PRESS RELEASE

A NEW COMPASS: The Completion of the Genuine Progress Index and the Future of Nova Scotia

“We've been working towards this for more than a decade,” says Ronald Colman, executive director of GPI Atlantic. “Today, Nova Scotia has become one of the first jurisdictions in the world to have a complete Genuine Progress Index. It’s like a new compass to show us the way into the future.”

For 12 years, GPI Atlantic has been constructing measures of progress that provide a much more profound understanding of Nova Scotia's social, economic, and environmental health than has ever been possible. A Halifax-based non-profit research group, GPI Atlantic has issued nearly 100 reports on various aspects of the province's wellbeing over more than a decade. Today, GPI Atlantic is releasing an updated summary of headline indicators in 20 social, economic, and environmental areas—measuring the province's overall progress towards genuinely sustainable prosperity.

The essence of the GPI is “full-cost accounting,” says Dr. Colman, “which is really “common-sense accounting.” The GPI counts as assets the value of things like volunteer work, a healthy and educated populace, nurturing communities, and a healthy environment. And it counts as liabilities the cost of factors like crime, smoking, pollution, and natural disasters which clearly degrade the human situation.

By contrast, more primitive measures like the Gross Domestic Product, or GDP, grossly oversimplify the complexities of human experience by measuring only the amount of money that changes hands in the economy. In GDP-based measures, the faster we destroy our natural environment, the faster the economy grows—counting the booming ground fishery of the 1980s, for example, as a splendid contribution to the economy. But GDP counted only what we extracted from the oceans, not what we left behind. As Atlantic Canadians now know, to their sorrow, the collapse of the Atlantic groundfish stocks led to the loss of 40,000 jobs and unravelled entire communities.

By valuing assets and liabilities appropriately, and by including the value of natural, social, and human capital as well as financial capital, the GPI provides a comprehensive overview of the health of a society, its environment, and its people. The Government of Nova Scotia adopted a similarly comprehensive view of wellbeing with its bold 2006 Opportunities for Sustainable Prosperity strategy and its 2007 Environmental Goals and Sustainable Prosperity Act.

“The government has re-defined progress, which is fabulous,” says Dr. Colman, “and the GPI meshes perfectly with the new Strategy and Act. It gives the government a reliable compass, a splendid instrument to help shape its policies and guide the province towards the goals it's already set out.”

Because the GPI looks at net rather than gross value, and accounts for the costs as well as benefits of economic activities, its analyses have already proven to have considerable powers of prediction.

Last month, for instance, GPI Atlantic’s Financial Security report showed that the previous decade's economic boom was debt-fuelled. Since 1999, only the wealthiest 20% of Canadians saw their incomes grow more rapidly than their debts — but for the remaining 80%, debt grew far more rapidly than income—impairing the ability of many households to make their payments on their debts. The poorest 20% of Canadian ended up with debts greater than the value of everything they owned.

When the GPI findings were released just before the current economic downturn, conventional economists argued that Canadian household finances were robust. But the more balanced GPI appraisal revealed that household finances were very shaky. The situation was worse in the US, where consumer spending had for years been based on home mortgage equity withdrawals.

Over the past 12 years, other GPI reports have made similarly accurate predictions in other fields. In 1998, the organization predicted a decline in community volunteer work due to increased paid work hours and time stresses. The resulting loss of volunteer work cost the province $370 million in lost voluntary services in 2005. And a 2001 GPI report predicted that the steady decline in the net incomes of Nova Scotia farmers would put the entire farming sector at risk – and in fact Nova Scotia farms are in crisis today, having recorded negative net farm income in four of the last six years.

GPI studies have also shown that the lost jobs and incomes that accompany economic downturns generally result in increases in crime (especially robbery), social unrest, and serious health problems. “But we also know how to deal with those effects,” says Dr. Colman. “This is the time to reduce and redistribute working hours rather than laying people off, to undertake infrastructure projects, and to build a more resilient and self-reliant local economy. Those investments have a cost, certainly – but the cost of not dealing with the consequences of the downturn are far greater.”

The same is true for environmental policies. Nova Scotians originally feared that their pioneering solid-waste program would be expensive and fail to generate adequate citizen participation. On the contrary, the solid waste program created jobs and businesses, and now saves Nova Scotia a minimum of $32 million annually – in addition to improving the environment and greatly enhancing Nova Scotia's reputation. Reducing greenhouse gas emissions will have similar benefits, Colman says. The latest GPI update released today shows that attaining the Province’s target of reducing greenhouse gas emissions to 10% below 1990 levels by 2020 will save more than $800 million net, when reduction costs are subtracted from the costs of avoided climate change damages.

“The thing people miss is, what's the cost of not acting?” Colman says. “Yes, there's a cost to reducing greenhouse gas emissions, but all the evidence – and not just in Nova Scotia – shows that any investment here will pay for itself many times over in avoided future costs.”

The GPI also reveals that Nova Scotians generally enjoy a remarkably high quality of life. “Though incomes are somewhat lower here” says Dr. Colman, “many costs are lower, too – and Nova Scotians enjoy a very rich web of informal supports. Home ownership is high, divorce rates are low, and Nova Scotians sustain one another through their families, churches, and voluntary organizations. Well, living in strong, cohesive communities is an important determinant of health and happiness – and that’s the objective, isn’t it? So that’s a good news story that we couldn't have quantified without the GPI.”

Dr. Colman says the GPI research and development phase is now complete. “What we're looking forward to now,” he says, is “seeing other people – particularly the government – make use of the GPI to move Nova Scotia towards a rich, rewarding and sustainable future.”

Funding towards this final summary report and towards the completion of the GPI was kindly provided by the Province of Nova Scotia. For more information, please contact Ronald Colman, GPI Atlantic Executive Director (902-489-7007) or Linda Pannozzo, senior researcher (902-857-2058).