Flashback - Nationalism and our Place in Canada

I recently came across an article written by Craig Westcott for the "Express" about 10 years ago. I found it to be a a piece that clearly shows the broad spectrum of citizens in Newfoundland and Labrador who question our place in Canada and also speaks to a number of the deep rooted issues we face in the Canadian federation.

Clearly the arguements for change coming from individuals like myself are not just the realm of what the mainstream media might like to marginalize as "wingnuts" or the "fringe element".

Read on.


Newfoundland's business and political elite make the case for a re-examination of Confederation
By CRAIG WESTCOTT, The Express

It started with Craig Dobbin. The Canadian Helicopters Corporation chief was sick of hearing mainlanders slag Newfoundland for being an economic sinkhole.

When Canadian Alliance strategist John Mykytyshyn said Newfoundlanders were too lazy to move away for work, Dobbin lost it. He wrote a speech. Then he delivered it in a venue where no one in the local who's who could miss it -- a St. John's Board of Trade luncheon.

"Let me pose a question to you," the former John-Crosbie-ally-turned- Brian-Tobin-backer began. "Who got the better deal from Confederation? Newfoundland? Or Canada?

"If we're such a drain, such a sinkhole, let us go. Cut us loose, baby."

It was a startling speech.

But even more surprising was that several months later, a similar one was delivered by none other than Vic Young, president and chief executive officer of Fishery Products International.
Young, a former senior government bureaucrat and executive with Newfoundland Hydro, turned his verbal assault on Ottawa and Quebec, lambasting the Churchill Falls deal.

"I can assure you, if it were Newfoundland and Labrador that had a geographic stranglehold over the export of Quebec's hydro resources, then Quebec would have fought," said Young. "Quebec would have won, and Canada would have changed national energy policy tout de suite."

To the appreciative ears of the 600 people attending the Board of Trade luncheon where Young came out of the closet with his feelings about Confederation, he shouted, "Vive Terre Neuve libre."

With two of Newfoundland's most successful businessmen questioning the quality of the ties binding Newfoundland to Canada, all that remained to completely open debate was for somebody from the provincial government to weigh in.

And that's just what then-Intergovernmental Affairs Minister Walter Noel did in an address to the Rotary Club of St. John's earlier this month.

"I've long felt some of the ways our federal system operates have to change to enable us to enjoy Canadian standards," Noel confessed. "Important interests are working against us."

Strong words indeed. But why do they sound so familiar?

Confederation's costs

Memorial University of Newfoundland historian John FitzGerald has been listening attentively to the questioning about Newfoundland's place in Canada.

As an expert on the Confederation issue, FitzGerald can't help but be fascinated by it.

"I'm not sure that it's new," FitzGerald said of the points being raised by Dobbin, Young and Noel. "Although quite clearly, the people who are saying it now would have very little in common with A.B. Perlin and the Responsible Government League who were saying these kinds of things back in '48 and '49.

"What you have now is people stepping back and taking a cold hard look at this and saying, 'All right, what really is in our best interest?' I'm not sure you'd call it nationalism. I think you'd call it enlightened self-interest."

Call it what you want, but there's no denying Newfoundland's established interests -- including Noel, a scion of Joey Smallwood's Liberal Party -- are saying strong things.

Take Dobbin.

"This province pumps tons of money into Central Canada annually," said Dobbin. "The hydroelectric facility at Churchill Falls contributes almost $1 billion each year to the economy of Quebec. That one item alone equals our transfer payments from Ottawa each and every year -- that one item.

"We're sending Canada our graduates. The Department of Education has suggested that about a quarter of our university graduates cannot find jobs and end up leaving the province. We move away to work more than anyone else in the country."

But for real facts and figures on the costs and benefits of Confederation, Noel is the man with the numbers.

An economist by training, the Virginia Waters MHA has spent a fair part of his time in office analyzing Newfoundland's relationship with Canada.

He's still a proud Canadian, albeit a troubled one. That's because, according to Noel's calculations, the national federation is built around two provinces -- Ontario and Quebec. Every other province is secondary.

"Ontario has been the primary beneficiary of Confederation," said Noel. "When Canada began, Nova Scotia was wealthier than Ontario. Central Canada has prospered because it dominates the House of Commons and because the Senate never became what the Fathers of Confederation intended it to be."

As a result, Ottawa has developed policies that principally benefit Ontario, Noel said. Among them is the Auto Pact. Noel estimates that for every car made in Ontario, Canadians have to pay an extra $2,000 for it to cover the subsidies that are propping up that province's auto industry.
And Newfoundlanders pay higher prices for other Ontario-made goods because Canadian tariffs keep cheaper imports out.

"Years ago, we had to sell our cod in blocks to the United States because they had a tariff policy against having it imported in one-pound packages, because Canada had tariff policies that hindered the importation of American goods," Noel said. "That favoured Central Canadian industry. It constituted a cost for us."

It also delayed Newfoundland from developing its secondary processing potential.
Ottawa itself, added Noel, is a testament to how Confederation has benefited Ontario and Quebec.

"Ottawa is probably the leading economic growth centre in the country, primarily because of the extent to which the federal government is concentrated there," said Noel. "And the spin-off from having it there has generated the high-tech industry. Ottawa would probably be nothing more than a farm service centre if it wasn't for the federal government being located there."

Then there's Quebec. In 1996, said Noel, Quebec received 39 per cent of Industry Canada's research and development grants -- even though it has less than 25 per cent of Canada's population.

Quebec also got over 50 per cent of federal technology "partnerships" funding. The four Atlantic provinces combined got two per cent.

