Canada’s G20 entrepreneurship

Introduction

The advent of global financial crises and the ensuing emergence of the Group of Twenty (G20) systemically significant states have propelled what Ravenhill has termed newly prominent participants’ (NPPs) rising role in governing the 21st century world. The broadening array of NPPs and their inclusion in the enlarged G20 could have brought a profound challenge to Canada, a country long seen as an archetypical middle power and an influential member of the Group of Seven (G7) major market democracies operating since 1975. ¹ However, Canada, with its high relative capability and international connectivity, has been the successful entrepreneurial conceiver, co-creator, and normative and policy shaper of the G20 since the start.

Under Liberal Party finance minister then prime minister Paul Martin from 1993 to 2006, Canada invented the vision, membership concept, and normative mission of the G20, co-created it as a forum of finance ministers and central bank governors with US treasury secretary Larry Summers in 1999, and had all leaders but US president George Bush agree to elevate it to the leaders level by 2005. Under Conservative Party prime minister Stephen Harper from 2006 to 2015, Canada supported the creation of the G20’s summit in 2008, served as its fourth host in 2010, added ministerial bodies and civil society engagement groups, co-chaired key working groups, and led policy outcomes on financial regulation and fiscal consolidation. Under Liberal Party prime minister Justin Trudeau from 2015 to 2017, Canada fostered the G20’s institutions, principles, and programs on women’s economic empowerment and gender equality. While Canada had several entrepreneurial failures in the institutional, normative, policy, and material domains, its lead was usually followed by a changing configuration of enough established and rising members to make its G20 entrepreneurship succeed.

Canada’s effective entrepreneurship was driven by its relative invulnerability to the growing global finance and terrorist shocks that threatened the largest countries, by its second-tier institutional position in the old multilateral organizations of the International Monetary Fund (IMF) and World Bank that failed in their response, and by its rising relative specialized capabilities in the needed global public goods. Canada’s open economy and society, commitment to democracy and human rights, and growing demographic and linguistic diversity increasingly made it resemble the G20 as a whole. Canada’s three leaders brought strong domestic political control; continuity; considerable expertise in business, economics, and finance; and mass public support. Canada was also a highly international institutionally well-connected member of a G20 club at the hub of a global network.

This study analyzes Canada’s G20 entrepreneurship using John Ravenhill’s framework of entrepreneurial states. ² Focusing on Canada’s consciously constructed, purposive, non-unilateral, non-coercive behaviour, it covers the conceptions of key individuals about the G20; Canada’s institutional, normative, policy, and material initiatives; its skill in securing supportive followers and making concessions; and the ambitiousness of its entrepreneurial initiatives (including its norm entrepreneurship and aims to reinforce or revise the existing system) and their successes, failures, and consequences. As causes, it considers Canada’s specialized material and ideational capabilities relevant to the international system’s new foundational characteristics, demands, international institutions, polarity, and power configurations; Canada’s domestic society pressure and support; bureaucratic interests; the role of key departments, political partisanship, and political leaders, and their entrepreneurial focus or overstretch; and the timing, execution, and resources behind these initiatives.

Paul Martin’s G20 entrepreneurship, 1997–2005

Stephen Harper’s G20 entrepreneurship, 2006–2014

The crisis was the necessary catalyst for the creation of the G20 summit, which George Bush called, hosted, and chaired in Washington, DC on 14–15 November 2008. Canada’s Conservative Party prime minister Stephen Harper was initially uncertain that the G20, rather than a G7, perhaps along with the G5 big emerging economies leaders, was the proper combination of leaders to respond, but soon supported the Australian and US Treasury-pioneered call. ⁸ Harper quickly engaged in G20 entrepreneurship on the critical policy issues of stronger, internationally harmonized, market-sensitive financial regulation with serious supervision, fiscal consolidation, and, along with others, trade. Shortly thereafter, he added institutional leadership, by having Canada co-chair with India the key working group on financial regulation and then on macroeconomic policy; by serving as G20 summit host and chair in 2010 after only the major powers of the US and UK had; and by pioneering for his Toronto summit a new G20 ministerial meeting for labour and engagement groups for business, labour, and young entrepreneurs.

