Mr. Tom McMillan (Hillsborough) moved:
That this House condemns the Government for abandoning its commitment to alleviate regional economic disparities and thereby encouraging continued economic inequality between the Atlantic provinces and the rest of the country through a policy of gutting the Department of Regional Economic Expansion, slashing investment in regional development, and downgrading, for political purposes, federal-provincial development agreements.
He said: Mr. Speaker, few Opposition motions on any subject are as important as the one we are debating today. The motion strikes at the very heart of what Canada is supposed to be all about, namely a land of opportunity from coast to coast, from sea to sea.
The country's wealth is shared unequally from one region to another and from one province to another. Indeed, national myth notwithstanding, the difference in economic opportunity between residents of Prince Edward Island and Newfoundland on the one hand, and those of Ontario and Alberta on the other, for example, is analogous to the economic disparities between blacks and whites in the United States. It is as though we in the have-not parts of Canada were living in a separate country altogether from the land in which the wealthy provinces of Canada find themselves. Yet the current government has abandoned any commitment it had to alleviating regional economic disparity in Canada.
After 16 years in office, the Prime Minister (Mr. Trudeau) prepares to take his leave knowing, as he must, that regional disparities have not improved a whit in the time that he has been in office. The irony is that in his first election campaign in 1968, only days after becoming Leader of his Party, the Prime Minister made the elimination of regional economic disparity his major commitment and his only major specific promise. How the hopes and expectations of Atlantic Canadians were raised by him in that campaign!
Those sentiments were raised still higher when in 1969 the Government heralded the creation of the Department of Regional Economic Expansion. To be fair, and I want to be fair, I believe sincerely that at the time the Prime Minister actually was committed to the high-sounding objectives of the
Throne Speech of the day in which the proposal for the Department of Regional Economic Expansion was made. However, like the North-South dialogue and now his peace initiative, the regional disparity issue was but a fad for him, something to entertain his mind until the next political fashion came along.
Certainly the record of the Government from the time of the establishment of DREE to the present has not been one of relatively stronger economic growth in Atlantic Canada. Rather, it has been one of continued economic disparity between the region and the rest of the country. When DREE was established in 1969, the earned income per person-personal income excluding government transfer payments like unemployment insurance-was $1,738 in the Atlantic Provinces. For the rest of Canada, the corresponding figure was $2,747. The personal income of people living in the Atlantic Provinces was only 63.3 per cent of the personal income of those living in the rest of Canada. In 1982, the last year for which data are available, the per capita earned income in the region was $7,312 compared to $11,455 for the rest of Canada, making a ratio of 63.8 per cent. There was an improvement of only one-half of 1 per cent in 13 years.
Similarly, in 1968, the first year of the Prime Minister's administration, there were 38,000 people unemployed in the Atlantic region and 320,000 people unemployed in the rest of Canada. The number of jobless in the region constituted 11.9 per cent of the number of jobless in the rest of Canada. In April, 1984, with 143,000 people unemployed in Atlantic Canada, the regional jobless figure is now 11.4 per cent of that of the rest of Canada. The disparity has narrowed, Mr. Speaker, only one-half of 1 per cent in 16 years. Indeed, the number of jobs in Atlantic Canada relative to the rest of the Canadian labour force has actually shrunk and not increased since the Prime Minister first took office. It has gone down from 8.5 per cent to 7.9 per cent.
Only 6 per cent of the jobs created in Canada in the last 16 years have been created in the Atlantic region. Yet the region contains over 9 per cent of the country's population. In 1968 the seasonally adjusted unemployment rate was 6 per cent in the Atlantic region compared to 3.9 per cent in the rest of Canada. In April, 1984 the seasonally adjusted unemployment rate was 15.1 per cent in contrast with the figure of 11 per cent for the rest of Canada. The ratio is exactly the same now as it was 16 years ago-one and a half to one, to the disadvantage of the Atlantic Provinces.
