What a 'well-being budget' could look like in Canada

The federal government is looking at a new way to measure economic success ahead of their spring budget.

Minister of Middle Class Prosperity, Mona Fortier, has been asked to look at so-called "quality of life measurements." Those measurements are supposed to translate into the government's decision making and budgeting.

It's something other countries are already doing. Last year, New Zealand unveiled its "well-being budget" with billions of dollars for some of the country's most vulnerable. 

But what exactly does it mean — to budget for well-being? CBC Happiness and Well-being columnist Jennifer Moss, who sits on the UN Global Council for Happiness, explains to CBC Kitchener-Waterloo's The Morning Edition. 

• LISTEN: Budgeting for well-being with Happiness Columnist Jennifer Moss

Craig Norris: Why incorporate well-being into federal budgets?

Jennifer Moss: This has actually been a long time in the making. Some of the most respected economists in the world believe that GDP should have been obsolete a long time ago. We really need to see countries expand their current way of showing economic success.

It's really just been this main tool for measuring a country's economy, but it's morphed into this planning tool and that provides really a risk for us defining our country's success and it just makes us look through a very narrow lens.

CN: So I assume you agree with the economists that the GDP is too narrow a way to define economic success. Why is that?

JM: Even the man behind the concept said that it should not be used as a welfare measure and if used as a planning tool, it just makes really the wrong assumptions. We have a pretty varied socioeconomic spectrum in our country. Take for example — 2008, the big crash. Roughly 91 per cent of those gains went back to the top one per cent, but GDP would say we have a robust economy and so that's really not accurate.

And then there is an example of how the idea of GDP actually isn't understanding our modern economy. They didn't understand that Internet would be free. So it's hard to map that. And you have families that would have spent money on going to the movies or going out for dinner and now they're binge watching Netflix or Prime or Disney Plus or whatever. And so GDP would say they're not better off. But that's arguable. So we're really you know missing a lot of that grey area data.

CN: So is using GNH or the Gross National Happiness — is that a better way to measure this?

JM: The GNH — probably why it's been hard for a lot of countries to adopt it is that idea of measuring happiness is so nebulous. But it was developed about 20 years ago by Bhutan, it tracks 300 items. The Global Happiness Council has started to modify that since 2012 and they created this happiness index and then they mapped it over the Gallup World Poll. And the thing with the Gallup World Poll is it tracks and continually surveys citizens in 160 countries. It actually measures 98 per cent of the global population and it looks at stuff the GDP is looking at too.

So you merge those two things and then what happens is that you could analyze how clean drinking water can both be socially beneficial as well as financially beneficial. And you're looking at the value of cultural inclusion and trust in government. Loneliness epidemic — it costs a lot of money. But what if we could improve loneliness. I mean we're looking at some of these things that are social impacts, but they have very expensive costs if we don't handle them.

CN: What other countries might Canada would look at to make this a reality?

JM: Scotland and Iceland have been doing a pretty big effort. Brexit has slowed down their budgeting, now that should probably change. But what they've done is create this well-being economy government initiative and so the three prime ministers — all three women I should add — what they've done is they've created this framework. And so they're looking at creating this sort of objective. And Canada will be looking toward them as this framework to create more of an economic policy that shaped around collective well-being, to show that happy and healthy can also equal wealthy. One doesn't have to come at the expense of the other.

CN: So if Canada were to develop a well-being budget, what do you think they would focus on?

JM: Well, I think they'll follow similarly to what New Zealand is looking at because there are similar issues. And often these issues for everyone are the most expensive band aids. The most expensive issues are the ones that we want to tackle first because we can basically show that there's a quantified reason for it.

We'll look at mental health and solving for that as much as we can. Obviously housing is a big one in Canada and solving for not just homelessness but adequate housing. And we'll also look at making sure that there is some sort of way of looking at climate change. Obviously it's important to be able to manage prosperity in climate change and also just you know the other factors that play into that.

CN: So let's say the government does do these things. How then did they measure whether or not they're successful?

JM: The thing is that they're already doing a lot of this prevention stuff now. But it's not inside of that budget, it's sort of buried in different places. And so what that means is Canadians can't actually see how that's being impacted. So taking it into a well-being budget basically says "OK, we're going to tackle these issues."

Let's look at New Zealand for example, their domestic violence issue — it's a big one. They actually have police called every four minutes to someone's home. I mean that's huge. It's costing them $4-billion to $7-billion a year, unchanged it could cost $80-billion in the next 10 years. So if we look at that they're going to put $500-million dollars annually in that year and they're going to say how much are we getting back from that. And so right away, it's an upstream investment which is scary for a lot of politicians. But we show it over time that it does actually make an impact.

CN: So in essence is that what this is? It's just placing the budget investment further upstream?

JM: Yeah, that's exactly what it is. So you know it's scary, like I said.I mean New Zealand right now they had a 3.1 per cent prediction of their GDP, it's now 2.1 per cent. And so obviously they're going to blame it on a well-being budget when there's a lot of factors. So they have to really own this and say you've got to trust us, but it's going to play out in the long run. But Canadians, we are one of the happiest countries in the world. We do care about social justice. So it makes sense that we would be taking this this next step.

Edited for clarity and brevity.