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"Ontario and Canada: Loyal Forever"

          One of the great virtues of federalism is that it encourages different leaders, elected to separate orders of government, to work together. These leaders differ in their political orientation: liberal, conservative, social-democratic, populist. But they are also different because their perspective is not the same: whereas the federal government is naturally inclined to look at things in terms of the common effort needed to mobilize the country, the governments of the constituent entities are concerned about their autonomy of action necessary to respond effectively to the needs of their own populations.

          This ongoing clash of ideas and this plural quest for the best policies and best practices create a unique synergy within federated countries, with the potential of yielding good results for their populations. Moreover, this pluralism is an excellent school for tolerance, the ongoing proof that people of different political stripes can reach agreement for the common good.

          Of course, the coexistence of all these governments, however productive it may be, does not occur without difficulties on a daily basis. It creates many headaches for federal and provincial politicians and officials. Inevitably, disagreements regularly arise, are noisily expressed, and accords are not always easy to negotiate. For something positive to emerge from all this, the goodwill of each and everyone must be based on unwavering loyalty to the country and solidarity among all citizens.

          It is precisely this loyalty to Canada, this solidarity of all Canadians, that is supposedly disappearing in your province, if we are to believe a line of thought currently in vogue. Loyal No More is the title of a recent book by 
John Ibbitson, a journalist with the Globe & Mail. The economist 
Thomas Courchene has best explained this thesis (Courchene and Telmer, From Heartland to North American Region State: The Social, Fiscal and Federal Evolution of Ontario, 1998). It can be summarized by three assertions:

- first, relations between Queen’s Park and the federal government are worse than ever;

- second, this deterioration is the product of a structural change in the Ontarian economy, which is increasingly north-south oriented rather than east-west;

- third, Ontario will increasingly detach itself from Canada and set off to seek its own destiny.

          "Ontario is becoming estranged from Confederation," Ibbitson warns, "a road that may end in a fork, with Ontario going one way and the rest of Canada, another." (Loyal No More, p. 3).

          All three premises of this thesis are inaccurate. First, although relations between the Harris and Chrétien governments are not easy, Canada and Ontario have seen this before. Second, while we are witnessing a spectacular increase in the importance of external trade in the Ontarian economy, the latter remains profoundly Canadian. Thirdly, and most significantly, Ontarians are loyal Canadians who feel solidarity with all their fellow citizens.

          Let’s look at these three elements in order.

1. Canada and Ontario have seen this before

          To be sure, relations between Queen’s Park and Ottawa have at times been easier in the past than they are today. But sometimes they have also been just as complicated, if not more so. It is not just as of late that the Government of Ontario has been calling on the federal government for more powers, more money, in the name of provincial rights and interprovincial equity.

          By and large, the relations between Messrs Chrétien and Harris are much more civilized than those between John A. Macdonald and his former articling student, Oliver Mowat. The epic battles between Macdonald and Mowat (1872-1896) contributed to shape intergovernmental relations in Canada for a long time. On issues like Ontario’s western boundary and prerogative powers, Mowat was successful in challenging Macdonald’s vision of Canada as a highly centralized state with weak and dependent provinces.

          Similarly, let’s not forget the wall that Premier Mitchell Hepburn (1934-1942) wanted to erect against the social initiatives of a federal government that wished to help Canadians get through the Great Depression in the 1930s. His attacks against Prime Minister Mackenzie King were especially virulent. His disagreements with King were such that the two leaders were opposed on practically every issue. When Ontario constituents voted massively in favour of King in the 1940 federal election, in spite of Hepburn’s imprecations, the latter’s prestige was so tarnished that he was forced to resign in 1942.

          Older Liberals bitterly recall that Ontario Premier Leslie Frost, upset by the introduction of the equalization program in 1957, went on the warpath against the Saint-Laurent government in the subsequent federal election and helped to defeat it.

          When the Pearson government undertook a cross-country extension of the medicare model, invented in Saskatchewan, the Ontario government of John Robarts opposed it with all its might and used the harshest language in denouncing the program, before finally signing on in 1969.

