Mark Wiseman is a Canadian investment manager and business executive serving as a senior adviser to Lazard Ltd., Boston Consulting Group and Hillhouse Capital, and the chair of Alberta Investment Management Corp. He was formerly the chief executive officer of Canada Pension Plan Investment Board and a senior managing director at BlackRock and chairman of its global investment committee. Follow Mark on Twitter.
Critical components of Canada’s economic and physical infrastructure are facing imminent threats. Crises, be they storms, financial meltdowns, viruses or trucking convoys, are becoming more frequent and consequential. With perilous harbingers looming larger, now is the time for Canada’s public and private sectors to come together to assess and improve risk preparedness and response competency.
While we have done some things well, the pandemic exposed crucial crisis management flaws. As former U.S. Securities and Exchange Commission chairman Jay Clayton and I recently discussed, taking a long view of these shortcomings will be essential in preparing for the next inevitable crisis.
Consider, the realm of cyberspace, where we are demonstrably exposed and unprepared for a significant attack. Recently, our government warned critical industries to prepare for such disruptions. That same week, as our diplomats vouched for Ukrainian sovereignty and prepared economic sanctions against Russia, Global Affairs Canada’s information systems were disabled by a cyberincident.
The government’s warning on this front is far from sufficient. Learning from the mishandlings of the pandemic, they must focus on four key areas for improvement.
First, we need to improve real-time public analysis and decision-making. Leaders must have access to the right data and metrics to make the right calls. Second, Canada must modernize and invest in expert agencies. Prior to the pandemic, there was no supply chain management expertise within government, yet the health care system and economy needed this specialized capability at hand before the crisis hit. Third, we must have better co-ordination among governmental authorities – particularly important in our federated state. This shortcoming has been laid painstakingly bare by the fumbled municipal, provincial and federal co-ordination in response to the trucker protests. Fourth, and key to success in all the above, we must use expertise and establish public-private partnerships, both before and during a crisis.
The dangers of resisting this collaboration were exposed through the pandemic as the government was too slow in assimilating private-sector assistance. Early disruptions in access to personal protective equipment and vaccines were greatly improved by incorporating the infrastructure and capacity of the private sector, but crucial time was lost as early offers of support were obstructed by arcane, byzantine procurement rules.
The current federal government’s general mistrust toward private industry meant we relied mostly on underequipped public agencies for advice and implementation. Compare this to Operation Warp Speed in the U.S., which saw Pfizer, FedEx and the military collaborate to create and distribute vaccines at an unprecedented pace, leaning on the competency of private enterprise.
Hindsight must now galvanize foresight. Most pressingly, our government lacks the existing capacity to handle a major cyberattack or other crisis, and increasing reliance on inefficient public agencies has created an inward approach to preparedness. To ignore the cross-functional expertise of our private sector is dangerous, and the recent Global Affairs experience is a stark reminder that the public sector alone is probably not equipped to confront these challenges.
Our public policy apparatus must work alongside critical industries. This means identifying the chinks in our armour and matching private sector experts to them. Public-private partnerships will be essential in mitigating a crisis that will likely be even more complex and specialist-dependent than the pandemic.
Should another major crisis occur, our governments’ obligation to respond to the inevitable panic and outcry will cloud and mislead our response. Politicians have an important role to play but are ultimately reliant on popularity. With an event as complex as a pandemic or cyberattack, the required response will be nuanced and, at times, unpopular. In establishing a preparatory framework, industry experts can provide apolitical authority and metrics to guide a plan. For example, in 1942, at a time of geopolitical peril and confusion, the U.S. created the War Production Board, led by the private sector. The agency was tasked with balancing the needs of civilians, the economy and the military by supervising production, allocating scarce materials and prohibiting non-essential production.
Fear of the private sector cannot overrule the need to have our best and brightest tackling crucial issues, regardless of their fundamental profit motive.
Canada’s private sector is full of willing partners who, with self-interest, want to better protect themselves from these threats – so none of this costs more. Over half of Canadian ransomware victims last year were in critical health care, energy and manufacturing sectors, further demonstrating the need for these industries to be part of the plan. In Canada, the business sector is highly competent and well-equipped to help prepare. Last year’s cyberattack on America’s Colonial Pipeline spooked many in our energy sector to invest proactively in informational and operational prevention and detection technologies, furthering their capacity to assist in cyberspace.
The 2019 federal budget committed $80-million over four years to cybersecurity, yet our private sector directly invests about $7-billion annually to prevent incidents. This area is primed and begging for public-private collaboration.
As we work to move beyond the effects of COVID-19 let’s use the momentum to be forward-focused – and to facilitate expert collaboration so that we don’t make the same mistakes.
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