My Canada - Today and Tomorrow

Tim Reid, President, SIR Capital Corporation and Director, The Empire Club of Canada; Sydney Young, Grade 11 Student, Havergal College; The Rev. Canon Fred Hall, Canon Pastor (Retired), Diocese of Toronto; Jane Clark, Principal, Clark Communications; David F.W. Cohen, Partner, Gowling Lafleur Henderson LLP; William Taylor, Vice-President, TransCanada; Ted Rogers, President and CEO, Rogers Communications Inc.; Scott Hand, Chairman and CEO, Inco Ltd. and Director, The Canadian Club of Toronto; Damhnait (Davnet) Doyle, Singer and Songwriter; Ernie Eves, 23rd Premier of Ontario; Alfred Whiffen, Vice-President Sales, Newfoundland and Labrador, Aliant Inc.; and Michael MacMillan, Chairman and CEO, Alliance Atlantis Communications Inc. and President, The Canadian Club of Toronto.

Introduction by Bart Mindszenthy

Ladies and gentlemen, welcome to the address of the eighth premier in the Empire Club's very special Premiers Speakers Series that continues throughout the season.

As you know, we have invited all the First Ministers to come and talk to us about their Canada--today and tomorrow--and articulate what they see as the major challenges and opportunities for our country in the next decade.

And to experience all our premier presentations so far, and through to June, just go to our Web site at www.empireclub.org and watch what they've had to say and will be saying, since we now webcast all our luncheon meetings.

Today, we have the pleasure of welcoming the Honourable Danny Williams, Premier of Newfoundland and Labrador.

He is one of the seemingly many Rhodes Scholars from the Rock. Premier Williams earned a degree in arts in law from Oxford, his bachelor of law degree from Dalhousie, and was appointed Queen's Counsel in 1984.

He was part of a consortium of smart business people who got the province's first cable television license. From 1975 on, he guided Cable Atlantic to where it became one of the largest communications companies in Atlantic Canada.

His business acumen led him to become involved in his province's oil and gas industry, and its hospitality and tourism industry.

In his spare time, he has served on the boards of numerous worthy charitable organizations. And I'm not even going to talk about his commitment to hockey.

Just a little more than 16 months ago, he was the Progressive Conservative Opposition Leader.

And for the past 16 months, he has been a very vocal, visible premier of Canada's newest province and oldest landfall in the northern new world.

Premier Williams has been a flag-fluttering, turf-wagering, deal-demanding advocate whose words and actions have placed his province squarely in the bright glare of media focus and the more subtle inquisitiveness of the rest of us Canadians.

No matter how you may feel about what he has said or done, there is no doubt about the fact that Premier Williams has seared his proud and wonderful Province of Newfoundland and Labrador into the national consciousness.

And well so because his province is deeply steeped in the history of this continent and this country.

To really know Newfoundland and Labrador is to know a place that breeds wonderful people who love life, cherish family, and value laughter.

And they do all that in the face of cold Atlantic winds and waves, and for too many years now, so few God-given gifts to harvest.

Ladies and gentlemen, please welcome to our podium the Premier of Newfoundland and Labrador, the Honourable Danny Williams.

Danny Williams

I would like to thank the Empire Club of Canada and the Canadian Club of Toronto for the invitation to be here today. And, thank you all for taking the time to try and find out what this crazy guy from Newfoundland and Labrador is all about. It is indeed an honour and a privilege to join my fellow premiers in this series of speeches and to share my views on Canada.

And, I would like to say I am humbled by the impressive list of world leaders that have graced this podium from Churchill to Reagan. But I am reminded of the wisdom of another of your speakers, Golda Meir, who said: "Don't be humble, you are not that great." Like most Newfoundlanders and Labradorians, I truly love Ontario. It is always a pleasure to be in Mr. Roger's neighbourhood.

In fact, two of my staff with me here today were drawn to the lights of the big city and lived here for a few years. However, like most who move away from our great province, they were drawn back to the place we dearly love to call home.

From my perspective, apart from its natural resources, I think Newfoundland and Labrador contribute to this country a far more precious resource--some of the most talented, gifted entertaining individuals in the world. We need look no further than our head table here this afternoon to our own Damhnait Doyle--a bright, energetic, enormously talented young Newfoundlander and Labradorian taking this country by storm.

Right across the country, we start our day with Seamus O'Regan on Canada AM, and end it in the evening with Rex Murphy on The National. We begin the week watching the intelligent humour and commentary of Rick Mercer on Monday Report and we finish the week enjoying the satirical wit of the talented cast of 22 Minutes.

Our authors are award-winning, our bright young minds lead corporations around the world and our musicians enjoy tremendous national and international success. Our boys from Great Big Sea are the hottest ticket in town in Boston on St. Patrick's Day. The endorsements do not come much better than that.

