Quebec of the Eighties
The Empire Club of Canada Addresses (Toronto, Canada), 12 Jan 1984, p. 183-193
Parizeau, The Honourable Jacques, Speaker
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Brief description of what has happened in the last few years in Quebec. The French-speaking majority at peace with its language. A shift in business away from Montreal to Toronto as the economic centre of Canada. The void filled by native entrepreneurs. The economic structure in Quebec. Foreign investment. Economic objectives are of a widening consensus. Investment. Competition. Exports. Dependence on external markets. Shift of resources towards new technology. "The Technology Conversion." Recognition of Montreal as the centre of government development policies. Political objectives of the eighties: no consensus. The issue of Quebec's independence. The Constitution. Economic recovery in Quebec. Unemployment. Future optimism.
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12 Jan 1984
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Full Text
JANUARY 12, 1984
Quebec of the Eighties
CHAIRMAN The President, Douglas L. Derry, F.C.A.


Monsieur le ministre, mon reverant, chers invitees, mesdames, et messieurs: Nous avons le plaisir de revoir parmis nous aux Empire Club L'Honorable Ministre Jacques Parizeau. He is a man who has steered Quebec through some of its most volatile and difficult financial years. To the credit of the individual concerned, he has not only survived in this role for the last seven years, but has come through it with the considerable respect of observers, regardless of whether they support the underlying political policies of his government.

Mr. Parizeau last addressed us on March 17, 1977, on the topic "Four Months After" - that, of course, being the time since the first electoral victory of the Parti Quebecois. He went to considerable effort to explain the rational fiscal approach of his government, but very clearly within the framework of a planned successful referendum leading to political independence for Quebec, and within the framework of the Parti's social democratic platform.

Since that time, the Parti Quebecois has had a volatile relationship with its electorate. The stunning 1976 defeat of the Bourassa government was followed in May 1980 by the referendum on the question of political independence and the answer was a clear rejection of it. However, a year later, the Parti Quebecois was easily re-elected, which might suggest that the electorate was well satisfied with the government if not with the possibility of independence.

In the tide of political fortunes, the vanquished Mr. Bourassa is again leading the Liberals in Quebec and the popularity of the Parti Quebecois has in recent months dropped to approximately 20 per cent, being roughly half that of the Liberal party. I expect that it is small consolation that Mr. Trudeau might note that this distinct lack of popularity of a governing party is far from unique at present in Canada. However, Mr. Parizeau would undoubtedly be quick to point out that with over two years until the April 1986 deadline for another general election in Quebec, the game is as yet far from over.

Indeed, last November, the Quebec government announced a wide-ranging economic recovery package designed to generate billions of dollars of investment in Quebec. It is sorely needed at present, for in spite of the widely acknowledged skills of our guest speaker as Minister of Finance, the province has certainly been suffering through the recent harsh times. While the proof of the pudding will be in the eating, we look forward to hearing from Mr. Parizeau today on this and the current fiscal situation in Quebec.

Born in Montreal in 1930, Jacques Parizeau studied at Montreal's Ecole des Hautes Etudes Commerciales, and then in Paris at the Institut d'Etudes Politiques and at the Faculte de Droit. Following that, he obtained his doctorate at the London School of Economics. From 1955 until 1976, Mr. Parizeau was Professor of Applied Economics at his Montreal alma mater - Ecole des Hautes Etudes Commerciales.

For many years, Mr. Parizeau has been closely linked to a number of government projects, and from 1965 through 1969, was an economic and financial adviser to the Quebec government. He has been active in the Parti Quebecois since 1970, and was first elected to the Quebec National Assembly in 1975. He has been Minister of Finance since November 1976, and during that time, he has tabled seven budgets in the National Assembly. In addition to being Minister of Finance, Mr. Parizeau is today Chairman of the Comite de Developpement Economique, and is minister responsible for the Commission des Valeurs Mobilieres du Quebec and for the Inspecteur General des Institutions Financiers.

Il me fait plaisir de souhaiter le bienvenu d Monsieur Le Ministre Parizeau, qui nous addressera au sujet de "Le Quebec dans Les Annees Quatre-vingt."