In 1998, Noel added, business subsidies to Quebec came to $528 per capita. In Newfoundland, the number was $202.

"We have always gotten a disproportionately low share of Canadian government spending for goods and services, and military purposes," said Noel. "Between 1995 and 1999, (federal) public service employment here was cut by 32.5 per cent, compared with the national average of 17 per cent and 12 per cent in Ottawa. Nova Scotia has 20 federal departmental Atlantic Regional Headquarters -- we have none."

Then there is the issue of equalization payments. In 1997, said Noel, federal payments to Newfoundland came to $2.1 billion. Off-setting that was the $2-billion Newfoundlanders paid in taxes to Ottawa. And once you calculate Newfoundland's per capita share of the national debt charges, pensions to public servants, and other costs, Ottawa's net contribution to Newfoundland was just over $1-billion.

"In 1997, Quebec Hydro alone received about $1.1-billion from the sale of Churchill Falls power, enough in itself to cancel our total net gain," Noel argued.

To these costs, Dobbin would add others -- loss of control of our fishery, which resulted in mismanagement that nearly wiped out the cod stock; paltry royalties from our offshore oil; and no control over our fiscal capacity to lower business and personal income taxes to attract business investment.

Incontrovertible proof

Noel and Dobbin raise good points, said FitzGerald.

"History is incontrovertible on some of this stuff," he said. "Ottawa did not support our request for a power corridor through Quebec -- Confederation failed us."

But, FitzGerald added, Newfoundland has lost out on seemingly smaller, but vitally important items, too -- like no longer being able to regulate its own airspace.

Because they are independent countries, Ireland and Iceland were able to open their skies and markets to international carriers, FitzGerald pointed out, unlike Newfoundland, which has to put up with the Air Canada monopoly.

"I think it is a very good idea to question this relationship (with Canada)," said the historian. "It would certainly help demolish the myth that's put out there by The Globe and Mail and the National Post that we're a basket case, that we're a drain on Canada. They've been slandering us now for 50 years. And it's interesting to see who is exactly subsidizing whom. In fact, we're both subsidizing each other. But isn't that what the nature of the country is supposed to be anyway?"
Explaining the terms

While Newfoundland's business and political elite are publicly questioning the problems of Confederation, those problems are not new. They find their origins in the famous Terms of Union that Smallwood and a small band of politicians and local mandarins "obtained" for Newfoundland nearly 53 years ago.

"My interest in this as an historian is looking factually at the Terms of Union," said FitzGerald.
The terms were negotiated by people who were appointed, not elected, to go to Ottawa on Newfoundland's behalf, FitzGerald said. The delegation was appointed by the Commission of Government, which itself was appointed by the British government.

"And what they were up against?" said FitzGerald. "They were up against the Mitchell Sharpes and Hugh Keenleysides and the Jack Pickersgills and the Rhodes Scholars and the professional civil servants in Ottawa who had been studying the (Newfoundland) question for 10 years.

"We had nothing like that kind of advice. Essentially, we were told to take the terms or leave them. Mr. (Prime Minister Louis) St. Laurent put it to us, 'This is the best we can do.' But those terms were never submitted back to the Newfoundland people. There was never any discussion on them. They were signed, sealed and delivered before anyone here knew what was in them.
"And the whole time Smallwood was up there, he was trying to get himself appointed premier. His idea was, 'What we don't get now, we can negotiate later when I'm in charge.' You can see why people would be disgruntled with the Terms of Union if you factually look at the history of the thing."

Since the terms were signed, FitzGerald added, a whole raft of other arrangements between the province and Ottawa have been made, covering everything from the railway closure to the running of Marine Atlantic.

"The terms are not the only thing we've got to look at," FitzGerald said. "We've got all these subsidiary agreements. The point is, we don't have a road map and until we do, we're really at the mercy of all these civil servants up in Ottawa."

A new deal

For Noel, changing our place in Canada will mean changing the minds of important interest groups on the mainland. But before Newfoundland can do that, he said, Newfoundlanders themselves have to realize that a new arrangement is needed.

"If we are going to get change, we have to agree on what it should be, pursue it with determination and work with allies across the country," Noel argued. "An effective Senate, like they have in America, would be the best means of strengthening our influence in Ottawa, in my opinion. What other way is there? Simply asking for more of a role in federal decision-making has not worked."

But longtime Newfoundland nationalists like painter Grant Boland believe Noel may have his work cut out for him. For too long the province has neglected its own culture and history, not even teaching it in schools.

"The absence of that kind of information leaves people ignorant," said Boland. "How can you expect people to be nationalistic if they don't know where they came from?"

Some nationalists suspect the powers-that-be are afraid to open up the curriculum to Newfoundland culture too much. It might lead to a reawakening of feeling for the independent country Newfoundland was.

"If separatism came, I think I'd embrace it," said Boland. "But it seems like a sleeping dog situation."

Separatism is the last thing Noel wants.

"I think if we explain our case properly to the rest of the country we will make progress," Noel said. "We don't have many alternatives. We are an integral part of Canada today and I think it's dreaming for people to talk about separating. Newfoundlanders don't want to separate from Canada. We're integrated economically and politically with the other provinces, and socially we have relatives all across the country. We want to be Canadians. But we want to have a fairer share of the benefits of being Canadians."

Questions of nationalism aside, FitzGerald believes the arguments being made by Noel, Dobbin and Young signify something important.

"The one thing that is overwhelming in this is that I think people are starting to realize generally that Canada's best interests are not necessarily Newfoundland's best interests," said FitzGerald.
"And that's a good thing."