Canada's Political and Economic Problems as Seen by Premier Frank Moores of Newfoundland

MR. KARN:

Mr. Premier, Mr. Minister, Reverend Sir, distinguished guests, ladies and gentlemen: Newfoundland, the oldest British overseas possession (Newfoundland and Labrador as of 1927), which became a Crown Colony in 1933 and a province of Canada on April 1, 1949, has long enjoyed the admiration of The Empire Club of Canada.

During our founding year of 1903-04, which was about 900 years after Leif the Lucky is reported to have established his Viking Colony at L'Anse aux Meadows on the northeast tip of the island, Mr. J. M. Clark spoke to us on the subject "The French Shore Question and Newfoundland".

Three years later, Mr. A. B. Morine addressed our club on the topic "The Newfoundland Fisheries Question".

Those of you who are students of history and economics know that the discovery on June 24, 1497 of what is called Cape Bonavista by John Cabot, for which King Henry V11 awarded him a gift of k 10 sterling on his return to England, was the launching of the western Atlantic fishing industry, which to this day attracts fleets from the entire world to the waters off the coast of Newfoundland. This has inevitably involved the governments of Britain and France initially, then the United States and latterly Canada in international negotiations over territorial rights relating to this industry.

Subsequent development of mineral, forest, and water power resources has aided the economic progress of Newfoundland and Labrador, but fishing is still the source of livelihood for more of its citizens than any other activity, and our guest of honour today understands these people and knows their problems, their hopes, their aspirations.

After graduation from the United Church academy in Carbonear, and St. Andrew's College in Aurora, he returned to Harbour Grace to join the family business. Under his guidance shore facilities were enlarged, more trawlers were added to the fleet, and turnover was tripled prior to sale of the company in 1965.

To his local community, his province, and to the Atlantic region in general he has made a commendable contribution, serving as a director or president of other corporations, trade associations, economic councils, commissions, and service clubs.

He is also a well known sports enthusiast, promoting athletic activities not only in Harbour Grace but throughout the province.

In 1968, Frank Moores made his first foray into politics, being elected to the House of Commons in Ottawa as the P.C. member for Bonavista-Trinity-Conception, by a majority of 6,000 votes over his Liberal opponent, a seat that had been Liberal since 1949.

Within the year the Progressive Conservative Party of Canada chose him their president and fourteen months later the P.C. party in Newfoundland and Labrador elected him their leader.

His successful campaign in leading his party to their first provincial victory on October 28, 1971 was such a shock that he had to repeat it five months later, claiming 33 of the 42 seats. Again in 1975, supported by his own district of Humber West, he led his party to their third victory.

On October 24, 1975 in Corner Brook, the regional college of Memorial University awarded him an Honorary Doctor of Laws degree.

Ladies and gentlemen, I am most pleased to welcome on your behalf the Honourable Frank Duff Moores, M.H.A., LL.D., and to invite him to speak to you on the subject "Canada's Political and Economic Problems as Seen by Premier Frank Moores of Newfoundland".

MR. MOORES:

Mr. Chairman, ladies and gentlemen: When I was first asked to speak to the Empire Club, I quite naturally planned to talk about Newfoundland and Labrador and its future. Since that time, however, the Quebec election has come and gone, and dramatically affected not only Newfoundland, but our country as a whole. I think it is only proper that, as one of Canada's premiers, I give my views as to exactly what effect that election may or may not have on our country.

To date, we have heard many opinions expressed regarding the recent Quebec election. Some of these opinions are based on shortterm facts: others are based on wishful thinking. Others still are based on insular emotion. A few people are trying to place the reality of the situation in its proper perspective.

People are wondering what it means to Canada: what it means to Quebec: and for that matter, what it will mean to our economic prospects, our financial credit, our image abroad, our social programs and so on.

It would appear that all the queries that the recent Quebec election poses have to be interpreted and answered in as favourable a light as possible. As Canadians, we have been cushioned so long from unpleasantness that facing up to reality, if it is unfavourable, has to be avoided.

After all, who wants to accept the fact that the future of our nation, as we have known it, is now uncertain? Who wants to accept the fact that we are going to have a period of extreme uncertainty for some time into the future, and that investor confidence in our country has, and will, decline as long as this uncertainty is there? Who wants to believe that governments will be preoccupied with this problem at the expense of economic and social programs that are critical at this time in our country?

