Rebuilding and Renewing: Ontario in the Eighties

BGEN. ANDRUNYK:

Distinguished guests, members and friends of The Empire Club of Canada: A recent study of Canadian legislatures shows that our politicians are considerably younger and much smarter than they were a few decades ago. Our guest speaker today is evidence of this new profile of Canada's elected officials.

Mr. Bob Rae, Member of Parliament for BroadviewGreenwood, is a 33-year-old politician who has already served in the House of Commons for over three years. The son of a diplomat, he received his early schooling in Ottawa, Washington and Geneva. He graduated from the University of Toronto with an honours degree in modern history and a law degree, and he was a Rhodes Scholar for Ontario at Oxford University, graduating with a Bachelor's degree in political philosophy.

Despite his young age, Bob Rae has garnered a wealth of experience through his community work before entering law school, his service as an assistant to the Canadian General Counsel of the United Steelworkers, and his deep involvement in labour relations and labour law.

Bob Rae was elected to the House of Commons in a by-election in 1978 and was re-elected in the 1979 and 1980 general elections. Currently the NDP finance critic, he has established a national profile as an extremely bright and articulate politician. When he entered the race for the Ontario NDP leadership he was immediately hailed as "the NDP's potential saviour in Ontario, possibly even the giant killer."

Ladies and gentlemen, it is my pleasure to welcome to The Empire Club of Canada Mr. Bob Rae, Member of Parliament for Broadview-Greenwood and a candidate for the New Democratic party leadership in Ontario, who will address us on the topic "Rebuilding and Renewing: Ontario in the Eighties."

MR. RAE:

Fellow New Democrats: I would like to thank you for inviting me today.

Your club was born in the heyday of the British Empire, and a tour through some speeches fifty years ago shows how much that Imperial connection meant to your members of that day.

Those speeches were, ironically, given in the years when a young Member of the Provincial Parliament named Mitch Hepburn led an alliance of forces that broke the Conservative party's long monopoly of political power at Queen's Park. The economic collapse of the British Empire had brought with it a major change in Ontario's political life. Dean Acheson once said in a speech at West Point: "Great Britain has lost an Empire, and has not yet found a role."

Today we are in the midst of changes in power--economic, social, and political--on the world scale that are just as profound as those which faced us fifty years ago.

Ontario's role in Confederation did not change simply because the constitution has been on the political agenda for the last couple of years. Rather, the debate on the constitution revealed what has happened to the dynamics of federalism in recent years. The constitutional debate, filled as it was with bitterness and division, was not a proud one for Ontarians. We saw a government here that sent its Attorney General out to argue against key portions of the Charter of Rights. We saw a government that refused to recognize the rights of an important minority--the Franco-Ontarians--because it feared a backlash from another minority, the small-minded and petty irrationalists who fear change simply because it is change.

We saw in the debate the extent to which that elusive intangible called power has shifted. No longer were Ottawa, Toronto and Quebec City the only players in the game. Edmonton, St. John's and Charlottetown could not be ignored, something the Supreme Court of Canada confirmed when it said, "Legal, yes; constitutional, no."

That Ontario gave up its veto over constitutional changes in the final stretch of negotiations was not so much a diplomatic concession as a belated recognition of Canadian reality. Ontario does not have a veto. It is one of the ten provincial voices.

Ontario has, in a sense, lost its empire. It has lost its economic primacy in just about everything but sheer size. In growth, job creation, employment and other indicators of economic well-being, Ontario has been surpassed by at least one, and usually many more, provinces.

I won't use reams of statistics that show that everyone else is shooting up past our ears while we stagnate, but I do stress that the shift in economic power has significant political implications as well. I also suggest that some serious thought must be given by all Ontarians, of all political stripes, to the causes of that decline, and to the direction the Conservatives have charted for us.

Under the Tories, Ontario is an aging dowager, pawning her silver teaspoons (something about which I am

particularly sensitive) to whitewash the walls while the foundation rots. It does not have to be that way. And it must not be that way.

Deindustrialization is in the vocabulary of defeat, yet it is a polite word for what is going on in the economy. With the real risk of permanent damage to the productive capacity of this province growing ever greater, three thousand jobs are being lost every working day. Layoffs have reached epidemic levels. Hundreds of thousands of workers have thrown up their hands and said "enough" after months of looking for jobs that simply are not there.

The economic cost of chronic unemployment is intolerable. But the human cost is tragic.

What happened? In political terms, the Tories have based their long reign on their perceived ability to manage the provincial economy. This managerial approach, superbly marketed by public funds in a barrage of government advertising, has convinced many people that political issues are really administrative issues, and who, after all, are the best managers?

But let's look at what really happened.

