignity and equality, while steering the course of history toward greater justice and opportunity for all. 

Today, I’d like to focus on one pillar of that strategy—mobilizing coalitions.  Indeed, galvanizing the international community to address problems that no one nation can solve alone is the bread and butter of our global engagement.  And, in many ways, it’s both the hardest and the most important element of how America leads on the world stage.          

This concept is not new.  Collective action has long been the hallmark of effective American leadership.  The United Nations, NATO and our Asian alliances were all built on the foundation of American strength and American values.  American leadership established the Bretton Woods system and supported open markets, spurring a rapid rise in global living standards.  Nor is this approach the province of one political party.  It was President Reagan who negotiated the Montreal Protocol, hailed today as our most successful international environmental treaty.  President George H.W. Bush insisted on UN backing and assembled a broad coalition before sending American troops into the Gulf.  And, President Clinton led the campaign to enlarge NATO, opening Europe’s door to the very nations who, as Secretary Albright put it, “knocked the teeth out of totalitarianism in Europe.”  Our history is rich with successes won not as a lone nation, but as the leader of many. 

Now, our approach must meet the new demands of a complex and rapidly changing world.  The architecture that we built in the 20th century must be re-energized to deal with the challenges of the 21st.  With emerging powers, we must be able to collaborate where our interests converge but define our differences and defend our interests where they diverge. Our coalitions may be more fluid than in the past, but the basics haven’t changed.  When we spur collective action, we deliver outcomes that are more legitimate, more sustainable, and less costly.   

As global challenges arise, we turn first, always, to our traditional allies.  When Russia trampled long-established principles of sovereignty, territorial integrity, and international law with its illegal annexation of Crimea, the United States rallied the international community to isolate Russia and impose costs. With American leadership, the world condemned the seizure of Crimea through an overwhelming vote in the UN General Assembly.  We expelled Russia from the G8.  Last week, the G7 met for the first time in 17 years, and we continued to concert our approach to Ukraine and other pressing global challenges.  We’ve reinforced the unity of our NATO Alliance and bolstered our commitment to Article 5.  President Obama has pledged to invest an additional $1 billion to bolster the security of our Eastern European allies against threats or intimidation.  More U.S. Army and Air Force units are now deployed to Central and Eastern Europe, more American ships patrol the Black Sea, more American planes police the Baltic skies.  And, meanwhile, with the support of the international community, Ukrainians have the chance to write a new chapter in their history. 

By working in lockstep with the EU and other partners, we imposed sanctions that are biting the Russian economy.  The IMF, the World Bank and private sector estimates all suggest that $100-200 billion in capital will flow out of Russia this year, as investors move their money to more reliable markets.  Russia’s economy contracted in the first quarter, and the IMF has declared that the country is likely in recession.  Its credit now rates just above junk status.  Russia has lost standing, influence, and economic clout by the day.  With our closest partners—Europe, the G7 and other key allies —we continue to send a common message:  Russia must cease aggression against Ukraine, halt support for violent separatists in the East, seal the border, and recognize the newly elected Ukrainian government.  If Russia does not, it faces the very real prospect of greater pressure and significant additional sanctions.

The speed and unity of our response demonstrates the unique value of America’s leadership.  Unilateral sanctions would not have had the same bite as coordinated efforts with the EU.  American condemnations alone do not carry the same weight as the UN General Assembly.  Bilateral U.S. assistance to Ukraine could not match the roughly $15 billion IMF program.  And, for our Eastern allies, American security guarantees are most powerful when augmented by NATO’s security umbrella.  

The United States’ commitment to the security of our allies is sacrosanct and always backed by the full weight of our military might.  At the same time, we expect our partners to shoulder their share of the burden of our collective security.  Collective action doesn’t mean the United States puts skin in the game while others stand on the sidelines cheering.  Alliances are a two-way street, especially in hard times when alliances matter most. 

As we approach the NATO summit in Wales this September, we expect every ally to pull its full weight through increased investment in defense and upgrading our Alliance for the future.  Europe needs to take defense spending seriously and meet NATO’s benchmark—at least two percent of GDP—to keep our alliance strong and dynamic.  And, just as we reassure allies in the face of Russia’s actions, we must upgrade NATO’s ability to meet challenges to its south—including by reinforcing the President’s commitment to build the capacity of our counterterrorism partners. 

Likewise, our historic alliances in Asia continue to underwrite regional stability, as we move toward a more geographically distributed and operationally resilient defense posture.  In the face of North Korea’s increasing provocations, we’ve developed a tailored deterrence strategy and counter provocation plan with South Korea, and we are updating our defense cooperation guidelines with Japan for the first time in almost two decades.  We aim also to deepen trilateral security cooperation and interoperability, which President Obama made a central focus of his summit with the leaders of Japan and Korea in March and his trip to the region in April. 

Improved coordination is a necessity in the Middle East as well.  The 35,000 American service members stationed in the Gulf are a daily reminder of our commitment to the region and clear evidence that the United States remains ready to defend our core interests, whether it’s disrupting al-Qa’ida or preventing Iran from developing a nuclear weapon.  At the same time, we look to our partners, both individually and through the Gulf Cooperation Council, to cooperate on missile defense and develop other critical deterrence capabilities, including in the spheres of counter-piracy, maritime security, counterterrorism and counter-proliferation. 

