Canadian Federalism Today
The Empire Club of Canada Addresses (Toronto, Canada), 12 Feb 1981, p. 236-246
Clark, The Right Honourable Joe, Speaker
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An exploration of the differences between the Liberals and the Progressive Conservatives. Issues discussed include regionalism; federalism; reasonable government; the role of Britain in the Canadian constitution; the Canadian energy industry and program; separatism in Quebec; Western Canada; pride and confidence in Canada.
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12 Feb 1981
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Full Text
FEBRUARY 12, 1981
Canadian Federalism Today
CHAIRMAN The President, Reginald Stackhouse


Ladies and gentlemen: When he proposed the Missouri Compromise that prevented the United States from breaking up as a union in 1820, Senator Henry Clay was warned that this policy could cost him his chance for the White House. He replied: "I'd rather be right than be president."

Joe Clark is also a man who wants to be right--and many Canadians believe he has been right on critical issues of our time: about the need for energy selfsufficiency; about the need to preserve private enterprise; about the need to respect the provinces; about the need to Canadianize the constitution--in Canada.

Joe Clark, however, is not a man who just wants to be right. He also wants to be prime minister--again. But re-entering the winner's circle is no easy challenge. Of Canada's sixteen prime ministers, no fewer than ten were defeated while in office, and only four have made a comeback to the political championship.

Our distinguished visitor has thus set himself a high mountain to climb. But struggling up the slope is no new task for Joe Clark, and making it to the top is no new feat for him either.

His first constituency was named Rocky Mountain, and he may often have felt that he's been climbing political mountains ever since: struggling for a nomination against an entrenched local favourite; winning his first federal election against an incumbent Liberal; besting ten other contenders in the 1976 Progressive Conservative leadership convention; finally, in 1979, making it all the way up to that Olympian summit where only prime ministers dwell.

Now he is facing another upward challenge--renewing his leadership and his party to offer the country direction in the 1980s.

It is a daunting prospect, but the person who aspires to national leadership has to have the courage described by James Ullman in writing about Mount Everest and man's determination to master it:

Challenge is the core and mainspring of all human activity. If there's an ocean, we cross it; if there's a disease, we cure it; if there's a wrong, we right it; if there's a record, we break it; and finally if there's a mountain, we climb it.

Our guest of honour has demonstrated that courage before many challenges, and the Empire Club is privileged to welcome Canada's sixteenth prime minister and the leader of Her Majesty's loyal opposition, the Right Honourable Joe Clark.

THE RIGHT HONOURABLE JOE CLARK: Ladies and gentlemen: The Canadian political system is, normally, dedicated more to reflecting our pluralism than to promoting ideology. That means that most of the disputes in our national politics are fought at the margin. Rhetoric aside, our two major national parties usually are pretty close to consensus on overall direction. Our differences have more to do with precise means than general objectives. Occasionally, however, the differences run deeper, and reveal differing views of the nature of Canada. We are today in one of those relatively rare periods of profound difference between the major parties, between the Liberal party of Pierre Trudeau and the Progressive Conservative party which I have the honour to lead, and I think it important to spell out precisely where we differ fundamentally and why.

--~ In doing so, I hope that I will not put too great a strain on what I respect as the non-partisan nature of your club.

As I look at the policies and attitudes of the current government in Ottawa--especially its policies on the constitution and on energy, especially its attitude toward separatism in two of our regions--they are based, above all, on what I would regard as three false premises about the future of Canada.

The first of those premises is that regionalism is so divisive as to make this country virtually ungovernable as a federal state. I believe the opposite.

The second premise is that the private sector is so selfish as to make increased state control of the economy essential. Again, I believe the opposite.

And the third, largely a consequence of the first two, is that only through a dramatic shift of power to the central state can we hope to achieve any worthwhile national objective. That, in my view, is precisely the wrong way to build Canada.

These three false propositions, all central to current Liberal thinking, cast shadows over a quite different reality--namely, that our federal system, our mixed economy and our national self-confidence have now reached a maturity that will let us achieve as a nation the great goals we have dreamed of for generations.

You will recall, we all do, that Sir Wilfrid Laurier predicted that the twentieth century could belong to Canada. Well, the twentieth century has two decades left to run and I believe we can still make Laurier right if we are prepared to have national policy reflect national reality.

Nothing illustrates better those false premises of the federal government than its approach to constitutional change. That approach is based fundamentally on the view that the federal system no longer works and that progress cannot come from consensus.

On that premise, the government justifies acting arbitrarily and unilaterally against the opposition of both provinces and people. On that premise, the government insists on incorporating a referendum proposal which would give the central government the power, unilaterally, to change our constitution without any reference to the elected legislatures or the elected governments of any province. On that premise, another country, Great Britain, is being asked to vote on basic Canadian rights and freedoms--a blatant surrender of Canadian sovereignty which the Liberals seek to justify on the grounds that we could never get agreement on those important questions here in Canada_

The Honourable Robert Stanfield calls it a "coup d'état." He is right.