We had better accept these facts and start to deal with the situation--and pretty quickly. The situation is serious. In my opinion, it is the most serious turn of events that has faced our nation in peacetime. Political platitudes are worse than the ostrich approach of putting one's head in the sand, and unfortunately, I suggest the very high likelihood of politicians doing both at the same time.

Let us look at what actually happened in Quebec, and why. First of all, the Parti Quebecois won an overwhelming number of seats in the Quebec National Assembly. Most observers will state, quite correctly, that a substantial proportion of the P.Q. support came from people who viewed the previous Liberal government as arrogant and incompetent, amongst other things, and therefore voted to throw that government out of office. Most of these same people will then say the voters were really federalists and the P.Q. was the only alternative to the Liberal government. But how dedicated, really, are these voters to federalism? I would suggest not nearly as much as we would like to think.

As Professor W. S. Livingston has stated: "Federalism is a function not of constitutions, but of societies."

Thus, I would suggest that a truly dedicated federalist would find it extremely difficult to vote for a seperatist party. There were, after all, other alternatives. The Union Nationale, the Creditistes, the Democratic Alliance and the Independents--all dedicated to federalism, and 25 % of the voters supported them. So, I say, the 41% of the voters who voted for the Parti Quebecois are capable, in time, of voting for separatism.

I say this for another reason. Regionalism in our country today is not just unique to Quebec. While regionalism, spelled out in the terms of separatism, is more identifiable with Quebec today, regionalism as such exists across this nation and challenges the essence of our federation. The mood has been growing for many years, spearheaded by the provinces with a certain degree of success, largely because of the federal government's approach in preferring confrontation to co-operation with the regions of Canada. It is based on the arrogant federal attitude that consultation is not necessary, but rather that decisions made in Ottawa are for the good of everybody, whether they like it or not.

Our national government has been very bad at understanding that different regions have different problems, and as a result, it has been guilty of formulating umbrella policies that apply to everyone, irrespective of region. For example, there are agricultural programs, based on the needs of the prairie farmer, which have no relevance whatsoever to the farmer in Prince Edward Island. There are fisheries policies, supposed to suit the Atlantic and Pacific coasts at the same time, even though conditions, markets and even the species of fish, are different. There are energy policies, based primarily on oil and gas, secondly on nuclear reactors, and thirdly, on hydroelectricity, even though hydro-electricity is cheaper, more stable and, much more importantly, a renewable resource. Unfortunately, hydro resources are located, in the main, in northern Quebec and Labrador, and they can be neglected because political pressure groups are scarce, to say the least, from these areas.

These are but a few of the insensitive policies that have been dictated by our federal government. The obvious result has been confrontation with provincial governments,, who then formulate policies in isolation from what may be in the national, or for that matter, even the regional interest. Such policies are more often than not insular, and because of that, they are often ineffective. All this, and of course, much more, has led to a very strained Confederation.

What do we have in our country today? I suggest we have regionalism--and a dangerous type of regionalism at that. Let us look at our nation and its regions, beginning with British Columbia. The fact is that British Columbia may not have preached separatism, like Quebec, for they have taken the more convenient route of actually practicing it. The reason given is the natural physical barrier of the Rockies, and also the natural north-south trading pattern. This, to a large degree, is true. But it would seem to an observer that a great many people in British Columbia have a western patriotism that is equal, if not greater, than their commitment to Canadianism.

The second area is the prairie provinces, who have always viewed the east, and Ontario in particular, as the hoarders of Canadian wealth. With their vast region, a small population, and a low income over the years, they could do little as far as their own destiny was concerned. After all, serfs are never troublesome until after the revolution. The revolution, at least economically, is now taking place. The west can now look through the same coloured glasses at Ontario as the OPEC nations do at the industrialized world. And they like it--not just for economic reasons--but, I would suggest, it gives them the independence that they have desired so long to say to the east, particularly to Ontario and Quebec, "If you don't like it, you can lump it, and we don't particularly care which option you choose."

In this regard, Professor Donald Smily of the University of Toronto, in his book Canada in Question, has stated the case very simply: "The Pearson-Trudeau Liberals have governed Canada without providing an effective outlet in the party for attitudes and interests which are specifically western." The same could be said of all regions outside the centre of Canada.

