A National Vision

Introduction

In May of 1988 my wife and I flew to Halifax for a meeting. On the return flight the weather was clear and bright. As we headed west towards home we were flying at about 15,000 feet and passed over the Bay of Fundy. What a spectacular sight! The tide was obviously out because you could clearly see the mud flats, like long fingers stretching far into the rocky shoreline. The St. John River was spewing a brownish-red far down into the Bay. Even from this height and this early in the season, the country was beautiful. Indeed, Canada is a beautiful country, rich in variety of scenery and people.

I have never been to New Brunswick, at least on the ground. We once drove to Gaspe and for a while drove along the Restigouche River as it headed south into New Brunswick, but we didn't enter the province.

Two years ago Premier Joe Ghiz of Prince Edward Island addressed our members. He made us very aware of the issues that profoundly affected his province--decisions made in Ottawa to the benefit of Central Canada and the detriment of the Maritimes. One such example was the closing of the air base on P.E.L. The financial savings to Ottawa did not seem to stack up well to the loss of employment on the Island.

Our guest speaker today is also a Maritimer who has worked for many years to develop a special economic relationship within the Eastern provinces of Canada to more powerfully encourage economic development for the 1.5 million Canadians of that region.

Premier Frank McKenna is a Canadian who is deeply committed to solving regional problems within the Canadian Federal umbrella. John Godfrey in the Financial Post in January of '88 (two weeks after I flew over New Brunswick) wrote: "There is a solidly impressive quality about Frank McKenna. Hardworking, well-prepared and bright, he is clearly a man with a carefully calculated timetable and set of priorities. After he was first elected to the New Brunswick Legislature in 1982, he went up the ladder more quickly than he expected, because he was a leadership candidate who found himself 'in the right place at the right time'."

I suspect that it was more than fate that brought Mr. McKenna to the Premier's Office. His personal struggle to find a solution for the impasse of the Meech Lake Accord, while ineffective, showed a man who had the maturity of leadership to thoughtfully adjust his position when the facts were clearly seen.

Born and educated in New Brunswick (except for a brief period at Queen's University), Mr. McKenna holds a B.A. from St. Francis Xavier and a Bachelor of Laws from U.N.B. He had a large criminal law practice in Chatham N.B. before his election.

At the present time his position as Premier seems fairly secure as his Liberal Party holds every seat in the Legislature. But even so, his reputation indicates that he has a long distinguished career ahead of him as Premier of New Brunswick. We welcome him to The Empire Club today.

Ladies and gentlemen. Premier Frank McKenna.

Frank McKenna:

One week ago, the Prime Minister of Canada, the Right Honourable Brian Mulroney, stood before this same audience and spoke on the important question of national unity. The Prime Minister acknowledged the need for fundamental change and challenged Canadians not to give up on national unity.

I'd like today to respond to his challenge.

Uncertainty and ambivalence are the enemies of progress. Canada is currently facing uncertainty on two major fronts.

We are facing constitutional uncertainty and our national focus is fading. We have no defined national vision.

I want to take advantage of this opportunity to make several "modest proposals" to you for bringing greater certainty to our future.

I'd like to begin on the constitutional front.

As citizens of one of the greatest nations on earth, we must immediately stop our whining and complaining. Everybody is claiming alienation. Nobody really knows why and nobody knows what to do about it. We have become a nation of perpetual navel gazers with our natural confidence and optimism rapidly being replaced by gnawing anxiety.

I want to make it clear at the outset that I speak to you today as a Canadian, as well as a New Brunswicker. In fact, we in New Brunswick have no hesitation in saying we are Canadians first and New Brunswickers second. We are proud of it. We believe in Canada.

There was a time when it may have been said that New Brunswickers felt this way because they were so heavily dependent on the rest of Canada for financial support. That may have been true at one time. It is not true today. I come here today as an equal, not as a supplicant.

In the last ten years, federal transfer payments to New Brunswickers have declined by about one-third. We are in our third consecutive year of balanced budgeting. Our credit rating is one of the best in Canada. In 1988, we led all provinces in Canada in investment growth. And since then, we have outstripped--or equalled--the national average. Last year, we placed second in Canada in employment growth. For the past five years we have led all of Atlantic Canada in economic growth. This year we will place amongst the top three Canadian provinces in economic growth. Our unemployment rates have been declining in the midst of a national recession and high unemployment elsewhere.

