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Thursday, April 10, 2008

National Post - Canada's biggest mistake: Newfoundland

The following is presented simply to foster discussion and debate (As I'm sure it will on both sides of the question).

Colby Cosh on Canada's biggest mistake: Newfoundland
April 10, 2008
by Marni Soupcoff
National Post

Don’t take this too seriously, but I think it’s possible to argue that the worst political mistake in Canadian history can be summed up in one word: Newfoundland.

Adding a 10th province to Confederation in 1949 was, of course, not Canada’s error alone: It required mutual acts on the part of what were then routinely referred to as “our two countries.”

But Canada had turned its back on Newfoundland in times of fiscal trouble for its sister Dominion before, and might have done so again if not for the triumphalist postwar mood. The celebrations that followed, in which Canadians hailed the addition of a new time zone with Soviet-style bigger-must-be-better glee, now seem like a last reflex of imperialism, driven by the esthetics of mapmaking as much as anything.

Whose interests were served by the merger of Canada and Newfoundland? The smaller (but senior) partner is still debating the question.

Newfoundlanders often ponder that alternate world in which they drove the “Canadian wolf” from the door.

The bitter truth is that those who came closest to being right about joining Confederation in the referendum fight of 1948 turned out to be the most extreme, most paranoid of the anti-federates.

They said that Confederation would lead to an exodus of Newfoundland’s young and most talented. They said that Ottawa would run the cod fishery short-sightedly and perhaps destroy it. They said, long before Churchill Falls, that joining Confederation would leave Newfoundland at the mercy of French-Canadian interests. Can history offer any retort?

The pro-Confederation forces, for their part, promised that a “yes” to Canada would bring a wave of social programs and debt relief — and that prediction, too, was borne out. Union led to immediate improvements in Newfoundland’s infrastructure and in the social indicators, like tuberculosis, that played such a role in shaming the province into voting the way it did.

But other North Atlantic countries have prospered far more in the meantime. Confederation’s net fiscal contribution to Newfoundland since 1949 comes to at least $80-billion in today’s money. For that kind of cash, one would have thought the whole province could have been paved with gold; doing so might not have been as wasteful, on the whole, as the economic policies pursued by Premier Joey Smallwood (who rode the referendum victory to unchecked lifelong power) and his successors.

Mere numbers do not sum up the price that the other nine provinces have borne. The presence of Newfoundland in Confederation was the main reason that Ottawa, under the influence of cabinet secretary-turned-MP Jack Pickersgill, brought self-employed fishermen under the unemployment insurance program in 1957.

Pickersgill knew doing so would secure Liberal fortunes in Newfoundland for a long time, and his time as a civil servant had taught him that sheer dumb stubbornness would succeed in overcoming the opposition of the bureaucracy, which objected that “insurance” was by definition supposed to be for unforeseen labour-market shocks, not for predictable annual periods of slackness.

The economic disorder resulting from the concession of this principle spread to all of the Atlantic provinces.

In the meantime, the question of offshore oil revenues has added another layer of chaos to equalization, which was introduced the same year (and which thus compounded the regional-welfare effects of expanded UI).

Newfoundland is understandably reluctant to allow the clawback of revenues it would have enjoyed as a matter of right as an independent state, but that leaves other provinces wondering why they get a raw deal when they trade in nonrenewable assets for cash.

Before 1949, Canada already had problems reconciling the uniqueness of Quebec with the principle of equal treatment for the provinces. Newfoundland’s entry into Confederation has multiplied those problems — while at the same time setting an awkward moral precedent for Quebec to secede on a 50%-plus-one referendum vote. (If a nation can extinguish its statehood forever upon the slenderest of majorities, surely one can bebroken up the same way?)

The Canadian wolf got its meal — and it’s had a tummyache ever since.


Anonymous said...

The article actually seems quite sympathetic to NL - she doesn't deny the negatives that the province has experienced since Confederation. And realistically NL's entry into Canada has complicated some issues for the country.

Colby Cosh said...

That is a good summary of the spirit in which it was written. I hope that comes through.

Anonymous said...

The author put a dollar figure on what Canada put into Newfoundland and Labrador, I only wish the author had put a dollar figure on what the following natural resources namely from Newfoundland and Labrador, fish quotas, hydroelectric energy, minerals and oil have meant to the Canadian economy. And what if Newfoundland and Labrador had aligned itself with the United States or some other country, what problems would that have posed for the Canadian Wolf?