The third region is Ontario. Ontario has always been looked upon as a distinct region of Canada, at least by everyone else, primarily because of wealth, and also because of the attitude that wealth spawns. Jealousy has been a large part of the problem. For many years, the province did little to dispel its national image. Profound announcements are conveniently made from the comfortable pew and most Canadians, rightly or wrongly, look upon Ontario as having always occupied a very, very comfortable pew if not a "feathered nest".

The fourth region is Quebec. Quebec, as a distinct region, is accepted as such by all Canadians living in or out of that province. The recent election spells this out in spades. I will return to this situation in a moment.

The fifth region, of course, is the Atlantic Provinces, which today is the only region in Canada which hasn't the affluence to do much else but be indignant. However, I would suggest that the people of the Atlantic are the most closely-knit and proud of any Canadians. Austerity down through the ages has made us this way. But times in the Atlantic region are changing. This gives me an opportunity to talk about my province of Newfoundland and Labrador for a moment.

The face of my province is changing, both economically and socially. Today, Newfoundland stands as an emerging province with probably the brightest future of any province in Canada. I am sure it is difficult for you to appreciate this, not knowing, I suppose, a great deal about the potential of Newfoundland.

At a time when Canada is running out of domestic supplies of oil and new energy resources are needed, the energy equivalent of Labrador in undeveloped hydro is the equivalent of 300,000 to 400,000 barrels of oil a day--forever. This is the equivalent in electricity of undeveloped hydro power in Labrador. Let us not forget that this is a renewable resource, not one that is depleting.

Secondly, Newfoundland and Labrador stands today on the threshold of major commercial discoveries of offshore oil and gas. Most people are not even aware of this development, but the fact is that since 1966, some $250 million have been invested in increasing exploration. This started with just $3 million in 1970. Over $60 million is being spent this year, and substantially more is being planned for next year. Exploration to date has resulted in three significant gas discoveries which are potentially commercial. These three discoveries resulted from a total of nine structures drilled on the Labrador Shelf, a truly remarkable success ratio for rank wildcat drilling. Experts predict that the chance of identifying a commercial discovery within the next four years is better than 70%.

We are naturally excited and optimistic over discoveries of natural gas and oil off our coast. It is estimated that the net revenue associated with the average economic recoverable resource potential would be in the order of 70 billion dollars. This net revenue is defined as the funds remaining after all development costs and company profits have been subtracted from the total funds generated by the resource.

In addition, there is the recently declared 200-mile limit and the effect that it will have on our fisheries. What a lot of people don't realize is that last year some 2,000,000 tons of fish were caught in what are now Canadian waters, and of that amount only 450,000 tons were caught and processed by Canadians in Canada. However, with the management of the 200-mile limit, the amount of fish available will increase, and with joint ventures with Europeans, the processing can be done on-shore in Canada. As well, the boats can be crewed by Canadians and this, in its initial stages, is expected to create some 6,000 additional jobs. Once again, we are talking about a renewable resource in this instance, a renewable resource based on protein food. It is now forecast that the potential fish landings in eastern Canada, in the near future, is some three billion pounds with a value of one billion dollars annually.

Also, we have huge tracts of land, both in the island part of our province and in the mainland part of Labrador, that are still unexplored as far as mineral properties are concerned.

What all this means is that my province, in the foreseeable future, can be by far the richest province per capita in our country. After all, we have only 500,000 people and all this potential wealth.

I hope I have enlightened you a little concerning Newfoundland and Labrador, and I could go on. However, I feel it is incumbent upon me to resume my talk in the national context, at this critical juncture in our history.

The fact is that we have, as I have mentioned, five distinct regions in Canada, all with varying degrees of individual patriotism. It is provincial patriotism, and it has been on the increase since the end of World War II, when the provinces began to assert themselves as partners in Confederation and not "pawns" of the federal government.

The pressures for more provincial autonomy led to our present form of federalism, termed "co-operative" or "executive" federalism. It is characterized by close interaction between the two levels of government, and to support it, various institutions have evolved to encourage closer co-operation, such as the federal/provincial conferences. Unfortunately, while grand in theory, the system has failed somewhat in practice. We may meet regularly, but mutual decisions are not being made because the federal government has usually decided what shall be before we gather around the conference table!

Again, this is the confrontation approach which I mentioned earlier, leading to the provincial attitude of retreating into the respective provinces and doing what one can in relative isolation--as far as this is financially possible.

