Lawrence Solomon
National Post
May 30, 2003
Two clashing cultures cause most of the discord that characterizes our country. Until we reconcile the two, large parts of our economy will continue as cripples, large parts of our environment will continue to be destroyed, and regional movements – some of them separatist – will threaten to tear us apart.
These incompatible cultures are not English v. French Canada, not central Canada v. the West and other regions, not whites v. coloured immigrants. The clash is between a largely expansive free market urban economy that generates most of Canada’s wealth and a largely protectionist government-run rural economy that nurses grievances and demands ever-greater subsidies from the rest of the country.
The threat of separatism, the ultimate expression of regionalism, was once confined to Quebec. Today it bubbles coast to coast. The loss of East Coast fisheries has made separatists of many Newfoundlanders, and in the West, many in Saskatchewan, Alberta and B.C. are aggrieved by everything from failed farm policies to the Kyoto Treaty. In all cases, the aggrieved ally themselves with their provincial governments in common cause against the federal government.
But the real quarrel of the regionalists, and of the separatists within them, isn’t with the federal government so much as with the modern, urbanized world. The federal government they loathe promotes policies that consistently reflect the preferences of the urban majority: socially in favour of abortion rights, gay rights, and gun control; economically in favour of immigration and environmental policies that remove vast tracts of land to protect endangered species or create protected parkland. Regionalists are disproportionately rural folk who fear or resent the social and economic changes swirling around them. To parry the federal government that brings them their upset, they rally around provincial governments. In effect, the regionalists are trying to recreate mini-Canadas of bygone days by wresting powers from the federal government and vesting them at the provincial level.
Quebec separatist have their strongholds in depressed rural Quebec, where government subsidies and government policies protect resource workers from the market economy and other globalizing forces. In contrast, Quebecers from the province’s more entrepreneurial and urbanized south, and especially those in commercial, cosmopolitan Montreal, voted decisively to stay in Canada. “It’s true we have been defeated, but basically by what?” asked Quebec premier Jacques Parizeau after the 1995 referendum. His answer at the time drew widespread outrage but it was right on the mark: “By money and the ethnic vote.”
Those in other parts of Canada who resent federal government policies – East Coast fishermen, Prairie farmers, and B.C. loggers – also disproportionately come from subsidy-dependent communities. Their dislike of Toronto and Ottawa is often matched by residents of Ontario’s own rural communities, who have much more in common with their rural counterparts 3,000 to 4,000 kilometres away than with fellow Ontarians a three to four-hour drive away. Likewise, support for the federal government is often high in the West’s cities. The West’s presumed alienation from central Canada is mostly mischaracterized. The alienation is less deeply felt region to region than across city lines.
Many regionalists especially resent central Canada for undervaluing them and marginalizing them economically. They assert that Canada’s economy would amount to nothing without our vast natural resources and that central Canada appropriates their great wealth. On this premise, they construct much of their case. As put by Western Canada Concept, perhaps the West’s leading separatist organization: “Western Canada produces 52% of Canada’s fishery, forestry, mining and agricultural revenue with 27% of Canada’s population. It produces 90% of Canada’s oil, gas and coal. . . . There are only three provinces in Canada whose exports consistently exceed their imports in value: B.C., Alberta and Saskatchewan.”
In truth, Canada’s resource economy doesn’t amount to much. According to Statistics Canada, the nation’s entire resource sector accounts for a mere 5.8% of GDP. Even that 5.8% greatly exaggerates the resource sector’s importance because – aside from energy resources – it mostly operates at a loss. As it’s currently run, our resource economy strips Canada of wealth rather than contributing to it. If the rural economy had to stand on its own, it would shrink dramatically. Prairie farms would mostly revert to wilderness; most of B.C.’s logging towns would either disappear or, when the scenery warranted it, transform themselves into resort towns servicing the recreational needs of urbanites.