Washington, November 2008

At Washington, Harper sought and secured his central objectives: fixing the banks first, integrating exit strategies from the start into the fiscal stimulus thrust, and taking a strong anti-protectionist pledge. ⁹

On financial regulation, Harper insisted on fixing the banks first, through a balanced approach based on prudent market oversight based on stronger, Canadian-style regulation that would allow for providing the real economy with the liquidity that had evaporated, and that would be followed by the strong supervision that Canada had earlier introduced at home. He aligned himself more with Bush’s defence of free market capitalism, rather than the European and Australian argument that the crisis had been caused by deregulation and unchecked speculation. Yet Harper added—and the summit leaders agreed to—a distinctive emphasis on the banking capital, leverage, and liquidity solutions pioneered and proven in Canada. To implement and improve these decisions, G20 leaders chose Canada along with NPP India to co-chair, and thus institutionally lead, the key working group on financial regulation, one of only four they created.

On fiscal policy, Harper supported the standard Keynesian response of strong, coordinated fiscal stimulus, but alone insisted that leaders build in from the start the fiscal consolidation that should come when the stimulus worked and growth resumed. He was guided by the balanced budgets that he and Paul Martin before him had routinely achieved at home since 1997. Supported by Germany’s Angela Merkel and Bush, he prevailed.

London, April 2009

At the second summit, held in London on 1–2 April 2009, Canada’s priorities were to keep the focus on fixing the banks first, on delivering the fiscal stimulus of 4 percent of members’ gross domestic product (GDP) that the G20 had promised at Washington, and on combating trade protectionism—rather than on instituting a global bank tax and quickly adding major new fiscal stimulus, action against hedge funds, money laundering, and climate change.

With British Labour Party prime minister Gordon Brown as host, and US Democratic Party president Barak Obama attending his first G20 summit, Canada secured only some of its goals, but still managed to strengthen its initial policy entrepreneurial success. On financial regulation, Canada was pleased that London endorsed for follow-up the recommendations of the regulatory working group which Canada’s Tiff Macklem co-chaired. Supported by the NPP members, Canada prevented acceptance of the global bank tax that the European major powers sought. On fiscal policy, the G20 started to talk more about exit strategies, even if London’s signature achievement was a US$1.1 trillion package of additional stimulus. A compromising Canada as a responsible material follower contributed C$10 billion to it, its traditional 10 percent of the United States’ contribution; while Japan, the US, and Europe (including Britain at US$15 billion and France at US$16 billion) promised US$100 billion each. Canada had similarly produced discretionary fiscal stimulus in its budget a few months earlier, to fulfill the Washington summit’s approach. It also succeeded in realizing an initial institutional ideal in having London agree to enlarge the FSF into a new Financial Stability Board (FSB) with all G20 countries as members.

Pittsburgh, September 2009

At the third summit, in Pittsburgh on 24–25 September 2009, Canada’s greatest entrepreneurial success was institutional, as it was chosen to host the next summit of a G20 its leaders had just chosen as the permanent, priority forum for their international economic cooperation. Canada also advanced its earlier entrepreneurial emphasis on fiscal exit strategies and financial regulation. It took its first step into material entrepreneurship by offering C$2.6 billion in callable capital for the African Development Bank (AfDB) as part of the G20 thrust to reinforce the resources of the multilateral development banks (MDBs).

On the institutional issue of who would host the next summit, Canada, which had not overtly sought the right and responsibilities, was chosen by the group, over a repeated strong bid from Japan. Canada thus became the third country to host, following the two Anglophone imperial powers of old, and to be followed by NPP Korea as a non-G8, non-BRICS (Brazil, Russia, India, China, and South Africa), non-Atlantic member.

On the policy issue of financial regulation, Canada again advanced its preferred approach, now reinforced by the Basel Committee on Banking Supervision and the new FSB. Canada was disappointed that the summit’s highlight was the new Framework for Strong, Sustainable and Balanced Growth. It was pleased that this enabled a shift in the macroeconomic policy approach from stimulus toward consolidation when growth returned, and that the US and UK, if not France and Germany, agreed that it was not the time to start.