What else can we do? The federal government will not adopt a federalist approach to problem solving. The Prime Minister calls himself a "federalist". He is a distinguished academic who knows what the term means in all its variations, and I won't dispute that. However, his attitude in dealing with the provinces is not geared to making Canadian federalism work for all regions of Canada.

His attitude is rather that one region, Quebec, is the pivotal region around which all others revolve, and problem solving is based on a satisfied Quebec. To this end, he has done everything possible to entrench the French language across the country and to make Canada a bilingual nation. It has stirred increasingly hostile reactions since 1968--in all regions--not because of the principle, but because of how the PM has chosen to make that principle a primary part of the life of every Canadian. Why, even in Quebec itself, this approach has been rejected.

It is not a happy mood for any country to be in, and the situation has most surely been brought into focus by the Quebec election. What has happened in Quebec must be faced up to, not just in the context of Quebec separatism, but equally, in the context of our nation as a whole. Perhaps, for the very first time, if we are totally honest with ourselves, we will find a national spirit amongst us that will offset our many differences. For it is a bare fact, despite our protestations, that our country was not born out of revolution or the pursuit of ideals. In the words of Professor Edwin Black, "Confederation was born in pragmatism without the attendance of a readily definable philosophic rationale." Is it not time to truly decide our feelings about this land of ours?

Since the election, the Prime Minister, many of his ministers, provincial premiers and others have been saying at every opportunity that there is no need to panic. It is being said so often that most people will soon start to feel that there is reason to panic. I am not one of those who believes there is, at this moment, any reason to panic, but I am one of those who feels we need strong leadership and definitive decisions. The constitutional approach of our Prime Minister will not fill the bill, for again, his form of federalism is too narrow to suit the situation.

Let us look at the Parti Quebecois for a moment. Mr. Levesque is a brilliant and extremely clever politician. He also has one overriding purpose, and that is the separation of Quebec from Canada. Whilst it was not the issue he used to get elected in the recent campaign, it is certainly the major priority of the Parti Quebecois, and the new government of Quebec will work towards this end. To say otherwise would be to ignore the reason for their existence. Mr. Levesque won't deny this, and why should he when it is the very basis for his party's existence?

I don't know if most people have any idea of the real power of government, especially when that power is dedicated to one purpose and one purpose primarily, in this case, a highly emotional purpose. Elections are won on emotions and not on facts or statistics. Given time, with a massive propaganda campaign based on pride and emotion, it's surprising the influence such propaganda can have on any individual. This is but one reason why a referendum cannot be postponed for three or four years.

There are other, more pressing reasons in the short term, some of which I have mentioned briefly previously, such as the overall effect on the economy; the uncertainty of the Canadian dollar; the uncertainty of the fiscal markets; the drying up of new investment in Quebec and the reluctance of foreign investment in other parts of Canada; the delay of federal-provincial programs; the matter of the Constitution itself. The list goes on and on. The obvious effect is that the major issues like inflation, unemployment and the development of our economy, generally, will not be dealt with at a time, when, if we are to survive and prosper as a producing nation, they must be dealt with.

I don't know how Mr. Levesque can be persuaded to have his referendum and get it over with as quickly as possible. But I know every influence that can be brought to bear should be. I don't know, for instance, if the federal government can hold its own referendum in Quebec, but if it can, it should do so.

In the meantime, the federal government has to have everyday dealings with Quebec, and in my opinion, this is going to be extremely difficult. It is critical that Quebec be treated fairly, the same as any other province, but not differently. But will being treated fairly be seen in the same light by all parties? Probably not, but every effort must be made. What would be disastrous would be any suggestion of extremism. If, for instance, the federal government held to a tough line and tightened the purse-strings, the reaction in Quebec would probably be volatile. Even worse, if the federal government opened up the purse and showed favouritism to Quebec, two things would happen. Firstly, the voters in Quebec would, in large measure, credit the P.Q. for their good fortune, and secondly, there would be such a backlash in the rest of Canada that it would, in fact, give Mr. Levesque just the emotional issue he needed to achieve his main objective of separatism.

So where does this lead us? After all, defining the problem is not difficult. Finding the solution to this particular problem is. What should we do? What are our options? As I have said, every influence should be used to allow the people of Quebec to vote on their destiny as soon as possible. Our country, and particularly Quebec, cannot stand the period of uncertainty that presently is being suggested.

