A Future for the Maritimes

MR. JACKMAN:

It is always a very great pleasure for The Empire Club to have as our guest a Prime Minister of Nova Scotia, Canada's oldest and most historic Province a Province whose influence on Canadian history and events far outweighs its size.

Almost every Premier of Nova Scotia, since the turn of the century, has spoken to The Empire Club at least once during his term of office. Every one of those Nova Scotian Premiers who have honoured this Club by their presence, have exhibited a continuing faith in Canada, but at the same time have brought forcefully to our attention our continuing responsibilities to Confederation.

Confederation has not always been universally accepted by Maritimers. In 1938 the Honourable Angus L. Macdonald, a distinguished Premier of Nova Scotia, said:

"It seems to me that from the Nova Scotian's viewpoint the strongest argument for Confederation is the argument on sentimental grounds. The economic argument only is weak. Indeed I am now, and I have always been, convinced that, stating the case in terms of economics only, it would have been distinctly to Nova Scotia's advantage to remain out of Confederation."

This address quite naturally attracted a good deal of publicity, not only in Nova Scotia, but throughout Canada and when, a generation later, in 1966 another former Premier, the Honourable Robert L. Stanfield, visited this Club he referred to Macdonald's speech and said:

"I do not come here today to complain. But I would remind any of you who believe in the supremacy of economic considerations above all others that if Nova Scotians had allowed themselves to be governed by economic considerations in 1867 Canada would not have been born. Pure economics are no more capable of binding Canada together than they were of creating it. None of us should live in the past, but a remembrance of the past illuminates our understanding of the present."

Separatist sentiment in Nova Scotia has perhaps subsided, or at least been overshadowed by their more vocal counterparts in the Province of Quebec. Nevertheless, those Nova Scotian Premiers have better enlightened us as to the richness of our Country's heritage and our continuing responsibilities to the ideals of Confederation.

Our guest today is one of that new generation of young political leaders who, in the past few years, have been elected to Provincial Premierships in their 30's or early 40's, in almost every Province in Canada. The only holdouts to the trend are Premier Bennett in British Columbia, and at least as of 1:00 p.m. this afternoon, Premier Smallwood in Newfoundland.

Our guest was educated at Saint Mary's University, Dalhousie University and the Dalhousie Law School, where he graduated with his Bachelor's degree in law. He entered politics in the mid 50's, an era which was not particularly auspicious for a Liberal in Nova Scotia, being defeated four times prior to his election to the Federal House of Commons in 1963, as the Member of Parliament for Halifax. He served with distinction on various Committees of the House of Commons, including External Affairs, Industrial Relations, and served as a member of the Canadian Delegation to the United Nations Organization.

In 1965 the Liberal Party in Nova Scotia was going through one of those leadership reassessment processes, which seem to characterize all Canadian political parties who are temporarily out of office. Our guest accepted the leadership of his Party. He became a member of the Legislature in 1967, and in October 1970, only 15 short months ago, he scored an upset victory becoming Premier, defeating a long entrenched Conservative regime.

Although our guest has been Premier of his Province for only a very short time, he has already exhibited that measure of decisiveness and intelligence which I know will serve his Province and our country well in the years ahead.

It is with great pleasure that I introduce to you the Honourable Gerald A. Regan, Q.C., M.L.A., Premier of the Province of Nova Scotia.

THE HONOURABLE GERALD REGAN:

I am very happy and indeed highly honoured to have been invited here today to address such a distinguished group as the Empire Club.

I am always enthusiastic about receiving an invitation to address a group such as yours, because it affords me the opportunity to talk about the many exciting potentials and investment opportunities that Nova Scotia has to offer.

In my address today, I want to briefly highlight some of the important developments of the past few months for Nova Scotia, explore the Province's development potentials for the future, and offer some suggestions as to the role that the private sector can play in equalizing opportunity in Canada.

Mr. Chairman, I am also cognizant of the fact that many attending today's luncheon have schedules to keep, so I will try hard to live within my time limit.

No doubt 1971 will be recorded as one of the periods in which the greatest adjustments were required of Nova Scotia industry, stemming from a combination of international crises including a continuing economic recession, fiscal and monetary reforms, nationalist protectionism, and the introduction of tariff and non-tariff barriers. In considering the overall balance, however, I feel that Nova Scotia fared well in relation to other provinces of Canada and certain areas of the world.

