Interview

With Quebec finance minister Jacques Parizeau

June 27 1977
Interview

With Quebec finance minister Jacques Parizeau

June 27 1977

With Quebec finance minister Jacques Parizeau

Interview

If René Lévesque represents, in the popular mind, the soul of the Parti Québécois government in Quebec, his finance minister, Jacques Parizeau, is its brain. Lévesque has given to the portly, patrician Parizeau, the job of devising an economic charter to guide the building of a sovereign Quebec. Parizeau, easily recognizable to television audiences with his jetblack hair and moustache and ever-present cigarette, was born in Montreal in 1930, of well-to-do parents. He has a doctorate from the London School of Economics and was chief economic adviser to Liberal and Union Nationale governments before becoming a separatist. Parizeau’s immediate concern is selling the idea of some form of economic union between an independent Quebec and the rest of Canada. In a recent interview with Maclean 's Ottawa Correspondent Ian Urquhart, he was self-assured tothe point of arrogance, tempered by a well-nurtured sense of humor. He brushed aside critics of sovereignty-association and spoke confidently about the inevitability of it all.

Maclean’s: Economic association between Canada and a sovereign Quebec has been rejected by the premiers of Ontario and the Western provinces. Where does this leave you?

Parizeau: I think they’re reacting to a rather astounding canvass by a Canadian magazine and a Gallup poll which suggest that either there’s a fairly large minority or even possibly a small majority of English Canadians that already feel an economic association should take place. Now compare this to the large rise in the numbers of French Canadians that agree with the idea of independence, if it is linked with economic association. In other words, you have a certain number of Quebeckers who are in favor of independence, who are in favor of independence with or without economic association. But that number jumps dramatically if economic association is linked with independence. Now. when you have all of these figures in front of you and you’re an English-speaking political leader, you would say no to economic association obviously. That way you try to impress a number of French-speaking Quebeckers not to follow the path to independence and, secondly, you try to impress English-speaking opinion that economic association shouldn’t take place. In that sense. I think that it’s perfectly understandable, the reaction of Mr. Davis and the Western premiers.

Maclean’s: You mean a sort of bargaining position . . .

Parizeau: Oh yes. of course, not in terms of bargaining position but in terms of trying to influence public opinion that is going in a direction with which they don’t agree. And it’s perfectly understandable

English Canadians are much more a country than some people are willing to recognize

that a political leader at times should say “Well, public opinion is going in a direction that 1 don’t agree with.’’ Now. we’ll have to see in the next few months whether public opinion still flows the same way or whether some political leaders have managed to swing it into other channels. Maclean’s: Wouldn’t Ontario, for instance, have to decide whether it would maintain an association with a sovereign Quebec or go with the West which has little interest in economic association with an independent Quebec?

Parizeau: No. I think Ontario—and I feel

it will come—Ontario will have to try to keep both.

Maclean’s: Oh, I’m sure it’ll like to keep both . . .

Parizeau: Oh, it will go to—I wouldn’t say any length, but it will go very far to keep both, both markets because it’s obvious that the Quebec market is very important to Ontario. But the Western market is also very important to Ontario. And in that sense I think Ontario has to keep both as its markets. They’ll have to find a formula. Maclean’s: But they’ll have to come to a point where they’ll have to decide between one or the other.