We are the new kids on the block. We are confident. We are aggressive. We are attracting new industries. In fact, we have received two important new business commitments this week, which will be announced in the next few weeks. We are growing.

Above all we are Canadians. Canada has been good for New Brunswick and we want to contribute to Canada. Returning to the issue of national unity, it is obvious that we must get control of our constitutional situation. Our only hope of resolving the current constitutional impasse lies in splitting the problem into two parts. Firstly, we must fix the process. Secondly, we must address the substantive issues. The current constitutional process is a straitjacket. With the current amending formula it seems impossible to effect fundamental change. It is impossible for the constitution to grow and respond as envisioned by the Fathers of Confederation. How do we fix the process? Our constitutional shores are littered with the wrecks of past efforts. Attempts were made to find a new amending formula in 1927, 1935, 1950, 1960-61, 1964, 1968-71, 1975, 1976, 1978, 1979, 1980, 1981. Initial success was achieved in 1964 with the Fulton-Favreau Formula and again in 1971 with the Victoria Amending Formula. Both proposals eventually failed.

I believe it is time for us to resolve this question once and for all. I propose that we adopt a regionally-based amending formula to amend the Canadian Constitution. I propose that the current time limit for ratification be changed from three years to one year. And, I propose that the new process be finally decided by a National Referendum.

Let us take the issues in order.

To begin with, I suggest a regionally-based Victoria-type amending formula because it most clearly resembles current thinking about Canada as a country of regions. No formula will get unanimous support. This formula may come the closest.

For major amendments, the Victoria Amending Formula required the consent of the Senate, the House of Commons, two of the four Legislative Assemblies in Atlantic Canada, the Legislative Assembly of Quebec, the Legislative Assembly of Ontario and two of the Legislative Assemblies in Western Canada, representing at least 50 percent of the population in that region. The end result was a more flexible amending formula where change could take place without the requirement of unanimity.

Paradoxically, we have evolved to a situation today where the concept of a regional veto makes even greater sense. Ontario and Quebec each constitute a region if only because each represents more than 25 percent of the country's population. Western Canadians are increasingly speaking with one voice and developing mechanisms for greater regional cooperation. In Atlantic Canada, we are rapidly moving towards the idea of Maritime economic union. And this spring we'll be holding a Maritime economic forum, consisting of provincial cabinets, to establish a schedule for greater integration of the economies of the respective provinces.

In this context, a regionally-based amending formula makes sense. Each region would have a veto, but not every province would have a veto. Since I am sure there could be numerous variations on such a proposal, the precise definition of a regional veto does not have to be identical to that proposed in the Victoria Amending Formula. Western Canada and Atlantic Canada may decide that three out of four provinces is preferable or may hold to two provinces having 50 percent of the population or perhaps some other type of arrangement. The end result, however, would be a more flexible amending formula where change would be much easier to achieve.

I also believe that the maximum time limit for change must be reduced from three years to one. Governments change, leaders change and issues change. In a rapidly evolving and complex world, I believe it is imperative that we provide ourselves with more flexibility by reducing the ratification period to one year.

I am not suggesting here that we should amend our constitution on a whim. Rather I believe we should take the time at the beginning of the process to develop a broad understanding and sufficient consensus across the country before proceeding to the formal process of placing resolutions before Parliament and the Legislatures. Once we have achieved that broad consensus, Legislatures should be able to act efficiently.

Why must this issue be decided by a National Referendum? Quite simply, while some may question the constitutionality of such a proposal, there may be no other way of changing the amending formula. At the present time, unanimity is required for changing the amending formula. I believe it is impossible to achieve such unanimity and the most that we can hope for is substantial support for any given proposal.

This issue of amending the Canadian Constitution has perplexed our nation for over a hundred years. Let us end the matter once and for all. In fact, I would strongly propose that we should proceed to hold a National Referendum on the amending formula before any substantive issues are resolved.

Success in changing the amending formula will accomplish two objectives. Firstly, we will regain our confidence by scoring a constitutional "win." Secondly, those seeking modernization of our constitution will realize that freeing Canada of its procedural strait jacket could permit real change.