America will always maintain our iron-clad commitment to the security of Israel, ensuring that Israel maintains its qualitative military edge and can protect its territory and people.  Equally, we consistently defend Israel’s legitimacy and security in the UN and other international fora.  In turn, we expect Israel to stand and be counted with the US and other partners on core matters of international law and principle, such as Ukraine.

Drawing on the strength of our alliances and the reach of our partnerships, the United States’ brings together countries in every region of the world to advance our shared security, expand global prosperity, and uphold our fundamental values.    

Let me start with our shared security.  To responsibly end our war in Afghanistan, President Obama first rallied our NATO allies and ISAF partners to contribute more troops to the coalition, surging resources and helping Afghan forces take charge of their nation’s security.  As we bring America’s combat mission to an end, we’ve enlisted our allies and partners to make enduring commitments to Afghanistan’s future—so that Afghan Security Forces continue to have the resources they need, and the Afghan people have our lasting support.

Partnership is also the cornerstone of our counter-terrorism strategy designed to meet a threat that is now more diffuse and decentralized.  Core al-Qa’ida is diminished, but its affiliates and off-shoots increasingly threaten the U.S. and our partners, as we are witnessing this week in Mosul.  The United States has been fast to provide necessary support for the people and government of Iraq under our Strategic Framework Agreement, and we are working together to roll back aggression and counter the threat that the Islamic State of Iraq and Levant poses to the people of the region.  Yet, as President Obama said at West Point, we must do more to strengthen our partners’ capacity to defeat the terrorist threat on their home turf by providing them the necessary training, equipment and support.  That is why the President is asking Congress for a new Counterterrorism Partnership Fund of up to $5 billion to assist nations on the frontlines of terrorism to fight al-Qa’ida, its affiliates, and groups that embrace its violent extremist ideology.   

To shrink terrorist safe-havens and end civil conflicts, which can be breeding grounds for transnational threats, we continue to lead the international community to strengthen the foundations of peace and security.  The U.S. is the largest supporter of UN peace operations, which both reduce the need to deploy our own armed forces and mitigate the risks that fragile and failed states pose.  When violence in South Sudan broke out in December, and the world’s youngest country reached the brink of all-out war, the United States led the Security Council to augment the UN mission in South Sudan and re-focus it on protecting civilians, while we recruited, trained and equipped additional peacekeepers.  Since December, nearly 2,000 more troops have surged into South Sudan, with approximately another 1,700 expected this month. 

In Syria, by contrast, we have seen the failure of the UN Security Council to act effectively, as Russia and China have four times used their vetoes to protect Assad.  With fighting escalating, terrorist groups associated with al-Qa’ida are gaining a greater foothold in Syria, the horrific humanitarian costs are mounting, and the stability of neighboring countries is threatened.  So, while Russia and Iran continue to prop up the regime, the United States is working with our partners through non-traditional channels to provide critical humanitarian assistance and, through the London-11 group, to ramp up our coordinated support for the moderate, vetted Syrian opposition— both political and military.      

Yet, even as we strongly oppose Russia on Syria and Ukraine, we continue to work together to eliminate Assad’s chemical weapons and to prevent Iran from obtaining a nuclear weapon.  We built an unprecedented sanctions regime to pressure Iran while keeping the door open to diplomacy.  As a consequence, working with the P5+1, we’ve halted Iran’s progress toward a nuclear weapon and rolled it back in key respects.  Now, we are testing whether we can reach a comprehensive solution that resolves peacefully the international community’s concerns about Iran’s nuclear program and bolsters our shared security.

In today’s world, the reality is: many transnational security challenges can only be addressed through collective action.  Take the threat of nuclear material in terrorist hands.  One unlocked door at any of the facilities worldwide that house weapons-usable material is a threat to everyone.  That’s why President Obama created the Nuclear Security Summit.  So far, 12 countries and 24 nuclear facilities have rid themselves of highly-enriched uranium and plutonium.  Dozens of nations have increased security at their nuclear storage sites, built counter-smuggling teams, or enhanced their nuclear security training.  Our nuclear security regime is stronger today, because we created a coalition to address the problem, and we’ll keep the momentum going when we host the fourth Nuclear Security Summit in 2016.

Consider, as well, infectious diseases like MERS, bird flu or Ebola, which present yet another type of threat to our security.  In 2012, 80 percent of countries failed to meet the World Health Organization’s deadline for preparedness against outbreaks.  The international community needed a shot in the arm.  So, the United States brought together partners from more than 30 countries and multiple international institutions to develop the Global Health Security Agenda, which we launched in February.  Our strategy, backed by concrete commitments, will move us towards a system that reports outbreaks in real time and ensures nations have the resources to contain localized problems before they become global pandemics.

As we confront the grave and growing threat of climate change, the United States is leading the world by example.  As National Security Advisor, part of my job is to focus on any threat that could breed conflict, migration, and natural disasters.  Climate change is just such a creeping national security crisis, and it is one of our top global priorities. 

Our new rule, announced last week, to reduce carbon pollution from power plants by 30 percent compared to 2005 levels is the most ambitious climate action ever taken in the U.S.  It’s the centerpiece of our broader climate action plan.  And, as we work toward the meeting in Paris next year to define a new global framework for tackling climate change, we’re challenging other major economies to step up too.  We’re working intensively with China, the world’s biggest emitter, to bend down their emissions curve as fast as possible.  We’ve built international coalitions to address short-lived climate pollutants like black carbon, HFCs and methane.  And, we’ve led in encouraging private investment in green infrastructure projects overseas, while reducing incentives for high-carbon energy investment.    