On development, on the eve of the summit, in its first act of material entrepreneurship, Canada announced a contribution of C$2.6 billion in callable capital to the AfDB, a proposal developed by the Department of Finance and Bank of Canada as a mechanism to help the MDBs. Canada also discussed with the Inter-American Development Bank how to assist it in a similar way.

Toronto, June 2010

The fourth G20 summit, held in Toronto, Canada on 26–27 June 2010, was thus hosted and chaired by Stephen Harper. ¹⁰ Canada’s core entrepreneurial policy initiative and the summit’s central achievement was to contain the erupting Eurocrisis through an agreement on medium-term fiscal consolidation with hard quantitative targets and timetables for advanced economies’ deficit and debt control. Harper as host, Canada’s strong financial and economic position, and the erupting Eurocrisis catalyzed the agreement on fiscal consolidation, the rejection of a global bank levy, an extended anti-protectionist pledge, and acceptance of Canada’s policy model.

In shaping the agenda for the summit, Harper first publicly signalled his approach in late September 2009. ¹¹ He would focus on the economy and implementing the commitments already made, notably on the financial system, stimulus and exit strategies, trade liberalization, international financial institutional reform, and the Framework. ¹² He later elaborated in early 2010. ¹³ On 29 March, the leaders of Canada, Korea, Britain, the US, and France, as the G20’s leadership pentarchy, sent a collective letter calling on their colleagues to advance the “good progress” the G20 had made.

By late May, however, all were absorbed in the European difficulties on sovereign debt, European banks, and their lack of transparency. There were considerable differences of view on whether a G20 agreement on fiscal consolidation, as Canada and the Europeans sought, was the right approach.

Several weeks before Toronto, Harper sent his G20 colleagues a carefully worded letter calling for fiscal consolidation to be the key issue at the summit. He proposed a precise set of targets and timetables for deficit and debt reduction in the advanced economy members. This was a calculated risk, as Canada was unsure of what the US position would be. Canada soon learned that the others could live within the limits proposed. The Japanese had a specific problem, so Canada produced compromise language accommodating them. While a variety of opinions emerged, Canada never encountered one that said this could not be done. ¹⁴

At the summit, Canada’s priorities prevailed. On the central issue of the macroeconomic message with hard targets and timetables on deficits and debt to contain the Eurocrisis, Canada initiated and the Europeans supported, while the Americans and several emerging economies resisted. But in the end, Barack Obama’s Americans accepted medium-term targets and timetables. Harper succeeded at the summit, and its message succeeded in effectively containing the Eurocrisis for the five months until the next G20 summit was held.

On the divisive issue of a British-proposed uniform global bank tax, Canada was the only G7 country left opposing it. Canada argued, in a way appealing to the emerging G20 members led by China, India, and Indonesia, that a one-size bank tax did not fit all, and that they should not have to pay, as none of their banks had failed at home. At the summit, the tax was not approved. Had this issue been decided in the G7 or G8, Canada could well have lost.

On trade, Canada failed at an early stage in its proposal to eliminate nuisance tariffs and provide duty-free access for least-developed countries. On fossil fuel subsidies, Canada was pleased to have Toronto’s leaders reiterate the Pittsburgh promise to phase them out and add a review of progress at future summits, but resisted the addition of the producer subsidies that would directly affect the energy-dependent economy of Harper’s Conservative Albertan and Western Canadian political base. ¹⁵

For Toronto, Harper’s successful entrepreneurship extended into the institutional domain, with the addition of the first Labour Ministers meeting, a Development Working Group, and the advent of the G20 engagement groups for business and, informally, for young entrepreneurs. ¹⁶

Seoul, November 2010

The Seoul summit in November 2010, while confronting the next instalment of the escalating Eurocrisis, gave Canada its first completed policy entrepreneurial success with an historic agreement on stronger banking standards.

On the final afternoon session on financial regulation, Harper was the third country leader to speak. He declared the G20’s progress on financial regulatory reform to be one of the great achievements of the G20 in Toronto, but noted that there was still a long way to go in implementation. He noted that market speculation was not the cause of the failure of financial institutions, and that supervision in implementing financial regulatory systems was key.