It is not at all difficult to identify what went wrong with the Government's regional development policies. There were two
May 17, 1984
main problems with those policies. The first problem was a failure of administration and the second was a lack of continued commitment to funding and programming. Programs were frequently ill-conceived. In my Province of Prince Edward Island, for example, DREE often supported industries that were doomed to failure from the beginning because they did not relate to the indigenous resources of the province or to the competitive advantages of the Island. I ask you, Mr. Speaker, if it is realistic to think that a province like Prince Edward Island with a population of only 125,000 people, a province that is situated a thousand miles away from any major metropolitan market, could ever sustain an industry which manufactured skis? DREE thought so but the marketplace did not. The result was calamity for both the company in question and for the workers whose jobs and dreams were destroyed.
The record of DREE throughout the Atlantic region is replete with such examples of departmental ineptitude. In other instances, genuinely worth-while projects initiated by DREE were undermined by other departments of the federal Government. It was not that the left hand did not know what the right hand was doing; it was that the left hand was chopping the right hand off at the wrist. For example, in the City of Charlottetown, the Department of Regional Economic Expansion invested something like $9 million for the redevelopment of the waterfront. It was one of the most innovative efforts in all of North America. The anchor of that ambitious project, that ambitious complex of public and private facilities and services, was to be the relocated headquarters for the national Department of Veterans Affairs. It was to be relocated on Queen Street on the city's waterfront itself. However, because of sheer bureaucratic bungling, officials of the Department of Public Works pulled the rug out from under its sister Department of Regional Economic Expansion. DPW did so by wrenching the DVA headquarters from DREE's waterfront project in favour of a city-core location which was isolated from anything in which the federal Government had a direct interest. In one fell swoop, one federal department risked the total collapse-certainly a major collapse-of the multimillion dollar efforts of another department.
Fortunately, the waterfront project, of which I have spoken, was given a much needed boost by the erection of a multimillion dollar convention centre on the spot where DVA was to be located. That outcome was made possible only by a last-minute federal-provincial funding arrangement. Meanwhile, the waterfront project was seriously set back and, to make matters worse, the federal Government now stands to lose a million dollar law suit to the developers associated with the original DVA waterfront site.
I mention that example because I think it graphically illustrates what went wrong with DREE as administered by this Government. Just as DREE programs were plagued by interdepartmental warfare within the Government, so also were they undermined by the failure of the federal Government to consult with the very governments most affected by those
programs. The change in the DVA location from the Charlottetown waterfront to the city centre was made against strong representations, not only by the Province of P.E.I., but also by the city itself, not to mention local public opinion. The same type of insensitivity to provincial and local priorities was characteristic of DREE-related programs throughout the region-not just in Prince Edward Island but in New Brunswick, Nova Scotia and Newfoundland as well.
The second major problem with DREE was the lack of sustained funding and program support. There can be no doubt that, following an initial flurry of federal Government investment, regional economic expansion payments to the Atlantic provinces soon dropped steadily, to the point at which they all but ceased with the abolition of the department in 1982. In 1971, two years after the establishment of DREE, regional economic expansion payments to the provinces amounted to $473 million in 1982 dollar terms. Such payments remained around that level until 1979. From then on, support plummeted from $485 million in 1979 to $350 million in 1982. That represents a 41 per cent drop in support in four years.
What was even worse for the Atlantic provinces than the over-all decline in DREE funding was the region's declining share of the total. Originally DREE assistance was restricted to areas of Canada whose unemployment levels were constantly high, whose industrial base was low and whose hopes for improvement were otherwise remote. DREE money was intended to assist those areas in industrial development, the provision of essential services and in job retraining. However, Mr. Speaker, for purely electoral purposes this Government watered down eligibility criteria until almost every part of the entire country qualified for so-called regional development aid. Provinces like Prince Edward Island found themselves competing with parts of even wealthy Ontario for a share of the funds. As more and more communities from one end of the country to the other became eligible, we in the Atlantic Provinces had to scramble for our share of the pie. Given that the pie was originally intended for us, the outcome was nothing less than scandalous.
When DREE was established in 1968, Mr. Speaker, the Atlantic Provinces received over half the total money expended by that department across Canada. When it was abolished in 1982, that proportion was down to less than a third. Not only was the pie smaller, but our piece of the pie was smaller yet.
The truth is, Sir, as the Senate Standing Committee on National Finance concluded after examining regional disparities in 1982, the Government has turned its back on the goal of regional disparity. It was more interested in courting electoral support in vote-rich Ontario and other major centres than in honouring its commitment to assist the have-not provinces to achieve some degree of self-sufficiency. In fact, Mr. Speaker, the Government saw DREE as an obstacle to its re-election chances, because the provinces seemed to be getting credit for the expenditure of federal dollars, and none of the provinces was Liberal.