Over and over, we are told that Canadian federalism is a record of failure. In fact, that Canadian federal system, when run by reasonable governments, has produced agreements on hospital insurance and medicare, on a Canada Pension Plan and equalization, on highways and energy--and, most recently in September, on the so-called Vancouver consensus as the basis of an amending formula which would let us change our constitution here in Canada.

The genius of Canadian federalism is that it does work, when reasonable governments and reasonable leaders allow it to work. The system fails only when its leaders let it down.

I reject completely the Liberal idea that 114 years of Canadian partnership should be abandoned and that our federal system should be replaced by some form of unitary state. Our federal traditions grow out of the nature of this country. There is no other system that could thrive here, no other system that could suit our diversity. That nature has not changed and to tear up our federal traditions would be to risk tearing up the country from which those federal traditions flow. Worthwhile constitutional progress does not lie with abandoning federalism. Nor does it lie, if I might say so, with attacking other countries--with what the press has called Britain-bashing.

" The British have no business deciding the substance of our Canadian constitution. More to the point, Canada, as a mature independent nation, has no business asking the British to make those decisions. There is only one acceptable role for Britain to perform and only one acceptable request to be made of them. Let Britain send our constitution home immediately, with an amending formula acceptable to Canada, and let every other question about our constitution be decided in Canada by Canadians. Let me turn now to the Liberals' energy package, which I believe reflects the same skepticism about Canada's tradition of a mixed economy that their constitutional proposals reflect about the federal system. As with the constitution, the government's description of its goals is a disguise. It pretends to encourage Canadian ownership. In fact, it encourages state ownership, and the evidence of that is the alarming number of privately owned Canadian companies who have been forced either to leave Canada or to limit their operations as a result of the Liberal energy package.

Let me cite some figures. The Canadian drilling industry, an industry that is ninety per cent Canadianowned, already has seen two hundred drilling rigs either idled or moved to the United States since the budget came down. The Independent Petroleum Association of Canada, which speaks for some three hundred smaller Canadian-owned companies, says investment by its members in new Canadian exploration and development will be down this year by onethird. Those are smaller companies we are talking about, they are not large multinationals. Most of them are Canadian. They are companies like Canadian Hunter, Norcen, Pan Canadian--companies which in the 1970s did two quite remarkable things.

First, those companies tripled the percentage of Canadian ownership in the Canadian energy industry. It used to be ten per cent; it now is thirty per cent. That was a change achieved by the very companies being forced out of Canada by a Liberal energy policy that pretends to promote Canadian ownership.

Secondly, vitally important for a nation like ours, energy rich in a world that is energy poor and energy hostage, those Canadian companies made seventy per cent of the discoveries of new oil and new gas in this country in the 1970s. It was not the multinationals who made most of the finds. It was the small Canadian companies who made the discoveries and those are the companies that are being forced to leave our country now.

A distinction should be made between two elements of the present government's energy policy. Part of the problem, clearly, is the failure of governments to agree on how their jurisdiction will be shared and no doubt there is fault in both Ottawa and the various producing provinces. That problem can be resolved. I know it can be because I have had experience in resolving a very similar problem. I won't pretend that the producing provinces came easily to our position--to the energy agreement that we had ready for signature last December, 1979--but it is true that those provinces responded to good faith with good faith. Lines have hardened since that time; projects have been stopped; opportunities have been lost, some of them irretrievably. But I continue to believe that provinces which accepted a reasonable federal position in 1979 would accept one in 1981 if the federal government were prepared to act reasonably.

The new and the more damaging element of the energy program is the proposal to concentrate increasing power in the hands of the Canadian state. That is accomplished in two ways. First, in the oil and gas bill that is now before the House of Commons, there are discretionary and regulatory powers, which among other things, allow Marc Lalonde to act in ways that are retroactive, to act in ways that are confiscatory and to act in ways that allow no review and no control by the Parliament or the people of Canada.

Second, there has been introduced a combination of taxes on the private sector and special privileges for the state, a combination that forces small Canadian companies out while it builds state ownership up. The budget includes provision for something that is called a Canadian ownership account, and the government's own literature describes that account as follows: "special charges on all oil and gas consumption in Canada to be used solely to finance an increase of public ownership in the energy sector." That is the purpose of the Canadian ownership account. In effect, what that does is to allow PetroCanada, or any other state enterprise, to levy taxes directly, up to an aggregate of four billion dollars a year, for the purposes of increasing public ownership in the energy industry in this country.

On the basis of its most recent activity--the purchase of PetroFina for a price which both the founder and president of that company call exorbitant--there is every reason to believe PetroCanada will use to the fullest this four-billion-dollar power to tax Canadian consumers and citizens.

Let us have a strong national oil company. But let us also have a strong private Canadian oil industry. Despite federal tax laws that made investing in Canadian resources more attractive to Americans than Canadians, these private Canadian companies tripled our share of the oil and gas industry during the 1970s. Despite federal pricing policies that made it far more attractive to explore for energy outside Canada than in it, these private Canadian companies found seventy per cent of our oil and gas during the past decade. They can continue to do a job for Canada, if they are given a fair break through policies that respect the Canadian tradition of a mixed economy.