Our security also relies on defining and upholding rules that govern our shared spaces—rules that reject aggression, impede the ability of large nations to bully smaller ones, and establish ways to resolve conflicts peacefully.  A key element of our Asia Rebalance is collaborating with our partners to strengthen regional institutions and international norms.  That’s why we are working with ASEAN to advance a code of conduct for the South China Sea that would enhance maritime security, reinforce international law, and strengthen the regional rules of the road. 

Similarly, we are building partnerships to set standards of behavior to protect the open, reliable, and interoperable Internet, and to hold accountable those who engage in malicious cyber activity.  That’s why we’re working with our partners to expand international law enforcement cooperation and ensure that emerging norms, including the protection of intellectual property and civilian infrastructure, are respected in cyberspace.   For example, last week, working with 10 countries and numerous private sector partners, we successfully disrupted a “botnet” that had been used to steal hundreds of millions of dollars and filed criminal charges against its Russia-based administrator.  Last month, the Department of Justice indicted five Chinese military officials for hacking our nation’s corporate computers, making it clear there’s no room for government-sponsored theft in cyberspace for commercial gain.  We are working with our allies through efforts like the Freedom On-Line Coalition and the Internet Governance Forum to preserve the open Internet as driver for human rights and economic prosperity.

This brings me to the second key reason we mobilize collective action—to expand our shared prosperity.  In 2009, facing the biggest financial crisis since the Great Depression, President Obama led to establish the G20 as the premier forum for international economic cooperation.  We needed more voices at the table, writing the rules for the global economy and committing to dramatic measures to restore growth.  Our efforts included mobilizing more resources for the IMF and World Bank to support the most vulnerable countries.  And, thanks to a broad and concerted international effort, the global economy has turned the corner.

Last year, we played a key role in enabling the 157 members of the WTO to reach a landmark agreement that will modernize the entire international trading system.  In every region of the world, we’ve brought nations together to increase trade and develop high-standard agreements to further boost growth and job creation.  This is a key pillar of our rebalance to Asia, where we’re working with 12 economies, representing almost 40 percent of global GDP, to finalize an ambitious Trans-Pacific Partnership.  With the Trans-Atlantic Trade and Investment Partnership, we’re taking what is already the largest trading partnership in the world to a new level.  To increase trade both within Africa and between Africa and the United States, we will join with Congress to extend and update the African Growth and Opportunity Act before it expires next year. 

In regions brimming with economic potential, including Africa, Latin America and Southeast Asia, we’re supporting entrepreneurship and fostering private sector investment.  Our Power Africa initiative will double access to electricity across the continent through more than $15 billion in private sector commitments.  We’re assisting young people throughout Africa and South East Asia to develop their business and entrepreneurship skills, as well as their leadership. 

As we approach 2015, we’re pressing our partners to deliver on the Millennium Development Goals and to devise bold new goals that will guide the next phase of the fight against poverty.  Building on the extraordinary progress in many developing countries, our approach isn’t simply about pledging more money, it’s about bringing together resources and expertise from every sector to do more with what we have and to support models of economic growth that fuel new markets.  We’re building public-private partnerships, investing in academic breakthroughs, supporting non-profits that translate ideas into action, and creating stronger connections among them all.   

Take, for example, the progress we’ve made in agricultural development.  Back in 2009, at the G8 meeting in L’Aquila, President Obama made food security a global priority backed by billions of dollars in international commitments.  In 2012, the President launched the New Alliance for Food Security and Nutrition, which has now grown to ten African countries, more than 160 companies, and delivered more than $7 billion in responsible planned investments in African agriculture.  And through our Feed the Future partnerships, millions of smallholder farmers are planting better seeds, using better fertilizers, and seeing their incomes rise. 

Which leads me to the third key reason we mobilize collective action.  For, however much we might like to, we rarely can force nations to respect the rights of their citizens.  So we must catalyze the international community to uphold universal values, build broad coalitions to advance human rights, and impose costs on those who violate them.  

Human rights must be protected for everyone, especially traditionally marginalized communities such as ethnic or religious minorities, LGBT persons, migrant workers, and people with disabilities.  That’s why President Obama decided to join the UN Human Rights Council, so we could lead in reforming that flawed institution from within.  In fact, we have made it more effective.  Because of our efforts, the Council has spent far more time spotlighting abuses in Qadhafi’s Libya, Syria, Sudan, North Korea and Iran than demonizing Israel. 

At the same time, the Open Government Partnership initiated by President Obama in 2011, has grown from eight countries to 64, all working together to strengthen accountable and transparent governance.  Our Equal Futures Partnership unites two dozen countries in a commitment to take concrete steps to empower women in their societies both economically and politically.  And, as civil society comes under attack in more and more places, we’re bringing countries and peoples together to counter restrictions and strengthen protections for civil society.

Moreover, we’ve focused the global community on elevating that most basic aspect of human dignity—the health and well-being of the most vulnerable people.  We’re partnering with nations that invest in their health systems.  We’re working with NGOs to improve child and maternal health, end preventable diseases, and make progress towards a goal that was inconceivable just a decade ago—the world’s first AIDS-free generation. 

