Why have we been left behind?

Economic development needs a regional strategy, not just a provincial one or even a local one

For those looking for insight into how we can address economic development in Cape Breton it is worth reading Université de Moncton professor Donald Savoie’s new book, “Looking For Bootstraps, Economic Development in the Maritimes” (Nimbus, 2017).

Savoie follows through on an obvious question asked decades ago by economist John Kenneth Galbraith in the 1980s about Atlantic Canada: Why could the region not take advantage of its strategic geographical location? Why was it left behind in Canada’s march towards prosperity? Why is the region still so dependent on federal transfers?

After all, the Maritimes straddle the world’s economic superpowers, the U.S. and western Europe. They border an ocean of economic opportunity on the maritime fringe of the global economy. Atlantic Canada is strategically positioned to grow in tandem with the world’s strongest economies.

Yet economic development has evaded eastern Canada and gravitated to the central and western provinces. Savoie thinks that needs to change.

The underlying reality is that Canadian federalism doesn’t respond to regional development needs. It only responds to provincial needs. But the Maritime provinces are geographically and politically divided. They generate economic policies beneficial mostly within their boundaries.

In Atlantic Canada, provinces cut short the economic role of their governments for planning a comprehensive strategy for developing the entire ‘region.’

One “game changer” overlooked in the Ivany report was to cultivate a regional framework to grow the Maritime economies. Quite possibly this was because it begs the question of “Maritime union,” which by implication sounds the death knell for planning beyond provincial borders. But a rising tide of regional development would lift all boats in eastern Canada.

Nova Scotia’s economy alone could not do it. Nor could the development plans of the Cape Breton Regional Municipality alone lift many boats. But as part of a regional development plan, a stronger economy in the CBRM would actually empower all other Maritime economies.

Without an overarching economic strategy for eastern Canada economic development in Cape Breton will remain a painful process of looking for the right bootstraps to pull up. In the end, it takes the resources of every level of government to make Cape Breton’s plans a reality. So why not do it by pooling government resources specifically directed at regional development?

Pierre Trudeau embraced the challenges of regional disparity in the 1970s. But as honourable as his intentions were at the time there were intervening factors that derailed the efforts of his government to fully address the needs of Atlantic Canada.

One factor was the rise of Quebec sovereignty in the 1970s, which pulled many resources away from the Atlantic region to Montreal and eastern Quebec. It was designated as a “special region.” This created bad optics for the Trudeau government west of Ontario, not to mention here in the Maritimes.

Ontario and Quebec have retained their sovereignty over economic development issues. Since Brian Mulroney, prime ministers have appointed ministers who favour development in central and western Canada.

The Atlantic Canada Opportunities Agency (ACOA) ostensibly targets eastern Canada. But today every other part of Canada including the North has an economic development agency, competing for the same federal dollars. All federal transfers are not designed to economically enhance the Atlantic region.

There is no longer a regional minister for Atlantic Canada to push the agenda for the region. In fact for the first time since it was established, ACOA reports to a minister from southern Ontario. How regional is that?

Navdeep Bains is the federal minister responsible for ACOA but he is not a regional minister. He heads the Department of Innovation, Science and Economic Development Canada, concerned mainly with the economic interests of Ontario and Quebec.

Here in Nova Scotia we know from experience that federal transfer payments do little to address regional disparities. When you add up all of the federal transfers to the Maritimes the idea of regional development isn’t on the radar.

In fact the federal government isn’t even interested in monitoring how each Maritime province spends its equalization transfer. There is no annual federal audit of how and where that money is spent. Does the federal transfer assist municipalities in levelling the tax burden of residents throughout the province? Is it even considered to be economic development money? Does it equalize our tax burdens within Nova Scotia?

Barely! The federal government cares not at all that most of these monies end up in general provincial revenues. The equalization transfer is an “unconditional” gift to any elected provincial government. And the public doesn’t know and apparently doesn’t care. Out of sight, out of mind.

ACOA only responds to funding requests from within each province, for example, such as streetscape improvements in Yarmouth, street lighting in Antigonish and research and development in products of Cape Breton companies. There is no regional lens, nor are the dots connected across all of the other federal transfers to assess whether they are an effective upgrade to Atlantic Canada.

Since Stephen Harper, the federal government has acknowledged that it is not in the business of alleviating regional disparities. The neoconservative paradigm operating in Ottawa and Halifax relegates economic development to the private sector.