The perils of dependence.
by Don Cayo


Welcome, Manitoba, to the little basket that used to be just for Atlantic Canada.

No, not the bread basket. That distinction has long been yours, and your Prairie sisters’. Ours is a less attractive one, as in “the basket case of the Canadian federation.”

The figures on my desk run only up to 1995, but they track a trend. Manitoba is about to supplant New Brunswick – if it hasn’t already – as Canada’s fourth-most dependent province. The four bottom spots have never before occupied by any but an Atlantic province.

You may be pleased to know – as a New Brunswicker, I am – the reason your province and mine are trading places on the dependency scale. It’s mainly that we in the East are growing stronger, not merely that you guys are getting worse. And, yes, I know you’ve seen federal cutbacks, too. But, trust me – and trust the StatsCan figures that make it clear – the cuts were deeper down here. (From 1980 to 1995, federal spending on goods and services dropped a tiny fraction of one per cent in Manitoba, and three per cent in New Brunswick. Federal payments directly to people rose three per cent in Manitoba, and fell one per cent New Brunswick. And transfers to provincial governments rose two per cent in Manitoba, and fell five per cent in New Brunswick.)

The up side of this leaner, meaner reality for Atlantic Canada is that it pushes us to do more for ourselves. And, take it from one who knows first hand, independence is much, much better than dependence – no matter how generous the Sugar Daddy.

Not so long ago, the feds used to ship money down here like your farmers ship grain. If you think it never did much good, you only know half the story. Fact is, all that money made things worse.

The Maritimes have been poor for a long time, but not forever. And a lot of our latter-day woes are policy-driven. It was the result of not only our own greed and stupidity, but also much that was imposed on us by our friends on Parliament Hill.

At the time of Confederation, a brisk world trade kept things humming here. But Sir John A. Macdonald’s focus was the Central Canadian economy and the settlement of the West. Montreal and Toronto got our institutions – our banks and big businesses went down the road long before our people began to follow. Those big cities and the Prairies got most of Canada’s newcomers. Protectionist tariffs killed our manufacturing, which was always based on international trade. When rail costs soared after World War I, we lost what branch plants we had left. A massive recession set in. The 1920s were actually worse down here than the infamous decade that followed.

Not till the 1960s did we start to recover. And for a while we were doing okay. Our per capita economic growth back then was twice the rate of the rest of Canada’s; we were catching up. Then Ottawa stepped in with a helping hand. The era of big-time transfer payments began.

Before that era started to wind down, the net inflow of federal money to our region reached as high as $5,000 per capita per year. A lot of money came our way over 30 years – enough to pay off the national debt. Had we invested it sensibly in things like individual RRSPs, each man, woman and child in Atlantic Canada would now enjoy annual interest of more than $50,000 from our personal accounts.

But we spent all that cash on other things – on political priorities, not sensible ones. Too many of our workers learned to sit home on regionally enriched pogey rather than accept wages that unsubsidized companies could afford. Too many of our businesses learned to focus on governments’ wants, not customers’ needs. We got make-work projects by the score, some monuments to political egos, some nicely paved roads to nowhere.

And all those things took us nowhere. Our once-encouraging growth slowed to well below the national average, and it stayed there.

But, lo and behold, we’re moving again in the right direction. As government hands out less, we’re earning more – there’s a correlation.

Not that it’s easy to make the transition to self-sufficiency. Nor that everyone sees that we’d be better off if we do. There’s something initially repugnant about taking hand-outs but, once you get beyond that, the process is seductive. Privileges become rights; transitional help becomes perpetual. And scores of Atlantic Canadians – politicians and ordinary people alike – continue to spend their energy protecting those perceived entitlements rather than tackling the root cause of our economic woes.

There’s a lesson here for Manitoba, or for any province beginning to stumble down the road to massive dependency. Canada is capable of being an extraordinarily generous country, but good intentions don’t always lead to good policy. Your problems may be real and pressing. But sustainable solutions, if found at all, will be found close to home – not in Ottawa.

So look your gift horse in the mouth. If our experience is any guide, you may find the teeth to be less sound than you hope.