The past year, as it has affected many sections of the economy of the Province, has been a good one . . . container and bulk shipping, the discovery of oil and gas, steady progress in plans to develop the Fundy tides, the coming on stream of several major industrial projects and stabilization of labour-management relations are but a few of the occurrences which have laid the stepping stones for a bright future.

Thus, I think it can be said that Nova Scotia has entered upon an unprecedented period of growth, and could well attain the take off point that would turn it into Canada's fourth "have province" even sooner than is yet suspected.

This growth in industrial capacity and in the number and quality of jobs is taking place through the utilization of our resources and opportunities . . . and no longer as a consequence of policies of industrial bribery.

Our Crown Industrial Promotion Agency, Industrial Estates Limited, which previously had a mixed reputation because of free and ill-advised use of taxpayers' money, has been restructured and redirected as an effective promoter of industrial growth.

Under our Government in 1971, this Crown Agency assisted many new industries to locate or expand in our Province without the committal of five cents of public money by ways of grants and with only modest, well secured loans in a small minority of cases.

Perhaps the single most important industrial project initiated by I.E.L. to date was the establishment of Michelin Tires Manufacturing Company of Canada Limited's two major plants at Granton, Pictou County, and Bridgewater.

With both plants having started up production, there are nearly 1,000 persons on the payroll, and by the time their announced expansion of January 1972 is completed, the Michelin plants will provide employment for 1,860 persons.

We are predicting an even better performance in 1972 as the new policy of I.E.L. moves into full operation.

The expansion of existing Nova Scotia firms accounted for some 700 new jobs in 1971 . . . and new firms announced and under construction in 1971 will produce some 3,700 new jobs.

Our officials say that by the end of 1972, employment in I.E.L.-assisted plants will reach an all-time high of over 7,000 male and female employees.

This Agency, along with the Department of Development, serves to tie together the necessary component factors for industrialists interested in taking advantage of our unexcelled location for serving offshore markets or providing North America with products containing component parts from overseas.

Volvo Canada Limited is an excellent example of this concept as they receive component parts from Sweden and assemble automobiles in Halifax.

Their Halifax operation already highly successful, Volvo recently announced that its assembly operation will increase by 12 per cent in 1972, to a total of 9,200 units, after achieving record production and sales in 1971.

Volvo, in addition, has been exploring the possibility of supplying the inland United States markets through Halifax and its recently established autoport.

In mentioning the Department of Development a few moments ago, may I point out that this is a newly structured body which has absorbed many of the functions of the former Department of Trade and Industry and other related Government activities.

The Province has indeed been fortunate in attracting to the Public Service senior personnel from private industry and government to head up the new department and its expanded role in the over-all economic development of Nova Scotia.

Increased emphasis was placed on the marketing function of the department during the year, particularly in the New England area where several promotional missions were undertaken including the successful trade fair held aboard the ferry "Prince of Fundy" in Boston involving the active participation of 31 Nova Scotia firms.

In the important area of capital investment, the Province showed a 4 per cent increase over 1970 to a revised forecast of close to $600,000,000, while the total value of manufacturing shipments will increase slightly to approximately $740,000,000.

Nova Scotia exports for 1971 will top the 1970 figure of $205,900,000 despite adverse international trade conditions.

The establishments of the Nova Scotia Tidal Power Corporation has indicated to the business and financial communities at home and abroad the depth of the Provincial Government's commitment to develop and utilize our great natural resources and the magnitude of the power potential in the Bay of Fundy commands the attention of the investment world.

The relentless advance of technology, the continuing depletion of fossil-based fuels, and North America's ravishing and seemingly unquenchable thirst for electrical energy makes the development of our vast tidal power reserves highly attractive and inevitable. The only real question is when.

The rising costs of industrial fuels combined with the pollution aspects of thermal and nuclear power also adds to the attractiveness of tidal power.

Therefore, when you add the shrinking supply of fossil-based fuels, the spiralling costs of these fuels and the pollution factors together . . . the argument for total power is strengthened considerably in that it offers (1) a reliable power supply, and (2) it is pollution-free.

