Madam Speaker, how we measure the value of things says a lot about who we are as a people and as a society.

Currently we measure the performance of our economy by gross domestic product. GDP measures the market value of all goods produced and services provided in a given period of time.

When the consumption of goods and services goes up, so too does the GDP, regardless of whether the effects on people and society are positive or negative. For example, if a couple gets a divorce, it is great for the GDP. There are lawyers' fees to pay, and if the divorce proceedings go to court, the bills are even higher.

The former spouses now have separate homes and greater expenses than when they lived together. If they have children, the cost of setting up two homes for the kids increases expenses even more. If things go horribly wrong, and an angry spouse burns down the family home or totals the car, that is a bonus for GDP growth. However, what is the real cost of all this economic activity?

Healthy family relationships are integral for childhood development, and many divorces have a negative impact on that development. GDP does not account for the personal and social value of happy healthy families. GDP also does not account for the value of a healthy, biodiverse environment. When one is only measuring GDP, an old growth forest ecosystem has no value until it has been clear cut and turned into lumber.

Nobel Prize-winning economist Joseph Stiglitz is among the economists arguing that gross domestic product fails to capture the impact of climate change, inequality, digital services and other phenomena shaping modern societies. He points out that GDP failed to reveal distortions in the bloated U.S. housing market, which triggered the 2008 financial crash.

Some economists refer to GDP as gross depletion of the planet. At a rate of 3% GDP growth annually, we double the size of our economy every 24 years. That means we also double the exploitation and consumption of resources, which is completely unsustainable. If all humans consumed and disposed of products and materials the way the average North American did, we would need seven planets for the necessary resources.

GDP only values things that can be commodified. In a society where GDP is the main measurement, efforts to protect the environment can never succeed. There might be occasional small wins, but the endless drive to turn everything into money will always triumph because unexploited nature has no value on a balance sheet. The crash in biodiversity is the inevitable result of an economy and society that only values GDP growth.

While it would not make sense to completely eliminate GDP as a measurement, it needs to be tied to other indicators, such as the United Nations human development index, which adds together consumption, life expectancy and educational performance at the country level. Another option is the genuine progress indicator, or GPI, which incorporates environmental and social factors that are not measured by GDP. For example, GPI decreases in value when poverty rates increase. The GPI separates the concept of societal progress from economic growth.

It is time to adopt measurements of well-being that support healthy and happy humans, healthy and happy societies, and a healthy, resilient environment.

Paul Manly

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Adjournment Proceedings

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