May 17, 1984
In Prince Edward Island, for example, the federal Government scrapped many established federal-provincial cost-shared programs in favour of direct delivery of federal services, often totally excluding the province from policy input. The result has been to render previously robust provincial departments of government-notably fisheries, agriculture and energy, and others which could be mentioned-mere shadows of their former selves, with attendant Public Service lay-offs and local service cutbacks. Even more significant, Mr. Speaker, the direct delivery approach has denied federal Government programs the local participation so essential to effective implementation.
With DREE folded into the Department of Regional Industrial Expansion as of 1982, and thereby effectively abolished, the Atlantic region has lost the one federal department, with all its faults, to which it could turn as a friend at court. Make no mistake about it, Mr. Speaker, in any competition between the twin but conflicting goals of the new department, national industrial objectives will win over regional development objectives ten times out of ten, at the expense of the Atlantic region.
The federal department has made an orphan of the Atlantic Provinces, leaving us increasingly to our own devices to survive. Not only has it abolished DREE and abandoned formal regional development programs of the DREE type, but it has also slashed support through broad fiscal and other programs. From 1977 to 1983, federal transfers to other levels of government have steadily gone down as a percentage of total federal expenditures, even excluding public debt considerations. Federal changes to Established Programs Financing for health care and post-secondary education has cost the Atlantic Provinces $90 million a year in lost revenue. Apart from those changes, the application of the Government's six and five program to the post-secondary education component of EPF in 1983-1984 and 1984-1985 will cost the region a further $32 million over those two years.
In such areas as transportation, so vital a part of the economic base of the region, the federal Government has left us high and dry, alone to fend for ourselves. In 1968 the Government subsidy under the Maritime Freight Rates Act was, in 1982 dollars, $57 million. In 1982 it had shrunk to a paltry $11 million, a drop of 81 per cent during the 16-year period in which the current Prime Minister was in office.
Sir, no part of Canada depends more on vital transportation links with the rest of Canada than does P.E.I. We have suffered, however, a steady loss of passenger freight and parcel express services, and railcar and railline repair and maintenance capacity. Having entered Confederation to save our railway, we see the federal Government dismantling it before our very eyes. Although the island is grateful for federal help towards such major projects as the Atlantic Regional Veterinary College and the Prince Edward Hilton Convention Centre, it is once again the classic story of the Government giving with one hand while taking with the other.
Sir, we in the Atlantic region are a proud, hard-working people, a people determined to be self-sufficient again. We were once self-sufficient. Before Confederation our region was actually quite prosperous. That is in fact why we were one of the first parts of Canada to become populated and settled. Successive central Canada-dominated federal Governments, however, have adopted policies undermining economic diversification in the Atlantic region and also in the west. This has weakened our economic strength and our morale. The region, once highly industrialized by the standards of the day, has now been reduced to producing staples. The production of those staples, for example potatoes in Prince Edward Island, does generate jobs, I grant you that. Much of the income, however, is then simply spent in central Canadian markets, mostly for manufactured goods. The same happens with federal transfer payments to provincial governments and individuals alike. In the Atlantic Provinces the money simply gets recycled back into the central Canadian economy.
Frankly, Mr. Speaker, I am not convinced that such regional servitude is exclusively the result of either accident or neglect. One cannot overlook the fact that it has served the interests of central Canada-and I am fond of central Canada-to have the Atlantic Provinces as a ready market for their manufactured goods rather than engage in manufacturing themselves. National policies like protective tariffs have consistently favoured Quebec and Ontario, the very provinces whose votes have enabled the Liberal Party of Canada to govern the country for most of this century.
What we need, Mr. Speaker, is a truly federal state, one that recognizes the enormous potential of the Atlantic region both to be self-sufficient and to contribute to the total weatlh of Canada. However, that will only come, Sir, with a new team of Canadians in charge of affairs here in Ottawa.
Subtopic: BUSINESS OF SUPPLY
Sub-subtopic: ALLOTTED DAY, S O. 62-REGIONAL ECONOMIC DISPARITIES