In the mid 1970's, Peter Lougheed
painted a picture of the Western Canada
he saw developing:
"I think it will be a stronger
part of Canada a decade from now, both
in terms of population, in terms of distribution
of income, in terms of spending of a more
balanced industrial economy.
I think the West will have more
confidence and hopefully more input into
Canada will be a stronger nation,
because we'll be a stronger West"
Edmonton publisher Ted Byfield
described our current situation a while
"...something is grievously
wrong in Western Canada.
Farmers can't afford to seed their
crops, mines are closed, oil rigs lie
derelict, shipyards are idle, food banks
are besieged, the savings of many lifetimes
have vanished, homes have lost their value,
and a host of unemployed burst the welfare
rolls of every town and city."
There is probably some literary
licence in this, but is the present reality
in Western Canada much different from
what Byfield described?
I think not!
It is against this background,
that I would like to offer a few thoughts
on the West in Confederation today.
To fully comprehend the magnitude
of western alienation today, one must
look directly at the Industrial and Regional
Development Program, at the figures of
federal procurement, and most importantly
at the employment and procurement schedules
of Crown Corporations.
For Ottawa's Industrial and
Regional Development Program (IRDP) the
1986/87 figures indicate that our four
western provinces received 77 of 850 projects
across the entire country.
This amounted to $18.8 million,
which was 9.1 percent of the total amount
spent on large programs.1 On
both a population and regional unemployment
basis, this is outrageous.
Reform here is long overdue for
all the regions outside the Windsor to
Quebec City corridor.
The Western Diversification Strategy
and Atlantic Development Corporation are
steps in the right direction, partly because
they should put more economic decision-making
into the hands of people in the two affected
regions. Left to themselves, generations of Ottawa policy makers have
all but forgotten that some parts of Outer
The various federal departments
spent approximately $8.1 billion during
fiscal 1986/87 on goods and services. The four western provinces with about 30 percent of the national
population received only about 11.5 percent
of these procurements by total dollar
Atlantic Canada, with about 10%
of the population, received only about
Ontario and Quebec received fully
76 percent of the dollar totals of these
This situation, which appears
to have persisted for many years, is defended
on the basis that western and Atlantic
Canadians just don't produce the right
kind of goods and services.
According to the best information
I can obtain, between 45 and 55 per cent
of the federal procurements are now services. In the case of Western Canada, a recent Organization for Economic
Cooperation and Development (O.E.C.D.)
study indicated that well over 50 per
cent of us are in the services sector
(B.C. - 66%, Alberta - 54%, Saskatchewan
- 59%, Manitoba - 66%).
Our work force is thus fully entitled
to a fairer share of federal procurements
both in services and in products if enough
necessary political will is there.
If the West received 30 percent
of federal procurements of $8 billion
instead of 11 percent as now, another
$1.6 billion annually would be spent in
Elemental fairness in this area
would of course help get a lot of unemployed
Western Canadians back to work.
As of 1986, there were 53 federal
Crown Corporations thought important enough
to be "scheduled". Only 16 of the 53 have their head offices outside the two Central
Why, for example, does the federal
Farm Credit Corporation, which evidently
does most of its business west of Ontario,
continue to have an Ottawa head office? Why is a good deal of the Energy Department not located in
Or the Energy Section of the Canadian
International Development Agency?
Why isn't the Asia/Pacific section
of the Canadian International Development
Agency located in B.C.?
And why isn't part of our federal
Environmental department located in each
of environmentally-sensitive P.E.I.
Take the example of
our so-called national film and television
production agency located in Montreal. On telephoning their head office last year, I was told that
Telefilm had financed 22 films in the
previous twelve months, 14 in English,
8 in French.
How many of these were done outside
of Ontario and Quebec.
One in Halifax.
I suppose it's possible that no-one
else applied from outer Canada, but is
The Chairman of Telefilm indicates
that the current administrative budget
for its western office was $185,214, 1.6
percent of its national administration
budget of $11.5 million.
federal Crown corporations should demonstrate
an exemplary national attitude.
In late 1987, I wrote to the chief
executive officer of each of them inquiring
what portion of their employees live in
Western Canada and what percentage of
their goods and services purchases are
made in the region. A number of the worst offenders (eg. CBC) didn't reply within
three months in substantive terms.