          Turning to the current disagreements between the Harris and Chrétien governments, I am struck by their completely classic and habitual character. Rather than a reflection of a structural change in Ontario’s economy, they are the result of the frictions to be expected between a Liberal government in the political centre and a Conservative government undoubtedly farther to the right than average. This philosophical difference pits them against each other in a host of sectors: criminal justice for youth, environmental standards, firearms control, health policies.

          The Harris government has taken the lead among the provinces to obtain more federal transfers. Not every Ontario government has taken on such a role in the past. But here again, it is difficult to see how Mr. Harris’s insistence on obtaining more money from Mr. Chrétien would be the reflection of a structural economic change. The explanation is much simpler than that.

          The Harris government’s ideological confidence in the virtues of tax cuts, notably in terms of greater economic competitiveness, led it to take pains to lower its personal income tax drastically even before having achieved a balanced budget. It urged the Chrétien government to do likewise. The latter prudently preferred to balance the budget before proceeding with major tax cuts.

          When Mr. Harris came to power in 1995, five provincial governments were spending less on a per capita basis than Ontario. Today, there is no longer a single province whose per capita spending is lower than Ontario’s. It does not appear that all Ontarians appreciate the consequences that such austerity may have had on the quality of services. This is why the Harris government is demanding more money from the federal government with such zeal and persistence.

          If the disagreements that have arisen between Ottawa and Queen’s Park in the past decade were the result of a structural economic change, we would see some consistency in the Ontario government’s economic policy. But the Peterson and Rae governments had an approach that was completely opposite to that of Mr. Harris. They applied an expansionist budgetary policy that vexed a federal government then busy limiting inflation and keeping interest rates low. Today, a very fiscally conservative Ontario government is looking to Ottawa to obtain more money. Nothing could be more classic.

          It is true that Ontario’s economy has changed a great deal in the past 20 years. But that in no way disengages it from Canada.

          In 1981, Ontario’s exports to the other provinces slightly surpassed its exports abroad. As of 1994, its international exports were more than twice as large as its interprovincial exports. Of all the provinces, Ontario has experienced the greatest increase in its international exports relative to its gross domestic product (GDP) between 1981 and 1999. That share now represents half of Ontario’s GDP. No other province comes close to such a proportion.

          That being said, the "Canada" label is an excellent sales tool to break into external markets and Ontarian companies are not depriving themselves of it. Our large network of embassies, our strong diplomatic presence in the United States, the professionalism of our diplomats, commerce officers and science and technology advisors, the fact that these impressive resources are deployed by a country that our trading partners know and respect, all this is greatly appreciated and used by Ontario’s companies and government alike. The same is true for the other provinces. The Canadian economy’s impressive breakthroughs into external markets have in no way harmed our union. On the contrary, they have highlighted the strength of our economic and political union.

          As for interprovincial trade, it remains very important for Ontario. It increased from $62 billion in 1981 to $75 billion in 1999 (in constant 1999 dollars). If trade between provinces is growing less quickly than external trade, it stems from the fact that our national economy is already very integrated. According to John F. Helliwell (How Much Do National Borders Matter?, 1998), the flow of goods between provinces is 12 times greater than between Canada and the US, once we take into account factors such as size and distance. He calculates that this flow is 30 times greater for trade in services (Helliwell, C.D. Howe Benefactors Lecture 2000, p. 5). And the services sector represents 60% of Ontario’s GDP.

          Besides, there is a danger of making too much of the trade in goods between Ontario and the United States, where the auto sector has such a disproportionate place. Ontario’s economic links with the rest of Canada can also be seen in its larger economic role. Ontario is the centre of our financial services industry, which remains strongly trans-Canadian. Ontario is English Canada’s media and cultural capital. It is by far the largest home province of headquarters for Canadian companies. You need only go to Pearson airport on a normal day – not such as we have had following the terrible recent events – to see how extensive our East-West links are, even compared with the growing air traffic to the USA.

          Today as yesterday, Ontario’s economy greatly benefits from the Canadian economy’s strong integration. And this integration is no accident. It is because we share political and legal institutions, a common currency, harmonized economic and social policies, and because we are linked by a feeling of loyalty, that curious thing that we call national solidarity.

          This loyalty to Canada, this sense of solidarity among all Canadians, is as strong among Ontarians as it has ever been, as we shall now see in the following section.

