- The Empire Club of Canada Addresses (Toronto, Canada), 25 Feb 1993, p. 227-239
- Wells, The Hon. Clyde K., Speaker
- Media Type
- Item Type
- The speaker's views on the current political and economic situation in the country as a whole and Newfoundland and Labrador in particular. This address is four months after the referendum in Quebec: a summary of the current state of affairs in Canada generally. Issues discussed include the following. The sense of dissatisfaction in Quebec and Western Canada. The sense of alienation in Atlantic Canada. The sense of alienation and dissatisfaction amongst Aboriginal People. A slow recovery for the economy. The growing national debt and provincial responsibility for this issue. The challenge of solutions. The Strategic Economic Plan for Newfoundland and Labrador. The closing of the Newfoundland fishery, with some background and history of both the cod fishery, and the government's handling of the situation. The involvement of Newfoundland and Labrador in the management of the fishing industry. Joint management.
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- 25 Feb 1993
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- Full Text
- The Hon. Clyde K. Wells, Premier of Newfoundland and Labrador
MANAGING THE FISHERY
Chairman: Robert L. Brooks
President, The Empire Club of Canada
John F. Kennedy predicted that there will be four key questions when the high court of history judges politicians:
First, were (they) truly men of courage... Second, were (they) truly men of judgment... Third, were (they) truly men of integrity... Finally, were (they) truly men of dedication?
In my opinion, most Canadian politicians do not get very high scores on that test. But, if the letters of support he's received are any indication, The Honourable Clyde Wells is well up in the rankings.
A lawyer by profession, Mr. Wells indulged his interest in politics for the first time in the 1960s but then resigned from Joey Smallwood's cabinet over conflicting ideas about investment incentives in Newfoundland. He was persuaded to re-enter politics and give up his legal practice for a second time in 1987 and became Premier of Newfoundland in 1989. He came to national attention, of course, with his deeply held opposition to the federal government's Meech Lake proposals.
When it comes to principles, Mr. Wells has a reputation among his colleagues for being about as flexible as a rock. So, it is perhaps fitting that he comes from Newfoundland. Now as a matter of principle, he has decided to try and change the course of the economy in Newfoundland and move the people towards greater self-sufficiency.
Last June Mr. Wells made public a new strategic economic plan. With this plan, he hopes to generate enough investment in his province to end its dependence on government transfers. If his scheme works, the high court of history may very well bestow on him the mantles of courage, judgment, integrity and dedication. It will take a lot of each of these qualities to succeed in revitalizing an economy that has, for so long, been so spare.
Please join me in welcoming our distinguished guest.
I would like to thank the directors of this distinguished institution for giving me the opportunity to address you today. It is not a small honor and I acknowledge it as such. I had intended to address you on my views on the current political and economic situation in the country as a whole and Newfoundland and Labrador in particular. The events of yesterday make things tempting but I'll still stick with my original intentions.
It is now four months, just under four months, after the referendum. Until yesterday it seemed more like it was four years. It seemed like it happened so long ago that most people had almost forgotten it. But yesterday things seemed to get resurrected and, I hope, only for a very brief period. But it does raise the question of where are we in this country four months after the referendum?
Constitutionally we are essentially in the same position as we were, say after the 1982 amendment, no significant change. The problems that existed and continued throughout that period are still there, the dissatisfaction and the disharmony that has grown, not just in the last five to 10 years, but over a quarter or half a century.
In Quebec, there is still the sense that there is not a means within Canada where there can be a full expression of the expectations of the people of Quebec and where the aspirations of the people of Quebec can really be achieved; that level of dissatisfaction is still there.
There is still that level of dissatisfaction in Western Canada, in particular that feeling of sort of being alienated from major decision-malting in the country. The sense that the vote really doesn't count in Western Canada, that decisions are made by means of the overwhelming majority of members of the House of Commons that come from the central provinces of Ontario and Quebec. That sense of alienation is still there, there is no Triple-E Senate to correct.