Harper was the first country leader to speak on the global economy in the summit’s opening morning session, which allowed him to help frame the debate in a strongly market-oriented way. He highlighted the need for structural reform, fulfilling commitments to fiscal consolidation, and exchange rate flexibility. Recalling his time as a student of economics, he warned against “beggar thy neighbour” policies and protectionism if fiscal consolidation, imbalances, and exchange rates were not addressed. Speaking in support of Harper were the leaders of several NPPs: Spain on food security and trade, Mexico on imbalances, and Brazil on trade.

Cannes, November 2011

At the sixth G20 summit, in Cannes, France on 3–4 November 2011, amid the latest instalment of the European financial crisis, Canada focused on preventing the crisis from going global and causing another recession which could fragment the Euro area and the EU, with which Canada was negotiating a full free trade deal.

Canada from the start set several goals. First, for the Europeans to act to stop the escalating crisis. Second, for the US and other laggards to fulfill their Toronto commitments on deficit and debt control. Third, for China to move to exchange rate flexibility. Fourth, for G20 members to implement the agreed financial sector reforms. And, fifth, resisting protectionism. ¹⁷ These were followed by: stopping France’s proposed global financial transactions tax; stopping France’s proposal to reduce commodity price volatility by controlling international agriculture markets (supported by fellow agricultural commodity exporters Brazil and Argentina), and thus lessening the revenues that major exporters received; and, lastly, having the Governor of the Bank of Canada, Mark Carney, appointed the new head of the FSB.

These were mostly modest follow-ups of earlier policy entrepreneurial initiatives. Canada secured most, including its new institutional entrepreneurial initiative of having Carney chosen to chair the FSB.

Los Cabos, 18–19 June 2012

At the seventh G20 summit, in Los Cabos, Mexico on 18–19 June 2012, Canada again focused on implementing its earlier entrepreneurial initiatives. ¹⁸ Harper’s first priority was for Europe to finally act decisively on a credible, medium-term plan to deal with its critical debt crisis.

He further called for an ambitious trade agenda, science and technology policies, labour market and regulatory reforms, and more European coordination and integration in their very rich region. He thus rejected a Canadian contribution to a new “firewall fund” at the IMF to assist Europe, and worked to announce at Los Cabos Canada’s participation in the Trans-Pacific Partnership (TPP) for free trade across the Pacific. With support from six of the nine TPP members, Canada needed to convince only the US, Australia, and New Zealand to let it join.

Canada secured many of these goals. The G20 led European members’ promise to “take all necessary policy measures” to secure financial stability in the Euro area, and produced an action plan on growth led by Canada and India. Materially, along with only the US, Canada did not contribute to the new IMF firewall fund. Canada as a follower joined the TPP negotiations. In a small act of material entrepreneurship, it joined with the UK and Australia to fund the new AgResults initiative on food security. ¹⁹

St. Petersburg, September 2013

At the eighth G20 summit, in St. Petersburg, Russia, on 5–6 September 2013, Canada again focused on furthering the six priorities flowing from its past entrepreneurial initiatives. First, as co-chair of the G20’s core Framework Working Group, it sought a St. Petersburg Action Plan with a macroeconomic strategy credibly combining short-term growth with medium-term fiscal consolidation. Its second priority was to advance implementation of the agreed financial regulatory reforms, starting with the Basel III standards on bank capital approved at Seoul. Its third was to liberalize trade, through endorsements of the many major trade deals Canada was negotiating with Europe, its Pacific partners, Japan, and India, and an extension of the G20’s anti-protectionist pledge beyond its expiry date in 2014. Canada further sought to combat corruption, to use modest public sector money to catalyze market-based solutions to help the poor, and to advance the G20’s accountability for delivering its own promises.

Canada achieved many of these modest goals. It got a strong growth-first message, backed by G20 country-specific growth strategies, but failed to secure hard caps on government debt or serious fiscal consolidation plans. It obtained a push for implementation of Basel III capital standards by all G20 members in the short term. The anti-protectionism pledge was extended for three years, over the resistance of NPP China. Small steps were agreed upon on tax fairness, transparency, development, and combating corruption. The G20 released its first Development Accountability Report. More broadly, Canada secured its preference on the biggest issue at the summit, by seeing chemical weapons soon removed from Syria without the use of military force.

