Media Clipping — May 30, 1999, The Sunday Herald, Halifax

Numbers Game

New measuring tool takes deeper look at economy

By Silver Donald Cameron

IF ECONOMIC statistics had been kept in 1918 as they are today, Halifax would have looked wonderful. Sales of almost everything were at record highs; construction was booming; everyone was working. The gross domestic product was soaring.

Were Haligonians happy? Hardly: the city was literally a disaster area, having been levelled by the Halifax Explosion in December 1917. That wouldn't have mattered to the GDP calculation. Because the GDP simply tots up all the activities which can be measured in money, it is equally happy about crime, crumpets and Christmas trees. Crime generates prison construction, expands police forces, improves sales of security equipment. Up goes the GDP.

In addition, the GDP doesn't include unpaid work. If your kid mows the lawn for nothing, the GDP ignores it. If you pay the kid next door to mow it, the GDP includes it. The work of housewives and community volunteers literally counts for nothing. A forest enters into the GDP calculation only when it is cut down and sold, a fish only when it is caught and processed.

This is obviously a stupid way to measure progress, but it has gained a stranglehold on our thinking. There has to be a better way to calculate progress—and fortunately there is. Down in Hacketts Cove, a small village near Peggy's Cove, a small nonprofit research group is working on something called a genuine progress index. GPI Atlantic is funded by Statistics Canada and the provincial government, and it is fieldtesting its new instrument on the economy of Nova Scotia.

Unlike the GDP, the GPI uses "fullcost accounting," adding positive things and deducting negative ones, just as ordinary people do when they make their own decisions. It also answers the question, "Progress towards what?"

As GPI director Ronald Colman explains, sustainable long-term development involves moving forward in harmony with four clusters of values— security of the person; equity among living people and also between generations; environmental quality, and "other human and social values," which include freedom, knowledge and the various ways we care for one another within society.

The GPI therefore recognises not just one form of capital but four—natural, human, social and "produced" capital. If any of these is unsustainably depleted, the result will be a poorer society. And the GPI does include the economic value of unprocessed natural resources, and also the value of parenting, housework and community services.

F tillcost accounting, says Colman, is simply 'streetsense economics," but its results are startling. Last year, GPI Atlantic reported that the value of volunteer work here in Nova Scotia—which traditionally has a high level of volunteerism—was almost $1.9 billion. This year it found that volunteer work had declined by 7.2 per cent, a loss of $60 million, largely because of time pressures due to downsizing and cutbacks. The GDP would never have noticed this decline, though we all know intuitively that the budget slicing of recent years has weakened our communities.

GPI's most recent report, released last month, reports that the cost of crime in Nova Scotia is about $1.2 billion annually, or about $3,500 per household. Yet though we have a greater problem with crime than we once had, our crime rates are still relatively low. Nova Scotia's property crime rate is 82 per cent of the Canadian average, its serious violent crime rate is 63 per cent, and its robbery and motor vehicle rates are less than half the national average. The low crime rate is an economic advantage for people in Nova Scotia.

And here, I think, is the most interesting vista which the GPI opens up to Nova Scotians. Since the GDP adds the cost of such miseries as crime, pollution, divorce, traffic accidents and addiction to the general value of production, these miseries increase the official disparity between the Maritimes and the rest of the nation. If the cost of misery is deducted, however, then regional disparity goes down. If other positive Maritime factors are added as well—low divorce rates, high levels of home ownership and a relatively clean natural environment, for instance—the gap closes further. As it should.

Fundamentally, the GDP is only about abstract numbers, while the GPI is rooted in real things: civic peace, clean air, strong community bonds.

GPI Atlantic has only begun to work its way through 20 different social, economic and environmental indicators, but its reports already demonstrate that Nova Scotia offers an impressively high quality of life.

In the end, I suspect that the GPI will confirm what many of us already feel in our hearts: not only that the UN is correct to call Canada the most liveable country on earth, but also that the Maritimes are the most liveable region in Canada.

Silver Donald Cameron is an award winning author living in D'Escousse. His book The Living Beach has won the 1999 Evelyn Richardson Award.

Copyright © 1999, Silver Donald Cameron

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