The Idea Whisperers

Worth A Look, Think Tanks, Frontier Centre

Think those politicians out there pounding the pavement have their heads full of great ideas from voters like you and me?

Think again. Many policy innovations, clever or errant, are often first cooked up by powerful intellectuals and influencers who the public is barely aware of, but who have the credibility and heft to set the country’s agenda.

Forget your conspiracy theories about international organizations, a politician’s own financial status, or even where they went to university.

While leaders like Paul Martin and Stephen Harper come to power with some intellectual capital and assumptions of their own, they are also then steered and influenced by think- tanks that help shape government policy. Through widely disseminated studies and informal relationships with bureaucrats and politicians, think-tanks are Canada’s idea whisperers — and they’re out to help steer the ship of state.

The direction is a constant tug of war. When Martin, as finance minister, began to cut program spending in the mid-1990s, it was at the urging and influence of conservative think-tanks such as the Fraser Institute and C.D. Howe. But when he reformulated poverty policy, he did so after much consultation with the left-leaning Caledon Institute.

While little known to ordinary Canadians, think-tanks are far from invisible. You will often hear their spokespersons on talk-radio or see them pop up on the six-o’-clock news. But that’s only their most visible influence. On a deeper level, whether it’s economic policy, homelessness, the environment, immigration, defence or myriad other issues, think-tanks act as “wholesalers” of ideas that governments might later adopt at the “retail” level of legislation, policy and regulation. In fact, over several decades, think-tanks have carved out a niche once almost exclusively the preserve of the civil service and universities.

Influence: Lots of media or pillow talk? Are think-tanks influential?

By one measurement — media exposure — it would appear so. The granddaddy of coverage is the Fraser Institute with 3,203 media “hits” in TV, newspapers and magazines. But media numbers are not always the best indicator of influence.

What counts is also what happens behind the scenes, out of public view. “The links aren’t random,” says William Watson, an economics professor at McGill University in Montreal, who notes that governments usually take the advice of institutes they are ideologically comfortable with. He notes, for example, then-finance minister Martin’s decision to adopt the Caledon Institute’s idea of a child tax credit in the 1990s. Making pillow talk with government is one way to get your ideas implemented; another is to publish data governments can’t ignore. “Some of the intellectual takeovers have been hostile,” says Watson, such as the Fraser Institute’s relentless “outing” of hospital waiting lists. “The fact that Canadian governments now talk candidly about waiting lists in medicare and are compiling absolute, as well as relative, measures of poverty is due almost entirely to the persistent pioneering work of the Fraser Institute.”

When the Fraser Institute’s executive director, Michael Walker, started publishing survey data on waiting lists in the early 1990s, he was widely ridiculed, says Watson. “But ordinary people found them persuasive — they accorded with the experience they were living — even if bureaucrats didn’t, and governments were finally forced to start collecting their own data on waiting lists. “Today, everyone recognizes they’re a problem.”

One of Fraser’s competitors, Ken Battle, the executive director at Caledon, notes media coverage alone doesn’t always win policy battles. “When it came to reforming the Canada Pension Plan, Fraser and the C.D. Howe Institute were running around and talking about the need to privatize CPP, put it into individual RRSPs. That got all kinds of media attention, but it was never, never on the government table,” says Battle.

If massive media coverage doesn’t guarantee policy victories, smaller media numbers don’t necessarily equal little influence either.

In Atlantic Canada, the tiny Atlantic Institute for Market Studies (AIMS) gets far less media coverage than Fraser or the Conference Board of Canada, but some of AIMS’ studies on that region’s federal slush funds eroded that region’s assumptions in the nanny state.

Liberal MP Scott Brison cribbed from AIMS studies when he advocated dumping regional development agencies in exchange for lower business taxes. And AIMS helped formulate policy-making when it came to that region’s oil and gas industry.

Conservative Leader Stephen Harper also borrowed from AIMS and the C.D. Howe Institute when recently he suggested re-formulating equalization payments to exclude natural resource revenues, something both think-tanks recommend.

They really like us: academic influence

Another measure of influence — or at least a guide to which organizations are noted in the ivory towers — is how often academics cite the various think-tanks.

A seven-year review of scholarly mentions lists the Fraser Institute at the top (197 citations), with C.D. Howe next (116), the Conference Board of Canada third (82) and the Canadian Centre for Policy Alternatives fourth (40).