Brisbane, November 2014

At the ninth summit, in Brisbane, Australia on 15–16 November 2014, Canadian entrepreneurship was absent in any form. Harper stood out for his forceful public opposition to Russian president Vladimir Putin’s aggression in Ukraine. Harper strongly supported Australian prime minister Tony Abbott’s desire for a summit agenda limited to economics, focused on private sector-led growth, and producing a Brisbane Action Plan to lift members’ GDP over 2 percent above the baseline trend over the following five years. Harper and Abbott realized their core economic goals, but failed in their desire to keep climate change largely off the agenda, as the US and China joined to produce a robust passage on climate change control in the communiqué. ²⁰

Justin Trudeau’s G20 entrepreneurship, 2015–2017

On 19 October 2015, Canadians elected a majority government headed by a new prime minister, Justin Trudeau, leader of the formerly third-place parliamentary Liberal Party, now politically based in urban and suburban Central and Eastern Canada. It was a strong test of whether these domestic political and societal changes would alter Canada’s traditional but recently fading G20 entrepreneurship, and if so, in what way. In fact, the new leader and government immediately brought Canada’s G20 entrepreneurship back, with increasing strength and effect from 2015 to 2017, in new normative, policy and institutional ways.

Antalya, November 2015

After formally becoming prime minister on 4 November and proclaiming, “We’re back on the world stage,” ²¹ Trudeau headed off 11 days later to the long-scheduled G20 summit in Antalya, Turkey, on 15–16 November.

Trudeau did change Canada’s G20 process. The prime minister’s personal style and his substantive priorities and policies produced energetic normative entrepreneurship, if not in an immediately effective form. He brought intense global summit involvement and a new engaging, open, consultative, global rock-star personal style. He shifted Canada’s own foreign policy priorities to discretionary deficit-financed fiscal stimulus through smart infrastructure investment, ambitious climate change control, welcoming Syrian refugees, and withdrawing the air combat mission from the counterterrorism fight. Above all, he promoted the normative principles of inclusiveness, youth employment, gender equality, and immigration as a source of economic growth. However, his effort at energetic G20 entrepreneurship was initially not effective enough to attract others to shift the G20 in new directions.

Hangzhou, September 2016

On 4–5 September 2016, Trudeau visited Hangzhou, China for his second G20 summit, after his first full summit preparatory cycle and his first G7 summit in nearby Ise-Shima, Japan on 26–27 May 2017.

At Hangzhou, Trudeau sought to show that Canada was a constructive global player, to play a leadership role, and to speak out to express Canada’s values and protect its interests. The summit came immediately after Trudeau’s first official visit to China and his bilateral meeting with China’s president Xi Jinping. Thus Trudeau wanted to be seen as helpful to China in its G20 chairmanship, and to support China’s headline initiatives and those on trade and the new Sustainable Development Goals. Trudeau raised human rights with respect to asset recovery and fugitive recovery, and struck a balance in an effective way. As global growth remained weak and uncertain, Trudeau pushed the implementation of the Brisbane growth strategies. His overriding emphasis was on the need for inclusive growth and government spending focused on the middle class, and above all women, girls, and youth. Amid Brexit and the rising pressures of anti-globalization, Trudeau pushed the traditional trade liberalization agenda, but stressed that its benefits should reach all. Trudeau also pushed to get agreement on G20 members ratifying the Paris Accord before the end of 2016. Canada’s specific priorities were, first, short- and medium-term economic growth that emphasized inclusiveness, gender equity, youth, and small and medium enterprise; second, trade liberalization; and, third, climate change control and energy security.

In the end, Canada’s resumed entrepreneurship under Trudeau expanded the G20 agenda. Normatively the G20 agreed to fully respect human rights in combating corruption, on inclusive innovation, on gender inclusiveness and equity, and to provide a counter-narrative to the anti-globalization voices on trade. In policy, Canada prevailed on preventing paying ransom to terrorists to release their hostages, even if it fell short on ratification of the Paris Agreement on climate change. Institutionally, it co-chaired the ongoing Framework Working Group responsible for economic growth strategies, and co-chaired the G20 Trade and Investment Working Group, even if it failed to get the G20 trade ministers meeting to continue in 2017.