Improving the amending process is, however, only half the battle. The second half of the battle is to effect real change in the substance of our constitution. In this regard, it is my belief that we should start with a blank sheet of paper. We should remember that the framers of Confederation in 1867 could not have possibly envisaged the evolution of our country or the world. They did not and could not anticipate sophisticated communications, aeronautics, the rising tide of environmental concerns or many other issues that confront our nation. The time has come to wipe the slate clean and redefine the distribution of powers and responsibilities between the Government of Canada and the provinces. This exercise should not be conducted for the exclusive benefit of Quebec. It must be conducted for the benefit of all Canadians.

Quebec is not the only province with grievances and confining the debate to Quebec's concerns will only serve to infuriate other Canadians and patronize Quebecers.

I am convinced that as more and more Canadians realize that they are not now as well served as they could be, they will appreciate the merits of this exercise. I am receptive to a whole range of possibilities as to how this might be accomplished ranging from a founding convention through a series of task forces, to a national constituent assembly. One thing is certain, extensive and thorough public involvement will be required in this, and any future constitutional change.

Is there a need for a redistribution of powers and responsibilities? Absolutely. There are dozens of areas where duplication of effort costs tax-payers money and undermines the main objective. There are dizzying layers of bureaucracy. There are overlapping Programs involving unemployment insurance, training, workforce reintegration, literacy efforts, environmental legislation, regional economic development, research and development, communications and transportation.

The administration of agriculture involves federal boards, provincial boards, marketing boards, and other structures to the extent where the efficiency of the industry is prejudiced. Taxation is a nightmare of federal, provincial and municipal measures. Common sense demands a rationalization of responsibility whether Quebec continues to be a member of the Canadian constitutional family or not.

I said earlier that the Constitution is only part of the problem in Canada. In fact, it is really only a problem because we have decided it is a problem. There are many countries in the world including Great Britain where there is no written constitution. More than changes to the amending formula and the substance of our constitution are needed. We must be driven by a national vision. We must have a shared set of objectives and values. We must aspire to something. We must be proud of something. We must yearn for something.

A nation can survive without a constitution. It cannot survive without a national vision.

A national vision can be comprised of many elements. From my perspective, the fewer the number of elements the better. I suggest three for your consideration.

Firstly, Canada must aspire to have the highest quality of education in the world. That is not the situation today. Forty-four percent of our population at the present time does not have a Grade 12 education. 17.3 percent are not literate. By comparison, Japan has a literacy rate of 94 percent.

In Canada we spend an average of 163 days per year in school. In Japan the average is 243. Much of the rest of the world is closer to the Japanese average than Canada's. By the time a Japanese student has completed Grade 12 he or she has been in school for two more years than a Canadian student.

The dropout rate for a student in Canada is approximately 30 percent. The dropout rate in the United States of America is 12 percent and in Japan it is 2 percent. Interestingly, Japan had the same dropout rate as Canada in 1965.

It is not the school system alone in Canada which must share the responsibility. Japanese businesses spend more in one week on training than Canadian companies do in one year. In fact, our public expenditures on education are relatively high. We devote 7.3 percent of our GDP to education. In Japan, 5 percent of GDP is devoted to education.

It is evident, in part, that our problem lies with the expenditure of our educational dollar and the lack of business support for training and education.

It is my proposal to you today that we must make a conscious decision in Canada that we are going to be the best educated country in the world by the end of this decade, that we establish measurable goals, that we allocate the necessary resources and that we demand accountability of our leaders to achieve the desired objectives. We must reduce our dropout rates, we must increase our literacy rates, we must lengthen our school year, we must place more emphasis on basic skills such as reading, math, and science. We must better train our teachers, we must challenge our students more and we must spend our dollars wisely. The effort and financial resources required are considerable. The return on investment will be staggering.

Secondly, I propose that Canada become the most environmentally progressive country in the world. Why should we hope to be successful in this area? We are a young country, we have a vast land replete with bountiful natural resources. We have not irretrievably damaged our surroundings as has happened in many other countries of the world. We still have time.