The sense of alienation in Atlantic Canada, being left out of the economic mainstream of the country, is still there. It is there in my own province, a province where after 40-odd years since Confederation with Canada the earned income is still less than 60 per cent of the national average, and less than 50 per cent of the Ontario average.
The other Atlantic provinces are marginally better off, but only marginally, so that sense of frustration of not being able to achieve a means of correcting the economic disparity is still there. The sense of alienation and dissatisfaction amongst our Aboriginal People is still there, it has not been addressed as a result of the failure of the most recent efforts.
Very little, if anything, can be done about any of those things, at least until there is a new federal mandate and a new election and an adequate period passes to allow these issues to be discussed in a reasonably dispassionate and objective manner.
I believe we have to move rather quickly to address the Aboriginal issue. The need for it has been made clear recently by the awareness, the growing public awareness, of the state for example of the Innu people in Labrador in my own province. Much of the representation that you heard in the media is totally inaccurate and incorrect and over the next week or so I hope to take steps to correct some of it.
That doesn't mean that there isn't a major problem, there is a major problem that needs to be addressed and Davis Inlet is only one of many Davis Inlets throughout this nation. So that needs to be addressed.
Economically and financially we are in major difficulty in this country, and have been for quite some time. We have been trying to cope with a persistent recession; it just doesn't seem to want to go away. In more recent weeks, there is an indication of some signs of improvement and some reason to be more optimistic.
But the thing that is clear is that the recovery is going to be very slow. We are not going to turn it around very quickly and there are a number of reasons.
One aspect is the extent to which the Canadian economy is dependent on what happens in the United States. Unless, and until, they turn around and increase their demands for our goods and services, economic activity in Canada will be diminished below a level that is sufficient to enable the vast majority of people of this country to earn an adequate living for their families and generate a sufficient level of revenue for government to manage public affairs.
There are other factors at this particular time that exacerbate the situation in Canada; for the first time, at least in living memory, the massive economic engine of Canada was dealt a body blow in this more recent recession. Apart from what happened to the fishery in Newfoundland, or the economic consequences of the fisheries problem, I don't think any province of Canada suffered more severely, proportionately, than did Ontario.
Don't forget that Ontario is to Canada, in terms of an economic engine, what the United States is. If the United States economy doesn't improve then we have narrow chances of showing marked improvement in Canada because they are such a major portion of our market. Within Canada, Ontario is such a major part of our economy that if it is excessively restrained, or if it is in greater difficulty, then the whole nation is going to take a lot longer to recover.
Another major factor is the problem of our persistent deficit and the constantly growing national debt year after year after year at all levels of government, federal and provincial.
We came out of the 1982 recession fairly quickly because government was able to stimulate the economy. But the deficits that were created by those measures were never, after that, brought under control. We just continued to borrow and continued to have massive deficits year after year.
Despite the commitment of Mr. Mulroney and the Conservative government to deal with this deficit problem, they were never really able to come fully to grips with it. But it is not a federal problem alone. Look at the impact that the provinces, collectively, are having on the debt and deficit situation in the nation.
The provinces, too, have a responsibility here, they just can't look at what the federal government is doing and not look at the impact that they are having. The result is we have built up a massive debt.
The C. D. Howe Institute recently stated that in 1975 the total debt of all the provincial and federal governments was a whopping $50 billion. In 1993 it is $665 billion. Now you don't have to be a raving economic genius to be aware of the consequences of that circumstance and the impact on the nation as a whole.
It is sort of like a family with a level of income that could support a $50,000 mortgage on their house, without any real significant change of income, suddenly finding itself with a $665,000 mortgage. It is really no different. We must deal with the problem if we are to preserve the financial integrity of this nation and all of its component parts. It is abundantly clear taxes, at least taxable loans, are not the way to deal with it because the more we take out of the economy in taxes, the more we limit its ability to generate revenue and the more we impair the ability of government to really respond to the problem.
So that is the problem that we all have to take responsibility for; premiers and provincial governments can't simply stand back and say it is a federal problem. It is a national problem that we all have to be determined to deal with collectively.