Governor Kenneth Curtis of Maine, told his fellow New England Governors recently that Canada's Atlantic Provinces "may be New England's best future sources for electric power and refined oil products".

Mr. Chairman, if I sound a bit exuberant when I talk about the fabulous potential of the Fundy tides, I come by it honestly, for the great Joseph Howe in counselling his cabinet in Halifax one day said:

"Boys, brag of your country. When I am abroad, I brag of everything that Nova Scotia is, has, or can produce; and when they beat me at everything else, I turn round on them and say, 'How high does your tide rise?' "

To illustrate the potential of the Fundy tides, may I point out that the combined generating capacity for three of the prime Fundy tidal power sites is in excess of 16,847 million kilowatt hours, compared with the Maritime power pool's existing capacity of 6,967 million kilowatt hours.

Without question, one of the most vital accomplishments in Nova Scotia last year was the return of industrial peace to the Province after years of turmoil and discord between labour and management, particularly within the construction industry.

I am sure it is no secret in Toronto that Nova Scotia, up until a year ago, had a terrible labour-management record, and at times, almost equalled British Columbia in the number of illegal wildcat strikes.

When my party took office in October of 1970, the first priority was to clean up the labour-management mess in Nova Scotia because we fully realized that despite the fact we had many opportunities to offer potential investors, most would be scared off by our labour record.

We were the first Government in Canada to have the courage to take a firm approach and legislate against wildcat strikes and illegal picketing and walkouts.

Although the number of amendments we made to our antiquated Trade Union Act are too numerous to mention, I might just say that they were extremely successful.

Proof of this can be found in the fact that the number of illegal strikes went from an almost record high to practically zero within a period of a few months . . . thus Nova Scotia travelled the route from having one of the worst labour records in Canada to having one of the best, if not the best record in the country today.

May I add, however, that it was just not our legislation which restored good order, because industrial peace cannot be attained by legislation alone . . . I must pay tribute to both labour and management for their co-operation and change of attitude in recognizing and accepting their responsibilities in this matter.

Mr. Chairman, to a great extent, Nova Scotia's economy in the future will be geared very closely to her deep-water, year-round ports . . . specifically, Halifax and the Strait of Canso.

Although he had no way of knowing it, 17th century scholar George Herbert very aptly described the natural advantages of our two super ports when he wrote "Great ships ask deep water".

In an age of revolution among shipping concepts where special ships are designed to carry any type of cargo . . . Nova Scotia's geographic location and deep water ports have already proved advantageous to three of the new types of specialized vessels, namely: container ships, bulk carriers and auto carriers.

A well known shipping consultant said recently that revolutions in bulk and container shipping would perhaps have more impact and effect on Nova Scotia than on any comparable land area of the world.

Today, more and more international attention is being focused on Nova Scotia because of her strategic location between Europe and the major markets of North America.

An obscure but far sighted author wrote in 1887, "Geography and treaties have united to make Canada's unification difficult".

Interestingly enough, for the first 100 years of Confederation, Nova Scotia's geographic location was a severe disadvantage . . . However, today, with new trade patterns and lower tariffs, the Province's location has become a distinct advantage.

Companies such as Volvo and Michelin have already been attracted to our Province because of its advantageous geographic position, with its ice free ports, are ideally located to tranship either by rail or coastal freighters down the Eastern Seaboard of the United States.

We are confident that a considerable number of additional investors will be attracted to Nova Scotia for the same basic reasons in the years ahead . . . particularly those who distribute goods to both Canada and the United States.

Up until five or six years ago, if you asked any movement economist what was the most practical approach for the movement of goods, he would have told you to ship as far as possible by ship, and as short a distance as possible by rail.

Actually, it was this approach which ultimately led to the dredging of rivers and the construction and development of the St. Lawrence Seaway.

The coming of containerization has, however, changed this approach . . . Today, because of the fast turn-around time needed by modern container vessels, and the speed of modern rail shipments, the greatest economies are found in shorter distances by ship and longer hauls by rail.

Containerization has begun a revolution in shipping which has been as dramatic in its day as was the change from sail to steam a century and more ago.

Within a relatively short period of time, it has resulted in entirely new types of ships, new cargo handling equipment, new alignments of shipping companies, new trade routes, and even new ports of call.