Across all these vital and far-reaching challenges, we continue to bring the resources of the United States and the reach of our partnerships to bear to forge a safer and more prosperous world.  Our goals are bold and won’t be realized overnight, but the essence of U.S. leadership, as always, remains our ambition, our determination, and our dauntless vision of the possible – the pursuit of a world free of nuclear weapons; a world where extreme poverty is no more; where people are free to choose their own leaders; and where no child’s potential is cut short by a circumstance of her birth. 

We’ve earned our unparalleled position in the world through decades of responsible leadership.  We affirm our exceptionalism by working tirelessly to strengthen the international system we helped build.  We affirm it daily with our painstaking efforts to marshal international support and rally nations behind our leadership.  We affirm it by taking strong action when we see rules and norms broken by those who try to game the system for their own gain.  As President Obama told those graduating cadets at West Point, “What makes us exceptional is not our ability to flout international norms and the rule of law; it’s our willingness to affirm them through our actions.” 

As we leave an era of American foreign policy dominated by war, we are in a much stronger position to shape a more just and secure peace.  In doing so, we will be vigilant against threats to our security, but we also recognize that we are stronger still when we mobilize the world on behalf of our common security and common humanity.  That is the proud tradition of American foreign policy, and that is what’s required to shape a new chapter of American leadership.

Thank you very much. 

The Honourable Jason Kenney delivered a speech at Polytechnics Canada’s 2014 annual conference

DATE:  May 7, 2014

LOCATION:  Algonquin College – Ottawa Campus, Ottawa, Ontario

SUBJECT:  Minister of Employment and Social Development Jason Kenney delivers a speech recognizing the work at polytechnics to ensure graduates have the skills employers need at Polytechnics Canada’s 2014 annual conference “The Future We Want, the Difference We Make.”

Hon. Jason Kenney: I think the work that Polytechnics Canada and all of its member colleges represented by you here tonight is in many ways the most important work being done in the Canadian post-secondary education sector. And that’s really what I’m here to talk about tonight.

Algonquin College represents 159 college programs, with 21 apprenticeship programs and 61 online programs, to name just three from an impressive list of what’s offered at this college, typical of all the polytechnics across Canada.

Now let me just begin my remarks by situating them in the kind of context of Canada’s economy. Of course, up on Parliament Hill we have our partisan debates about our strengths and weaknesses, but fundamentally, I think we can all recognize that the Canadian economy is doing pretty well—in fact, significantly better than most other developed economies. The recession, the global downturn here was shorter and shallower than in virtually any other developed democracy, and the recovery has been stronger, with the creation of some 1.1 million net new jobs since the 2009 downturn— the overwhelming majority of them—about 90 percent of them—being full-time jobs, and 80 percent of them in high-wage industries.

We have one of the strongest fiscal positions in the developed world, with one of the lowest levels of debt, of public indebtedness at the federal level in the developed world. We’re going to have a balanced federal budget next year, and a number of provinces moving to balance—at relatively low tax levels for our history. In fact, the federal tax take as a share of our Gross Domestic Product is at its lowest level since the mid-1960s. And still that word has not got out very well around the world, and people still have this brand idea of Canada as a high-tax jurisdiction and a country that not too long ago was a bit of fiscal basket case.

Well, we have turned that around, and we now have the lowest taxes in the world on new business investment, at least amongst the major developed economies of the world.

Bloomberg just last week ranked Canada for I think the third straight year as the best country in the world in which to do business. The World Economic Forum says we have the strongest financial sector or the strongest banks. And the good news goes on and on. And these are things about which we should be grateful, but with all of those strengths come certain challenges.

But first, you know, the future’s looking even brighter—brighter because Canada, as you know, has always been an export-driven economy and we are diversifying our export markets in important ways. For far too long, of course, we have been over- dependent on the United States as virtually a captive market for our goods and services, but we are diversifying, having moved from 4 to 43 free trade agreements in the past 6 years, including trade agreements with the European Union, 28 member states representing 500 million consumers, largely in highly developed economies. And we will be the first jurisdiction in the world with simultaneous, basically tariff-free access to the market of 300 million people in the United States and the 500 million people in the European Union.

To that, we are adding, we hope, market free access to one of the most dynamic and the most innovative economies in Asia, that of South Korea, which will begin accelerated Canadian market access to these enormous and growing Asian economies.

So altogether, things are looking bright from a fiscal point of view. We’re doing relatively well in our domestic economy. Our export markets are opening up. And on top of all of that, we are on the cusp of what some people are calling a new industrial revolution in Canada’s economy that is a result of the hundreds of billions of dollars of capital investments that are coming on stream in extractive industries in a huge swath of northern Canada.

From the offshore oil and gas in Newfoundland to heavy minerals in Labrador to precious metals in northern Quebec, mining operations in northern Ontario’s Ring of Fire, to new hydro developments in Manitoba, potash and uranium in Saskatchewan and hydraulic fracturing in southern Saskatchewan, resulting in an energy boom there, to of course our bitumen reserves, oil, gas and other resources in Alberta, new mining developments in northern B.C. and all across the three northern territories opening up new horizons of opportunity, especially for our First Nations people, our Aboriginal people who happen to be proximate to so many of those huge new investments.

And by the way, each one of those developments, every one of those mines, every one of those projects of course is a public policy challenge. We have to make sure all of those things happen in a way that is environmentally sustainable and responsible. But if even a relatively small fraction of these prospective investments proceeds, we are talking about the creation of hundreds of thousands of high-paying, high-quality jobs primarily in skilled trades and vocations. And the challenge, as you know, is that our education systems have not been preparing young Canadians for those kinds of jobs in adequate numbers.