Worse still, I have told you that the total debt in 1975 was a whopping $50 billion. To put the picture in perspective, the deficit for this year alone, of the federal and provincial governments, exceeds $58 billion. Now that will tell you where we stand and the kind of action that we must take to deal with this problem.
It also gives us a very difficult challenge--the problem of convincing the Canadian people of the seriousness of the situation and the necessity for governments to take strong measures to curtail their spending to get the deficits under control. But at the same time, not so depressing, psychologically and economically, that they won't continue to spend and build and improve the economy.
The more we try to convince people of the seriousness of government problems, speaking for myself at home, the greater adverse impact I have on the spending habits of people. So we have to find the right balance.
This is not an insolvable problem, it just takes a little discipline and restraint on the part of all the governments and all of the people of the nation to recognize that this is a real and serious problem and we have just got to deal with it constructively and in a disciplined way. But primarily we must recognize that it is not a federal problem only and all of the provinces have responsibility.
That is the challenge that the government of Newfoundland and Labrador has been facing for the last four years. Lake most new governments we came to power with the determination to improve it, to help correct economic disparity that has existed for so long, to find solutions. We developed the Strategic Economic Plan as part of the means of finding a solution. During the course of that time we encountered some pretty substantial obstacles that made the challenge far greater that we ever anticipated, not the least of which is the inherent weakness in the Newfoundland economy. It is a narrow resource-based economy.
We know we are not going to be manufacturing airplanes or automobiles so the first element of the Strategic Economic plan is to be realistic. We know that we are not going to solve the problems overnight because if the economic performance of Newfoundland were twice the national average year after year, without exception, it would take more than 25 years to catch up to the national average.
You ask yourself what are the prospects of the economic performance of Newfoundland being twice the national average consistently for 25 years? So step No. l is to be realistic.
That is what we have tried to do, but we didn't count on a number of other significant factors. We did not count on the extent to which the national obsession with constitutional issues would divert attention from economic matters and other social concerns for such a long period and, in the end, achieve so little.
We didn't count on the worst recession since the Great Depression of the 1930s. It has been a most persistent recession and I would judge that the recession has affected this nation more than any other since the depression of the 1930s.
We didn't count on having the kind of financial crisis that we are in as a result of the deficit persistence and the recession that lowered governmental income to make it virtually impossible to reduce the deficit. All of that has exacerbated the problem.
But, more than anything else, we didn't count on the federal government closing down the major portion of the Newfoundland fishery, putting a moratorium on the northern cod fishery. Now it would take far too long for me to detail for you the history of the northern cod and how it relates to the Newfoundland economy. But suffice to say that all of the communities on the northeast coast of Newfoundland are totally, and have been for 400 years, dependent on the northern cod.
When I say all of those communities, don't forget that of the 623 communities in Newfoundland, only 10 are not on the tide water; everything is focused on the fishery. It was the northern cod that, for much of the year, was out in the North Atlantic Ocean anywhere from 20 to 200 miles offshore. But in the spring they migrate inshore to all the bays and coves. That was the fish stock on which Newfoundland was built.
There was nothing else in Newfoundland unless you mined in the early part of the century. They built a paper mill in 1905 and another one in 1925, but there really was nothing else but fish; Newfoundland was fish. Everything we did was fish; our currency was fish much of the time. It was the currency that people used and went to the supplier and got supplies and paid in the street. That is how the province was built. It was essential to our existence to have a secure supply of the northern cod.
Well, we became a province of Canada in 1949 and it was the right decision. We should have been a province of Canada since 1867. When we did join Canada, management of the fishery transferred from the government of Newfoundland to the government in Ottawa and there was nobody there who knew what a cod fish looked like. And I am not sure that there is anybody there today who knows what a cod fish looks like, judging by the decisions that are made.
But it didn't take long. In the 50s and 60s the foreign fleets developed a deep sea trawler technology where they could shoot out the trawl and haul back anywhere from 30 to 60 tonnes of fish.