Today, more than 74 percent of all general cargo on the North Atlantic is carried in containers.

Halifax was a major winter port with slack periods in the summer as far as the bulk and general cargoes were concerned, before the container revolution struck the major trading routes with dramatic results.

The historic old seaport city is now rapidly regaining the world eminence in shipping which she had once enjoyed.

Halifax is a natural location for a container terminal both because of its deep, ice free water, capable of berthing the largest container ships afloat, and because of its location, hundreds of miles closer to Europe and almost astride the "great circle route" between Europe and North America.

Added to the natural advantages of the Halifax container facility is the participation of Canadian National Railways in operation of the terminal.

Canadian National, the Province of Nova Scotia, the City of Halifax, and Clarke Traffic Services Limited, all entered into partnership to form Haltern Limited, which operates the advanced container handling and roll-on/roll-off facility.

The CN provides fast direct rail service on special container trains to Montreal, Toronto, Detroit, and Chicago.

The use by CN of unit trains to speed containers from Halifax to Detroit and Chicago is the first application of unit trains to containers in America.

Because Halifax is 550 miles closer to Europe than any other major port in the western hemisphere, it can offer containership operators a fast turn-around of their vessels and quick, low cost delivery of containerized cargoes to the industrial heartlands of Canada and the United States.

The St. Lawrence Seaway was built several years ago at a cost of about one-third billion dollars . . . 70 per cent of which was put up by Canada, 30 per cent by the United States.

All this was designed to bring foreign ships to Chicago, Milwaukee, Cleveland, etc.

The Great Lakes ports today are suffering pain . . . we, on the other hand, have already demonstrated that freight can be carried through Halifax by a ship-rail scheme faster and cheaper than via the St. Lawrence Seaway.

For example, European container cargoes can be dropped off in Halifax, and delivered by CN's fast unit trains to Detroit (30 hours), and Chicago (40 hours), before the same containership could berth in New York.

Considering that it takes from $15 to $20 million to build a containership, and costs upwards of $10,000 a day to operate one, big containerships cannot afford to call at a large number of ports . . . their time must be spent at sea and not shuttling along coasts, if they are to be economic.

The port's position on the great circle route to Europe makes it ideal as an east coast feeder service. This one port of call enables the use of larger, higher revenue-producing ships and a high utilization of them.

Halifax presently has four regular container services operating from its facilities: a Trans-Pacific Service (Columbus Line) which operates between Halifax, Australia and New Zealand; two Trans-Atlantic Lines (Atlantic Container and Dart Container Lines); and a Caribbean service.

We are confident that within the next 12 months, there will be a number of new container lines calling at Halifax, and a coastal service in operation between Halifax, the east coast of the United States, and possibly, the Caribbean.

Apart from the obvious direct benefits that Halifax and the Province are enjoying from the container business, I wish to point out that in 1971 the container terminal is a significant contributor to the Province in operating wages and salaries.

Also, the terminal has stimulated employment in other areas, notably at the Trenton, Nova Scotia, railcar manufacturing plant through the CN's requirement for more than $8,000,000 in special rolling stock for moving the containers to market.

The very fact of frequent sailings and improved rail distribution will progressively make our area more attractive to industry.

The year 1971 saw yet another exciting new development for the port of Halifax take shape in the establishment of an autoport on the east side of Halifax Harbour at Eastern Passage.

The autoport, which will be in full operation, using all its own facilities in a few more weeks, will have an initial capacity for 80,000 cars annually.

While the great proportion of business will come from overseas imports, there will be domestic traffic as well. The facility hopes to become an increasingly important focal point for the distribution of automobiles for the Maritimes and Newfoundland.

Canadian National has already chartered a 10,000 ton vessel capable of carrying 150 cars to run weekly on a service between Halifax and Newfoundland.

In addition to Fiat, Datsun and Toyota are also using the autoport for some Maritime distribution.

Looking ahead, operators see prospects for a development similar to that of the Halifax container terminal in handling traffic from overseas for the mid-West United States . . . and, like the Halterm operators, are looking forward to the establishment of a coastal service to serve North American east coast ports and the Caribbean.

Nova Scotia's second major port, the great 10-mile long, deep-water harbour at the Strait of Canso is actually a byproduct of an earlier development.