Now this is the big challenge that we will be facing. If there’s one reason that we are unable to fully grasp the potential offered by this “new industrial revolution,” it will be because we don’t have an adequate number of people with the right skills to actually fuel that prosperity.

Now let me be clear about this. This is a subject of some debate these days. As I’ve said as long as I’ve been in this position, Canada does not have a general labour shortage. The data doesn’t support it. If we did, we’d see wage rates rising more quickly than they are. But I think it’s undeniable if you actually look at the lived experience, the reality on the ground, if you listen to what employers and their representatives are saying from coast to coast to coast, that we are facing significant and acute skill shortages in certain regions and industries.

Let me give you some of these estimates. The construction sector says they will need 319,000 new workers in the next decade. The mining industry of Canada says they’ll need 145,000 more workers by 2020. The petroleum sector estimates they need 130,000 workers—additional workers—by 2020. And Skills Canada, which is, as you know, a great organization that we support, promoting the trades, tells us that we’re going to need a million skilled trade workers by the end of this decade. And the list goes on, whether it’s the Conference Board or the Chamber of Commerce, all of them estimating significant shortages, particularly in skilled trades.

So our challenge will be to fix the paradox of too many Canadians without jobs in an economy that has a growing number of jobs without Canadians.

And by the way, this isn’t a flash in the pan. It’s not based on anecdotal views. This is not just the data. This is also very obvious and intuitive when you understand that baby boomers are beginning to retire. We have a growing economy. The economy is growing most quickly in areas with sparse population through much of northern Canada where the extractive industries are located, and they tend to be in occupations which our education system has been under serving.

And by the way, you know, some of the demographers and economists tell us not to worry too much about the aging of our society and the retirement of the baby boomers—the demographic bulge—because they say people are working longer, and that’s true—for white collar workers. But for folks who are engaged in tough manual labour every single day, guess what? They’re not going to be working as welders and as carpenters and as heavy equipment operators into their 70s in work camps in northern Canada.

So let’s be realistic about this. These are occupations where we are going to see an entire generation of highly skilled Canadians—they have already begun—leaving these occupations. That pace is only going to accelerate. And regrettably, in part because of problems in our apprenticeship systems, we don’t have adequate opportunities for them to transmit their knowledge and learned experience to younger generations.

So for me, this is a matter of some urgency, and solving it requires movement on the part of the federal government, provincial governments, employers, industry associations, unions, educators, trainers in all different sectors.

Ces difficultés sont importantes mais nous comptons sur des personnes très compétentes pour trouver des solutions, particulièrement personnes comme ceux comme vous ici aux Polytechniques Canada.

And I want to thank Nobina, Ken and their whole team at Polytechnics here in Ottawa for playing an integral role in helping us address these challenges.

Vous vous proposez en vous appuyant sur des recherches et des données probantes des idées qui retiennent l’attention des décideurs au sein du gouvernement fédéral.

You challenge my officials to update their thinking on the changes underway in the Canadian education system, and I’m the first to admit that Ottawa doesn’t always have the answers. That’s why we appreciate the valuable input and the challenge function that Polytechnics Canada provides.

Let me give you just one very pressing example of what I’m talking about. The centrepiece of the most recent federal budget was called the Canada Apprenticeship Loan. The idea with the Canada Apprenticeship Loan is that apprentice students,  when they’re doing their formal block training, will be able to apply for and obtain interest-free financing through the Canada Student Loan Program. Students will be able to apply for up to $4,000 in interest-free loans. It’s estimated that at least 26,000 apprentices a year will benefit from this. It’s just one of the things that we have to do to break down this ridiculous idea that skills and vocational training and applied learning are somehow second-tier or second-class forms of education.

And guess what? The idea of the Canada Apprenticeship Loan came directly from Polytechnics Canada. In fact, I recall exactly the moment when. I had only been in my current post for a few weeks, and I heard about this whirlwind of ideas and energy, Nobina Robinson. Everyone told me I had to meet her. She had the solutions to the skills challenges that Canada was facing.

So we arrange a meeting for Nobina, and she came in, and I couldn’t get a word in edgewise for an entire hour, as you might imagine, which was just fine because she downloaded a brilliant analysis of the challenges that we’re facing in our post-secondary education system, and some fantastic solutions. And she said, “Why is it, Minister, that we give preferential loans, supported by the federal government, to students engaged in full-time academic studies at degree-granting universities, but we leave the apprentices out in the cold?”

And I looked at that, and I thought, you know, here we have a problem. We’ve got—thankfully—a growing number of young Canadians registering in apprenticeship programs. We’re now up to about 340,000. Well, that’s good news. The bad news is only half of them are going on to completion. We have an apprenticeship completion problem in this country. And I believe one of the reasons is because the opportunity cost for young people to leave their good-paying jobs as apprentices and go and do their formal block training is significantly high.

You know how it is. If you’re a young fellow in your early 20s in a welding apprenticeship program, and you’re working up in the oil sands in northern Alberta making 35 or 45 dollars an hour, well, first of all, you know how young people are. Their spend rate, their burn rate automatically goes to their amount of money—to consume every dollar that they’re generating, right? Young fellows in their 20s are not famous savers.

