News Release Archive


Following is the text of a speech by Premier John Savage to the
Empire Club, Toronto, today (Tuesday, Oct. 15):

News addicts and television watchers here, may recall seeing Rex
Murphy's foray into the Canadian identity jungle last month.
Ponderously titled, "Searching for a Sense of Country," it was
one of those earnest probes into our national psyche. The
intrepid Rex emerged from the tangled brush with such a grab bag
of  ideas, comments, and opinions that even he had difficulty
bundling the unruly lot into an intelligible conclusion.

Rex was left asking himself,"is the chase worth the quarry?" ...
and responding, "there is a core here of attitude, temperament, a
special mix of history and experience -even in our clumsy and
sometimes reckless politics - that is finally recognizably our
own and worth keeping."

Frankly, I don't think Canada is nearly as impenetrable as the
media and other national hand-wringers maintain. As with most
nations, our identity is entwined with our sense of family.
--- Canada, after all, is a family.

To be asked what it means to be part of that national menage is
not much different from being asked what it is to be a Jones, a
Murphy ... or a Savage. These questions are fundamentally
unanswerable although, if pressed, we resort to the same well
worn and inadequate touchstones - membership by birth or
adoption, traits and heritage different from the neighbours',
geographic location, socio-economic standing, and expectations.

And that brings me to my theme, Two Canadas: the Devolution
Debate. What I have in mind here are not the uneasy relations
between Quebec and the rest of the country, or even the
contentious issues that beset aboriginal-non native dealings. I'm
referring to the Canada that has and the Canada that has not.

I'm convinced if we ignore these two Canadas today, we do so at
our peril. Further, I believe fairness is the only acceptable way
to deal with this family situation. Otherwise we risk turning it
into one of those latent dysfunctions that will eventually cause

You'll recall we heard a great deal about this topic in the  60s
and  70s under the heading "economic disparity." As transfer
payments and policies to encourage regional economic development
took root, the phrase faded from prominence in our national
political lexicon. With its retreat seems to have gone a certain
appreciation of its dynamic, at least as far as the have
provinces - Ontario, Alberta and British Columbia - are

That realization has grown with increasing regularity in the
current discussions on the devolution of some federal activities
and programs to the provinces. I'm talking here about federal
involvement in matters of exclusive provincial jurisdiction, as
outlined in our constitution - matters related to health care,
education and social welfare responsibilities.

  Most recently, the Two Canadas asserted themselves in August at
the First Ministers' Meeting when, as Newfoundland Premier Brian
Tobin so succinctly put it, "Courchene was thrown from the

While not on the official agenda, Professor Thomas Courchene's
controversial paper on re-balancing federal-provincial social
responsibilities gave us a defining moment. For the first time
Nova Scotia and five other have-not provinces voiced a resounding
and harmonious "no" to an option which obviously has some appeal
to Canada's rich provinces. We said "no" to the Courchene
scenario in which Ottawa would completely get out of social
programs like health care and turn its cash transfers into
equalized tax points for the provinces.

The fact that Have-Canada, particularly Ontario and Alberta,
would even bring Courchene's provocative paper along as a non
agenda item is troubling. It suggests the richer members of our
Canadian family are out of touch with their poorer relations;
that Ontario and Alberta don't fully appreciate the implications
of what Courchene is suggesting, and that perhaps Nova Scotia has
been remiss in not providing more enlightenment on the subject.

The plain truth is Nova Scotia can't afford to let Ottawa vacate
the social welfare field because, on its own, our province
doesn't have the money to bankroll a takeover. Ontario, Alberta
and British Columbia do. Consequently we still see a role for the
federal government in developing national standards, provided
they are achieved in consensus with the provinces. From past
experience we know how unilateral action by the federal
government in these matters can undermine provincial priorities
by diverting our comparatively modest resources from our

It should be remembered that if every have-not province paid full
fare for its social programs, this country's existing disparities
would be greatly magnified. The result - more discord, bickering
and resentment - would undermine our need for greater
co-operation, so vital today for our national well-being. As our
east-west economic links slacken to take advantage of the
continental north-south pull, it's generally agreed we must
maintain social bonds, like medicare, which Canadians recognize
as national family traits - as entitlements of citizenship and
unifying features of this country.

But this shouldn't mean Canadians in richer provinces should have
substantially better social programs than those in poorer
provinces -- unless of course you want two classes of citizenship
in this country. I'm certain Canadians won't buy that. And if
they did Have-Canada, let me tell you, would end up regretting
it. Imagine the strain on Ontario's financial resources if
Canadians from provinces like Nova Scotia started flocking here
for better medicare or enriched social services!

