In Brief: This column by Neil Reynolds in the Globe and Mail uses AIMS’ latest Atlantica paper to show why the concept works. And he includes some advice for federal policy makers – just step aside and let it be. 

by Neil Reynolds 
(nreynolds@xplornet.com)

OTTAWA — Robin Neill, the Canadian economist and historian, has argued for years that Canada’s continental destiny was pretty much decided 150 years ago. Now, in a new report on Atlantic Canada (specifically Nova Scotia, New Brunswick and Prince Edward Island) he argues that federal economic policy in the past century and a half – regardless of ideology – has made little difference to the region one way or the other. Indeed, he describes it as “a blind stumble through the long term” toward impossible and irrelevant economic goals.

Canadian governments have tried repeatedly to transform the Maritimes “into miniature versions of Central Canada,” he says. “[Yet] all attempts to turn the Maritimes into either a mini-Ontario or a mini-Canada have met with failure.” The Maritime provinces now need to look backward to find their future – backward to “the historical Atlantica.” Only in their transnational origin, he says, will they discover their “natural economy,” an economy driven forward by “the forces of history.”

In this new analysis – titled Historical Atlantica and published by the Halifax-based Atlantic Institute for Market Studies – Prof. Neill tells Canadians to stop comparing the Maritimes to Ontario or, for that matter, to the rest of Canada. Such comparisons only distort people’s understanding of the unique nature of the Maritimes economy. “Elements of the Maritimes economy do not ‘lag behind’ those of Central Canada,” he says. “They differ from them.” And they differ for a reason – “because a different set of forces is generating them.”

“The Maritimes is a unique, natural structure. It has a natural rate of growth.

“The Central Canadian economy is not a moral norm to which the Maritimes economy can be invidiously compared.

“Policy cannot make the Maritimes into a mini-Canada.”

Though quietly expressed, this is a radical analysis. Prof. Neill endorses the federal transfer of funds to the Maritimes provided the purpose is investment in infrastructure – which can in practice mean highways, schools, hospitals and universities. Yet this qualified endorsement of Canada’s equalization program must be a close call.

The country’s entire apparatus of transfer payments rests upon the sincere belief (or perhaps the sincere assumption) that Atlantic Canada “lags behind” the rest of the country and thereby deserves federal subsidies to compensate for this failure of Canadian markets. The only purpose in moving huge sums of money from richer provinces to poorer provinces is to eliminate this “lag.” If it doesn’t (and it hasn’t), what’s the point?

Whatever the federal strategy, Prof. Neill says, the lag in the Maritimes has never lessened. Nor has it increased. Only the slightest statistical evidence exists, he says, of Maritime convergence with Canadian averages for either personal income or per capita production. “Through good policy and bad,” he observes, “the relative position of the Maritimes has remained roughly the same.” This conclusion implies the presence of “an independent dynamism in the Maritimes economy.”

This dynamic is the natural economic ebb and flow of commerce between the Maritimes and the next-door economies across the Canada-U.S. border – the region, taken together, that constitutes “Atlantica.” As Prof. Neill notes, there are now a number of “Atlanticas,” depending on definitions. One of them forms a triangle anchored by Halifax, New York and Montreal. Another runs south of the St. Lawrence River and the Great Lakes, reaching westward to Buffalo.

Each of these Atlanticas, Prof. Neill says, has historical validity, and each produces its own economic consequences.

When you regard the Maritimes merely as “Atlantic Canada,” he says, you “predispose” equalization programs and transfer payments. When you regard the Maritimes as part of Atlantica, you “predispose” trade and transportation.

When you treat the Maritimes only as “Atlantic Canada,” you determine a certain rate of unemployment, a certain growth rate. When you let the Maritimes engage fully in its natural cross-border environment, you determine a different unemployment rate, a different growth rate.

“An integrated cross-border region consisting of New England and the Maritimes existed long before globalization,” Prof. Neill says. “There is an historical Atlantica [which] has persisted through all the gyrations of Keynesian policy, regional development policy and neo-conservative cutbacks.”

Interestingly enough, he says, “historical Atlantica seems to have remained intact.” The Maritime provinces now trade roughly the same relative amounts of goods with New England in the 21st century as they traded in the 19th century.

In other words, Prof. Neill concludes, the emergent Atlantica does not appear significantly different from the historical Atlantica – and offers the Maritimes, once again, “unique possibilities to realize a unique success.” The federal policy that should derive from this is ancient, though rarely deployed: Let it be.

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To read Robin Neill’s paper, click here.

To read more about Atlantica, click here.

Follow this link to the Atlantica website, www.atlantica.org