And so they kick up their spend rate, and they’ve got the lease on the new truck, and they’ve got the nice new apartment. And they’re spending every dollar that comes in. And the idea of suddenly going cold turkey for two months, so they can go down to SIAST or NAIT or BCIT and do their block training, suddenly is a very expensive and risky one. And so all the incentives are just to keep working and generating the income and to kick the apprenticeship can down the road.

Well, we have to soften the blow for them. We have to create the incentives for them to actually get to that journeyman Red Seal certification, so that they have that level of formal skills that they can transmit to others.

And a number of things need to be done in this area. First of all, we’ve brought in a policy that allows employers to pay those folks on their block training up to 95 percent of their regular salary level on top of employment insurance benefits, with no penalty. So the responsible employers can keep their apprentice employees whole during their block training. Point one.

Point two. We’ve now in this budget launched the Canada Apprenticeship Loan, which gives them a financing option to get through that period, as well to cover living expenses and other related expenses to reduce the opportunity cost.

And point three, in the budget, we’ve also launched a pilot project to support innovative ways of delivering the block training online and through remote learning, so that perhaps some of these people can stay in the remote work sites where they’re located and actually take their block training in smaller increments over weekends and evenings and through creative delivery of those programs. I know a number of you are doing that already.

Now this stuff isn’t terribly exciting. None of these ideas make it to the front page of the Globe and Mail, and I don’t think, Nathan, we’ve actually had a single question in the House of Commons on the Canada Apprenticeship Loans—probably a good thing— because I think there’s actually consensus around it.

By the way, political journalists—I’ll let you in on a secret, they’re actually fight promoters. So if there’s no fight on the issue, there’s nothing to report. But these are great ideas. And guess what? It was Polytechnics Canada, it was Nobina who came, and she said we’ve been trying to push this for years, but no one will listen. Well, someone finally did. And I’ll be honest, we encountered a certain resistance. I think the resistance was because before, you had to have 10 weeks of class in an accredited program in order to qualify for the Student Loan Program, and we didn’t want to water that down, we didn’t want to dilute it.

But you know, I think there was an unconscious bias behind that policy decision. And the unconscious bias was that apprenticeship learning isn’t really the equivalent to university education. And when I heard that argument offered, that’s what pushed me over the line. And I said, look, that’s exactly why we need to do this. We need to it not just to facilitate some financing options for young apprentices, so they complete their programs. We need to do it, just as importantly, in order to send a symbolic signal that the federal government regards apprenticeship learning in the trades as every bit as valuable as going to university in an academic program, and that’s what the loan says.

So thank you for the constructive role that you play.

Now another solution to this challenge of the future skills gap is to take a long and hard look more broadly at our secondary and post-secondary education systems.

Let me start by using Polytechnics Canada as an example of what I’m talking about. In case you haven’t figured it out yet, by the way, I’m a big fan of Polytechnics Canada and the work that your colleges do. And let me explain why I’m a fan.

Across Canada, you have 280,000 students enrolled in 11 institutions across 55 campuses. You offer a wide range of programs—a hundred stand-alone degrees, 24 joint degrees, 754 diplomas, 558 certificates, 200 graduate certificates and 225 apprenticeship programs.

What unites students across those different streams of learning is that they get good jobs. Some 90 percent of polytechnics students in Canada are employed after six months, and some of those coming out of the degree programs, it’s much higher. How many other educational institutions can boast numbers like that? Well, frankly, we don’t know, and that’s part of the problem, isn’t it? 

Interestingly, polytechnic schools are increasingly becoming a finishing school for general arts and science bachelor degree holders. Forty-six percent of your students have partially completed some kind of university or college training before enrolling at a polytechnic institution. Twelve percent of your students have actually completed a bachelor’s degree, and another 15 percent a college diploma or certificate before enrolling.

Students are flocking to your institutions. And by the way, I know you’re turning away far more than you can accommodate. They’re flocking to your institutions because of your small class sizes, your hands-on training on equipment used in industry, your teaching by industry-experienced faculty, and your integrated learning through placements, co-ops and internships—in other words, through applied learning. And of course, there’s also that 90 percent employment rate I mentioned before. As the jobs minister, I kind of like that.

The case outlined above demonstrates that the polytechnic model is hugely successful and the exact type of programming that governments should be supporting far more vigorously than they currently are.

That’s why it’s so frustrating to me when I hear that provincial government funding for polytechnic colleges isn’t keeping up with funding for other forms of post-secondary education. Between 2008 and 2013, the number of prospective students—people aged 20 to 34—in provinces with polytechnic institutions has increased by over 9 percent, all right? At the same time, federal government transfers to the provinces for post-secondary education through the Canada Social Transfer have increased by nearly five percent annually over the same period. So your prospective clientele’s grown by nine percent. The federal funding to the provinces has grown by five percent—sorry, we haven’t kept up with your population growth—but here’s the catch. Provincial funding to polytechnics through your operating budgets has only increased by 2.8 percent over the same period. And so there’s something fundamentally wrong with that. Provincial funding as a percentage of your operating budgets has actually decreased by an average of 2.9 percent.

So to summarize my point, employers from across Canada tell us that there is a current and growing demand for skilled workers in the very fields that your institutions are training young Canadians for. You’re producing a 90 percent employment rate—more than that in certain programs. And you’re clearly tremendously successful at knowing what jobs are in demand today, preparing graduates for those jobs. And yet your share of provincial support is not keeping up with the funds that the federal government is giving to provinces for post-secondary education. I want to know, where is our money going? And I think the federal government has a right to know that question.

