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.