None of these measurements can be taken in isolation. Academic citations can be critical or positive and there is no question a public media presence can help make the case for an issue. After all, if enough voters are convinced of the merits of a particular policy, expect the politicians to follow.

The best example of this policy-wonk-to-public-concern transformation occurred in the 1990s, when governments cut spending and deficits, this after the public became increasingly concerned about red-ink budgets. Debates over government spending and balanced budgets didn’t appear out of thin air. Rather, they bubbled up first in obscure academic journals, then in think-tanks, and only afterwards into the public and political consciousness via the media.

Libertarian to left: Think-tanks in all ideological flavours

Canada’s think-tanks range from Vancouver’s well-known, libertarian and privately-funded Fraser Institute to the left-leaning, almost publicity-shy Caledon Institute in Ottawa, which gets at least 30 per cent of its funding from government.

In Toronto, the C.D. Howe tends to be more operationally conservative in its approach, a reflection of its deep corporate support.

On the other side of the political spectrum, the Canadian Centre for Policy Alternatives (CCPA) portrays itself as an “alternative” to business think-tanks. Its website links leave no doubt about that distinction: the CCPA links to New Socialist, Socialist Worker and Socialist Resistance websites. Also on the left, up in Edmonton, the Parkland Institute recently headlined anti-globalization guru Naomi Klein at its annual conference.

If free-market parties like the Conservatives draw some ideas from Fraser, C.D. Howe, the Atlantic Institute for Market Studies and the Frontier Centre, the NDP draw strength from their soulmates at Canadian Centre for Policy Alternatives, Caledon and Parkland.

Some institutes pride themselves on not being easily pigeonholed, the so-called centrist think-tanks such as IRPP and the conference board.

But the political centre is an ever-elusive concept which shifts, depending on the strength of particular ideas. For example, back in the 1970s, Richard Nixon quipped that “we’re all Keynesians now.” Meanwhile, wage-and-price controls and nationalization of the commanding heights of the economy were practised by governments of every political stripe. Now, in 2004, almost no mainstream economist is Keynesian.

As for the political party-think-tank connection and the Liberals, arguably being less ideological than any party, they poach ideas from all the think-tanks as it suits them.

What think-tanks are not supposed to be: advocacy groups

Think-tanks all have the same goal: to influence government policy without looking obvious about it.
Because of federal laws that govern charities — which most think-tanks are classified as in the tax code — such groups tiptoe around the delicate subject of changed laws, regulations and policies, as opposed to lobby groups, which can openly hammer or praise governments.

The charity status that most think-tanks possess is the main legal difference between them and advocacy groups — such as the Council of Canadians or the Canadian Taxpayers Federation. Most think-tanks are federally registered charities and must file annual reports with the Charities Directorate at the Canada Revenue Agency.

If the charity designation seems odd, it exists because think-tanks are considered educational by the tax department and so, similar to educational institutions, are tax-deductible.

Without the charitable designation — not easy to obtain — think-tanks couldn’t receive donations from non-profit foundations (which, by law, can only give to other registered charities), nor would individual and business contributors receive tax receipts.
So while advocacy groups and think-tanks are both non-profit, only registered charitable think-tanks can issue tax receipts, an immensely helpful privilege in prying open the donor purse.

But because contributions to think-tanks are charitable, they’re supposed to mostly avoid active lobbying of politicians or government. In strict terms, that restriction means, for example, an environmental think-tank is not supposed to launch an advocacy campaign to support or defeat a proposed piece of legislation. But the regulations from Canada Revenue Agency on this matter are murky. Officially, no more than 10 per cent of the organization’s budget can be devoted to lobbying politicians. Thus, the idea-peddlers can “educate” the public and politicians, but active campaigning and lobbying are off-bounds.

Charitable versus political activity: Can you see the difference?

In practice, though, the charitable versus lobbying distinction is a large grey zone. In 2002, the executive director for the Canadian Centre for Policy Alternatives in B.C. sent out this fundraising letter to potential supporters in that province: “I’m Seth Klein. I invite you join forces with us to expose, challenge and replace the myths and distortions these right-wing think-tanks fabricate to dress up the naked power . . . of major corporations.”

If the language was strong, it was also directed at other unnamed think-tanks, probably the CCPA’s main ideological competitor, the Fraser Institute. But the letter went on to discuss the Campbell government in a tone that sounded close to what might be found in an NDP fundraising appeal or from a left-wing advocacy group: “The new B.C. government’s unprecedented majority, and the recklessness with which it is pursuing the same old corporate agenda, has made our office an essential place concerned British Columbians like yourself turn to.” That naked political advocacy runs contrary to the usual, publicly dry analysis usually put out by think-tanks.