Mr. President, ladies, and gentlemen: It is a difficult but necessary exercise for politicians to periodically take stock of the society in which they live and which, for better or for worse, they have been called upon to supply with political leadership. The present government of Quebec has now been in power for seven years, a very short time for an Ontario government, a fairly long time for a Quebec one. From the mid-seventies to the mid-eighties major changes have taken place and, without the pretence of expressing anything other than a subjective and personal point of view for the purpose of this presentation, I have been tempted to describe briefly what I feel has emerged in the last few years that is or can be, or at least that I feel is, of consequence. It might be the privilege of a very old Minister of Finance to do so.

Firstly, I think that the French-speaking majority of Quebec is now largely at peace with its language. In comparison to the mid-seventies, the shift is striking and of profound consequence. Gone are the public demonstrations of ten or fifteen years ago. Things are done now as a matter of course that were in times past the object of tension, of discussions, of squabbles. French-speaking Quebecers, including those in the business world, consider that, in practice, this issue has been settled. Indeed, English-speaking Quebecers now feel threatened in their institutions or in the recognition of their role. Their numbers have thinned; they do not assimilate immigrants as much as before. A search for a sort of balancing act is still going on, as it should be.

But the fundamental issue is not a real one any more. Daniel Johnson, former premier, wanted Quebec to be as French as Ontario was English. He probably never imagined that such a goal would be practically achieved in a matter of fifteen years. Gradually the old, basic, gut reaction that the French language is constantly threatened in the vast linguistic sea of North America is receding. Younger executives find it difficult to understand what the elders try to remember, and want to make sure their knowledge of English is adequate. The collective soul will still have cramps occasionally, but it is learning the virtues of serenity.

While this was taking place, a major shift occurred in business, the way it is, the way it is managed, the way it is perceived. Montreal is no longer the economic and financial metropolis of Canada. A great deal of activity has migrated to Toronto, and so have many of the powerful and the wealthy. The void is being filled. The eighties are the years of the native entrepreneur. He creates jobs. He invests. Three months ago, the French daily La Presse had the following headline: "St. James Street against S-31." It referred to a petition signed by twenty-one major business executives as a protest against Bill S-31. Not one name was English. For the newspaper desk, these executives were St. James Street. An extraordinary perception, no doubt, in some circles, but a very significant one.

The truncated society that was so typical of French Canada for generations, wherein a young Frenchman could have all possible opportunities for a future in politics, the universities, the media, the unions, but not in business administration, has in just a short time found its proper extension.

A very peculiar economic structure has developed in Quebec; because of its sudden emergence, it has not yet been analyzed. Few people in English Canada are aware of the peculiar attitude that French Canada has had toward business for so many generations and its inevitable consequence, that is, the acceptance of foreign (in the sense of external to the community) business decisions as more or less acts of God. Prosperity by and large would come from outside.

The void this has created, widened still further by the drift toward central Canada, called for something to be done. Thus, a widespread, powerful, multipurpose public sector was created over a twenty-year period. The co-operative movement developed, with an economic and financial muscle unheard of elsewhere in North America. Finally, a vast class of eager, habitually well-trained businessmen jumped into the fray. And all these institutions and people have now learned to work together to finance each other and crossbreed their projects.

There is nothing similar in the rest of Canada, indeed in North America. To state, as often happens, that nationalization is the key to Pandora's box, is not only ridiculous; it is also the expression of a misunderstanding. The complex structure of Quebec enterprise does not move by dint of nationalization, but by the mutual support of hundreds of co-operative public and private agents.That is why the federal offensive against the Caisse de depot in Bill S-31 was not well received in Quebec. Nobody seemed to realize across the Ottawa River that the Caisse has 300 partners in the private sector who happen to be generally quite happy with their relationship.

Public opinion has adapted to the new state of affairs. Native business, governments, and the caisse populaire next door are now perceived as the bulwark of economic growth. The Quebec Stocks Saving Plan is a huge success, as any investment dealer knows. The Fund established recently by the Quebec Federation of Labour to have its members invest in risk capital is, in itself, a remarkable and very significant development.

