Media Clipping — July 29, 1998, New Brunswick Telegraph Journal

Nova Scotia leads effort to improve GDP

Research group pioneers new test to see how well the country is really doing

By Graeme Hamilton, Southam News

HALIFAX—Politicians and economists are quick to quote gross domestic product figures as an indication of how well we're doing, but there is growing recognition that it provides only part of the picture.

A Nova Scotia research group has just published the first results of a pioneering effort to provide a better gauge. By including things like the value of unpaid work and the costs of crime and natural resource depletion, the Genuine Progress Index delves beyond the GDP's calculation of goods and services exchanged in the marketplace.

And Statistics Canada hopes the Nova Scotia model will eventually be used across the country.

"We always tend to think that when GDP rises, it's better for everybody," Hans Messinger, director of industry measures and analysis for Statistics Canada, said. "It's not necessarily better for everybody, and GDP gives no consideration of how well we can maintain that kind of development in the future. "

Statistics Canada has designated the Nova Scotia Genuine Progress Index as a national pilot project. Developed by the nonprofit research group GPI Atlantic with $120,000 in federal and provincial government funding, it is the first project of its kind in Canada.

GPI Atlantic director Ronald Colman read of the work of three U.S. economists creating a Genuine Progress Index in 1995 and decided to use the concept as a classroom exercise at Saint Mary's University in Halifax. But he soon recognised it had wider potential, pitched the idea to government and left teaching political science to work fulltime on the index.

Now into the second year of the project, GPI Atlantic published its first results this month, calculating the value of volunteer work. Using Statistics

Canada timeuse data and multiplying the hours volunteered by the going hourly wages in comparable jobs, the group concluded the 135 million hours of volunteer work put in annually by Nova Scotians is worth nearly $1.8billion, or about 10 per cent of the province's GDP. The value for all of Canada was $53.3billion.

Mr. Colman isn't suggesting volunteers should be paid, only that policymakers should be aware of the huge contribution volunteers make.

"Taking care of the sick and elderly, cleaning up the environment, that's work of economic value to our society. If that work did not exist, our standard of life would deteriorate," he said. "Yet it doesn't show up anywhere in our accounting system. It doesn't show up in the GDP, even though it's productive output. It doesn't show up in employment, even though it's work."

The group will be producing a string of reports over the next year looking at 20 indicators, including household work, leisure time, crime costs, greenhouse gas emissions, air pollution, soil quality, forestry and fisheries. Then they will combine the new information into a composite Genuine Progress Index, scheduled for the end of 1999.

Mr. Colman says the model can easily be adapted for use by other provinces and nationally. Ultimately, he hopes it will help prevent unsustainable economic development like fishing cod to the brink of extinction that still counts as growth under the GDP.

Statistics Canada's Mr. Messinger said the project shows great promise, but he added that it is only at the experimental stage. There is still much debate over what factors should be included in an overall index and how to assign them monetary value. He doesn't see a day where the Genuine Progress Index will supplant GDP, but it could greatly improve understanding of `'how well we're faring as a society," he said.

Copyright © 1998, New Brunswick Telegraph Journal

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