‘Maritimization’ of the Ontario economy

Working my way through Savoie’s book: Visiting Grandchildren: Economic Development in the Maritimes. Usually, I would have read that thing over a weekend, but things have been fast and furious in this corner of cyberspace over the past few weeks. Anyway…

I always loved the term ‘balkanization‘ – the definition but more importantly the derivation of the word itself.

Balkanization is a geopolitical term originally used to describe the process of fragmentation or division of a region into smaller regions that are often hostile or non-cooperative with each other. The term has arisen from the conflicts in the 20th‐century Balkans.

Imagine that. A region so hostile and polarized that actually gets a Webster’s dictionary word developed – balkanization.

With that as a backdrop, consider this quote from Savoie’s book:

[the opponents to NAFTA] …argued that Canada exported too much of its natural resources as raw materials to the US and that free trade would make matters worse. Some observers feared the ‘Maritimization’ of the Ontario economy, arguing that US interests would purchase Canadian firms, including financial institutions, and move the head offices and plants from Toronto to New York or Chicago, much as Ontario firms had to done to firms from the Maritime provinces….

Don’t forget that is not a historical policy – consider BCE and Aliant. D’Aquino explain that you heartless SOB.

But I digress.

The Maritimization of the Ontario economy. I like the sound of that. It’s more, ……definitional, than the recent quote by Ontario’s intergovernmental affairs minister regarding the fiscal imbalance “we are not going to sit back and allow Ontario to become a have-not province”. It would have been more compact for her, in this day of nanosecond sound bites, to say “we are not going to sit back and allow for the Maritimization of Ontario”.

It could catch on internationally. When talking about intractible in-region disputes, we could talk of its ‘balkanization’. When talking about a first world, regional economy regressing while the national economy booms, we could say its ‘Maritimization’.

Catchy, n’est pas?

Moving right along….

I am officially half way through the book – I haven’t even got to Savoie’s prescriptions yet. But I can make a few observations:

1) John Manley can kiss my Baptist (deleted on good taste grounds). He deliberately blocked any attempts to move federal jobs out of Ottawa. He nurtured a multi-billion dollar incentive program to grow industries in Ottawa, Toronto and Montreal while ignoring Atl. Canada. He was most likely the biggest detractor to regional development throughout the 1990s. Well, Manley, your dream has come true. Atlantic Canada is now losing population at never before levels. In your lifetime, John, you will be happy to witness the dissolution of Atl. Canada as we know it – and you will be able to pat yourself on the back.

2) When it comes to Federal government support for regional development there is an inverse correlation between need and economic development support and a direct correlation between need and subsidization. Let me explain.

The amount spent by the Federal government to support regional development in 2006 is, by my loose calculation, about 20% of what it was in the 1970s as a percentage of the national budget (this includes R&D spending). This despite the fact that all four Atl. provinces were growing their populations. Now, when three of the four provinces are losing population and provincial government budgets are growing exponentially to pay for health care, dollars to support regional development down 80%. That’s the inverse correlation.

At the same time, in New Brunswick, Equalization is up $700 million (not cumulative the actual amount) since Lord came to power and total Federal gov transfers are up by well over $1.2 billion. That’s the direct correlation.

That’s the welfare mentality folks. Any funds that could be directed to make things better are cut 80% and funds that are used only to make up for economic shortfalls are up massively.

This is just another case that girds my new philosophy of “with our without you”. If we continue to wait for a White Knight from Ottawa, we will end up waiting forever. We have waited 140 years. The White Knight is not coming, folks. We need to get on with it. We need to take the lead. If the Feds want ‘in’, that’s fine but we must move ahead anyway.

I know you will throw the Ireland/European Union thing in my face. But I will respond that New Brunswick would have better luck with the EU than with Ottawa. And I am friggin’ serious about this. When the EU decided to spend billions to bring up Ireland to the EU average for GDP per capita, income, etc. (EU measures), they still had Portugal. Cripes. France has 25% unemployment in its rural areas and the subsidies continued to flow to Ireland. Imagine the same thing in Ontario. You can’t. I can’t. End of story.

Last point this AM and I will leave you in peace. I was talking to someone last week that was trying to get the NB Dept. of Health and Wellness to consider supporting a health care research project on the grounds that the NB government spends over $2 billion/year on health – a massive amount – and that the department would be wise to consider how it can best spend its funds to support the development of the economy. A senior health official apparently said “we are not into wealth creation” go talk to Business New Brunswick that’s their business.

That, my friends, is the heart of the matter.

