For decades, assessment of a country’s wealth has been completed through an evaluation of Gross Domestic Product (GDP). This method is limited to the assessment of financial capital, while other factors such as quality of life provide a more complete picture of the country’s overall status. The Wealth Economy Framework assesses factors such as Natural, Human, and Social Capital alongside GDP, moving away from a monetary focus to provide a more holistic approach to national well-being.

Canada holds a unique position with regards to Gross Domestic Product (GDP) and the Wealth Economy Framework due to a disparity in land area vs population quotient. As the third largest country in the world, Canada boasts abundant natural capital, while human capital in relation to national GDP output is limited due to a small population of 40,000,00 (1). A more progressive approach that expands on GDP indicators would create more accurate data collection in the context of informing sustainability targets and policy.

Current Natural capital assessment within the context of classic GDP measurement and traditional methods of balance sheet and productivity accounting, is ,incompatible with a sustainable approach of conservation and restoration. Within the domain of climate and sustainability targets, however, natural capital such as forests and wetlands can be viewed as a stable asset for carbon sequestration, creating a more sustainable approach for future processes. Within this framework, Canada’s abundant natural resources would serve as a strength for meeting sustainability targets, an asset that is not currently being utilized to its full potential, as current national wealth is predominately measured in monetary terms. Progress has been made in initial data collection, with Statistics Canada leading a study of the Thousand Islands National Park in terms of monetary value, civil use and the intersection with social capital (2). 

As a country with a small population, Canada has a special interest in human capital, particularly in the context of efficiency in the national workforce. Social Capital studies are a weaker link in the Government of Canada’s exploration of the principles of the Wealth Economy Framework, with few studies on quality of life and civil society at the regional level (3). A strength in Canadian studies on social capital is the adoption of a holistic approach to achieving the end output, the most basic form being quality education + students = workforce output efficiency, with further areas including intersections with physical, natural capital and human capital through an economic growth lens (4). Efficiency is necessary to support a small national workforce, with the need for adequate physical capital presenting a challenge to growth measures, a challenge the Bank of Canada is exploring through the use of an algebraic approach to create an ideal balance of human and physical capital for maximized growth and output, utilizing a holistic equation; 

Human capital, skills, and efficiency within the workforce + physical capital, resources, and means to obtain capital sustainably = well rounded, efficient, positive and sustainable output (5).

In order to reap the full benefits of this equation for the Canadian economy and quality of life, it is necessary to have adequate physical capital (e.g., the skills and efficiency of members of the workforce) while studies show that peak productivity is only reached when workers have access to natural capital for the benefit of their mental and physical health. These linkages between different capital demonstrate a circular framework which is bound together on the strength of the assets humans derive from natural capital.

In a rapidly developing world riddled with complex issues such as climate change, technological ethics, and social justice, it is clear that national welfare cannot be accurately measured in monetary terms. The Wealth Economy Framework provides not only a rule of measurement, but platform to move away a monetary centric society, to one that considers the health and well being of all as an indicator of success, and recognizes that it is nature that binds these factors together.

Sources

1.  Statistics Canada, Government of Canada. 2023. https://www.statcan.gc.ca/en/subjects-start/population_and_demography/40-million

2.  Sustainable Prosperity. 2014. https://gibsons.ca/wp-content/uploads/2018/01/Importance-of-Natural-Capital-in-Canada-March-2014.pdf

3.  JF Beaumont, C Bocci, J Fonberg, G Schellenberg. 2021.https://www150.statcan.gc.ca/n1/pub/11-633-x/11-633-x2021007-eng.htm

4.  M Laroche, M. Merette. 2000. https://publications.gc.ca/collections/Collection/F21-8-2000-5E.pdf

5.  A Bowlus, Y Park, C Robinson. 2022. Bank of Canada: 

https://www.bankofcanada.ca/wp-content/uploads/2022/04/sdp2022-7.pdf

Photo credit: Hooded Mergansers in Quebec, Canada, photo by F.N. Brown