In 1956, the Provincial Government of the day constructed a causeway to link Cape Breton Island to the mainland of Nova Scotia.

More by accident than by design, the causeway formed a huge breakwater to keep back the drift ice from the St. Lawrence Gulf . . . thus leaving a deep-flowing, ice-free, year-round harbour capable of berthing the largest vessels in the world.

It wasn't too long after this before international interests recognized the tremendous potential of the Strait, and to date there is some $400 million worth of industry built up around the magnificent harbour.

Included in this industrial complex are:

- A $125 million pulp and paper operation, Nova Scotia Pulp Ltd., which is owned by Stora Kopparbergs of Sweden;

- Bestwall Gypsum Division of Georgia Pacific Corp., of the United States;

- Gulf Oil's $70 million, 80,000 barrel-a-day refinery, plus an $18 million deepwater berthing facility; and

- a multi-million dollar thermal power plant owned by the Province.

While these developments to date have been encouraging, we foresee even greater developments for the Strait in the next few years . . . with large salt deposits, petroleum and electric energy already in the area, it has the potential for a major petrochemical industry.

A study carried out by the ocean bulk shipping consulting firm of Jones, Bardelmeier, Clements & Co. Ltd., of Nassau, for the Provincial Department of Development, recommended that the Strait of Canso is a logical site for the development of a liquid and dry bulk redistribution terminal.

The study said a redistribution terminal established in Nova Scotia would provide significant freight cost benefits to a variety of bulk cargoes imported to, or exported from, the United States east coast and Canada as well as the Great Lakes.

The port has been visited by the 253,000 DWT super tanker "T. G. Shaughnessy" carrying some 2,000,000 barrels, or 63,000,000 gallons of Iranian crude oil for the Gulf refinery . . . the "Shaughnessy" was the largest vessel ever to enter a North American port.

Seven years ago, there were only four ships, all tankers, in the world merchant marine of over 100,000 DWT . . . there are hundreds in service today, and by the mid-1970's there will be over 800 ships . . . tankers and bulk carriers of over 100,000 DWT . . . which will be unable to berth at any U.S. East Coast or Gulf port fully loaded. This gives some idea of the unique value of the Strait of Canso port as a transshipment point.

Today, no big new steel or aluminum plant, oil refinery, or petrochemical complex heavily dependent on large volume overseas crude or raw materials should be built at coastal locations having less than 65 feet, and preferably 90 feet, or more, depth in the approaches or berth.

The days of 35, 40 and even 55 foot channels, where really large volume seaborne bulk movements are concerned, are gone.

Gulf Oil Ltd. is a world leader in the use of the large ships and other companies are now considering the construction of facilities to cater to large ships . . . within a few years, a major trans-shipping terminal handling oil, iron ore, coal and possibly grain, should be in operation at the Strait of Canso.

I might add that negotiations presently underway indicate that there will be over $500,000,000 of additional investment in this port alone in the next five years.

Few developments in the Province's long history have caused more interest and excitement than the offshore petroleum exploration and the long-range economic ramifications of the undertaking.

If the oil and gas find at Sable Island, Nova Scotia, is as good as it appears . . . and there is every indication that it is . . . and if the potential of the remaining off-shore area surrounding Sable is tapped . . . which it will be . . . then the total benefits to Nova Scotia and the Maritimes as a whole, from the oil and gas industry, and all ancillary industries, will be immeasurable.

In any country, province or state where commercial quantities of oil and gas are found, the economic benefits do not come just from the sale of hydrocarbons . . . but from the many allied industries that support the acquisition and marketing of oil and gas.

I think it accurate to say that oil is the economic multiplier through which the total overall benefits are derived.

Already, our Province has benefited tremendously from the oil and gas explorations off our coast despite the fact that not one barrel of oil or one cubic foot of gas has been sold commercially as yet.

To date, more than $110,000,000 has been spent in drilling and seismic work with increased activity and spending expected for 1972, at which time a recent Federal survey estimates the industry will spend $92,000,000 to equip itself with the necessary exploratory rigs and seismic and rig support vessels.