Every department that spends money should look at it through the lense of economic development. How can we leverage our spending to achieve our primary objective but also support the province’s economic development strategies.

Economic development is not just about BNB. It’s about every government department. It’s about the local communities. It’s about you and me.

You know that quote from the Da Vinci Code movie trailer? “We have been watching history, we are in history now?”

Well folks, we are in ‘Maritimization’ now. And if we want a Wikipedia definition to emerge, we just need to keep on this path for one more generation.

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0 Responses to ‘Maritimization’ of the Ontario economy

  1. Anonymous says:

    When I saw ‘BNB’ I thought ‘Bed N Breakfast’, which if you think about it, covers the activities of Business New Brunswick quite well.

    I think Lepreau sums everything up pretty well, it WILL be ‘without Ottawa’. However, still the question remains, what to do? We can note that while ‘with or without you’ is the motto, much of the blog has to do with areas of federal jurisdiction.

    Therein of course lies the ‘culture of defeat’ that Stephen Harper so aptly described. However, it is not just affecting atlantic canada.

    I did laugh at the use of the term ‘balkanization’ mostly because it shows just how little the status quo has to do with reality. After all, there is only ONE group there who are unhappy with the outcome of that balkanization-the group that used to run things.

    Look at that at a national level here in Canada. We’ve already got natives, who feel it can’t get any worse, and Quebecers, who feel balkanization can only make it better.

  2. scott says:

    I think the president of the Canadian Council of Chief Executives subscribes to the philosophy of Darwinism, in other words survival of the fitess economic climate.

  3. scott says:

    John Manley can kiss my Baptist (deleted on good taste grounds). He deliberately blocked any attempts to move federal jobs out of Ottawa. He nurtured a multi-billion dollar incentive program to grow industries in Ottawa…

    And yet another local Ottawa area cab min has subscribed to the same short-sightedness as Manley.

    I guess they both must have read Tip O’Neil’s book in detail.

  4. David Campbell says:

    I think the president of the Canadian Council of Chief Executives subscribes to the philosophy of Darwinism, in other words survival of the fitess economic climate.

    Sorry, Scott. When D’Aquino was sucking teat, CD Howe was using massive government money to build the industrial complex in Ontario that now complains about Atlantic Canada. John Manley put billions into some of the top Ontario and Quebec businesses in the 1990s. Bombardier is on the CCCE board of directors and was recently named as the most subsidized corporation in Canadian history.

    This is Canada, make no mistake. Whether we like it or not, government has played and is continuing to play an intimate role in forging the ‘economic climate’ that you are talking about.

    As posted before, I think its time for the CCCE to get reflective. To think about what role they have had in the demise of Atl. Canada. They are sucking on the pension and RRSP monies out and investing it elsewhere. They have, for the most part, limited investment in Atl. Canada to the bare minimum required to service local markets while creating 100s of thousands of jobs in the strongest economies in Canada.

    D’Aquino and his buddies should take a long hard look at the role they have played in this region’s problems and step up as part of the solution.

  5. scott says:

    I think blaming Mr. D’Aquino for the longterm economic woes of the Atlantic region is irresponsible to say the least David.

    He wasn’t at the helm when Liberal government after Liberal government mismanaged the “regional development” file in Ottawa. As for here at home, our provincial government leaders, with the exception of maybe McKenna, have focused too much on building ‘social policy’ rather then rebuilding our economic climate/regional philosophy/ infrastructure so that it is viable and competitive both nationally and globally.

    In others words, at the moment, we are left with nothing more then a region that is unfortunately reliant(co-dependent) on social assistance and social transfers.

    I don’t blame D’Aquino for that.

  6. scott says:

    As well, I believe what you and Mr. Savoie are essentially arguing is that in order for New Brunswick to be strong economically–a strong central government is required to solve most of its’ problems. Unfortunately, this can not be fully realized unless we have better regional representation and control of the executive branch. Which, in turn, means reforming the senate.

    So you can argue all you want about the drawbacks of ‘this program’ or ‘that agency’, but the fact of the matter is, the current bicameral system, the way it stands today, truly discriminates against New Brunswickers in our ultimate quest to be fully represented, pro tem, in the many powerful corridors above Wellington street.

  7. Anonymous says:

    i think we’ve travelled this road before. Either we need more people here to argue with or add something new to the mix.

    The reality is that government is SUPPOSED to be doing ‘social policy’, in fact thats ALL its supposed to be doing. Everything else was supposed to be left to the market and we’d be all smiles and chuckles.