In such a context, foreign investment is no longer the object of the love-hate relationship that was so typical of the past. By all means, let's have foreign investment if it increases the rate of growth or employment. Here again, the collective soul has unwound.

It has not unwound, however, with respect to social militancy, which has been so typical until now of the Quebec scene. The leaders of Quebec opinion have a much better understanding of labour and social movements than they have usually of business. The unions and what they represent were part of their youth and have until quite recently been part of their most fundamental perception of society.

Twenty years of strikes in the public sector have taken their toll. The level of tolerance of public opinion with respect to the disruption of services has dropped dramatically. Shutting down a plant or a company in times of unemployment for a 2 per cent difference in wages no longer seems an objective of which anyone can be proud. In fact, nobody believes anymore that the difference between a democrat and a fascist actually amounts to a 2 per cent difference in wages at bargaining time. The backlash is so strong that it imperils social progress. It becomes easy to consider that any social measure can jeopardize economic development and employment growth, and therefore, should be shelved.

The balancing act will be arduous to maintain in the next few years; and it will be difficult to keep up the drive required to improve various social programs, foremost among them pension provisions, to resist renewed efforts to increase wages faster than productivity warrants, and to mollify the negative reactions of business that will long remember the near-panic of 1982 conditions.

I suspect, however, that such a delicate equilibrium is not peculiar to Quebec and that, throughout major parts of the western world, the same qualms will prevail for quite a few years to come.

Among the objectives that now present themselves for the near future, those of an economic nature are the object of a widening consensus. Those of a political nature are still fundamentally divisive.

It is well understood, now, that Quebec has never, over the last half century, invested enough. While French Quebec was perpetually obsessed with the lack of capital or savings for development purposes, it has taken years to have it understand that what was lacking was good projects, not money, and that Quebec was usually an exporter of capital. The message is now well understood and government priorities have been shifted accordingly. It is not an insignificant achievement that, in the present circumstances, it was accepted without major difficulties that Quebecers should finance a large part of the Pechiney project or put $120 million of public funds into Bell Helicopter.

Secondly, Quebecers now generally recognize that 40 per cent of domestic production is exported and that bread and butter depends on competitiveness. This simple-minded observation has not always been clear, however. At a time when most Quebec exports were being handled by two dozen major corporations operating, in their decision-making process, completely outside the mainstream of society, the utter dependence of Quebec on external markets was not obvious to most. It is a startling development, in that respect, that for the past year, the Quebec government has been involved in export financing, over and above what is available in Ottawa, for the first time in its history.

Thirdly, the shift of resources toward new technology has been quite impressive recently and is really only just starting. It is a remarkable development of government policies that, five or six years ago, they were still grounded in the support of natural-resource industries and in the protection of traditional industries such as textiles or furniture, while now, after the publication two years ago of the government policy paper called The Technology Conversion, the shift of human and financial resources toward R & D and high-technology industries is accelerating as a sort of self-evident movement.

Fourthly, after years of discussion about regional development, a broad measure of agreement has developed about the role and importance of Montreal. It took a long time to understand that when Montreal sneezes, the rest of Quebec catches cold. For the first time, the Montreal area is recognized as the centre of government development policies, and resources are dealt with accordingly.

Such economic objectives might seem rather simplistic. Indeed, they are. But there are immense advantages in having simple objectives. They can be understood by everyone.

When it comes to the political objectives of the 1980s, however, there is no such thing as a consensus, and the battle - a very democratic one - rages on.

Politics in Canada and in Quebec have been dominated for some fifteen years by the issue of Quebec's independence. Premier Johnson came to power in 1966 with the motto of "Equality or Independence." A year later, General de Gaulle put an umbrella of respectability over what had been until then the reaction of fringe groups and the temptation of a premier. Soon afterward, a political party was launched. At the same time, in Ottawa, a group of French Canadians got together to block the same avenue.

At times, the idea and the objective were snowed under. In the mid-seventies, Mr. Trudeau was solidly at the helm in Ottawa, while Mr. Bourassa had under his guidance 102 out of 108 members of the National Assembly in Quebec City. Yet, during the same period, the main political issue both in Ottawa and in Quebec City was the independence of Quebec. At the end of 1976, the objective seemed to prevail. Four years later, the referendum was lost by those who favoured independence. A few months afterward, they won a general election.Then they lost the constitutional face-off with Ottawa.