It’s not our business to administer post-secondary education. We acknowledge – nous – évidemment, nous reconnaissons entièrement la juridiction constitutionnelle des provinces et territoires quant à l’éducation, y compris l’éducation postsecondaire.

Cela étant dit, en temps qu’une source des fonds importants pour l’éducation postsecondaire, d’après moi, le gouvernement fédéral a le droit au moins à poser les questions d’où vont les investissements des contribuables fédéraux? 

At the very least, while we respect provincial jurisdiction in the areas of education policy—as a major funder, I believe the Government of Canada has every right to ask why those dollars that we are increasing to provinces for post-secondary education are not finding their ways into the budgets and programs delivered by Canada’s polytechnic institutions.

Go ahead and applaud. I won’t turn you in to your provincial ministers, I promise.

I’m meeting with those provincial ministers, my Forum of Labour Market Ministers this summer, and make no mistake: I am putting this on the table. The next time the provinces ask me to spend more on post-secondary education or they ask us to increase their allotment for immigration or bring in more temporary foreign workers or what have you, I’m going to tell them that I expect to see money move to where results are in our education and training systems. That means moving money to polytechnics.

Now this is just one area of our secondary and post-secondary system that needs to be reviewed. We also need of course to do a better job of making a compelling case to young Canadians to consider a future in apprenticeship programs, in applied learning and in the skilled trades in particular.

For too long, we’ve settled for this kind of one-size-fits-all approach to youth employment, which has essentially been to tell young people to stay in school for as long as they can while in many ways frowning on vocational schools and apprenticeship training.

Provincial governments need to realize that the choices they made in the 1970s and 80s to downgrade vocational education were shortsighted. Forty years ago, most high schools offered vocational training. But for some reason, provincial education ministries and school boards decided to push vocational and skills training to the margins. In the 1990s, York University found that the number of technology courses taken by secondary school students in Ontario dropped from 480,000 in 1973 to 257,000 in 1996. Now it would be very interesting to see more recent data because all of the indications are that number has plummeted even further.

And that’s made worse still by the burden of debt incurred from staying in school longer, doing as they were told to do and then struggling afterward to find a good-paying job.

Let’s bear in mind, however, that some countries have fared significantly better than Canada—such as European countries—when it comes to connecting education and training to jobs in the labour market.

And that’s precisely why in March of this year, I led a study mission, which included Polytechnics Canada. Ken was there and Larry from SIAST attended together with all of the major Canadian business organizations, some of our largest unions and representatives from five of our provincial governments. And in Germany, we saw their phenomenal vocational training system. Now you all know about it; it’s almost mythic in its international reputation. And let me begin with the usual caveat. Of course we cannot replicate the German system, rooted as it is in hundreds of years of the guild system and their particular political legal system. We can’t replicate it. But what we can do is learn from it.

And here’s what I learned. I learned that nearly two-thirds of young Germans at the average age of 16 go into paid apprenticeship programs, typically with three and a half days on the work site, where an employer is paying them a good stipend of a thousand euros a month and then a day and a half in a vocational college, where they’re learning the applied theory of the skills they’re developing on the work site.

And I learned that on average those German apprenticeship programs are completed in three years. They’re graduating with their certificate, on average, at the age of 19, and 95 percent of them are going into employment in the field for which they were trained without student debt, with practical work experience, with a certificate that has equal value in every corner of their country, of their federation, and a certificate which is considered by everyone as having the same educational, social and economic value as a university degree. And that was perhaps the core learning that we had.

You know, that wasn’t just the advocates of the trades saying this. It wasn’t just the employers or the unions saying that. It was the academics themselves. I must admit I was astonished to hear one of the leading scholars of the German education system, a fellow with two PhDs, express how concerned he was to see a growing percentage of young Germans going into academic university programs as opposed to apprenticeship trades programs. I’d love to meet an academic in Canada who would share the similar sentiment.

And maybe this is why the German unemployment rate for youth is about half of our unemployment rate for young Canadians.

Of course a key part of the German system is the sense of responsibility amongst employers to contribute. German employers contribute the equivalent of 49 billion Canadian dollars per year in apprenticeship programs alone. And that contrasts rather unfavourably to private sector investments in skills development here in Canada.

You know the numbers. We have the highest level of public sector state-supported investments in skills development in the OECD. But we are the bottom of the developed world when it comes to how much companies, the private sector, put into skills development. So we need to find ways to prime the pump to encourage our employers to take up the challenge.

You know I was recently at the B.C. Business Summit. All the major employers in British Columbia were there. And every time I meet with these guys they say to me they need temporary foreign workers, they need more immigration numbers, they need to address the labour challenges in those ways. And I say to them, listen, I don’t want to ever hear you coming talking to me again about labour shortages and skills gaps unless and until we see demonstrable increases in private sector investments in skills training and preparing young people for the jobs of the future.

Now to give the employers their due, many employers are star performers, and many of them do participate. Many of them sponsor programs in your colleges and help you acquire new capital equipment for training—and I think we’re beginning to turn the corner on this. I think employers understand they have to put more skin in the game.