That is not to say that the problems confronting our nation on the environmental front are not immediate and serious. In Canada alone, some 175 animal and plant species are known to be at risk Valuable natural spaces such as wetlands are disappearing. One quarter of all Canadians rely on groundwater as their source of domestic water supply and it is rapidly becoming polluted. We have over 20,000 chemical substances in use in Canada today, with up to 200 new chen~ icals being added each year. In the Great Lakes alone, over 350 toxic chemical compounds have been found. In the summer months, more than one half of all Canadians are exposed to ground level ozone which has adverse effects on health. We produce an unbelievable amount of 30 million tons of garbage annually. This represents more than one ton of garbage for every man, woman and child. Only 10 percent of this garbage is recycled.

As Canadians we produce 8 million tons a year of hazardous waste and treat only 40 percent of that total. Every year 600,000 hectares of our forests are damaged by insects and disease. The list goes on. Fortunately, it is not too late. A concerted national plan as part of a national vision which involves all levels of government and all Canadians can make an enormous difference in our future. Like the investment in education, the return on investment may not be immediate, but it is enormous.

What gives New Brunswick the right to lecture on the national stage about education and the environment? I openly confess to our own shortcomings but would underline that, in our own modest way, we have begun to make some fundamental changes in both of these areas.

For example, we are installing scrubbers on our coal-fired plant at Belledune, we have passed the Clean Water Act, we have produced a new energy policy, whose cornerstone is efficiency and conservation, and we have introduced the most progressive beverage container legislation in the country. And while I was pleased to see that New Brunswick recently ranked third in Canada in terms of environmental performance, I fully recognize that we must all continue to be as vigilant and progressive as we can be in these and other environmental areas.

On the subject of education, starting this fall, New Brunswick will finally get a publicly funded universal kindergarten. We're stressing environmental and entrepreneurial education in our schools like never before; we're working on a massive literacy undertaking, and our student/teacher ratio is now the best it has ever been. As well, a national survey recently found that New Brunswick has the lowest school dropout rate in the country.

Finally, there is a third element to a national vision which provides an extraordinary return on investment, which is not immediate, which is not sexy and which is not popular. However, it is vital to every other issue that I have raised today. The final element that I am proposing in a national vision, very simply, is that we live within our means.

I say unequivocally, that a major part of our current constitutional dilemma stems from our fiscal situation.

The natural tensions which exist in Canada have been horrifically exacerbated by the constant grinding down of our fiscal capacity. Cut-backs in the West bring cries of alienation, cut-backs in the East bring cries of poverty, and cut-backs in Central Canada further undermine the national dream. Our constitutional and fiscal situations are inextricably intertwined.

Borrowing money on current account is a fool's game. The leader of today enjoys the popularity of dispensing bought favours. The leader of tomorrow must devote all of his or her energies and ambition to paying the bills.

The Government of Canada is currently spending 35 percent of its budget to service the debt. Every program and every project that has been proposed in the last five years could be accomplished without borrowing a single cent, if we could simply save the interest that we are currently paying on our outstanding debt. It should now be painfully obvious to Canadians that we cannot trust current leaders with our long-term future. The leaders of the '60s and '70s have placed a first mortgage on the future of Canada. The leaders of the '80s and '90s are placing a second mortgage on the same asset. There is no equity left. We must once and for all put an end to the suffocating debt-load we are placing on the backs of our children.

Governments must conduct themselves like private citizens. Borrow, if necessary, for capital assets such as a new home, but pay as you go for current expenditures, like the groceries.

Should we prove unable to exercise the leadership to accomplish this objective, I would support a legislative requirement for balanced current account budgets by our governments. This should not be done on a single year basis because it would not allow us to respond to the contingencies of extraordinary events such as recessions. It could, however, be based on a rolling average over the normal term of a government which is four years. In other words, each government would be legislatively required to produce a four year balanced budget. No leader could buy popularity today, with the dollars of tomorrow.

I fully recognize that some of the ideas I have advanced today may be considered radical.

However, I am convinced that the time has come for Canadians to adopt a broader and far reaching ambition.

In the absence of other approaches, it beats standing still.

The appreciation of this meeting was expressed by John Campion, Partner, Fasken Campbell Godfrey and a Director, The Empire Club of Canada.