Even some of those who did provided
some disturbing information.
In transportation, Air Canada has
25 percent of its employees living in
Western Canada, compared to our roughly
30 percent share of our national population,
but during 1986 bought only 12.7 percent
of its goods and services in the region.
Canadian National concedes that
fully two-thirds of its freight business
originates and/or terminates in the West,
but has only about 37 percent of its employees
living in the region and overall makes
only 25 to 28 percent of its purchases
in the West.
It contends that western railroading
is somehow less labour intensive than
in the East.
VIA Rail, while conceding that
17 of its 22 Canada tours now feature
western and northern distinctions, has
only 19 percent of its employees living
in the West.
Ports Canada has only 23 percent
of its total employees living in the West
although 42 percent of its overall operating
expenses and 46 percent of its current
capital expenditures are now occurring
in the region.
The Canada Mortgage and Housing
Corporation is doing reasonably well in
the West in terms of employment (26 percent
of total employees) but less impressively
in terms of procurement (e.g. only 13 percent
of furniture and equipment purchases).
The National Research Council has
a dismal seven percent of its employees
living in the West and made only 16 percent
of its entire 86/87 expenditures within
Defence Construction Canada has
both 25 percent of its employees and expenditures
in the West.
The Export Development Corporation
has 13 of its approximately 500 employees
living in Western Canada (Vancouver and
The Canadian Commercial Corporation,
on the other hand, is now making more
of an effort to be national in perspective.
Western suppliers of goods and
services to foreign governments through
the CCC amounted to only 8 percent of
the total number of Canadian suppliers
in 83/84, but by 86/87 were up to 19 percent.
The dollar amounts of the purchases
by region would, of course, be a more
The agency admits that its recent
improvement might be linked to adding
a number of western suppliers to its source
list since 1983.
Raising and Spending Ottawa
Fortunately, regional justice
is becoming a growing concern for some
academics, who have come to realize that
an unemployed Albertan, Newfoundlander,
or northern Ontarian must have more equality
of action by Ottawa than has been the
practice over many years.
Western and Atlantic Canadians
paid for the old National Policy in considerable
measure and we believe it is now our turn
to be the net beneficiary of national
More affirmative action is needed
for all disfavoured regions.
One place for a New National
Policy designed to strengthen the outer
regions (not to weaken Central Canada)
to begin is to recognize that knowledge-based
industries can be located in many parts
To illustrate, a university chemist
friend of mine has pointed out that the
high-tech products he orders from the
U.S. come from many locations there, east
and west, north and south.
In the case of Western Canada,
let's have Ottawa for once recognize that
our real strength is not rocks, wheat
and oil but our people.
A study commissioned by the governments
of the four western provinces in 1986
by the Science Directorate of the OECD
assessed the general strength and needs
of the four provinces.
It concluded that we westerners
are well-equipped for a knowledge-intensive
economy, this being attributed to our
thirteen universities in the west, already
existing quality technologies, and a diverse
The 1986 federal-provincial Task
Force of Regional Development Assessment
stated that "it is increasingly evident
that...those sectors that are most knowledge-intensive
are fastest growing and represent the
most promising avenues for new wealth
The federal government, and
the country as a whole, can aid in the
endeavour, for "public investment
in university research, post-secondary
education and training can, over time,
have a significant impact on the development
of specialized, knowledge-based regional
Note that the term development
was used we westerners have not only the
ability to continue the existing technologies,
but to develop new ones as well.
This is beneficial not just for
the West, but for Canada as a whole.
"Moreover," the task
force study continued, "the development
of such regionally based centres would
act as a further stimulus to the expansion
of the service and small business economies
of the regions".
With the growth of the knowledge
intensive industries, regional performances
will increasingly be related to the skills
of those entering the work force.
Again, this requires direct government
commitment to invest not only in education,
including literacy in light of the most
dismaying results released by the Southam
study, but also in the programs needed
to encourage the characteristics of self-learning
and initiation associated with the qualities
A recent report on Job Generation
and Wealth Creation process, by the Faculty
of Management Studies of the University
of Toronto, concluded that fully 55% of
net employment growth in Canada between
the years 1979 and 1982 was created by
companies with less than 20 employees.
Most of these firms are service
businesses, which happen to also form
the majority of the western enterprises.