The Halifax shipyards is at present constructing its third multi-million dollar oil drilling rig and has an order for a fourth. These rigs cost from $15 to $20 million each and have created hundreds of steady jobs over a prolonged period of time. At a time when many shipyards in North America are suffering, the Halifax yard is fully engaged and will be for a long period of time.

I point out that many of the materials used in constructing these rigs are purchased from Nova Scotia suppliers . . . therefore, the money from the paycheques of the workers and the money used to purchase materials is retained in the Province's economy.

Once the rigs are built and put into use . . . and I might add that three of the four rigs produced at the Halifax shipyards will be used in Atlantic coastal waters . . . it requires a lot of capital and servicing to keep them functioning.

I understand that to keep one of these rigs in activity requires an expenditure of $30,000 to $40,000 every 24 hours . . . much of this money is spent locally which is of great benefit to Nova Scotia. Aside from the pure economics derived from the construction and continued servicing of these rigs . . . Nova Scotia is benefiting from their existence in another manner as well.

I refer to the excellent reputation the Province and its workmen are gaining internationally through the expertise and workmanship displayed at the Halifax shipyards in constructing these drilling rigs.

Past experience elsewhere has shown that the actual development of a substantial oil and gas field can have a broad, beneficial effect of a continuing nature.

We in Government are determined to assist Nova Scotian enterprise to participate to the maximum extent in the ancillary activities generated by a developing oil industry.

Should this happen in Nova Scotia, the Province will benefit tremendously from increased employment and from increased taxes as well as from the direct receipt of royalty revenue.

Our Government is dedicated to the policy of extracting and retaining every conceivable benefit from the oil and gas industry for the strengthening of our Province's economy and bettering the standard of life for all Nova Scotians.

It was with these thoughts in mind that I recently announced that a policy had been established whereby the Government will take a limited equity position in certain industrial pursuits, thus enabling greater participation by Nova Scotians in the development of their Province.

In light of this policy, the Government agreed in principle to participate in a new company called "Offshore Industries Limited".

This company was recently incorporated by a group of Nova Scotia businessmen who, in partnership with Bow Valley Industries Limited of Calgary, will engage in servicing the Province's offshore oil industry.

I might also point out that aside from the obvious benefits to Nova Scotia, the development of our oil and gas reserves will relieve the Eastern Canadian dependence on imported oil . . . a situation which is faced by all Canadians east of the Ottawa Valley.

Finally, I might say that we are presently finalizing the best legislation possible to ensure that our beautiful environment is not disrupted in any manner by the oil and gas industry.

Certainly, any economic benefits derived from oil and gas would be quickly upset if ecological disasters, such as the "Arrow incident" polluted our beautiful coastline and left Nova Scotia an unfit place to live, work, invest, or attract tourists.

Tourism is another area which made rapid strides in Nova Scotia last year as a record number of tourists spent a record number of dollars in the Province.

We established a separate department of tourism with a full-time minister in order that greater emphasis and planning be spent on developing this vast potential industry into a year round venture rather than a three or four month operation.

Already, the promotional branch of our tourism department has met with great success in a number of imaginative national and international promotions which included travel with the Nova Scotia Voyageurs on their initial swing through all the American Hockey League cities, and entering a prize winning float in the annual Grey Cup Parade in Vancouver.

However, the most rewarding and exciting promotion to date was the Province's entry of a float in the Rose Bowl Parade at Pasadena, California, which carried off top international honours by winning the Ambassador's Trophy for the best foreign entry.

Graced by Ann Murray and a scale model of the "Bluenose", the float received world coverage via television, radio, and the print media.

An indication of its popularity was forthcoming within two days of the parade as officials of the tourist department were literally swamped with thousands of letters from people all over North America seeking further information on the Province.

We see this type of promotion valuable not only in attracting tourists, but as an image-maker as well . . . in the months ahead, our government departments, be they tourism, development, or related agencies, will be exploring many possibilities and utilizing their talents and initiatives in developing further opportunities for Nova Scotia.

Mr. Chairman, I have spent considerable time in outlining the present and future prospects for Nova Scotia and the Maritimes in general . . . I think it can be said that a definite new era of prosperity has been born.

However, I point out very quickly that if the Maritime region is to take full advantage of its many inherent potentials . . . then it needs help and a large portion of that help must come from the private sector.