And I suppose, looking into the future, that such battles, won and lost, can multiply. Coming out of the recession, the Parti Quebecois is dreadfully weak. But so is the government of Mr. Trudeau. For fifteen years, French Canadians have dominated the politics of Canada. English Canadians, in that awful conflict that pitted friend against friend, were set aside until such time as they showed themselves ready to junk the whole quarrel and reaffirm their right to govern themselves. French Canadians have become a dreadful pain in the neck to other Canadians.

Yet, in Quebec, the battle around Quebec's political future is as severe, as acute, as it ever was. I, for one, am as convinced as I have always been, that Quebecers will never achieve proper confidence in themselves until such time as they are responsible for what they do. Everything that goes on in Quebec at the present time confirms my conviction that a nation cannot live by proxy and must be accountable for what happens to it. I recognize the assaults that pit against each other the bourgeois of bygone power and the parvenus of recent clout. I can understand the fright of those who, not being used to decision making, are still wary of upsetting the apple cart. But they must learn. Societies are not properly organized around individuals who were afraid, are afraid, and will continue to be afraid.

But I also recognize the weight of those who feel that nationalism can be a withdrawal of intelligence, that it is through competition that worth is ascertained, that doors must be kept open, and that the federal government has a duty to keep them open.

There are, in such options, fundamental oppositions that will not fade away for years to come. A sort of wisdom prevails in Ottawa as far as the two major political parties are concerned to keep the image of an essential role of the French fact as intact as possible. There is in Quebec City an awareness that the reassertion of English Canada in Ottawa would help the drive toward independence.

Ottawa feels that a rapid economic recovery will stifle the drive toward independence in Quebec. Quebec City feels that economic recovery will have the opposite effect.

In other words, strategies are acutely different, just as much as objectives are. But, in the end, what we are talking about has to do with the souls of nations. Thus, the conflicts are staggering, the assaults without mercy.

I feel, profoundly, that the outcome is inevitable, that independence cannot be shaken off once a small taste of it has been had. Others obviously disagree. However, let all those, here and abroad, who look upon that great clash marvel at the fact that democracy has been so profoundly ingrained in each of us that we have found no other way to settle such a major conflict than by voting for whichever avenue of the future seems to be called for.

Be that as it may, the recovery of the Quebec economy, after the acute recession of 1982, shows a lot of strength. Economic recovery may not be as rapid as that in Ontario, as it is not fuelled as strongly by the remarkable rise in the automobile market. But in relation to the rest of Canada, the results achieved in 1983 are more than satisfactory. This year looks better still. There are signs already that investment might be higher than what was forecast a few months ago. Increased consumer confidence and better export markets will all contribute to a rate of growth higher than that of last year. Unemployment remains a major preoccupation: it becomes obvious that profound changes in labour and social programs will be required if we want to attain a level of unemployment in the single digits.

In that sense, the political preoccupations regarding the future of Quebec must not distract from the obligations that we all have, and that is, to ensure that our citizens, after having gone through the worst recession since the 1930s, can look to the next few years with optimism and with relative assurance that their governments are not working at cross-purposes to assure a decent rate of growth and as high a level of employment as it is reasonable to expect.

The appreciation of the audience was expressed by Barnett Danson, a Director of The Empire Club of Canada.

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Quebec of the Eighties

Brief description of what has happened in the last few years in Quebec. The French-speaking majority at peace with its language. A shift in business away from Montreal to Toronto as the economic centre of Canada. The void filled by native entrepreneurs. The economic structure in Quebec. Foreign investment. Economic objectives are of a widening consensus. Investment. Competition. Exports. Dependence on external markets. Shift of resources towards new technology. "The Technology Conversion." Recognition of Montreal as the centre of government development policies. Political objectives of the eighties: no consensus. The issue of Quebec's independence. The Constitution. Economic recovery in Quebec. Unemployment. Future optimism.