And, starting tomorrow, the defence system of this country will be under the extremely capable leadership of native Newfoundlander and Labradorian General Rick Hillier, the newly appointed Canadian Chief of Defence Staff.

To understand my views on my province and our country, a country I believe is the greatest in the world, you need to understand who I am, a challenging task to say the least. I suspect I have left many political pundits scratching their heads over the last number of months.

My actions, however, were motivated by a passion to strengthen Newfoundlanders' and Labradorians' place in Canada and a need to end the threat to the survival of our culture, a culture grounded in outport tradition and history that gives us a distinctive character.

All my life, I have welcomed a challenge. I entered the political arena four years ago not because it was a lifelong ambition, but because if I had not tried to make a difference, I would have failed a province that had given me so much. And I was on a mission.

Over the previous decades in Newfoundland and Labrador, I had built a successful career in business and law. I founded a cable television company with $2,500 of borrowed money and established businesses in the petroleum, tourism, recreation and real estate sectors. My legal practice was a street practice based on everything from mortgages to wills to insurance claims. My proudest moments were successfully defending the interests of the less fortunate in major civil and criminal litigation--the wrongfully convicted, the young victims of sexual abuse, a woman who struck back after years of spousal abuse and a sea captain who defended himself from a mutiny.

I learned from experience that the potential was there for individuals to achieve personal and corporate success in our province. But, as a business leader with my eyes wide open to what was going on in our province, I was frustrated that so many opportunities for growth were being missed, lost or mismanaged.

It was common to hear people ask the same question that has always bothered me: "Why is a province this rich in resources so poor?" Something was desperately wrong with the picture. And I entered office determined to do something about it.

So, I put aside my own business interests in order to devote my attention to making a difference in the political forum. I pledged that I would have a new approach to governance in Newfoundland and Labrador--an approach aimed at growing our economy for self-reliance while managing the public treasury openly and accountably in a socially and fiscally responsible manner.

That is the agenda that motivates me every day. It is a responsible, constructive approach to self-reliance that is based on a new attitude of self-confidence, pride and optimism. Our new government got a dose of reality quite soon after being elected. Fiscally, our province was suffering severely from the consequences of economic weakness. When I entered office, we were facing the prospect of successive billion-dollar deficits on total budgets of about $4 billion.

For a population of a half million, the situation was clearly unsustainable, and I spent much of my first year as premier trying to manage those fiscal challenges. But, I also understand that we cannot penny-pinch our way to self-reliance.

Ultimately, what we have to do is find better ways to turn our potential into an engine of economic activity. Newfoundland and Labrador is an investor's paradise. It is sitting on some of the most valuable natural resources in the world. In fact, I would venture to say that, despite our per-capita income being the lowest in the country, our natural resource wealth, on a per-capita basis, is probably the greatest of any province.

We brought into Confederation vast fisheries resources, forests and farms. We brought all types of minerals--from the iron ore of Labrador West to the nickel, copper and cobalt of Voisey's Bay, and gold and many other minerals still being discovered.

We brought some of the continent's most important sources of clean hydro power, including the as-yet-undeveloped Gull Island and Muskrat Falls sites on the lower Churchill River, which are understandably of great interest to the Government of Ontario among others.

And, we brought significant reserves of oil and gas that, even today, have not been fully delineated or valued.

I think the recent dispute between Canada and Newfoundland and Labrador needs to be assessed in the context of the last 55 years.

What has frustrated us for so long is watching our resources leave our province with little or no processing, shipped to other parts of the country where they create jobs and sustain communities, while our own are struggling to survive.

Richard Gwynn recently described the past conflict by stating: "What's really at issue is the survival of rural Newfoundland and Labrador which is the crucible of its poetry, its songs, its stories, its tragedies, its passions, its beauties."

We are a proud people from an historically exploited area that does not want to take advantage or to be taken advantage of.

Some time ago, a well known Canadian, since deceased, said that Canada would be better off if Newfoundland and Labrador was towed into the middle of the Atlantic Ocean and sank. It is this perception of our great province that I am committed to changing.

Our fellow Canadians need to understand that we have taken more than our fair share of hard knocks. We joined Confederation with a significant government surplus and, 55 short years later, our own Royal Commission, our lending institutions and our bond-rating agencies were saying that our fiscal situation was unsustainable.

We lost most of the return on our Upper Churchill hydro-power resource to Quebec, which received an outrageously lopsided contract to buy and sell our power after the federal government refused to grant us wheeling rights enabling us to get the power to markets outside Quebec. Our loss is estimated at a billion dollars a year. The prime minister of the day told our premier that the price to do otherwise could have been civil unrest in Quebec. Sounds extreme. But the reality is that we made the sacrifice for the sake of national unity.