Parizeau: Well, don’t sell short the imagination of people who are faced at last with a tough problem. They might come out with a rather impressive solution. See, the point is that in terms of market and economic development Ontario hasn’t had for a long time to give specific leadership in the sense that, by and large, it could find through Ottawa proper channels to maintain in Canada or set up economic proposals or economic policies that were very much in line with what Ontario thought was required. This time it’s different. A great deal of what’s going to happen will depend on how the Ontario government as an Ontario government, not as just sort of a pressure on the federal government, but the Ontario government as a government, feels that it is in its own best interest. And I think this is going to change the rules of the political game in Canada a great deal in the next few years. Ontario can’t necessarily count on the federal government. The federal government might be caught at one point in a very emotional fight, 1 mean a political fight with the Quebec government, a political fight of an emotional character rather. Ontario will have to pipe down on emotions at some point because Ontario has a great deal to lose with any breakup of a Canadian market. I think we’re going to see a very rational development in Ontario for quite some time. They’ll be the pivot of that kind of operation. I agree, Mr. Davis at the present time must try to swing public opinion both in English Canada and French Canada according to what he feels. That’s understandable. But he’s going to have a tough fight to try to change the way public opinion on both sides seems to be flowing with respect to economic association. At one point, he’ll be caught in that dilemma. Maclean’s: Whether to keep fighting or to cooperate basically?

Parizeau: That’s right. And I think coop-

eration is the only way to maintain the Canadian market as it has existed until now. And there’s such an immense interest in this in Ontario.

Maclean’s: Yes, but not in the West. Parizeau: Yes, I agree. I’ve always stated that. I’m not—I know very well, that ifl was living in Saskatchewan or British Columbia I’d see no major advantage to common market with Quebec. I’ve never been talking about the West, I’ve always been talking about Ontario for years. I’m talking about an economic association of all the parts of Canada.

Maclean’s: Let me assume that English Canada will stay together if Quebec secedes. What sort of economic association do you see as ideal?

Parizeau: The ideal one, I think, would be one that would be built slowly as problems come about and are solved on the original basis of a customs union and, right at the outset, an agreement about freight rates. In other words, to start with, we maintain for all practical purposes the customs union that exists now and maintain some of the agreements that rule our freight rate structure in Canada. I’m thinking particularly in terms of protecting the Maritime provinces. If we can do that then the ideal sort of economic association is one where we will build on this as problems arise one by one. The last thing I think we should go into is to try to negotiate in six months a very complex sort of document trying to cover everything.

Maclean’s: You’re not talking about a monetary union any more?

Parizeau: I’d be ready to discuss it. I don’t think it’s very probable because it implies a great deal of credibility on the part of the two partners over the acceptance of rather rigid rules with respect to the fiscal and monetary policies. I mean there’s a problem of credibility here.

Maclean’s: Is it desirable though? Parizeau: I think it would probably be useful with the oil situation. After all, without Quebec Canada is an oil exporting country and Quebec is an oil importing country. And with a sort of uncertainty that is with respect to oil prices, common currency could bring a lot more problems than would have been the case before the oil crisis started at the end of ’73. I think that’s one of the reasons why we’ve put quite some emphasis on monetary union before ’73 and since ’73 far less. And furthermore. there’s this additional dimension that the rates of inflation have been so different even within the European Common Market that the constraints with respect to monetary and fiscal policies that we would have to build into the agreement would be so tight that probably both partners would say “Oh hell, that’s too complicated.” So, I think it’s not very probable. But I’m ready to discuss it. I have no objections.

Maclean’s: A major problem, though, is that you would lose one of the very things

that you would be seeking and that would be sovereignty in a major area if you had a monetary union.

Parizeau: No. not really with respect to monetary policy itself. The sort of sovereignty with respect to monetary policy that Canada has with respect to the United States is already very small and we’d have a fraction of something that is small. So we’re not relinquishing very much in any case. A monetary union would still prevent us from having a fraction of the very small autonomy that Canada has with respect to the United States already.

Maclean’s: I would have thought that it would have been very usefulfor you to retain

Economic association is certain, because to not have it would, simply, be stupid

full sovereignty in the area of monetary policy though . . .

Parizeau: Well, that is what I was saying, with respect to foreign exchange. There’s no doubt at all that freedom with respect to foreign exchange is a considerable advantage in our days. And we wouldn’t be relinquishing that without asking for quite a bit against, there’s no doubt about that. But I was talking of monetary policy in terms of interest rates—the expansion of the money supply and that sort of thing. Maclean’s: Supposing Canada does not stay together after Quebec declares independence, then you wouldn’t have a politi-

cal entity to have any kind of economic association with, would you?

