Donald J. Savoie is the Canada Research Chair in public administration and governance at l'Université de Moncton. He is the author of Looking for Bootstraps: Economic Development in the Maritimes
Atlantic Canadians have learned that when Ottawa speaks about national unity it speaks, in reality, to Quebec's place in the federation and that "national policy" are code words for the economic interests of Ontario and Quebec.
Politics, not market conditions, killed the Energy East pipeline. If government and regulatory agencies drag the puck long enough and if they keep changing the rules of the game and adding new requirements along the way, market conditions will surely kick in. The Energy East initiative is a case in point. Not only was the approval process changed, and requirements added, it was done so retroactively. TransCanada pointed to market conditions to explain its decision – best not to point the finger at government and regulatory agencies knowing that it will have to knock on their doors in the future for another project.
Alberta will now continue to ship oil to the New Brunswick refinery by rail and Canada will continue to import oil by ship. Environmentalists should ponder this to see if it makes more sense than a pipeline uniting Alberta and Saskatchewan producers to a New Brunswick refinery.
About politics – Quebec will have 78 seats up for grabs in the next election. Alberta and New Brunswick combined will have 48. Political operatives in Ottawa know how to count and know that you win a federal election by winning in Ontario and you secure a majority government by winning in Quebec.
Saskatchewan Premier Brad Wall voiced his strong support for Energy East, making the case that it was in the interest of the national economy. Mr. Wall also made the point that the energy sector generates a great deal of economic activities, new employment and contributes greatly to federal coffers. The sector enables Ottawa to fund transfer payments to have-less provinces. Quebec – in dollar terms – is, by a wide margin, the highest recipient of Ottawa's equalization dollars. All major political parties with elected representatives in Alberta, Saskatchewan and New Brunswick supported Energy East.
Montreal Mayor Denis Coderre would have none of it. He responded to Mr. Wall much like Donald Trump would, by turning to bullying tactics. He said: "Metropolitan Montreal has a population of four million, Saskatchewan has 1.1 million – end of story." What I find both fascinating and revealing is that this logic actually made sense in Mr. Coderre's mind. He conveniently forgets that Canada is a federation, not a unitary state. The Senate, as it has since 1867, stood on the sideline as an observer rather than a participant. It contributed nothing to the debate.
That is how Canada has been governed since 1867. Atlantic and Western Canadians look in the mirror and see Quebec and Ontario while Quebec and Ontario only see Quebec and Ontario.
Mr. Coderre can get away with a Trump-inspired logic because Canada is the only federation in the world that does not have a capacity in its national political institutions to speak on behalf of the smaller regions. The Fathers of Confederation from Ontario and Quebec rejected a proposal from Maritime delegates for an equal and elected Senate simply because it did not square with Ontario and Quebec interests.
Quebec, in particular, has always strongly rejected a reformed Senate. Sir John A. Macdonald argued against an equal and effective Senate insisting that the voice of the regions would be heard through cabinet. That voice is being snuffled out as cabinet is slowly turning into a focus group for the Prime Minister. We no longer even have "regional ministers" to speak on behalf of smaller provinces because the federal government could not make the concept work in Ontario and Quebec.
The Energy East pipeline made sense for both Western and Atlantic Canada. It represented a safe way to transport oil, it would have fuelled a New Brunswick refinery with Canadian oil without resorting to rail transportation (remember Lac-Mégantic) and it would have created employment. It would have enabled New Brunswickers to pull themselves up by their bootstraps without a government handout. It would also have generated $15.7-billion in private investments. Contrast this to the $1.1-billion of public funds that Ottawa has poured into Bombardier (since 1966, adjusted for inflation) or the $3.5-billion (net) Ottawa gave to the Ontario auto industry after the 2008 recession all in the name of national economic policy.
We need to rethink Canada's institutional arrangements so that we have a two-way mirror that reflects the economic interests of Western and Atlantic Canada, not just Quebec and Ontario. We need a capacity in Ottawa to give voice to the smaller regions and to recognize that national unity is not just about Quebec.
There are many reasons why Atlantic Canada continues to struggle to generate economic activities. National policy is one. The Atlantic region does not have the political or economic clout to do something about extending the national unity debate beyond Quebec's interest. The same does not apply, however, for Western Canada and policy makers in Ottawa should take note before it is too late.