Small knowledge-based high-tech
firms arise in the presence of higher
education and research and development.
the largest and most promising element
in bringing the West into the Canadian
Confederation is the proposed Free Trade
Agreement with the U.S.
Today approximately 77% of
our entire exports of goods and services
go to the U.S.; about ten percent go to
Western and Eastern Europe, including
the U.S.S.R.; and roughly 10 percent to
Asian and Pacific Rim countries.
The rest go to many different destinations,
mostly in the developing world.
For Western Canada, the Canada
West Foundation estimated a month or so
ago that about two thirds of our exports
now go to American buyers.
Roughly 30 percent of every
service or product we create in Canada
An estimated three million of us
today depend on trade directly for our
As far as I can determine, 2-2½
million depend in whole or in part on
the U.S. market.
Take away all access to that market,
admittedly still a remote possibility,
and approximately one fifth of all jobs
in this country disappear.
On the premise that Western
Canada holds about 30% of our national
population, it seems reasonable to me
to infer that a minimum of 600,000 western
Canadians today depend on American customers
directly for their pay cheques.
How many more depend on exports
to the U.S. partly, or are involved in
the importing, distribution and sale of
U.S. goods here, unfortunately appears
to be unknown, but I'm quite certain that
it's a great many western Canadians. If you're a public employee, teacher, retired person or small
businesswoman, your ultimate economic
security is thus closely bound up with
the fate of westerners in the export sector
as well. Most of you here today are probably in the service sector,
the new frontier of international trade.
World trade in services is now
about $350 billion yearly and either you
or some of your children may well be selling
services either in the U.S. or elsewhere
for a living.
Canada's major exports to the U.S. include
a good share of the almost $3 billion
in agricultural products of all sorts
sold by Canadian farmers yearly in the
U.S. particularly grains, beef and
pork, natural gas and oil, potash, forest
products, and other minerals.
A number of these products, as
you know, have already faced severe access
problems under current U.S. trade practices
the practices are often the real problem,
not the laws themselves and in the absence
of an agreement will face many more if
the proposed Omnibus Trade Act, or even
a weakened version of it, makes it through
the U.S. Congress and the presidential
As I do not have time to rebuke
all the questions of those who fear a
free trade agreement with the U.S., there
is one question that I wish to address:
Some critics say the agreement
will probably be good for our economy
generally, but will weaken our sovereignty
and should thus be rejected.
We must remember that the agreement
can be terminated at any time by either
country with six months notice if Canadians
decide that it impinges too heavily on
our economic independence. For example, it appears that the agreement will make it more
difficult for any future government of
Canada to re-enact certain aspects of
the National Energy program of 1980.
If you liked the NEP regardless
of its consequences for Western Canada,
as both opposition parties essentially
did, you'll obviously dislike this feature
of the agreement.
Do the critics also want us
to renege on the agreement on an international
oil program we signed because it too reduced
our energy sovereignty?
Doesn't it have a reasonably similar
consequence for 19 countries in times
of oil shortages as the bilateral agreement
has with one?
Indeed the provisions of the international
oil program will take precedence over
the bilateral agreement here.
The same might be asked of our
membership in a host of international
organizations, including the United Nations
NATO and NORAD, and our full participation
in numerous U.N. and other international
treaties such as the Helsinki Final Act
and the U.N. Declaration of Human Rights.
By agreeing to share our energy
with the U.S. in times of crisis proportionally
to the total supply of oil available in
Canada, the U.S. in turn will drop its
embargoes on Saskatchewan uranium, create
no further restrictions on Canadian energy
exports (which now amount to more than
$10 billion and employ thousands of us
across Canada in our oil, gas, electricity
and uranium sectors), and allow Canadian
access to the Alaskan oil fields.
today approximately 23 large industrial
democracies in the world.
Virtually all of them have since
World War II voluntarily surrendered a
degree of independence in respect to the
imposition of tariffs and related issues
by entering into trade agreements.
Indeed, if Canada and the U.S.
ratify this agreement, the only one of
the 23 not to be in a trading community
will be Japan.
In other words, a world trading
pattern has been set whether Canadians
like it or not.
If we can obtain some relief from
the application of present and future
American-trade laws, I think most
Canadians are prepared to agree to some
loss of sovereignty in respect of tariff-making
and other trade issues only during the
currency of the agreement.