But as I said earlier, we as Canadians also have to step back and take a hard look at ourselves. Where are we? What do we want to become? How can we get there? As I mentioned, we weren't a country formed out of any great desire to be together--now, we have to test if the pragmatism that created Canada in 1867 has become more than that in the last hundred or so years. Do we have the national spirit necessary, when all is said and done, to want to stay federated, or is the nation too far apart, even in practical terms?

In my opinion, there are two options. Number one is to give the regions more autonomy with a view to developing and strengthening each region separately; in fact, endeavouring to develop five separate states in what would be a very loosely-knit federation, to say the least. Or number two, to develop a stronger federal system based on the kind of society we have, in reality, in 1976. We have neither today, because both are in conflict.

I believe that the second option is the only one that will work if Canada, as we would want it, is to survive. It is not an easy road to take, either. For federalism is a difficult form of government to operate, and Canadians have taxed their federal system to the breaking point. As well, no system can survive unless it is wanted and supported, despite its inherent weaknesses. In our Canadian experience, our failure to agree on an amending procedure and thus patriate the Constitution is a glaring failure on our part. It tends to leave us without an obvious focal point which supercedes the political realm and entrenches rights and privileges for all who live in Canada. But any amending formula has to recognize all regions of the country, and this is something that federal governments cannot seem to understand.

Many other changes will have to occur as well. Constitutions don't make a nation. First and foremost, there must be changes of attitude. Provinces, for instance, will have to realize, whether they like it or not, and let's face it, most of us won't, that our country is more important than creating our own little empires. The federal government will have to realize the meaning of the word "arrogance" that decisions cannot be made in the confines of Ottawa without the genuine consultation and understanding of those areas such decisions will affect. This will mean decentralization, meaningful decentralization--whereby applicable decisions are made in the various regions by the people who live in the areas. At present, decisions, or the lack of them, are being made by a bureaucratic system that boggles the mind of the most well-intentioned. It really amounts to developing a sensitivity to the particular needs of Canadians spread across our vast country.

The federal government will have to learn to recognize when programs are abysmal failures. Of course, leadership is all important in this regard. If the Prime Minister is promoting a program with all his power, it's hard to stop it, except at election time. One outstanding example of this is bilingualism, which is not working, not because the objective is wrong--it isn't--but rather because people cannot be forced into being good neighbours, or good linguists. One cannot expect, for instance, a western Canadian to accept the fact that in 1973 of the 7,600 appointments made to bilingual positions, 75 % were filled by people whose working language was French. After all, equal opportunity has to mean equal opportunity for all Canadians.

The fact is that bilingualism is a desirable objective. It is the sort of program that our children should have the opportunity to avail themselves of, to enjoy learning a second language. But it can only be encouraged, not enforced on people of all ages to the point where a country is wracked by quarrels about it. This is wrong for all concerned.

What I'm saying here is not meant to sound anti-Quebec, but rather I am using these examples and voicing these thoughts because I am a worried Canadian. The Prime Minister forgets sometimes that he represents all Canadians, and neither the English- or French-speaking peoples of Canada are thrilled with his leadership--or his programs--after eight years of giving him every opportunity in the world to cement this country together.

We must have a change in attitude in our country or suffer the consequences, and the consequences are very severe indeed, both for us as a nation, for us as provinces, and for each of us as individuals.

There is a tremendous challenge in the years ahead. The next few years will make or break our country. However, I believe that people with a purpose can succeed and it will take the maximum effort of us all. You here today, as leaders and opinion-makers in your own right, are critical to the success of any effort that is made. It will take sacrifice of a type that you have not been used to for a long while, if ever. The fact is, you are going to have to make that sacrifice if you believe in your country, if you believe in your own future, and if you believe in a prosperous land for your children.

That is your challenge, as well as mine, and it is our challenge as Canadians. I believe we will accept it, given the leadership at all levels we need at this time in our history. For when all is said and done, there is only one Canadian question, and that is how the nearly 23 million people who live within our national boundaries can establish and sustain governmental institutions which are at once humane, effective and responsive. Thank you.

The appreciation of the audience was expressed by the Very Reverend Ernest M. Howse, S.T.M., Ph.D., D.D., Litt.D., Honorary Assistant Treasurer of The Empire Club of Canada.