David MacKinnon, senior fellow in the Atlantic Institute for Market Studies, serves up another doozy in this Op/Ed piece called “Ontario can’t be Canada’s ATM”. I’m not going to cut and paste his content because I think you know what is coming. Have a look for yourself.
I would chuckle about this stuff if it was not so bloody serious.
National governments around the world use various tools to try and ensure reasonably equal access to government services around the country. As I have stated before, an expert on Iraq once said that if that country had Canada’s natural resource revenue distribution system, there would be civil war. But if you were to say (as some tried in the 1970s) that natural resource revenue shoudl be divvied up around the country you would have civil war but it would come from Alberta (and now Danny).
As for Ontario, the ATM for Atlantic Canada’s largess in AIMS’ view, Ontario built much of its success on the back of Atlantic Canada. With the federal government’s help, billions were spent to cut off Atlantic Canada as a trade route to central Canada (the St. Lawrence). For 100 years or more, many of Atl. Canada’s most educated and talented folks have left to take jobs in Ontario. While people are takers from the government (youth and seniors), they stay here. When they are contributors (taxpayers), many move to Ontario.
Of course, we won’t mention that almost all of Atl. Canada’s wealth (pensions, RRSPs, etc.) flow through the great Ontario.
And, let’s not forget the huge federal government spending to prop up economic development in Ontario.
I would suspect that New Brunswick could be the ATM for Ontario if the federal government had adopted a completely reverse policies over the years. How about using trade barriers to force Ontario to trade with New Brunswick and not Michigan? That’s exactly what the feds did back after Confederation. It cut off our natural trading relationship north-south to try and force and east-west. How about an Auto Pact with the industry centered in Saint John/Calais, Maine instead of the GTA/Detroit? Obviously I could go on ad nauseum but you have heard it here before.
There are two basic ways to achieve economic development. Strike oil (or other natural resources) or build globally competitive industries. Ontario has built – with the massive support of the federal government going back generations CD Howe and before – very successful global industries – pharma, aero, auto, plastics, finance, IT, and on and on.
The problem is that there is a grain of truth to the AIMS message. Equalization and EI have resulted in some unintended consequences. They have been used by the federal government as cover for not taking economic development here seriously. That is true. But AIMS, Fraser and all the other stink tanks never talk about serious economic development policy for this region. It’s always cut and run.
Now it’s cut and run or you will sink Ontario. That is a powerful message coming from Halifax’s AIMS.
I think this is a rising tide that cannot be stopped. 50 years ago, half the people in Ottawa had some direct connection to Atlantic Canada – parents, uncles/aunts, etc. now it would be down to maybe 25%. Within 20-30 years, almost every elected official in Ottawa with the exception of those from Atlantic Canada will have no connection here and most will have likely never even visited this place.
The idea that Equalization is enshrined in the Constitution is laughable. They have ‘tweaked’ it multiple times in just the last 15 years. Eventually they will force the AIMS/Fraser solution on the Maritime Provinces and it won’t be pretty. There will be huge social unrest. There will be serious dislocation and community collapse. Then there will be a Royal Commission on the Maritime Provinces problem’ and that will lead to forced Maritime Union and an even further scaling back of government in the region.
This will likely happen by 2030 or so if current trends continue. If there is sustained economic hardship in Ontario, expect it to happen within 10-15 years from now.
I believe there is an economic development-based solution that would avoid this outcome. That would result in a place like New Brunswick having a strong economy that was generating enough tax revenue to cover its own freight. A place with strong regional economies anchored by urban centres and supported by rural communities.
But we have to take an Ontario-style approach to economic development. The way CD Howe built Canada’s military industrial complex in the Windsor-Montreal Corridor we need to have some similarly successful economic development program for the Halifax to Moncton Corridor. Or the Belledune to Edmundston Corridor or whatever.
The way the feds pablum fed Canada’s technology industries (remember all the telecom, internet and satellite infrastructure was initiated and funded by the feds and based in Ontario), we need early stage support for growth industries down here. I remember a guy from the NRC giving a presentation on Montreal’s pharma sector. He said the Feds had been plowing millions into that cluster since the early 1970s and as of 2005 it was a multi-billion dollar industry in the province. What multi-billion dollar industries have the feds supported in New Brunswick since the early 1970s?
I’m done ranting. Gotta get ready for vacation.