Hamburg, July 2017

On 7–8 July 2017, Justin Trudeau attended his third G20 summit, held in Hamburg, Germany and chaired by chancellor Angela Merkel at her twelfth G20 summit and her first as host. Trudeau brought his three priorities of inclusive economic growth and women’s economic empowerment, progressive trade liberalization, and climate change control. Yet he and a supportive Merkel faced the newcomer, populist, protectionist US president Donald Trump, who had just withdrawn the US from the historic 2015 Paris Agreement on climate change. They also faced the UK’s electorally weakened Theresa May, who was consumed by getting Britain to leave the EU. So sharp was the divide between Trudeau’s global cooperation coalition and Trump’s “America first” populist protectionist approach, that Hamburg was a hard test of Canada’s entrepreneurial success.

At Hamburg, Canada—supported by Europe, China, India, and other sympathetic partners, including Trump’s US—secured its first priority of inclusive economic growth, with women’s economic empowerment at its centre and Canada’s institutional initiative for a Women’s Business Council agreed upon. Trudeau also largely secured his second objective, as Trump adjusted to allow the G20 to affirm its commitment to open, progressive trade. Canada also made advances on counterterrorism and on containing North Korea’s nuclear weapons program. ²² However, an adamant US president stopped Canada’s full success on climate change control, its lonely normative entrepreneurship on accepting immigration as a source of economic growth, and controlling global overcapacity in aluminum as well as steel.

Causes of Canada’s effective G20 entrepreneurship

Canada’s effective G20 entrepreneurship displayed both continuity and change. Continuity was evident institutionally in Canada’s creation, shaping, chairing, and hosting of the G20 at the ministerial and leaders’ levels; in heading its key working groups on financial regulation, growth, and trade since 2008; and in creating the FSB in 2009, the labour ministerial and Business 20 and Young Entrepreneurs Alliance in 2010, and the Women’s Business Council in 2017. It arose in pioneering the normative principles of the “systemically significant states” as a fact and thus membership criterion, promoting financial stability and making globalization work for all as the G20’s core mission, and affirming that gender equality caused economic growth. It appeared in policies to strengthen financial regulation by fixing the banks first and in quantitative deficit and debt control in the medium term. It took material form in Canada’s 2009 contribution to the AfDB. Canada was also continuously successful as a leader in stopping a global bank tax, an international financial transaction tax, government agricultural reserves, and initiatives to create a G20 secretariat; and in promoting liberalized trade in various ways.

Change came primarily in the decline and brief disappearance of Canada’s new entrepreneurial initiatives in the later Harper years, and in Trudeau’s revival of such initiatives on new subjects such as women’s economic empowerment, respect for human rights, and, far less successfully, immigration as a source of economic growth.

Shock-activated new global vulnerabilities from connectivity

The first cause of this particular pattern of entrepreneurial performance was Canada’s relative direct invulnerability to the financial shocks from Asia in 1997, the United States in 2008, and Europe in 2010; and from mega-terrorism in 2001. Such financial shocks inspired and enabled Canada to co-create and help elevate the G20. As one of the few G20 members with no failed banks or bankrupt governments since 1994, Canada led on financial regulation. As a country with no deaths at home from terrorists of global reach until the few in late 2014, Canada could host the 2001 finance ministerial meeting and have the G20 refocus on combating terrorist finance. Only after the presence and prospects of global financial shocks disappeared with the containment of the Eurocrisis in 2013 did Canada’s entrepreneurial emphasis shift from initiating new to implementing the old agendas.

Other vulnerabilities without acute shocks, such as climate change in 2016, the hottest year on record, catalyzed Canadian G20 action, but not in an entrepreneurial or successful way. Still, Canada acted on its recognition that in a world now defined by intense international and transnational connectivity, shocks abroad would soon damage it at home, as seen in the severe Canadian recession brought by the 2008 US-turned-global financial shock, and the 24 Canadians killed by terrorists in the attack in nearby New York City on 11 September 2001. Moreover, as a highly open country in trade, finance, and population, Canada knew it would be hurt by recession, protectionism, and natural disasters abroad, where many of its citizens’ relatives and linguistic compatriots lived. Yet no shocks or vulnerabilities inspired Canadian entrepreneurial initiatives such as gender equality under Trudeau.