As you know, one of the consequences of the energy and constitutional proposals has been the growth of separatist movements in western Canada. As a Canadian from that region, I want to say a word to you about what is happening there and why.

Those of us who come from western Canada know that political protest is no stranger to that region. The difference today is that the direction of protest is not just towards Ottawa. The direction of protest today is against and away from Canada.

The Progressive party, the old CCF, Social Credit, the farm movements, those all arose at a time when the west was weak. They sought strength from the west within Canada. Today, the west feels strong and at least some of the protesters believe the region could find greater strength outside Canada. That is a fundamental difference from earlier times. Many of us who urge our fellow western Canadians not to reject a great nation simply because it has a bad government, many of us who make that recommendation, nonetheless have to recognize that, for the first time, some of our fellow citizens see that temptation as being real. Whatever their motives, whether good or bad, whether for real or for show, citizens in the thousands in British Columbia, in Alberta, in Saskatchewan, are now patronizing movements which, at the very least, talk of separation.

I believe that separatism runs against the basic nature of the people of western Canada. Most western Canadians want to build, not dismantle. They are attracted by the opportunity of a large land, and they would not exchange that excitement for something smaller and more narrow.

The problem is precisely that people who live for large horizons see artificial limits being placed upon them. They believe their country is moving away from them, abandoning the principles of equality and opportunity which are as much a part of their intellectual geography as the stretching frontier is part of their physical geography.

What we face today, in western Canada, is not a deep desire to leave, but an intense anger at the unexpected price that region is ordered to pay to stay; a price that gives an automatic constitutional veto to Ontario, but not to Manitoba; that pays Mexico world price for petroleum products, but not Saskatchewan; that favours energy companies formed in Ottawa, but not those formed in Alberta.

It is that anger that we must address, that we must reverse and harness. Because I say to you that anger can be more creative than passivity. I can remember a time when many western Canadians accepted, with quiet resignation, policies that they believed were bent against them, just as many Quebecois can remember a time when their people accepted a subordination to the English. That time is past and we are a better nation for having it behind us.

The Quebecois today are proud of being FrenchCanadian. The westerner today is excited by success. Neither asks dominance; each asks equality; and both act with confidence. That can be the making of the Canadian nation, not its breaking. The history of a nation, its geography, institutions and resources give it a place on a map; but only pride and ambition and emotion give a nation a place in people's hearts.

We have been a young nation for a long time. But in recent years--for different reasons, in different regions--we have begun to become more confident, more caring, more mature. If they are frustrated, those qualities can become the seeds of separation. But if they are encouraged, they can be the source of a Canadian nation that is large in much more than land.

Remember what we have here in this country. We have abundant food in a world that needs it. We have abundant energy in a world that craves it. We have schools and skills which are the best that man can achieve. We have a modern industrial structure and a creativity which give us a world advantage in communications, in petrochemicals, in transportation and in other fields that are on the cutting edge of the future, and we have a cultural tradition which, instead of fearing diversity, celebrates diversity.

This is a land of freedom and of wealth and of opportunity, and it is becoming a land of pride and confidence. And that is the change. Because that pride and confidence are now occurring across this nation.

In the past, our national pride came in flashes; when Paul Henderson scored, or when Terry Fox ran his lonely pilgrimage of courage, or when the children of Centennial sang Bob Gimby's song. My father tells me that flash of pride was there when Tommy Logan was invalided home as the first High River veteran of the first World War. And, undoubtedly, there have been other moments--but they were moments--they were not a constant sense of pride in the country.

I believe that a more permanent pride and confidence are growing now in Canada. The evolution in Quebec, while it has separatism as one fact, has self-confidence at its core. The ambition in the west, while some of it is merely mercantile, is also an expression of both confidence and faith.

Twenty years ago, those two regions, the west and Quebec, did not see themselves as being equal to Ontario. Now each does, and that is healthy for this whole nation.

Equals must be treated as equals or that self-confidence will be diverted away. So long as Ottawa governs in fear of Quebec nationalism, or imposes double standards on the west, divisions will grow in Canada.

But they are artificial divisions, resulting from the policy of governments, not from the preference of people. The irony is that this nation has never been more ready to grow together, and the instruments of Canadian federalism and the Canadian mixed economy offer the way to build.

This is a time to respect Canadian federalism, not to abandon it, a time to encourage Canadian enterprise, not to drive it out. The Canadian system works and it is time for the Canadian government to respect it.

The thanks of the club were expressed to Mr. Clark by John Griffin, a Past President of The Empire Club of Canada and a Past President of The Empire Club Foundation.

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Canadian Federalism Today

An exploration of the differences between the Liberals and the Progressive Conservatives. Issues discussed include regionalism; federalism; reasonable government; the role of Britain in the Canadian constitution; the Canadian energy industry and program; separatism in Quebec; Western Canada; pride and confidence in Canada.