We lost the power to manage our fisheries when we entered Confederation, and Ottawa used our fishery to trade quotas to foreigners for favours benefitting other Canadians, and mismanaged some species of the domestic fishery to the point of commercial extinction. As a result of this mismanagement, tens of thousands of people have been forced to leave our province. Imagine, if in one day, 300,000 Ontarians suddenly lost their jobs as a result of the federal government's mismanagement of their industry. It would be a national disaster. In 1992, when the equivalent, 12,000, lost their jobs in one day in Newfoundland and Labrador, it was a national nuisance.

During this Super Bowl week, the words of Vince Lombardi are appropriate: "It's not whether you get knocked down, it's whether you get up." And, that is exactly what we did in Newfoundland and Labrador after our fishery closed. We took a knock, but then we got back up and diversified the fishery into a new, billion-dollar industry. But, the social impact on the province can never be recovered, and we have lost tens of billions of dollars from a ground fishery that still has not recovered.

Just recently, we were pleased to announce the development of one of the richest nickel cobalt copper discoveries in the world by Inco. The construction is ahead of schedule and on budget--a testament to the company and the many Newfoundlanders and Labradorians employed there. However, when the ore is processed, our province will receive less than 10 per cent of the royalties while the federal government will receive close to 90 per cent.

So, it is against this backdrop of the fishery, Churchill and our mineral development that our recent dispute arose. Compounding the loss of these other benefits was the loss of offshore oil and gas revenues.

Until now, most of the returns on offshore development have been leaving Newfoundland and Labrador. Most of the revenues flow to Ottawa under the equalization clawback, despite a provision of the Atlantic Accord promising that our province would be the principal beneficiary of our offshore resources.

We led the country in economic growth year after year, largely on the success of our offshore projects, yet the lion's share of the benefits was going elsewhere. Under that scenario, we would never have been self-reliant on the strength of oil because every step forward on revenues was accompanied by a virtually equivalent step back.

Similarly, we will never be self-reliant if we are simply a repository of the raw natural resources that create jobs and wealth in other jurisdictions. We will never be self-reliant unless we can do a better job of putting these resources and revenues to work for our own communities and economy.

That is why achieving a better arrangement on our non-renewable offshore resources has been one of my highest priorities. Last year, I proposed shielding our own provincial share of offshore revenues from the equalization clawback. It was a fair proposal. We have one window of opportunity to harness those non-renewable resources for our future.

Last June, Prime Minister Paul Martin agreed to accept our proposal on offshore revenue sharing. He recognized the fairness and equity of our proposal and, last Friday, after many months of discussions about the details, he lived up to his commitment. By holding out for fairness, we achieved an agreement that makes Newfoundland and Labrador more secure and lays the foundation for future progress. I applaud the Prime Minister for keeping his promise to Newfoundland and Labrador and Nova Scotia.

It required leadership, courage, strength of convictions and a desire to build a stronger nation. Mostly, it required a vision for the future of Newfoundland and Labrador. The Prime Minister's actions reflect the words of Franklin D. Roosevelt: "The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little."

The agreement in principle that we reached last Friday includes giving our province 100 per cent of our provincial share of offshore revenues free from any equalization clawbacks while we are an equalization-receiving province. It also includes several other tremendous benefits to the province. And Canadians will still receive more than 50 per cent of all revenues from our offshore oil and gas.

This agreement represents a big win for Newfoundland and Labrador. But, it also represents a win for Canada. Not only will Canada benefit from Newfoundland and Labrador's increasing self-reliance, but it can hold its head proudly on the international stage for its efforts to enable Confederation's poorest partner to realize its potential for prosperity within the federation.

I have never believed in getting something for nothing. If there is something you want in life, you have to go out and work hard to get it. And, in the past several months, our team has worked very hard--and sometimes made controversial decisions--to accomplish our goal.

The removal of the flag at the time was considered by some outside our province to be a setback to our cause but, from our perspective, it was necessary. I want you all to know it was not intended to show disrespect for this great country of ours. It was a statement to our fellow Canadians that we had issues that were deep-rooted, that were steeped in the wrongs of the past, that were about our survival as a people. We did not want to get out of Canada, we wanted to get into Canada as an equal-treated with dignity.

When Prime Minister Mulroney signed the original Atlantic Accord, he said he was not afraid to inflict prosperity on Newfoundland and Labrador. Rex Murphy summed it up best last fall when he said: "The infliction seems to have kicked in; we're still on standby for the prosperity." Last Friday, we came one step closer to the prosperity. As a result of our new agreement, my Canada is a lot stronger this week than it was last.

Our recent agreement could see Newfoundland and Labrador come off equalization for two of the next eight years. What an exciting and awesome prospect to be a contributor to the Canadian federation. Our disagreement with the Government of Canada was not just about money. It was about pride. It was about having the opportunity to stand on our own two feet and be financially independent. It was about having the opportunity to grow and prosper, to stand as an equal in the Canadian federation. You can't put a price tag on these feelings. Pride is something that can't be bought and paid for with money. It is something that you have to earn. And, Newfoundland and Labrador has earned this, believe me.