Multilateral organizational failure

The second cause was Canada’s second-tier institutional position in the established major multilateral organizations of the IMF and World Bank, who repeatedly failed to prevent and rapidly respond to these financial shocks. Unlike the major powers, Canada was not by itself an assured member of these bodies’ executive boards. Since 1944, no Canadian—in contrast to Europeans or Americans—served in the top job there. Canadians also recalled how the European-dominated IMF had refused to help Canada’s new NAFTA partner, Mexico, in the peso crisis of 1994, leaving it to Canada to provide bilateral support, but then providing support when Brazil went down in the autumn of 1998. In specific fields where no 1940s multilateral organization existed, Canadian G20 entrepreneurship helped create them, as in financial regulation with the FSB.

Conclusion

This study confirms that Canada was a successful entrepreneurial state in the G20 through three phases, under three successive leaders from its two major political parties—Liberal Paul Martin from 1997 to 2005, Conservative Stephen Harper from 2006 to 2014, and Liberal Justin Trudeau from 2015 to 2017.

The first phase featured effective, transformational institutional and normative entrepreneurship, above all through the concept and creation of the finance G20 and FSF, the almost-successful campaign for a G20 summit, the concept of systemically significant state as a membership criterion, and the G20’s normative missions of promoting financial stability and making globalization work for all. The second phase emphasized successful, reinforcing institutional, policy, and material entrepreneurship, primarily by fostering a G20 summit, hosting its fourth gathering in 2010, leading key working groups, incubating new ministerial and civil society engagement groups, securing agreement on quantitative deficit and debt targets in 2010, and contributing to the AfDB in 2009. The third phase highlighted incremental, reformist institutional and policy leadership on women’s economic empowerment with the Women’s Business Council. While the strength, form, and content of the entrepreneurship shifted somewhat, Canada’s core commitment to building the G20 as a central global governor of financial stability for all, and of globalization benefiting all, continued throughout.

This continuing and changing entrepreneurship had as its proximate case Canada’s ability to secure followers from changing configurations of supporters, notably the US and China in creating and elevating the G20, Germany and France on quantitative deficit and debt caps in 2010, all non-G7 members in stopping capital account liberalization and a global bank tax, and all democratic members on gender equality by 2017. With the support of others, Canada often successfully pressed to adjust US policies, most notably on quantitative deficit and debt caps as host in 2010. Only on those few occasions when the US remained adamantly opposed, as on climate change and migration under Trump, did Canada’s and others’ G20 entrepreneurship largely fail.

This study contributes to the evolving understanding of entrepreneurial states in several ways. First, it highlights how capability has been joined by connectivity and thus complexity, uncertainty, and vulnerability as system-defining characteristics of the twenty-first century world, and thus how the historic category of “middle powers” based on relative capability has been replaced by the new Canadian-pioneered concept of “systemically significant states.” ²⁵ Second, it includes in this flattening and broadening top tier of the international status hierarchy not only more emerging or rising states, but also principal power Canada as an NPP now able to lead global governance in an institutional, ideational, policy, and material way. ²⁶ Third, it shows how leaders themselves, finance ministers and their departments, as well as foreign ministers, can serve as effective entrepreneurs on their country’s behalf. Fourth, it suggests that a broader base of support across political, regional, and generational divides helps sustain entrepreneurial success.

This study also raises several questions whose answers can enrich the Ravenhill framework of entrepreneurial states. First, does taking a successful initiative to stop the entrepreneurial initiatives of others to maintain the status quo qualify as effective entrepreneurship, an inclusion which would add the bank tax, agricultural commodity stockpiles, and a financial transaction tax to Canada’s entrepreneurial repertoire? Second, can entrepreneurship arise from a state’s acknowledged status in the absence of its asserted position, as a country is pulled by others into its entrepreneurial success, as Canada was institutionally to some degree in hosting the Toronto summit in 2010? Third, does persistent implementation of past initiatives count along with launching new ones as entrepreneurial activity, and how much does eventual implementation backsliding by others erode the effectiveness of an entrepreneurial initiative launched before? ²⁷