For years, our industrial strategy boiled down to two words--foreign investment. That eroded our economic and cultural independence, and placed Ontario at the mercy of decision-makers who don't know the difference between Oshawa and Brazil.

The Tories were in office during the boom years of the fifties and sixties, and during those successful decades they gained a reputation for skilful economic management. Those were the years of American superiority in the international economy, and we rode on their coattails. The economic strategy of the government amounted to taking credit for the good fortune generated south of the border.

Gradually, those fortunes waned, and with them Ontario's pace-setting growth. And the success of the Ontario Tories during an era of economic complacency left them entirely unable to cope with the problems of a different age.

Being the northern rim of the U S. manufacturing heartland is no longer a guarantee of economic health. We had operated on the comfortable assumption that our position as head office for most of the American branch plants in Canada assured us access to high technology. It is not true.

We assumed we were at the other end of a dependable pipeline of economic efficiency. Not true.

And we thought that being the site of half the nation's manufacturing and sixty per cent of its heavy industry was a passport to continued prosperity. And that is not true.

Four factors come to mind when we seek to explain why the truisms of the 1950s are no longer fact in the 1980s. First, as the U.S. administration and the American states have fought to keep employment at home, this last decade has become one of acrimonious battles fought among North American jurisdictions to hold on to jobs and employment. Ontario has been the foremost Canadian victim of this war of non-tariff barriers.

Second, the industrial shift in the United States from the industrial north and midwest to the south and southwest has profound implications for our economy, because we have allowed the Golden Horseshoe to be intimately welded into a declining region.

Third, we have also experienced the energy price revolution in the last ten years. That revolution robbed Ontario of much of its ability to create new jobs for every dollar increase in the price of a barrel of oil.

Fourth, we are paying the price for the decline in the international competitiveness of the United States. That decline in industrial power has been reflected in increasing protectionism, which in many cases hits Canada first, and Ontario hardest.

Our future has been mortgaged, and like the profligate who borrows from Avco to pay HFC, the high cost of living off an unnatural prosperity has caught up with us.

Multinationals have moved steadily towards a virtual stripdown of their operations in Canada, supplying their branch operations with machinery, parts and components manufactured in their U S. operations. Many Ontario manufacturing industries have been reduced to little more than warehouses, linked to sales and service operations.

The result is a dramatic increase in imports. Last year, Canada's manufacturing trade deficit was a staggering $21 billion. That is a deficit of nearly $1,000 for every man, woman and child in this country, and a per capita deficit that is by far the greatest for any industrialized nation. The Conservative government has allowed this province to become a burden on Confederation, when it could be the productive centre of Confederation. The result is that Canada can no longer be expected to act automatically in ways that are coincident with the interests of Ontario.

Ontario has not yet found its role, for one fundamental reason. We are ruled by a government that has no vision of where we will be in twenty years, ten years or even five years. We are ruled by a government that has no solutions because it cannot, honestly, be given credit for our successes.

Today, it is no longer sufficient for Ontario to play the low-key administrative game of pretending that the essentially vital economic problems are all in Ottawa's lap. That approach has paid dividends for the Conservative party, but the citizens of Ontario are shouldering the economic consequences. Our economy needs reinvigoration, and we require the kind of creative government in this province that has not been seen since the creation of Ontario Hydro in 1905.

The solutions require a commitment to the principle of public control of our mixed economy, to government intervention in the market-place, to an invigorated Canadian small and medium business sector, to creative planning, and to a willingness to commit substantial amounts of money to a strategy that combines a human face with a sound economic base.

There are those among you who will cry, "Get the government off our backs and we will do the job!" I don't hear that from the auto industry or Massey Ferguson, from the shoe industry, or textiles, or petrochemicals, or many others, but it is still a familiar war cry.

Ontario's Treasurer has recently been quoted as saying that "what Ontario needs is a good dose of Reaganomics." That, sadly enough, is really the war cry of the dodo. The basic reality of our time is that neither people nor even most industries want the insecurity, the inequality, or the irrationality of oldfashioned capitalism. To harken back to it is to attempt to roll back the major social and economic achievements of the twentieth century.

Then there are those who cry, "Don't run Ontario down. Everything will be o. x. as soon as our traditional markets in the United States improve." To this I can only answer that there is a big difference between running down the neighbourhood and criticizing the landlord.

A combination of Milton Friedman and Tinker Bell won't put Ontario back to work.

The hard fact is that a disturbing number of our layoffs are not simply seasonal or even the result of the ups and downs of a cycle. They are structural, and unless we respond in a planned and direct way to these changes we shall be ignoring the very real needs of many Ontarians.

The question is not whether governments should intervene, but when and how, on whose terms, in whose interests, and for what purposes.

