The Referendum Debate

How can Trudeau preserve die whole when he can’t even define its parts?

Hu Harries September 5 1977
The Referendum Debate

How can Trudeau preserve die whole when he can’t even define its parts?

Hu Harries September 5 1977

How can Trudeau preserve die whole when he can’t even define its parts?

The Referendum Debate

Hu Harries

The balance of economic power in Canada has shifted. The West is emerging as the preeminent economic force in the life of Canada. It is the West and the North that will provide the cutting edge for the future. The Maritimes have lost the dominant position they occupied at the time of Confederation, and southern Ontario, which has grown rich on its exploitation of Confederation, at last recognizes that fact. Quebec is the story of a national community that has submitted to industrialization instead of participating in jt.

Confederation cannot survive in its present form and renegotiation is a necessity. Renegotiation of the economic basis of Confederation is necessary not because the original arrangement failed, but rather because it achieved a remarkable degree of success. Canadians enjoy one of the highest standards of living in the world. They also enjoy the benefits of living in a civilized society that has given increasing numbers better opportunities. The failure of Confederation is found not in its general result but in its lack of attention to detail. Its lack of attention is to the equity and the reasonableness of the shares of the economic pie available to the five distinct regions of Canada.

The federal government, dominated by the Liberal Party, has always understood the significance of Upper and Lower Canada but has been absolutely unable to comprehend the other three regions; the North, the West and the Maritimes. The hope for the future lies in Trudeau’s ability to emerge from his Cité Libre days and comprehend a total Canada. Alternately he will be replaced or defeated.

The West with its natural resources and energy is prepared to challenge the old order of a Canada dominated by Ontario and Quebec. Tariffs in Canada have always had a highly selective regional effect but it is only recently that studies show that each year the system pumps a billion dollar subsidy to eastern industry from the buyers in the West and the Maritimes.

A region’s stake in the tariff policies of Canada is very much a function of the nature of economic activity in the region.

Consider the situation of the goods-producing industries. If we define the resource based industries as consisting of agriculture, forestry, fisheries, trapping and mining, the regional dependence on the resource industries is in the Maritimes 27%, Quebec 17%, Ontario 14%, Western Can -ada 48%, and 24% for Canada as a whole.

Western Canada is three times more dependent on resource-based industries than

Ontario, while the Maritimes is about two times more dependent than Ontario.

Also worthy of note is the importance of manufacturing to each region: 70% of value added in goods-producing industries originates in the manufacturing sector in Ontario, 65% for Quebec, 36% for the Maritimes and 28% for the West.

The selective regional effects of the tariff have been reinforced by transportation policies. Transportation, which was viewed by the Fathers of Confederation as a means of developing all parts of the nation, has not done that. It hasn’t helped to give Canada a better economic balance. Rather, it has preserved the privileges of

Central Canada which began with the construction of the first canals at public expense.

Regional disparities have been strengthened by the economic direction we have permitted our surface transportation pricing to take. What we need in Canada is a transportation system that will bring the extremities of this country effectively into the heartland so that manufacturing and processing of raw materials can be done at the source of those materials, as Mr. Justice Emmett Hall so clearly said in his recent report. The means are at hand but their employment demands rejection of the regional privilege that has been so long maintained. Transportation is also linked to the concept of a national market.

The Fathers of Confederation foresaw a unified national market that would make large-scale production and low cost distri-

bution cornerstones of our prosperity. It didn’t happen. The Canadian market is split into five distinct regions, the Maritimes, Quebec, Ontario, the West and the North. Because transport costs between regions have remained very high it is frequently easier to produce for the regional market under the protection of distance and local usage. Under today’s circumstances one installation in Canada, no matter where it is situated, will be unlikely to get the full advantage of the Canadian market for the product it produces.

One of the big economic challenges that face Confederation is to determine the best way to break out of this small market syndrome. How do we more fully realize the advantages of a national market that exposes our creative and economic talents to 25 million people? Clearly the answer is to be found in bold policies that perceive (Canada as a unified nation. Again, timid policies that seek to preserve the status quo will only succeed in further fragmenting economic opportunity.

The question of how to amend our existing Confederation seems to boil down to one fundamental question. Can the federal government be made responsive to regional needs and aspirations and at the same time avoid creating five monsters that will ultimately destroy Canada?

As long as the federal government can hold office with three of the five regions of Canada almost unrepresented in the caucus then it will not be responsive to regional needs. The fact the Trudeau government could hold office for four years without Alberta representation, at a time when the whole place of Alberta in Confederation was being redetermined largely by the force of Premier Lougheed’s effort, is a tragic commentary on our federal structure. Such a state of affairs begs for tokenism and that is what it gets. The answer to regionalism is effective participation in a national scheme. The alternative is divisive self-serving and narrowselfishness that perceives its boundaries within an ever shrinking horizon.

We must renegotiate Confederation mindful of our daily good fortune and cognizant of the contributions that other Canadians make to it. The facts are clear. In the plethora of economic studies that the National Unity Debate has spawned, not one has been able to show that Canadians would be better off by balkanizing this vast and precious land.

Former Libera1 MP Hu Harries is president of an Alberta-based economics consulting firm.