          If the development of external trade really were to turn Ontarians away from Canada, that should be reflected in their attitudes. But 12 years after the Free Trade Agreement came into effect, Ontarians’ passion for Canada is in no way diminished.

          The polls confirm it: it is in Ontario that the feeling of belonging to Canada is expressed most strongly. It is in Ontario that there is the greatest tendency for people to see themselves as citizens of Canada rather than citizens of their province. It is also here that support for a common currency for Canada and the US is the lowest. After Alberta, it is in Ontario that the prospect of annexation to the United States generates the greatest opposition. Ontarians, more than other Canadians, oppose doing away with the border with the US. (Many of these results are taken from the Canadian Press/Léger Marketing poll published on August 30, 2001.)

          Among Ontarians today, 9% were born in another province and 26% come from another country. It is no surprise that they identify themselves strongly with Canada, rather than the so-called "region-state" of Ontario.

          On many issues, Ontarians have very different attitudes from their current provincial government. In a greater proportion than elsewhere in the country, they believe that their province is treated with respect within Canada (Crop-Environics-Cric, October 2000) and that it receives its fair share of federal spending (Ékos, February 2001). Ontarians tend to be less favourable than other Canadians to an increased decentralization of powers to the provinces (Environics, February 2000). They are the most attached to national health standards.

          Of course, the fact that the Harris government has been elected twice proves that it represents something in Ontario. But that is also the case with Jean Chrétien’s Liberals, who three times have had even more resounding electoral success in Ontario.

          It is a mistake to ascribe to the entire population of a province the orientations of its provincial government. The premier of Ontario is not Ontario, he is one reality of Ontario. In 1990, the social-democrat Bob Rae was elected with the support of 38% of Ontarians. Five years later, the 
neo-conservative Mike Harris took power with the support of 45% of voters. The majority of Ontarians were not social-democrats in 1990 and did not become neo-conservatives in 1995.

          If the Liberals win the next Ontario election, a portion of Ontarians will remain followers of neo-conservative or social-democratic ideologies, just as, at the federal level today, a portion of them do not support the balanced orientation of Jean Chrétien. Ontarian society is too pluralist for all of it to support only one line of thought.

          In short, I can see no general trend, either in public opinion or in the economy, that distances Ontarians from Canada or even condemns Ottawa and Queen’s Park to having bad relations. Nothing prevents those relations from improving... or from worsening if we are not careful.

          I did not need to demonstrate today that the Harris government is not separatist. Of course it is not. Tom Courchene, whom I know personally, is not either, no matter what may have been said about this. I have had enough dealings with separatists in my life to be able to recognize one when I see one.

          What I did want to demonstrate, though, is that it is false to think that Ontario is detaching itself from Canada simply because its external trade has undergone a phenomenal expansion, its access to the Canadian market is not as protected as before by tariff barriers, or its provincial government is complaining it does not receive its fair share from the federal government.

          I have stressed the fact that Ontarians’ economic interest is just as linked as before to their belonging to Canada. But the most important element in all this is that Ontarians’ loyalty to Canada and their solidarity with their fellow citizens transcend the evolution of trade and the climate of federal-provincial relations. They are based on the solid moral values of caring and generosity and on the conviction that the quality of life we have acquired, which is the envy of the whole world, depends on our unwavering desire to keep improving it, throughout the country.

          To be sure, we have different points of view as to the best means for improving this quality of life. As a Liberal, I have my doubts about the means chosen by your provincial government. As a Francophone as well, I must say. But as Canada’s Intergovernmental Affairs Minister, I have, as does the government to which I belong, the constitutional duty to reach out to that government and to work to govern for the better with it, while respecting each one’s constitutional powers and jurisdictions.

          This last aspect is very important. Those of you who are dissatisfied with your provincial government, work to change it in the next election. But in the meantime, do not ask your federal government to play the provincial government. It is not made for that.

          Loyalty to the country, solidarity among citizens, cooperation between governments based on mutual respect, all of these ingredients do not guard us against federal-provincial tensions. But they are the recipe that has given us, Ontarians, Quebecers, Canadians in all provinces and territories, one of the best qualities of life in the world. That is why we shall be loyal forever.