Anywhere from 60,000 to 120,000 pounds of fish would come out of the one net. You don't have to be a biological genius to figure out the impact of that on a natural species, even something that is as incredibly abundant as the northern cod.
Well with that kind of foreign fishing, pretty soon the catch of the inshore fishermen started to go down from in excess of 200,000 tonnes--that was the men who went out in rowboats and little punts, that's what they fished out of the sea. For three centuries they did that without any damage to the fish stocks, until the mid-50s and 60s and the deep sea trawlers.
The government of Newfoundland became worried and the federal government started to get some control and put some pressure on foreign fishing; remember foreign fishing used to take place three miles off the coast.
I remember in the community where I lived looking out in the Gulf of St. Lawrence and seeing what looked like a small city with the number of ships out there vacuuming the fish out of the sea before the Law of the Sea came to be in the mid-70s.
By the late 70s they got it a bit under control, but by then the catch of the inshore fishery was down to 36,000 tonnes from 200,000 to 250,000. My predecessor in office, Mr. Peckford, and his government made the strongest possible representation to the federal government of the day, which happened to be a Liberal government, and we persisted with the present federal government, which happens to be Mr. Mulroney's. We urged caution; decisions could affect the lives of tens of thousands of people. We argued against increasing the total allowable catch. We pleaded with them.
Mr. Peckford got so exasperated he used to ask for constitutional jurisdiction in Newfoundland. In other words, we would make the law that would apply to the North Atlantic. I disagreed with him for a couple of reasons; it involves international interaction and that should be done by the national government. There is also an inter-provincial dimension; one province shouldn't be making laws that could have an impact on another province. The third thing: We have a real struggle finding enough money to exercise the jurisdiction we have now and I'm not quite sure what we would do to exercise jurisdiction over 400,000 square miles of the North Atlantic Ocean.
So for practical reasons I said just give us a say in the management, let us participate jointly in the management because we have warned you over the years what is going to happen if you didn't listen.
Well they didn't listen to Mr. Peckford and they kept increasing the total allowable catch and they told the Newfoundland people and all Canadians generally, there would be a total allowable catch of 350,000 to 400,000 tonnes by 1985.
Fishing is going to be so good, build boats, build plants so you can find work. They started to increase the total allowable catch. It went up from 67,000 tonnes in 1977. They pushed it until 1988 when they wanted to put it up from 256,000 to 295,000 tonnes.
In the meantime, the inshore fishermen were crying constantly that the fish stocks were being diminished. The inshore fishery was going down, they couldn't catch the fish because there were no fish coming ashore. They were being caught in vast quantities offshore. But still the federal government said they were going to put it up to 295,000 tonnes.
We give Mr. Peckford and the former government due credit, they screamed blue murder and the federal authorities said OK, we will only put it up to 266,000 tonnes. That was in 1988. In four years it was put to zero because the stock was destroyed, because they wouldn't listen to the fishermen and those who knew about fishing. They wouldn't listen.
Prior to 1977 the Newfoundland fishery caught between 98 and 100 per cent of all the northern cod caught. It supports the fishery. This northern cod is just east of Newfoundland. It is not adjacent to Nova Scotia, New Brunswick, Prince Edward Island, Quebec or anywhere else; it is all east of the coast of Newfoundland and it is the fishery on which the people of Newfoundland rely.
Yet they persisted in allowing foreign vessels to have a certain level of fishing. They persisted in allowing Nova Scotia, New Brunswick, Quebec and others to access the northern cod and take it by idle plants in Newfoundland and bring it to Nova Scotia.
And when Brian Peckford screamed, he was accused of being greedy. It is hard to tell the 25,000 people who have been put out of work because of the moratorium on northern cod in 400 communities where there is no other means of earning a dollar, that Brian Peckford was being greedy. He was simply trying to protect the interest of the people who had built that fishery and relied upon it for 300 years.
