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Policy-Making Is an Essential Service

Policy Series Breakfast: The Energy Future for Ontario Remarks by Les Horswill to the Ontario Society of Professional Engineers The Toronto Board of Trade Thursday, September 1, 2011

Policy-Making Is an Essential Service Overview First off, Id like to join my fellow panelists in congratulating the Society for initiating and organizing this mornings workshop. My slides dont contain any numbers, but I include hopefully fairly complete sentences. So, Ill be brief now and not too elaborate. I look forward to your questions and ideas. From the perspective of a former energy policy manager now safely away from the action I want to touch on four aspects of the issue at hand: 1. The Ontario government context. In other words, it makes a lot of sense to be talking about electricity policy on the eve of an Ontario election. 2. Building it right and being adaptive. Unlike a perfect bridge, an electricity strategy shouldnt try to last forever. 3. The multidisciplinary nature of good policy. In making new energy policy, generalists and specialists need each other. 4. How to be effectiveand in the public service. 1. The Ontario Government Context Partnerships and consultations with other governments shouldnt undermine the importance of seeing electricity policy as overwhelmingly a provincial responsibility. The present distribution of responsibilities best allows for good policy and good politics. This isnt a parochial or statist point of view. Electricity is an essential service. And the provincial jurisdiction provides an appropriate scale for system development and democratic oversight. No essential economic service needs to be owned or managed, in detail, by the Government of Ontario. However, it is a good thing that one government stands out as clearly responsible for keeping this service up-to-day and responsive. The provision of electricity involves a unique mix of vested interests and emerging interests. Driven by innovation, the electricity sector is constantly in a state of flux, from revolution and consolidation to revolution again. Along the way, monopolies and market winners are created, strive to perpetuate themselves, and ultimately collapse. And all the while, government is constantly pressed to take sides. Fortunately, provincial governments do answer for their choices. Unlike national elections, provincial elections often turn on the management of essential services.

Policy-Making Is an Essential Service 2. Building it right and being adaptive As a capital intensive and physically integrated system, the Ontario electricity sector needs years to adapt to significant change and, so, government policy must focus on the long-term. For instance, electricity-restructuring initiatives in the mid-90s were designed, in large part, to ensure better electricity investment decisions in the early decades of this century. Governments are expected to respond to short-term problems and popular ideas, but they must also present a trustworthy point of view about the future. Simply, if the government and its regulators cant be trusted, taxpayers and rate-payers will have to carry most of the risks. Government has several tools to influence the future of the electricity system market incentives and subsidies, direct ownership, regulatory mandates, and supply planning. Three instruments best guarantee defined outcomes: public ownership, detailed planning, and regulation. On the other hand, incentives and R& D subsidies, for instance, best assure future adaptability. With nearly half of our wealth in traded sectors, it is critical that we at least match the pace of innovation elsewhere. It is vital for governments and users to accept that in promising ever-greater certainty, governments may end up discouraging greater innovation. Alternatively, if less government intervention is to be realized and not reversed users will have to accept greater responsibility, including paying more for their own mistakes. 3. The multidisciplinary nature of good policy Significant policy development isnt a struggle between science-based expertise and generalists who play politics. They need each other. In this material and secular age, the researcher, the politician, and even the playwright strive to be plausible, to find the telling detail. Would-be reformers must consider how change will affect economic behavior, how change can best be implemented and they must use persuasive communication tools. Governments will take risks. But first they need to be able to weigh what is likely to happen if they act, against what will ultimately happen if they dont. Despite newsworthy examples to the contrary, elected governments can still ask for short-term sacrifice to secure long-term benefits if they can marshal a credible case.

Policy-Making Is an Essential Service The most influential organizations in the electricity sector are implementers as well as advocates. Consequently, the consultation processes are very often highly technical. Both the government and the industry sides of the table need help in anticipating and speaking clearly to the concerns of the general public, as well as to the nervous members of Cabinet. Nevertheless, this slow, multidisciplinary process can lead to sustainable change. Again, provincial government, fortunately, is close enough to the people to make this kind of precise and inclusive change possible. 4. How to be effective and in the public service Id like to address this challenge as a former participant who worked with and promoted engineers and who spent an amazing amount of time and worry recruiting and rewarding talented professionals. Government is not only still a great employer. Public service can actually be exciting. Public policy-making helping a democratic government undertake and implement fundamental change is as challenging as any career in the private sector. And as change accelerates, the demand for competent policy-making will only increase. While public service is not a top-of-mind career choice among young engineers, they should better appreciate that they can excel in the public sector. Many of the great strategic builders of the Ontario electricity system were engineers. Of course, there are stereotypes that divide engineers and arts graduates, but they can work together in government. And, in fact, one set of foundation skills doesnt naturally prevail. It was striking to me, at least, to read recently that eight of the nine leaders of Chinas Communist Party the most powerful political organization in the world were trained engineers. (Im not conceding that we need to go that far.) Finally, Ill make one suggestion about how we prepare young people for public service. In Ontario, as elsewhere, policy-making is made at the top and is dominated by conflict. This is not emphasized or even generally acknowledged. To be effective to be able to realize an idea in government these two realities must be mastered. Today, engineering students study introductory economics and communications. Both are important, but two essential areas of knowledge left purely to chance are: personal ambition that is, understanding the ambition of others as well as, hopefully, ones own and, second, the ubiquity of human conflict. Arts students may not be explicitly instructed about these either. However, the study of history particularly, of great accomplishments and great mistakes and literature whether about the Mafia or the corridors of power can serve to deepen the education and inspire the career prospects of both.