By Brian Lee Crowley
Halifax Chronicle Herald, Moncton Times Transcript

NEWFOUNDLAND and Labrador joined Confederation in 1949. More than 50 years is enough experience for the province to take stock of what the ties to Canada have contributed to the well-being of its people. Liberal Premier Roger Grimes, at the head of an unpopular government on the eve of an election, took that opportunity, naming a Royal Commission on Renewing and Strengthening our Place in Canada. Or, as the commission’s popular nickname has it, it is the Blame Canada Commission.

But commission chairman Vic Young is too smart to fall into the trap of using his mandate simply to give official sanction to much of the easy blame-shifting that many provinces do, making Ottawa the scapegoat for many of the problems that they themselves have created. It’s a game as old as Confederation. As former Saskatchewan premier Tommy Douglas used to say, running against Ottawa in a provincial election was always worth another 10 per cent of the vote.

But that doesn’t mean Ottawa doesn’t bear an important share of the blame for the fact that the Rock continues to lag the rest of Canada economically. The peculiarities of jurisdiction and geography have given the feds disproportionate power over the province’s well-being. And that power they have not exercised intelligently. Here are three things Vic Young and his colleagues can and should say Ottawa must do differently if Newfoundland and Labrador is, at long last, to attain prosperity and self-reliance.

First, Ottawa must end the absurd situation where Quebec enjoys a stranglehold over the development of Newfoundland’s hydroelectric resources. Electricity is the only form of energy that cannot be sold across provincial boundaries without the consent of the province across whose territory it must move. Quebec uses that power to force Newfoundland to sell any surplus electricity to Hydro-Quebec, which, as the monopoly buyer, sets its own price.

That’s absurd. If Alberta puts natural gas in a pipeline bound for Ontario, the gas doesn’t have to be sold first to the provinces of Saskatchewan, then to Manitoba, and so on. The owner of the gas puts it in the pipeline in Alberta and sells it to a buyer in Ontario, and pays a reasonable charge to the owner of the pipeline for moving the gas to market. But because Newfoundland is pushing electrons down a wire rather than gas molecules down a pipe, the added value that Newfoundland might realize from its hydroelectric resources is siphoned off by Quebec because of an accident of geography. Because this is a matter of interprovincial trade, Ottawa could assert its jurisdiction if it chose. Our poorest province pays a terrible price for Canada’s timidity.

Second, Ottawa owns and manages the fish stocks, and has made a royal hash of it. Yet fish are again a natural resource at the heart of Newfoundland’s society and economy. In order to curry short-term favour with voters, Ottawa has increasingly politicized the management of fish, often granting unsustainable access in exchange for votes. The resource is parcelled out so as to maximize employment rather than efficiency, meaning that the industry is starved for investment and has difficulty adding value because the priority is jobs today, not sustainable economic development in the long run.

Yet Iceland, Newfoundland’s neighbour in the North Atlantic, has parlayed a dependence on fish into the fifth wealthiest economy in the world, and they’ve done so by making the fishermen, not the government, the owners of the fish stocks. They abandoned as unworkable Canadian-style racing to fish in ever shorter seasons with catching power limited by decree. The fishing industry is the cash cow for the rest of Icelandic society. Newfoundland could do the same, but not as long as Canada runs the fishery on the Soviet model.

Third, Canada needs to reshape its edifice of transfers to people and governments to remove all the ways in which they reward underdevelopment, seasonal work and dependence. This means we need a serious rethink of equalization, employment insurance, ACOA and all the rest.

To use just one example, employment insurance still operates on the assumption that Newfoundland has too many workers and not enough work, and so pays people not to work for long periods between brief bouts in the fishing industry. But employers in St. John’s are already reporting labour shortages, and the aging population and outmigration mean that Newfoundland’s workforce is going to shrink significantly in the next few years. The province needs better trained workers, working all year round in the places where opportunity is greatest. All our transfer programs push in the opposite direction.

I have no doubt that Newfoundlanders can achieve the prosperity the royal commission seeks. But to do so requires a revolution in thinking in St. John’s and Ottawa. Vic Young and his colleagues have their work cut out for them.