I don't think that is being greedy; I think that is trying to preserve and build the economy of that part of Canada that happens to be in the geographical boundaries of Newfoundland. There is no opportunity to farm in Newfoundland, there is no opportunity to build Michelin tires, there is no opportunity to build Chrysler, GMC or Ford automobiles, no opportunity for smelting. People of all of those communities know, and have known for 300 years, only fishing.
Despite the request of the Newfoundland government for joint management of the fishery, previous Liberal and Conservative governments resisted. Why? Those mandarins in Ottawa think they know more about how to manage fish than the people who have been doing it for 300 years--and did it successfully until 1950.
Obviously they don't, as has been proven on two separate occasions. And, despite all this, they have seen the fishery all but destroyed. This time it may be too late. It may be that the cod stock once fished so extensively that in one year they took 800,000 tonnes of the northern cod, may have come to an end.
I have been trying, in a clearly civilized way, for the last four years to persuade Mr. Mulroney and Mr. Crosbie to have joint management of the fishery. They seem to be afraid they are going to ruffle some feathers in Nova Scotia, because if Newfoundland is involved in joint management Nova Scotia will want joint management.
I said to the Prime Minister last November that doesn't cause a problem. Put in place a joint management board and, if you have 10 people on it, name five from the federal government and five from the Newfoundland government and let them manage the fishery in the waters around Newfoundland. The same five people from the federal government can be part of the Nova Scotia board too. You can make them the federal constancy and part of the New Brunswick or the PEI or the Quebec boards.
But for heaven's sake, we want some say in the management of the resource that is fundamental to our future. If there isn't joint management, John Crosbie will have been the Newfoundlander who presided over the destruction of the cod fishery in Newfoundland and Labrador. If there isn't joint management, recovering the stocks won't be worth anything because there is no reason to believe that it will be managed any differently and the people of those small coastal communities will continue to have to depend on assistance in order to live and put bread on the table.
There is an opportunity to deal with the economic problems of Newfoundland and Labrador. I put forth a proposal to the Prime Minister in September. He responded very quickly in November. In January he replied that he was prepared to engage the federal government at the most senior level to work with the government of Newfoundland and Labrador to deal with the persistent economic problems.
Up until this morning I haven't been able to reach him on the phone for the last few weeks. Federal officials have not returned any of our phone calls in over two weeks. I don't know if the Prime Minister's decision yesterday had anything to do with it or any impact on it, maybe it did.
But there is a solution to the economic problems of Newfoundland. There is a substantial opportunity for the fishery in the future and for it to be a major part of our economy. There is a substantial opportunity for oil to be tremendously beneficial to Newfoundland and Labrador and to Canada. Don't forget that more than one half of the direct economic benefits from the Hibernia is going to other provinces.
There is the opportunity to develop a variety of other economic ventures for the people of Newfoundland and Labrador: tourism, small manufacturing, the use of foreign trade zones which we continually ask the federal government to consider, at no cost to them. It doesn't cost them a dollar. They just provide special opportunity to allow it to be done.
There is the opportunity to improve the economy, not only of the province of Newfoundland and Labrador, but all of this country, if Canadians are prepared collectively to take discipline, unselfish decisions, and to put the interest of the nation as a whole ahead of selfish needs.
What we in Newfoundland and Labrador need to help develop our economy are the tools to do it. Not charity to survive without it, even though it may be given with the greatest financial generosity. When you do that, you do more harm than good. What we need is the means of doing it and the key to our future is joint management.
If I have to I will stomp this country from one end to the other to tell Canadians we need that, and to point out that it is grossly unfair treatment to the province of Newfoundland to leave us at the mercy of mandarins in Ottawa who know little or nothing, and probably care less, about what happens to the fishery of Newfoundland and Labrador.
We need to participate in the management of the resource because it is such an important part of our economy.
I hope I haven't spent too much time talking about matters that are of special concern to me, but I thought it important that Canadians in other parts of the country hear first-hand something of the Newfoundland economy. Thank you very much.
The appreciation of the meeting was expressed by The Hon. Barnett Danson, P.C., Consultant, and an Honorary Director, The Empire Club of Canada.