You'll recall British Columbia caught a preview of that nightmare
not long ago, when Albertans on pared-down social assistance
headed to the west coast where the benefits were more generous.
The result wasn't pretty - for either province.

Population migrations of this kind upset the economic balance.
People should move to take advantage of jobs and economic
opportunity, not social benefits. That only stands to reason
because we need tax revenue from jobs and economic activity to
sustain social programs.

Disparity, as we all know, already exists between Ontario and
Nova Scotia. Last year your annual average unemployment rate was
less than 9 per cent, ours was slightly over 12 per cent. Weekly
average earnings last year were estimated to be 25 per cent
higher in Ontario than Nova Scotia. And annual personal
disposable income for Ontario residents exceeded the Nova Scotian
figure by more than $3,000.

As a result our social programs in Nova Scotia aren't exactly
like yours here in Ontario. They aren't as rich. But they're
comparable and equitable. And we've been able to keep them that
way because of a system of federal equalization payments which
have been coupled with cash transfers for social programs,
containing in-built equalization factors.

Ontario argues these equalization factors should be scrapped from
our social programs and integrated into the formula for
equalization payments. We can't go along with that idea; we'd be
financial losers in the formula's renegotiation and we know it.
Courchene's scenario, turning cash transfers into equalized tax
points, falls far short of the mark too. Our social programs
would suffer. They couldn't be sustained in an equitable way with
Ontario's programs, Alberta's or British Columbia's.

Further, Ontario is captivated by the notion that it should get
100 cents back in benefits for every dollar it puts into the
kitty for national social programs. If we adopt that kind of
attitude, we won't have to worry about the consequences of a
Canada without Quebec; we'll already be well on the way to

Moreover the idea just doesn't make sense from the standpoints of
functionality or fairness. Consider how the principle would work
in employment insurance! Nova Scotia, where unemployment is high,
would collect disproportionately smaller benefits compared to
provinces where unemployment was low.

Let me put it to you this way: if you were living in a sparsely
populated hurricane belt, would you be satisfied if your
insurance agent offered you hurricane insurance with benefits
tied only to the premiums collected in your immediate area? Of
course not!

We understand Ontario's frustration at seeing money go out of the
province at a time when it could use the dollars at home. But
Ontario is part of a national family in which the members have a
long-standing tradition of taking care of one another in the name
of the common good.

Some fallacies, unstated but widely assumed, can get in the way
of a proper debate on this subject.

Among these misconceptions are the notions that Nova Scotia
doesn't pull its financial weight in the Canadian family; that we
aren't much of a factor in the central Canadian economy; and that
continued help from Have Canada will merely perpetuate our

These ideas are simply false! We are pulling our financial
weight. Federal taxes collected in Nova Scotia as a proportion of
personal income were the highest in Canada in 1993. We are much
less dependent on federal spending than we once were. Federal
expenditures on goods and services in Nova Scotia experienced the
fastest decline in all of Canada from 1980 to 1994. At the same
time federal revenues from our province have soared.

In 1980 net expenditure - that is all the money Ottawa sent to
Nova Scotia minus all the money we sent back - was 41 per cent of
Nova Scotia's gross domestic product or GDP. Then, because we
began to get less and send more to Ottawa, the net expenditure
figure dropped to just under 19 per cent in 1994. That's more
than a 50 per cent drop in this dependence measurement in less
than a decade-and-a-half. This data, of course, doesn't reflect
the substantial hits we took in the 1995 and 1996 federal
budgets. Those factors are expected to send this measurement of
dependence plummeting even further.

It isn't true either to say we aren't economically important to
central Canada. It may interest you to know, that Statistics
Canada recently released an analysis of interprovincial trade
which, while based on 1990 data, revealed some intriguing trade
patterns. Nova Scotia's interprovincial imports were worth $6.5
billion, nearly twice as much as our exports.

Slightly over half the value of those imports came from Ontario.
Quebec was next in line at 24 per cent and the Atlantic region
stood third at 18 per cent. By comparison, 42 per cent of our
exports stayed in Atlantic Canada with the remainder split
closely between Ontario and Quebec. We're an important market to
central Canada. Our biggest import item was automobiles. Now tell
me that isn't important to the Ontario economy!

Nor is it correct to suggest help from Have Canada is merely
perpetuating a syndrome of dependence. Our province lost close to
5,000 federal jobs in the last five years, far more in percentage
terms than any other part of the country. In fact 16 per cent of
all federal cuts in Canada since 1990 have been absorbed by Nova
Scotia. We estimate that the cumulative effect of federal cuts to
Nova Scotia will top $2.5 billion by the turn of the century.