This, by the way, was really the idea, the motive idea behind our Canada Job Grant, an idea that became unnecessarily controversial, but we’ve since reached agreement with all provinces and territories for them to deliver this Job Grant. The idea was actually radically simple in a way. It was picking up the Germanic idea of employer-led training and investment in training initiatives. This is a particular challenge for small and medium-sized businesses.

When we ask SMEs in Canada why they don’t put more money into training, why they don’t hire more apprentices, they tell us it’s because they are terrified of poaching. For an SME to spend thousands of dollars putting a young person through a diploma program or tens of thousands through an apprenticeship program as an indentured apprentice, only to find that person, as soon as they’re certified, poached by a major employer with deeper pockets and a bigger payroll, that’s a very serious point of exposure for small businesses.

The idea behind the Job Grant is simply to reduce that exposure for them, so that they can identify young people or a group of people for a specific training program, at the end of which they have a guaranteed job, but we’ll come in and support roughly two-thirds or as much as three-quarters of the training costs. They have to put some skin in the game. They have to be involved in recruiting the individual. They have to guarantee them a job and hopefully mentor them through the process. We hope this will begin to replicate some of the magic in the German training system.

You know, it’s not just in Germany. We also visited the United Kingdom, whose system, for various obvious historical reasons is closer to our own. But here’s the interesting thing. The UK went through very much the same kind of single-minded focus on academic post-secondary education in the 1980s. And they’ve begun to try to reverse the momentum back towards applied learning. In the 1980s their polytechnics all graduated to degree-granting universities essentially. And now they’re trying to build up the college sector doing vocational training, doing apprenticeship programs with teenagers, so that, again, they’re coming out before they’re 20 with valuable skills and typically very good employment prospects.

And did you know that in the United Kingdom someone who does an apprenticeship program makes $275,000 more in Canadian dollars over their lifetime than those that graduate with a university degree.

By the way, we need comparable data here in Canada. We simply don’t have it. And some of the data being used in this debate is, shall we say, more than a little misleading. To compare the outcomes of all university grads in Canada, many of whom are boomers in their peak earning years, many of who are in the highest paying professions, to compare that aggregate average with everyone else is an irrelevant comparison.

But let’s begin comparing the employment earnings of, I don’t know, sociology majors to welders. Let’s begin comparing the outcomes for bachelors in communications with power engineers. If we actually begin doing more disaggregated real world comparisons, then we have some data that’s useful to share with young people.

Now don’t get me wrong. I have to make this disclaimer. We do not—I do not for a moment seek to denigrate the enormous value of academic post-secondary education that’s offered by our universities or the humanities or the liberal arts, all of which are enormously valuable and most of which programs lead to great outcomes. But what I am suggesting is that what we must begin doing in Canada is to replicate what in Europe they call the parity of esteem between different forms of education, training and employment. We must stop sending cultural cues to young people through their high school counsellors, their parents, their governments that they are somehow failing or not realizing their potential if they pursue a technical vocation or trade. We need to clearly and at every opportunity indicate that the choice of going to a Canadian polytechnic and working in a technical vocation is every bit as valuable as going to university and getting an academic degree.

There’s a whole lot more we have to do, but I’ve spoken long enough. Let me just perhaps summarize it by saying that the Government of Canada is trying to play its role to create the right incentives, to send the right signals. For example, we created the Apprenticeship Incentive Grant and the Apprenticeship Completion Grant, which, together, represent $4,000 available to students who go through their apprenticeship programs. We’ve created the Apprenticeship Hiring Grant for employers to incentivize them to do the same. We created the Tools Tax Credit.

And by the way, we’ve reformed the immigration system to try to support skilled people in these kinds of vocations. You know, since the early 1970s, Canada basically closed its immigration system to blue-collar immigrants, people who work in the trades. We opened a new door in the Skilled Trade stream of our immigration system and through our Provincial Nominee programs in the last few years. These are highly skilled people who can come in as permanent residents and be the journeymen to take on apprentices. We need to reduce journeymen-apprenticeship ratios in those provinces where they are unrealistically high to allow smaller contractors to take aboard apprentices.

We need harmonization in the apprenticeship programs across the country. The New West Partnership in Saskatchewan, Alberta and B.C. is doing this. The Atlantic provinces are, with our support. It would be nice to see the two central Canadian provinces get with the program.

We of course need to continue knocking down the remaining barriers to interprovincial labour mobility and to mutual recognition of trades and professions. And we need to do more to recognize the skills of foreign-trained professionals and tradespeople who are too often under-employed in our economy.

And of course we must all continue to focus particularly on those groups in our population like young Aboriginal Canadians who are massively under-represented in the workforce.

So these are big challenges, but the good news is I believe we’ve begun to see a significant change in the debate and the allocation of resources. The recent announcement by the Government of British Columbia that they’ve begun reengineering their secondary and post-secondary education systems, that they want to track labour market outcomes from all of the PSE streams and they want dollars to follow results is extremely good news. This is a model that can and must be replicated right across the country.

So with the innovative ideas and programs that you are delivering, with a federal government that is in full support of this new skills agenda, with provincial governments coming onboard, with employers understanding the urgency of these issues and increasing their investments, particularly in engaging Aboriginal Canadians in the workforce, I believe we can see a bright new horizon in a reform in our post-secondary education system that ultimately will be all about helping us to help young people to realize their potential and to contribute to our wonderful country’s prosperity.

Thanks very much for your time and for all the good work that you do.

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