Let me give you two examples: Ontario's mining and non-renewable resource sector, and our car industry. We export thousands of tons of increasingly scarce nickel, copper, uranium and other minerals in raw form from this province every year. Three hundred years ago the first Ontarians traded furs for beads. Today it's resources for radios, mining machinery, and computers.

Our resources are non-renewable. As their scarcity increases, so too does their value and potential value. The rents and profits from the sale of these resources are not going to the people of the province. Nor do we control their sale. With few exceptions, we do not upgrade, refine, or transform these resources in Ontario.

That is why our party puts so much emphasis on public ownership and control in the resource sector. The returns from increasing scarcity should no longer go to absentee landlords. They should go to the people of this province, and should then be channelled to give real economic choice and diversity to those hundreds of communities which have become dependent on single industries.

Instead of showing the courage and determination to make these essential moves, the Conservative government at Queen's Park gives us new adventures in cosmetics.

Take Suncor. Or as Henny Youngman might say, take Suncor, please. It must be hard to be an Ontario Tory these days. Bill Davis thought he'd latched on to a good thing with Suncor after reading how popular the Liberals' Canadianization was in the polls. But he is too much of a free-enterpriser at heart--even if you can't be an executive you can still have an executive jet--and he got cold feet at twenty-five per cent.

So instead of pulling off a shrewd popular takeover in the resource sector, the Conservatives pulled up short. Majority control remains in the parent's hands, the minority shareholders got trampled in the deal, and most of the Cabinet and all of the Legislature were less informed than Marc Lalonde and Peter Lougheed.

That is what you get when you send a Tory to do a socialist's job. Not a single new job for the province. Not another inch closer to greater economic diversity or resource control in the province.

Let me take another example: the automobile industry. We have been making cars in Ontario for nearly seventy years. We have too much invested--in financial, human and community terms--to allow the car industry to collapse, or to see that industry completely emasculated while we sit on the sidelines.

I was the guest of the European Common Market last fall, studying their car and steel industries. It was fascinating to find that for all the protestations of freer trade, France, Britain, Italy, and Germany had all done two things: established bilateral agreements with Japan to limit imports, and made a basic public commitment to remain involved in the making of cars through state investment, to ensure a continued national stake in the increasingly competitive world car industry.

We can do no less, taking into account the particular nature of the Canadian industry. We need to control imports, increase Canadian content, and launch a joint federal-provincial crown corporation to coordinate public investment in this key sector. Without these initiatives we are in danger of becoming passive bystanders to the erosion of a basic industry.

To return to Dean Acheson's remark, Ontario has not yet found a role. But there is a role waiting. It is not nostalgic to say Ontario can be strong again, and be a leader again, because it will be a different Ontario in a different Canada. It is a better-balanced Confederation today, with room for an Ontario whose manufacturing and resource industries make a positive contribution to the nation's life, and whose policies provide examples of enlightened leadership on social issues.

The New Democratic party's agenda for that future is different. It is not the product of an ad man's fetish; it does not consist of the politics of convenience written by Madison Avenue. It is a serious program ruled by our commitment to revitalize Ontario's manufacturing base, to make our resources work for the people of Ontario, and to manage the economy with sound management and compassion.

I want to close by reminding you that perhaps the most difficult and challenging problem we face as people is dealing with change. I always hear businessmen say: "Workers--and unions--are too resistant to change. They have to understand that no job or industry can last forever. As markets change, so too will technologies, and so too will jobs."

This approach is too simple, and ignores some basic, human problems. Workers are entitled, surely, to ask why they alone should pay the costs of change, to question an economic system which provides so little security. If layoffs were matched by exciting job creation and retraining, if they didn't mean loss of hope, or even sometimes loss of home and loss of family, then "change" and "insecurity" would not be synonymous.

That is why I am convinced that social democracy is essential to sound economic planning. Sharing burdens and benefits, taking responsibility not simply for ourselves, but for our fellow travellers on this planet and our children and grandchildren as well, giving all our citizens a stake in the future of this province, these are changes which, rather than dampen initiative, will give it the only home in which it can flourish.

Make no mistake about it. Our party has formed governments in British Columbia, Saskatchewan and Manitoba. We have done so by capturing the imagination and hope of millions of Canadians looking for progressive, practical, competent government, governments which do not take the present or future for granted.

There is a challenge in Ontario which will either be met with complacency or with leadership. We in the New Democratic party are determined to win the confidence of the people of this province, to lead the province out of this century and into the next, not in a narrow or partisan spirit, but in a spirit that combines generosity with tough-minded planning.

The thanks of the club were expressed to Mr. Rae by Edward B. Jolliffe, a Past President of The Empire Club of Canada.