    Unfortunately, we can spend forever pointing at the bogeymen and asking why the global market let down the maritimes, or why Ottawa let down the maritimes. We can even spend lots of energy crying out ‘it’s our own fault’.

    In the end, this is the reason people fight for ‘freedom’. So that people can make their own futures. They’re doing it all over the world against national governments. We see it in recent referenda where people reject the provisions of the EU. We see it in the third world countries at meetings of the WTO.

    New Brunswickers aren’t alone in this, there are canadians all across the country who have the exact same problems-a federal government more interested in cutting taxes for the wealthy and paying down debt instead of doing what people want-instead of even giving them the opportunity to decide.

    “Scott” is quite right that its representation-although it isn’t just that. We DO have a representational senate, there are senators from every province, that doesn’t mean anything-when’s the last time the Senate came out and accomplished anything?

    However, in the end we just travel this same road around and around. McKenna, of course, had tons more money coming into the province from the feds than Lord does. Before him Hatfield sunk 200 million into bricklin. In todays dollars McKenna’s ‘investments’ don’t even come close. NB Works was completely paid for by the feds and had rural people cutting brush at the roadside instead of learning computer programming.

    Even before CD Howe you can see the exact same thing. Different names from D’Aquino, but the result was the same. Read the debates just prior to 1867, most of the industries knew what was coming, which is why they fought against it.

    We can get into a fun filled argument about whether business controls government, or whether Ottawa just has it in for the maritimes, in the end, what does it really matter? The effect is still the same. And Harper wonders WHY there’s a ‘culture of defeat’? It’s from losing.

  8. David Campbell says:

    Both of you haven’t addressed my position at all. I think that corporate Canada has a role to play in regional development. I don’t think this is incogruent with capitalism and the maximizing profit motive. Take Aliant – previously NBTel. NBTel was known across the country as an incubator for great ideas such as IPTV, advanced IVR applications, call centre services, etc. What possible benefit is there to BCE from slowing crushing that innovative capacity in New Brusnwick (by centralizing leadership and power in Toronto)? I think that most Canadian companies are stuck in a 30 year old model of centralization (as is the Canadian government) assuming they are getting ‘economies of scale’. But they are not. They are getting ‘diseconomies of scale’ by creating these huge, lumbering bureaucracies. Pick your national firm (mostly from D’Aquino’s list). Almost all of them, I would wager, would benefit from a more distributed model across Canada where each region was run by semi-autonomous centres of excellence.

    When I went to university 20 years ago, the whole thinking was around flatter, leaner, more decentralized organizations. If I look at most of the top corporations on D’Aquino’s list, it’s as if they skipped that whole school of thought altogether.

    And as for Anonymous’ contention that ‘we need more people to argue’ with is also missing the point somewhat. I don’t mind your posts – in fact I like most of them. But my target for these blogs is the upwards of 800 or more daily visitors to it. I can’t walk through the Farmer’s Market without having 3-4 people tell me they read it.

    I am not stupid enough to think what I am serving up on these pages is somehow the gospel truth. I just want to get people thinking about economic development in fresh way. So my content will not stray too far away from its core – that is that we need to become a place that attracts business investment and top notch people. We need to be a place where government’s tackle economic development head on. We need to be a place where the media slots economic development into their daily grind.

  9. scott says:

    The reality is that government is SUPPOSED to be doing ‘social policy’, in fact thats ALL its supposed to be doing.

    Not if it is done with the intent of “nation building” or in this case building a biased provincial welfare sentiment.

  10. scott says:

    Also, with regards to Mr. D’Aquino, I don’t have to tell you that he is a heavy hitter on Bay street and Wall street; as well, he has the ears and eyes of both Wahington and Ottawa.

    After the 911 tragedy, I can remember running into him[D’Aquino] on the hill at least 3 or 4 times from the month of Oct to Dec 2001. My boss sat on one of the most crucial and important committees[Immigration and Border Security] during that uneasy period. What impressed us the most was the hardwork and effort of both D’Aquino and Perrin Beatty during this time as they had formed and lead a coalition of business groups whose main objective was to put pressure on both federal governments in order to ensure that the flow of goods, across the Can/US border, would remain steady and constant. To my recollection, it was not the Canadian government that led on this issue, it was the US government[Tom Ridge and John Ashcroft] and special interest business groups that showed initiative and leadership. I can remember vividly that Manley, McLellan and MacAuley showed absolutely no political backbone during this crucial time of negotiation.

