The premiers test troubled waters

Michael Clugston September 6 1982

The premiers test troubled waters

Michael Clugston September 6 1982

The premiers test troubled waters


Michael Clugston

Canada's premiers launched a balloon last week only to see it shot down almost as soon as it took

flight. It was a precarious venture at best, especially because the provincial leaders could see that the economic health of the nation was riding in the basket. At their annual get-together in Halifax, the 10 premiers—none of whom is Liberal—outlined a relatively stale set of proposals for economic recovery that would only help if the federal Liberals implemented them as part of an overall rescue program. Still, as the conference ended on Thursday, with a call for a federal-provincial first ministers’ meeting on the economy, British Columbia Premier William Bennett reminded a reporter about St. Paul’s instant conversion on the road to Damascus: “It might just be the dramatic conversion of Pierre on the road to retirement,” he said.

Then, at week’s end, federal Finance Minister Allan MacEachen denounced the premiers’ plans as too vague to warrant any formal discussions between the provincial leaders and Prime Minister Pierre Trudeau.

MacEachen also expressed regret that the premiers did not endorse Ottawa’s six-five salary limits. “I am disappointed that the provinces did not find it possible to take action on price and income restraints,” he declared. After the support the program had gained from business, MacEachen had hoped that the premiers would give it “an additional boost.” He was also upset because their communiqué did not mention that Canada is caught in a worldwide recession and that the word inflation was not mentioned—even though inflation has caused much of the reduced investment, high interest rates and rising unemployment to which the premiers object. If it is accepted that inflation is the central problem, “then you are driven by relentless logic” to embrace the six-five solution, MacEachen added.

For 23 years the premiers’ conferences have developed an ambience somewhere between a clambake and a board meeting, with an inevitable final scramble to present a unified front on the issue of the day. But last week there was every indication that the 10 were seriously determined to make common cause in the salvaging of the national economy—to the extent that their diverse interests permit. The common de-

nominator was their lack of enthusiasm for—and, in some cases, total opposition to—the federal government’s restraints on increases for civil servants over the next two years. The premiers believed that some sort of wage restraint would be acceptable if it were part of a larger program that would also spur investment and create jobs. The Foreign Investment Review Agency and high interest rates also came under heavy attack throughout the three-day gathering, joining a long list of weighty subjects on the agenda.

The conference was not all business. Newfoundland’s premier, Brian Peckford, recently smitten by photography, looked sporty as he disappeared into “scrums” with newsmen, his camera around his neck. There were also reports that he continued shooting during the talks. On their first afternoon several of the premiers dallied beside the track at the Seventh Annual PanAmerican Wheelchair Games, cheering on competitors. There seemed little desire to leave the sunny sparkle of the afternoon for the killjoy agenda or the

crush of some 130 cameramen and reporters. “I’ve said the same thing so many times to so many reporters that I’m starting to believe it myself,” joked Manitoba’s Howard Pawley, emerging from an anarchic jumble of tape recorders, cameras and elbows.

Hard bargaining clearly dominated the session. And, just as clearly, the premiers were conscious of the “restraint” theme being aired for public consumption—down to the screw-top wine, Hochtäler, served at Tuesday’s reception. In three main meetings they put together their 3V2-page (17-paragraph) outline entitled “Economic Recovery Program,” which embodied 10 points, in varying degrees of clarity. It was that loose package that the premiers hoped to sell to the federal government in a meeting they proposed for the week of Sept. 13. (The vague document was to have been a rough sketch of a more specific package to be tabled at the envisioned federal-provincial negotiations.) None of the points broke new ground, in calling for lower interest rates, the restoration of investor confidence, or altering FIRA and the National Energy Program, giving the provinces a voice in foreign trade, and co-ordinating certain economic projects among the provinces. Scarcely controversial were the recommendations that public debts be kept “manageable” or that governments trim waste by not duplicating one another’s labors.

On the key question of public sector wage restraint, Ontario alone declined to agree that the economic diversity of the provinces makes it prudent for each to design its own tailor-made program. Davis argued that a single nationwide program would be more efficient and he was also alone in suggesting its use as a bargaining chip. In his opening statement he told his unenthusiastic colleagues, “If they [the federal government] are prepared to join with all of us in shaping a full recovery, we should join them in some version of their six-five program.” By week’s end some other premiers were acknowledging the need for give-and-take with Ottawa.

With no such negotiating position established, the package seemed doomed from the outset. The nine-point economic tonic that emerged from lastyear’s premiers’ conference was largely ignored by the federal government. And there appeared to be little incentive for Ottawa to give the current model any more attention. But Buchanan believed until the last minute that the package

shad a chance “because the economic cir*cumstances in this country are worse ^today than they were [in 1981].” Bennett, the first premier to introduce wage controls for government employees, argued that the package was “no miracle cure. It will take two or three years of tough slogging to make it work.” The premiers mistakenly based their hopes for the plan on the gamble that Trudeau might have felt forced at least to look interested in their ideas because of his restive caucus and general unpopularity throughout the country. The federal government would ignore the recommendations “at its political peril,” declared Buchanan.

As six of the premiers sailed off on the Bluenose II for a harbor cruise at the conference’s end, the stance that Ontario will take on a restraint policy regained the central question. Davis is ?the key to the success of any national restraint effort because of Ontario’s 2dominant economy. But the premier

carefully withheld his endorsement of any scheme.

Also unclear was whether or not Davis is shrewdly working himself into the position of power broker between Ottawa and the provinces. Some observers believed he was simply being indecisive. Even his advisers expected him to make a decision on restraint at some point during the conference. With the current severe economic problems in Ontario, Davis may also be exceptionally wary of joining the “six-andfive storm troopers” and “Gestapo”— terms used at a Halifax rally last week by public service union leaders who were addressing some 600 members from across the country. (Apart from Davis, the major dissenter was Pawley, who refused to endorse the recommendation of “substantive change” in

FIRA—“chasing shadows,” he called it.Bj Some others refused to join an extreme* movement that favors a total abolition^ of the agency.)

Throughout the talks New Brunswick’s Richard Hatfield, Quebec’s René Lévesque and, to some degree, Davis himself remained skeptical about the whole enterprise, correctly anticipating that the federal government would disregard their recommendations. Still, Lévesque, who calls FIRA “idiotic” and six-five “desperate,” said that despite lingering bitterness over his exclusion from the constitutional settlement last November he was impressed by the Halifax consensus. “But I remain skeptical about its staying power and about the reaction in Ottawa, after living through economic conferences in Ottawa.” That comment sounded like a foretaste of hindsight. But it also proved to be an accurate—if unsettling-


With John Hay in Ottawa.