Therefore, I am here to pronounce a somewhat controversial gospel to the effect that it is in the best interests of private industry located in Ontario to share their expansion with the so-called slower growth areas of this country.

I am fully aware that the prime direction of private industry is to maximize return on investments and superficially this would seem to dictate building strength on strength by expanding in areas where their investment already exists.

However, I suggest that an in-depth examination would indicate that the long term consequences of such a policy are indirectly more costly than the alternatives.

Support of eight "have not" provinces through your tax dollars is a major cost item since a better distribution of Canada's opportunities would remove the necessity for the many equalization programs and result in an era of much lower taxation.

It would also result in the achievement of a national unity which is of vital importance to all Canadians . . . I contend that the private sector has a responsibility parallel to that of our National Government to combat regional disparity.

As I have already suggested, "a richer Martime area will lead to a lower tax era".

National companies can do much for the slow growth areas in terms of expanding branch plants to the Maritimes, Quebec and the Prairies.

Another helpful and significant step forward on the part of national companies within the private sector would be for them to adopt the policy of "equal pay for equal work" as practised by the Federal Government.

For too long, there has been a substantial wage gap between Eastern workers and those workers in Central and West Coast Canada in circumstances where they work for the same company doing the same job. Some companies already follow this policy. The private sector would make a massive contribution to combatting regional disparity if every national company in the service and merchandising fields adopted this policy.

The thought once expressed by Joseph Howe that "you have got us and now you have to keep us" . . . certainly doesn't hold true in Nova Scotia because in all sincerity I say that within 15 years we will be granting, rather than receiving, equalization payments.

Again, I say however, that we need help to develop our wealth of resources and, at the present time, we are forced to turn to the United States and foreign investment fields to meet our needs.

While there is a great deal of emotionalism amongst economic nationalists in Central Canada who would cut off the flow of foreign investment to protect our national identity and maintain our economic independence . . . the fact still remains that a shortage of investment funds yields a paucity of development . . . a luxury which Nova Scotia just can't afford.

Canadians are investing in Canada in such areas of the economy as merchandising, agriculture, housing, and public utilities, where their funds predominate . . . in addition, important new blocs of Canadian investment funds have developed and are constantly growing.

But the fact remains that the rate of capital formation within Canada itself has simply not been rapid enough to meet our requirements in the past, nor is it likely that capital formation by residents of Canada will be adequate for decades in the future.

It is axiomatic that Canada, with a paucity of people and multiplicity of resources, cannot generate sufficient capital investment within its borders to finance the most utilitarian and productive rate of development of its resources.

And I strongly suggest to you that whatever Canadian capital is available, inevitably will be invested in Ontario rather than in the so-called "high risk areas" of Canada.

Unfortunately, this pattern will continue in Canada until there is sufficient capital . . . however, I want to point out that having enough capital will not solve the problem . . . the only solution is a fair and equitable system which will proportionately distribute equity capital to all areas of the nation.

Therefore, until such time as a better program is developed in Canada whereby sufficient amounts of equity capital can be generated and directed, provinces like mine will, out of necessity, turn to foreign investment for much of its financing.

Gentlemen, a new era is in store for Nova Scotia . . . we are no longer an isolated peninsula on the East Coast of Canada . . . the determination of our people, along with the far-sighted programs which we are implementing, is going to catapult us into this new era of potential and ultimate prosperity.

In the words of the great Joseph Howe, "You don't need a big field to raise a big turnip".

Thank you....

Premier Regan was thanked on behalf of the Empire Club of Canada by Mr. Marvin Gelber.

EDITOR'S NOTE: Premier Regan's glowing description of the economic prospects for Nova Scotia contained a reference to the continuing need for foreign capital to finance development of Maritime resources and industry. He suggested that Canadian generated capital inevitably tended to be invested in Ontario rather than the so-called high risk areas of the country.

These comments should be read in conjunction with the addresses by Mr. David Lewis (page 60) and Mr. Jack McClelland (page 205), both of whom expressed concern over the amount of foreign control of Canadian industry. Generally speaking, while the Federal Government showed concern over the political and cultural implications of foreign control, Provincial Premiers like Premier Regan gave much higher priority to jobs and the need to promote regional development (see note on page 227).