    During the committee deliberations, I can tell you that the Windsor-Detroit border took precedent over many of the other crossings. My boss and I were lucky to be able to visit at least 10 US/Can border crossings from BC to the maritimes. What surprised and astonished me the most was that they[Canadian gov] treated the Maine/NB crossing as a second thought. It was the start of many more inside lessons that I would eventually learn while on the hill. That being that politically, we don’t count and that goes for economic investment as well. it is a bloody shame, but also it was a lesson in realism.

    As you know, unfortunately, it sometimes comes down to politics, region and representation when it comes to who leads and makes decisions on your behalf. So you may be right about certain influences that D’Aquino and Beatty have had with regards to big business and government, but where you are way off is that it comes down to pure politics and nothing more. You try to separate them, but the two are inseparable.

  11. Anonymous says:

    If you’re getting 800 visitors a day you are easily in the top 1% of bloggers, so congratulations. However, I find it very strange that so few people make any response.

    Nobody seems to be even debating the same thing anymore, just making comments. I don’t even know what the argum

    The ‘leaner’ decentralized business model may have been in fashion 20 years ago, but businesses are global, and bigger is better. Irving isn’t content with just oil for a reason, and banks want more mergers for a reason.

    These arguments have absolutely nothing to do with capitalism. Like ‘democracy’, capitalism is an idea which has not been tried. I’ve mentioned before that the closest thing to it was Britain in the late 1800’s and they quickly discarded it.

    As was said above, Bombardier et al, is the biggest subsidy pig in the nation. Irving easily ranks up there as well. Large companies are content to make profits, but don’t want to take risks, which is why governments are there-to bail them out. Governments are not getting smaller, they are getting bigger, and primarily for one reason-it takes a large state structure to bail out a sector or a giant company.

    You are quite right about NBTel, and like all public enterprises, it is built up by taxpayers, then sold off cheap to the market. I always laugh when I hear people talk about the ‘efficiency of the market’, because that is utter nonsense. The market is the most inefficient system around. Virtually every technological, medical, and societal advancement has occurred because of government innovation and taxpayer funding-not investment.

    There is no reason that industries can’t be decentralized. Like I said, for IT work people don’t even need to be in the same location, there’s absolutely no reason that workers can’t be in rural areas connected by link. The only reason we don’t have it is because ‘the market’ is so inefficient. As I also said, the people I know who work in IT are run off their feet and would gladly work fewer hours.

    That’s odd considering an unemployment rate in many areas bordering on 30%. As for training, my sister’s first IT job was at UNB where professors refused to take part in the ‘online learning’ forestry program, so SHE wrote the courseware for forestry. She had zero training in it, yet she worked her ass off and now forestry students across the country learn based on HER knowledge, not professors.

    All these things exist because of the rampant inefficiency of the marketplace. In the early nineties the liberals did a massive survey on the idea of job sharing because unemployment was so high, it was shelved because of the economic problems. Those problems are gone now, yet still we see no addressing of this issue.

    The only way such a program would get off the ground is if GOVERNMENT initiated it. We know how much work is lost to illness, idleness, tiredness, unhappiness, stress, etc., etc., but the only way that can be addressed is through government.

    In short ‘corporate canada’ DOES have a part to play, the point is that without legislation they have no reason to, and quite simply won’t. A company like Nortel wouldn’t even exist today if it weren’t bankrolled by taxpayers, it’s virtually impossible to say that they have no responsibility to taxpayers, hell they OWE us EVERYTHING! However, anyone holding their breath and waiting for them to ante up will be waiting awhile.

    Notice how arguments like that aren’t often espoused by the Chamber of Commerce in Ontario. WHenever an ontario company of that size is in trouble, canadian taxpayers bail them out. In New Brunswick, there is also a similar bailout, but handing Irving $50 million to close a shipyard is hardly the same thing.

    I don’t even follow what “Scott” is talking about anymore, so can’t comment. His conclusions seem to be the opposite of what you actually said. Saying that corporate canada has a responsibility seems to be a far way off from his conclusion that you are saying that it’s “pure politics”. Again, the conclusion that “the two are inseparable” merely backs up the conclusion that you can blame corporations, or blame Ottawa, but the effect is still the same, so it’s largely academic.

    Mr. Savoie’s conclusion that it comes down to ‘representation’ seems fairly accurate, however, I think it goes beyond that right down to the very structure and function of our federation. In the states a community can release municipal bonds and has numerous powers of taxation, in other words, people are ‘master of their domain’. In Canada, the level of government where every political theorist arguing democracy will tell you is the most integral, also happens to have the least powers. That’s also not a coincidence and leads to huge inequalities as well.