Anonymous said...

There are truths in this and BS but regardless, if we all agree it was a mistake then let's fix it by getting the hell out. Then everyone will be happy. I know I will when this mistake is recified.

Anonymous said...

I am going to preface my remarks here by saying that I am in no way a separatist, instead I want to get into Canada on an equal footing with the other provinces.

I am sick and tired of being the Cinderella of Confederation, especially given the resources that we brought to the Canadian Table.

As far as I am aware the people of Newfoundland and Labrador didn't put on an all-out campaign to be part of Canada since they wanted to retain their independence, but since we are part of the nation of Canada, I would like to see our province become embedded with very deep roots in the Nation and become an equal partner and that is what I am striving for, no more or no less. Unless a market economy can be created here in the province, that will never happen. There will always be discontent.

According to one historian in this province, Newfoundland and Labrador were traded off by England to pay off a war debt of $8Billion dollars which was owed by England to Canada. I will also quote the author of the article I am responding to in the National Post; it had a lot to do with the drawing of the Maps. Plus, of course, Canada new of the great geographic location of the country to its extreme East, gaining it would give Canada the complete land mass North of the United States, from Newfoundland and Labrador to British Columbia. Plus Canada knew very well of the resources which were contained within that land mass.

Believe me Canada would not have taken on a country that it couldn't have extracted resources from to pay off the infrastructure for which it would be responsible. Ottawa knew the resources were there to pay for everything, and had Ottawa seen to it that first there would have to be an economy built in Newfoundland and Labrador to employ its people, it still would have been a big winner. But the other areas of Canada knew of the resources and wanted those resources to be be utilized in their provinces. They not only wanted the raw natural resources, they also wanted our human resources. If some of us had not been as resilient as we were, Newfoundland and Labrador would have been void of its people, and Canada would have had a land mass to the East that could have been only described as a 'BOWL OF NATURAL RESOURCES".

I am sure if we had we been left alone for another 5 years after World War Two, we would have been no different than the other countries of the world that grew large economies? Germany and Japan had to be completely rebuilt, and became two of the G7, now G8 economic powers of the world. I am not saying that we would have been part of the G8, but with our resources and the demand for the resources after the War which we were endowed with, we would also have found our way in the World, no differently than some of the other countries in the North Atlantic, like Norway and Iceland.

I would say that Quebec is a much happier province in Canada now that it would have been, even though it professes to want to separate.

Essentially Quebec has the benefits of Labrador, the Hydroelectric Energy to sell to the markets and the minerals to refine, while the province of Newfoundland and Labrador is holding the bag for the upkeep with very little monies to do so.

The roads of Labrador could have been paved with the best Asphalt that money could have bought had the revenues from its resource been streaming into this province.

Then, of course, as late as 5 years ago, one of the largest Nickel deposits in the world was developed in Voisey's Bay so that the ore could be sent off to two other provinces to keep ailing refineries there from closing, Sudbury, Ontario and Thompson, Manitoba. Who was minding the shop for the province of Newfoundland and Labrador in that instance?

At a time when Newfoundland and Labrador's politicians were so enlightened and aware of the non-existence of a real market economy in our province, both the Newfoundland and Labrador provincial and federal politicians saw to it that the economies of two ailing Central-Canadian smelting towns would be rejuvenated and kept percolating with one of the best deposits of Nickel ore known to mankind. Were our politicians inept, or were they corrupt? Name the adjective to describe them.

Then, of course, consider one of the most prolific fish nurseries known to mankind, the Grand Banks of Newfoundland, fish quotas from that nursery were put in the hands of the Ottawa Federal Government for safe-keeping, but which since have been predated by fishers from almost every Continent on the Globe. I don't understand since Canada took on the responsibility to look after the fish resource and protect it, why would it have allowed so many nations to come to our waters to over-fish the resource. What was Ottawa thinking about, less offences than that have caused debacles in Ottawa?. For instance the Soft wood lumber dispute with the United States has received much attention from Ottawa, and the United States is Canada’s largest trading partner.