The burden of picking up the slack has fallen to our private
sector and it has risen to the challenge. A good example is this
past August when the public sector was found with 8,000 fewer
jobs compared to the same month last year. While public sector
employment fell, private sector employment was up by 6,000.

As a provincial government we've been responsible. We've
aggressively slashed our spending to cope with a deficit which ..
at more than a half a billion dollars a year .... was out of
control when we came to power in 1993. We balanced our operating
budget this year - 12 months sooner than we originally
anticipated. We've brought in legislation to outlaw deficits in
future years and we've targeted our net direct debt for
demolition. Suffice it to say if we could get rid of our net
direct debt, now an estimated $8.43 billion, we'd be a
self-sufficient province. We're working on it!

Beyond that, we're doing what we can to help our private sector
expand and generate economic activity. And there are signs our
strategy is working. As of January this year we had the lowest
unemployment rate and the highest job growth in Atlantic Canada.
In July only five major centres in Canada had a lower
unemployment rate than Halifax.

More encouraging, our economic future holds signs of new wealth.
If current plans come to fruition about 30 per cent of Canada's
oil and gas production will come from the east coast within the
next five years. I'm thinking of the combined effect of Hibernia
and Terra Nova off Newfoundland and Sable gas off Nova Scotia.
These projects represent a big potential plus not only for the
Atlantic region, but for our national economy. Canada could
expect to realize more income from energy exports and experience
less reliance on imported fuel.

The Sable gas project has a value of at least $3 billion. The
consortium developing the project ... led by Mobil Oil .... will
make a final decision on the project about a year from now. A
joint federal-provincial review panel is up and running and has
started the public hearing process.

My government obviously has a great deal of interest in the
project. We have made it very clear that Nova Scotians must
receive maximum benefits from our offshore resource or the gas
will stay in the ground.

While we wait for the Sable consortium to give the final go-ahead
to the project, there is controversy over two competing proposals
for the pipeline which will carry the gas to markets in the
United States. One group wants to ship the gas directly to the
United States through Nova Scotia and New Brunswick. The other
proposal would see the gas go through Quebec before heading south
of the border.

Unfortunately, the routing of the pipeline has become a political
issue because of the Quebec government's interest in the project.
I have said repeatedly the decision is best left up to the
National Energy Board. Ottawa now agrees. But that's where the
debate should stop. I would argue that it is inappropriate for
any one in the federal government to comment further ... to argue
the merits or demerits of either pipeline proposal.

Let's let the regulatory agency do its work and keep us
politicians away.

I reiterate, Nova Scotians must receive maximum benefits from our
offshore resource in terms of jobs.

We anticipate that the Sable offshore project will play a
significant part in our desire to reach greater economic
independence. In the meantime, we remain vigilant in our efforts
to ensure that any changes to existing federal-provincial fiscal
arrangements don't penalize any one part of the country.

Ontario, with a government centred in one of Canada's richest
cities, doesn't argue about the principle or the need to equalize
services in the province's less affluent north. The Ontario
government strives to make its services as uniform and accessible
as it can for all provincial residents. Federal transfer payments
simply allow Ottawa to perform that same function on a
nation-wide basis.

... In all these matters, I am again reminded of Rex Murphy's
exploration of our Canadian identity. One of the people he talked
to was Harry Hayward, a volunteer with the Brandon War Museum. He
was quite critical of Canadians and said, "I think ... we've
become very self-centred and selfish, since probably the  60s.
It's me, me, me -- and we're not worried about anybody. I'm not
worried about you; I'm worried about me."

Well that's how it can appear at times, because we all come to
the family table as individuals with our own pressing concerns.
Only through the give and take of discussion do we begin to
perceive the family welfare as greater than our own.

Mr. Hayward seemed to sense this. He said, "... I think we're a
great country. We have a great history. We've done a lot of
difficult jobs together." Mr. Hayward remains concerned about our
future but he says, "I'm a typical Canadian. Ah well, I guess
it'll get sorted out somehow."

... Such blind faith is characteristic of Canadians. It's an
indication that our national family ties are more real, deep and
abiding than we care to admit  -- even to television
personalities. And it's in this spirit that I too believe we'll
get these issues sorted out. Moreover I'm convinced the outcome
will be guided by mutual good will and fairness. It's the
Canadian way.


Contact: Ann Graham Walker  902-424-2590

trp                      Oct. 15, 1996 - 2:25 p.m.