We are going to be very responsible in how we deal with our new-found monies. Over the coming weeks and months, my Cabinet will evaluate our options to determine how this money will provide the greatest possible return to the people of Newfoundland and Labrador. We won't waste this opportunity.

I was delighted to read reports from Standard and Poor's and the Dominion Bond Rating Agency (DBRA) that suggested this agreement could potentially improve our credit rating. In fact, DBRA said that, if this money were put down against our debt, our interest costs would be notably reduced and our debt-to-GDP ratio could fall by about 11 percentage points. That is precisely the type of analysis we will be conducting to guide our actions.

We will also look to find ways to foster economic development, to identify where changes are needed and pursue opportunities where they exist. And, if we can't see the opportunities, we will create them.

Newfoundland and Labrador welcomes investors with a host of advantages.

Our province has the unique geographic benefit of being strategically located, poised as a natural gateway between North America and the European Union. With our unique time zone, we can easily serve Europe and North America in the same business day.

Seventy per cent of our work force between the ages of 25 and 44 have some form of post-secondary education. On a per-capita basis, we have the largest available work force in the country. New and expanding businesses have access to a pool of over 40,000 skilled workers.

Memorial University, partnering with the province, is at the forefront of marine technology innovation and we are world leaders in ocean technology research with world-class facilities.

KPMG has rated our capital city as one of the lowest-cost locations to do business in North America, Europe, Australia or Japan, and St. John's has a 14-per-cent cost advantage over average U.S. cities.

Our companies score high in employee reliability, high employee retention rates, low absenteeism and high productivity.

The award-winning EDGE program is one of the best business incentives in Canada. The program provides a 15-year tax break, a 100-per-cent rebate on provincial corporate income tax, a 100-per-cent rebate on health and post-secondary education tax, a 50-per-cent rebate on federal corporate income tax (the only province in Canada to offer this rebate) and access to Crown land for business set-up, relocation and expansion.

We also offer generous equity, R&D and manufacturing tax credits to encourage and attract investors.

Do I believe in the future of our province? You bet I do!

Equally important to the prospects of our economic future, we have a great lifestyle to offer.

Dame Judy Dench, when asked by a British newspaper what she still wanted to accomplish in life, replied without skipping a beat: "The only thing I want to accomplish is to go back to Newfoundland."

Anthony Wilson Smith of Macleans described it as our "youngest, coolest province." He stated that he and his wife visited "a hotel that offers the best service anywhere, ate dinner at a restaurant the equal of most in Toronto and shopped at several boutiques that would sit comfortably alongside the hippest places in Montreal and Vancouver."

I ask you, where else in the world would Kevin Spacey be asked for ID at his film shoot's catering truck? Where else is storytelling a competitive sport?

Where else is a 15-minute drive to work considered a long commute? Where else can you leave the oldest city in North America and, within 30 minutes, see whales, icebergs, wildlife, bird sanctuaries and a breathtaking ocean coastline second to none?

There is certain "joie de vivre" in our province that has been given a tremendous boost in the past week. I said earlier this is not just a win for Newfoundland and Labrador and Nova Scotia, it is a win for Canada. Even more importantly, it is a win for rural Canada. My Canada cannot give up on its rural roots. We must balance the trend towards urbanization with the need to preserve the fabric of our nation that was woven in our small communities.

Urban dwellers are retreating in droves from the hectic pace. Successful professionals are realizing and appreciating the value of the peace, the calm, the serenity of small-town Canada. They are places for reflection. To be in the great outdoors, the walk in the woods, the view of the ocean, the sound of the birds--the tranquility that is missing in the big cities. Our wide-open spaces are a valuable asset and it is not worth the sacrifice if we lose them. Rural Canada is a national treasure and you cannot put a price on that.

Stronger communities, stronger cities and stronger provinces equal a stronger Canada. Our province embodies the dynamic of the cultural mix of a strong but threatened rural presence with a fast-growing trend towards urbanization. This recent initiative by Prime Minister Martin gives us the opportunity to grow and prosper, while preserving our rich culture. It gives us a future where our hopes and aspirations turn into reality.

Our success will be Canada's success. I firmly believe that when you hear the name Newfoundland and Labrador in 10 or 20 years, the words you will use to describe our province will not be cold, foggy or poor, but prosperous, vibrant and self-reliant.

The far east of the western world is the place to be. Today and tomorrow--a wonderful place, I am proud to call home.

Thank you.

The appreciation of the meeting was expressed by Michael MacMillan, Chairman and CEO, Alliance Atlantis Communications Inc. and President, The Canadian Club of Toronto.