No, not for the life of me do I understand the fish story. Ottawa says it didn't trade the fish for international trade preferences, yet many of the foreign nations that fish those fish conduct large amounts of trade with the Canadian provinces. Why hasn't it gotten the ire up of Ottawa, when it sees all those nations which it says it didn't authorize on it doorsteps fishing and depleting its fish stocks, all the while Ottawa is holding the liability and onerous responsibility for the maintenance of the fish quotas?

I notice in this mornings Globe and Mail that Saskatchewan is booming from its potash, which has been denationalize, its oil and its Wheat lands.

I am baffled on why the same consideration can’t be given to the province of Newfoundland and Labrador. Ottawa should give the province more control over its resources.

I have often heard that fish quotas off the province of Newfoundland and Labrador have greatly help the trading of wheat when times were bad, but getting to prove it is another matter.

You can be darn well sure that the accounting is not in full view. Canada has been downgraded for low-grade transparency on several occasions by Transparency International.

Then the Oil resource off the province of Newfoundland and Labrador, Ottawa has collected Billions from that resource since it has 8.5 per cent equity. Maybe it is time for Ottawa to pass that over to the province of Newfoundland and Labrador like it did with the potash resource of Saskatchewan.

While the article I am commenting on had some good points, it should have balanced out the story with what the province of Newfoundland and Labrador contributed to the Canadian Provinces with the resources that are exported there to keep the economies of those provinces staying viable. Why did the author not do the balancing act. If he/she had, there would be no need for my rant. Thanks

Calvin said...

No big Deal.It doesn't take an Intellect to know that.

But I will say this patriot, I love how the document states the simple truth of the matter .Wonderfull. ;)

Anonymous said...

Just one point.
The Newfoundland crypto separatists always compare apples and oranges.

Cosh's figure is the amount of money sent from the federal government to the people of this province, either via programs, or through intergovernmental transfers. It makes no sense to rebut that number with a hypothetical figure of resources. Resources are not transferred between governments or citizens. They are bought and sold on the open market. A market which is increasingly global.

Resources are not transferred anywhere. They are sold. For money. For real value. So if you are going to suggest that the rest of Canada
somehow benefits from our resources, then you have to count the prices that those resources fetch when sold.

It is indisputable, from a government perspective, that Newfoundland has been extremely costly for the rest of Canada. It is also very likely that had Newfoundland remained independent, the very same resources that are sold in bulk from the province would have been sold to the same customers on the same sort of terms. Federalism may control some things, but it does not dictate what anyone gets for the resources they sell.

oh - and Colby Cosh is a him not a her.

Anonymous said...

Canada dictates where the ore resources will be smelted, where oil will be refined and where fish will be alloted. Don't be such a naive character.

Canada has A KYOTO POINTS TARGET which it must constantly think about, it cannot afford to overspend, so to have ore smelted in already existing smelters and oil refined in already existing refineries makes a lot of sense for Canada, if it can get a certain province's politicians to agree to it. And that is what seems to have happened in Newfoundland and Labrador's case, our politicians, both federal and provincial, would have gotten their heads together and toed the line for what Ottawa wanted. Of course, I am not 100 per cent sure, but something happened akin to what I just related. But just try and prove it! Why else would politicians sell their province's raw resources without doing the primary and secondary processing in their own province, we all know that is where real market economies are created.

Please do not forget that Ottawa operates under the Patronage System and there are plums of all sorts in that tool kit. If the politicians want to be looked after for life, do what Ottawa wants and BINGO their every need will be catered to.

And Ottawa gets taxes from the places which are successful in getting our raw resources sources for smelting and refining.

So therefore Ottawa is better off with a secondary province smelting and refining our resources. It gets taxes on the sale of those resources from this province; and its gets taxes on the smelting and refining end from the beneficiary province and taxes from the secondary processing economies which are created there.

Calvin said...

April 17, 2008 11:28 PM

" It is indisputable, from a government perspective, that Newfoundland has been extremely costly for the rest of Canada "

I know this story is rather exsasperating Myles but I couldnt help myself.


How many BILLIONS of Dollars do you want to suck from Canada's minority.Outrageous Myles ,and you wonder why we have a Separatist Party in two out of 10 provinces.C'mon Newfoundland and Labrador,do you really think that you have used as much as you have given.Give Me a break .

You've Given way too much .And ,your far to kind.Its time for thease people Myles to think of themselves for awhile,to hell with Canada .And,thats Cosh with an 'i ' please.