Parizeau: I think English Canadians are more of a country than some people say anyway. I’ve always been impressed over the last 15 years to see how many are the political crises we’ve known. In every major crisis, when the chips were down, when Quebec had taken some minor or sometimes major advantage, with the help of some provinces, with the respect to the federal government, when the situation became dangerous, the English-speaking provinces would stick together. And it was admirable and I’m not criticizing, I thought it was simply the normal reaction of people who realize that they are a country.

Maclean’s: But you don’t think that emotional commitment would evaporate once a major part of Canada secedes?

Parizeau: No, I think you’ve been different from the Americans for too long. And Canada is not a new country; it’s about the same age as Italy, but we don’t realize it. A number of countries we consider old have existed for not such a long time. Unification of Germany is almost contemporary with the founding of Canada. I think historically speaking we’ve got all kinds of wrong perspectives in Canada. We were born with a number of other nation states in the middle of the 19th century. And just to assume that all of this goes by the board among English Canadians, I don’t think so. What Canada is going through is something that we’ve known in Europe through that last century. That is that linguistic minorities tend to become autonymous and independent. But the fact that the Czechs decided to become independent from Austria didn’t mean that Austria collapsed. The minorities were set up as independent countries and what was left of Austria kept together and separate from Germany.

Maclean’s: One suggestion that has been raised is that of a free trade association, something which English Canada might well go for. But that wouldn’t help you very much because your products wouldn’t have tariff protection in English Canada. Your textiles, for instance, would have to compete with goods from Taiwan which could come in tarifffree.

Parizeau: Now well, careful, not necessarily. In percentage terms the textile and the clothing industries are important to Quebec much more than they are in Ontario. This doesn’t mean that Ontario products represent nothing at all. The shift of, for instance, the clothing industry to Ontario has been quite noticeable for the last few years. It’s been developing around the Toronto market quite a bit and the fights between the federal government and industrialists over the tariff will go on. So, don’t assume necessarily that because Western people would like to have cheap clothing from Taiwan, they’d necessarily have their goal.

Maclean’s: No, they might get it a lot cheaper than they’re getting it now. They might retain the tariff.

Parizeau: They might and they might not. You see the main inconvenience of a free trade zone is the problem of control. . . Maclean’s: Yes, across the Ottawa river... Parizeau: Yes, that’s right. We’ve got so many points of entry along the CanadianAmerican border. How on earth are you going to patrol movements of goods that are shipped through Quebec because the tariff in Quebec would be low but higher in Canada? A tariff is three or four thousand items. So if you have a free trade zone it’s assumed that maybe a thousand items would be lower for Quebec than that of Canada and another thousand would be higher. How on earth—we’re going to need armies of customs men all over the country.

Maclean’s: Well, have you or your colleagues discussed having your own army? Parizeau: Well, with respect to armies, you know we’ve never been impressed with the necessity of having a highly technical army with a great deal of equipment. What we need as an army essentially is something that doesn’t go on strike when the Montreal Police go on strike. The army we wish for. And you don’t send the army in Montreal when the police go on strike with destroyers and jet planes and tanks. What you need is a few battalions of infantry. That’s all. And the sort of army we’ve been envisioning all along is that kind of an army. So, it’s not a very costly proposition.

Maclean’s: It might help soak up some unemployed too.

Parizeau: I doubt it, because there are quite a few French Canadians in the Canadian army at the present time and it’s not at all certain that all of them would stay in the Canadian army if Quebec became independent. 1 mean, why train other people when we have already trained people available. What we need here is essentially something for internal security. Obviously we won’t call for the marines or the Canadian army when the Montreal Police go on strike and there are 6,000 of them, so we need at least a few battalions just to patrol St. Catherine Street.