But while CCPA has not been hauled on the carpet for that letter, others have.

Several years ago, the federal tax agency’s Charities Directorate revoked Greenpeace’s tax-deductible number after it crossed the education/lobbying line once too often. Some pro-life groups have also had their numbers yanked. But if some green and socially conservative groups fell afoul of the federal tax agency, no think-tank has had its number revoked, even when they’ve engaged in similarly risky quasi-advocacy activity.

Think-tank money: it comes from government, foundations, businesses and unions

Compared to government bureaucracies, think-tanks are relatively small in budgets and staffing. In Canada, the largest of them all is the Ottawa-based Conference Board of Canada, with more than $30 million in annual revenues and a staff of 200. In contrast, the Atlantic Institute for Market Studies in Halifax has a staff of just seven and survives on $675,000. (Also in contrast, the entire federal bureaucracy along with Crown corporations employ 456,000 people.)

Large or small, think-tanks spend their money mainly on staff or associates such as professors; as the think-tank moniker implies, they’re all about creating ideas, which equals money spent on people who churn out papers on everything from defence to poverty and immigration.

And where do they get their money? Very few of the idea peddlers receive much money from individual donations, which form a very small part of their total revenue base, even when they claim thousands of individual members as supporters. The big money comes from four sources: government, foundations, businesses and unions.

As a rule, right-leaning think-tanks receive money from business and/or foundations; left leaning think-tanks get their money from government and/or labour unions. But the gifts from foundations can also be deceiving. On the right, foundations may simply be “flow-throughs” for money from the wealthy or business; on the left, foundations are often fronts for union cash.

Government cash: Flows to the left and to the “safe” think-tanks

On occasion, friendly governments also shovel tax dollars to think-tanks. In its dying days in the spring of 2001, the B.C. NDP government handed over $410,000 to the Canadian Centre for Policy Alternatives. Some of the money was transferred via Crown corporations. The NDP government also “requested” a three-year, $105,000 “enhanced” government subscription from the group, which gave it 50 copies of every study the CCPA produced. It was a transparent attempt to prop up the finances of the left-wing idea creators in advance of the NDP’s then-forecast loss of power.

If government cut off the flow of money to think-tanks, it’s clear which ones would suffer: left-wingers such as the Caledon Institute and the Canadian Centre for Policy Alternatives. But they’re not the only ones. If taxpayer cash dried up, some of the bigger, though less-quoted tanks would also shrink. Call them the “safe” think-tanks, which do plenty of research, but generally within accepted policy parameters. The Institute for Research on Public Policy (IRPP) received its start thanks to government and now lives off that government-started endowment fund.

Similarly, the Conference Board of Canada, while privately started, now receives substantial cash (37 per cent) from what it calls “public sector sources,” i.e., government ministries, Crowns and agencies. In the West, the Canada West Foundation receives about 40 per cent of its money from various government contracts.

Conversely, more conservative think-tanks such as C.D. Howe Institute are almost completely funded by business. While C.D. Howe refused to give a breakdown by source (individual, business, union, foundation and government) for this article, a scan of its last annual report reveals that corporate support is the C.D. Howe lifeline.

Where money leads the various think-tanks is not difficult to see. Privately funded think-tanks are generally more skeptical of government intervention in the economy; left-leaning think-tanks typically prefer it.

Money and members

But one thing every think-tank has in common is that it has very few members, at least in contrast to advocacy groups, whose supporters can number in the tens of thousands (the National Citizens’ Coalition) or hundred of thousands (the Better Business Bureau or the Canadian Association of Retired Persons).

In contrast, the Canadian Centre for Policy Alternatives claims 10,000 members, Fraser has 3,500, and most others number several hundred contributors, though numbers are always impossible to verify. Given the corporate, foundation, union and government support that flows to think-tanks, individual memberships is less of a priority, probably in part because individuals can rarely donate in amounts large enough to make much difference to an organization’s bottom line.

Wearing down government over time

Left, right or in the mushy middle, think-tanks exist not only to educate the public, the ostensible and useful charitable activity, but also to score some policy successes now and then much as they disavow that as an explicit goal.

“The role of think-tanks is usually a slow drip,” says William Watson, noting the example of Fraser on fiscal policy and Caledon on child policy, “but given time, the rock does give way.”