Maclean’s: One of your colleagues has advocated—instead of an economic association with the rest of Canada—an economic association with the United States, not Canada. Do you think that’s desirable?

Parizeau: The problem is that it would take years. You’ve got to have a sort of phasing-in period and it can be very longsix years, eight years, 10 years—and the benefits of that customs union—you don’t reap until quite a few years have gone by and rates have been reduced on both sides and what have you. Assuming that the United States would agree to that, which I’m not at all sure.

Maclean’s: You’d rather build on what you’ve got?

Parizeau: Sure, while the customs union with Canada is there. And all sorts of commercial and industrial interests live by it. What I suspect, however, is that, in any case over the next years, there won’t be many tariffs left between the United States and Canada and Quebec. In other words, in North America we won’t have much tariff protection left in any case.

Maclean’s: Isn’t it going to be tough for Quebec if we all have free trade with the United States eventually? Won’t it be a tough transition period for Quebec because a lot of the Quebec industry is as highly protected as in Ontario?

Ontario will have to pipe down on its emotions. It has a great deal to lose

Parizeau: You know, it will force Quebec, and I think it would have forced any government of Quebec, separatist or not, to address itself to the modernization of the industry we’ve got here. The main task, the first task we have is one of modernization, consolidation, mergers in a number of cases and the acquisition of outlets in North America, particularly in the large markets, the Chicago markets, the New York markets and so on. If we can put more emphasis on the control of outlets and less on protection. That job should have started years ago. The trouble is that for the last 13 or 14 years governments in Quebec have been dragging their feet. We cannot go on having as many obsolete industries. You cannot go on that way.

Whether we’re separatists or not, whether there’s an independent Quebec or not. Maclean’s: Can Quebec afford independence before that job of modernization is finished?

Parizeau: Oh yes, in a sense it is the sort of spark or urge that has been lacking over the last 30 or 40 years. We’re going to be responsible to ourselves now. Quebec becoming independent cannot count on anybody else doing the job. I suppose that if historically we try to find a reason why successive Quebec governments have not done the job they should have done it was that responsibilities were nowhere. Maclean’s: Would you rethink your whole position on independence if you knew English Canada were going to say no to economic association? Or would you be willing to accept a drop in standard of living in order to achieve independence?

Parizeau: No, I don’t think I’d even react to such an assumption or hypothesis. No matter how many politicians tell me “No, we don’t want an economic association,” I say “Well, what about Massey-Ferguson, what about Stelco, what about General Electric, what about Westinghouse . . . What about all of these companies for whom we know damn well that a Quebec market is important?” I simply can’t answer that question because I’ve always been convinced that—irrespective of the political statements we hear here and there, horse sense will prevail. Horse sense will prevail simply—or will probably be imposed by companies—by the forces of the market or of business. It would be, in other words, stupid not to do that. I realize that people can be very emotional. But people do like jobs on both sides of the border.

Maclean’s: Okay. Some extremists in English Canada are making the proposition that if Quebec does decide to leave the present arrangement that in return English Canada should demand two things: the return of Ungava and a corridor along the Seaway something along the lines of the canal zone through Panama. Do you think either of those things a reasonable demand? Parizeau [laughing]: No. Let me put it this way. While there’s nothing in the Canadian Constitution that prevents a province from seceding, it’s mute on the subject. The Constitution, however, is very specific with respect to provincial borders.You cannot change them without consent of the legislature—the provincial legislature. It’s not in the BNA Act, the original BNA Act, it’s in one of the amendments of 1878 I think. So, that in that sense, as long as we’re not independent we’re a province. And borders cannot be changed without our agreement. But we’ve never encouraged the sort of demands from groups of French Canadians that if we become independent we should try to get back Labrador. Maclean’s: But you’re not about to give up Ungava in a trade for independence? Parizeau: Heavens no. why should welf?