Instead of confronting the regionalists and the separatists with the truth of their economic importance, politicians prefer appeasement. To give rural people added say in the federal legislature, the federal government provides rural residents with extra ridings out of all proportion to their numbers – some urban ridings now have 50% more residents than do rural ridings, even within the same province. With these added ridings, rural residents vote themselves benefits unavailable to urbanites: subsidized telephone service, subsidized transportation services, subsidized communications services, regional unemployment benefits, tax preferences of all kinds.
Despite these preferences – and despite the boatloads of other subsidies provided by provinces and rural municipalities – regionalists work themselves into a lather, forever finding new grievances and constructing new rationales to justify ever greater takings. One day, because the Supreme Court of Canada has legitimized a province’s separation from Canada and because provinces that use regionalism to extract concessions from the federal government may come to believe their own rhetoric, a regional political crisis may well arise that leads provinces to actually leave.
Canadian legislators who wish to see Canada survive and thrive should not risk this outcome. Rather than pretending that regionalists have legitimate grievances and cravenly attempting to appease them – an approach that can never succeed for long – parliamentarians should understand that honesty is the best policy. With an honest, even-handed approach, rural discontent would shrink with the number of rural residents on the dole.
For starters, Canada should enforce the principle of one-person/one-vote, a task entirely within the control of Elections Canada, a federal agency. In a decade or two, after new federal censuses redrew ridings on a democratic basis, overrepresented rural ridings would disappear by the bushelful, giving rural residents their fair share of political power and no more.
In the meantime, Canada should cut the resource sector down to size by ending the subsidies that prop resource towns up. Without make-work jobs in the rural areas, coupled by employment benefits that bribe rural residents into staying stagnant in backwaters, rural folk will flock to cities for employment. There, as occurred in past migrations, tradition-bound tendencies will fade, brightening the entrepreneurial spirit.
To further end the appeasement of our protectionist rural regions, the federal government should resume its promotion of open markets. It cannot easily force provinces to accept property rights – provinces vetoed past federal attempts to enshrine property rights in our constitution and they’re likely to again. But the provinces probably couldn’t continue to thwart free trade within Canada, as they have done for decades, if the federal government pandered less to provincial sensitivities and simply asserted its powers. By restricting trade across provincial boundaries, our provinces have weakened ties among Canadians and encouraged more north-south trade than would otherwise occur.
These distortions weaken national unity and the national economy. They would not exist but for the perverse role that governments have played in keeping Canadians on the farm, and in the fishing villages, and in other rural communities that could not support them without subsidies. To reconcile Canada’s urban and rural populations, the historic trek to the city must resume, until city and countryside are rebalanced, each self-supporting and in harmony.
Next: America’s 51st and 52nd states. Lawrence Solomon is executive director of Urban Renaissance Institute, a division of Energy Probe Research Foundation. www.urban.probeinternational.org
E-mail: LawrenceSolomon@nextcity.com.
Western Canada Concept
May 29, 2003
Independence for Western Canada, chosen by the people of each of the four Western provinces and northern territories in a referendum.
Founded in 1980, the Western Canada Concept stands for:
Independence for Western Canada, chosen by the people of each of the four Western provinces and northern territories in a referendum. A citizen’s constitutionally established right of reasonably accessible referendum, initiative and recall. Protection for the sanctity and safety of human life, property and security of the person and their fundamental freedoms. An end to immigration to preserve our environment, culture and stability. Equal rights for all, with no special status for any race, or ethnic origin. Preservation of our Christian culture and European heritage. A two-house legislature, one elected by population the other by region, both with original legislative jurisdiction and both required to approve before a law was enacted. One official language of Western Canada. The establishment of a balanced budget by law under the constitution so no future debts can be incurred by government.
Fundamental Facts:
Western Canada is the size of Europe. Western Canada produces 52% of Canada’s fishery, forestry, mining and agricultural revenue with 27% of Canada’s population. It produces 90% of Canada’s oil, gas and coal. Western Canada has a common language, and a direct interest in and access to Pacific Rim trade. There are only three provinces in Canada whose exports consistently exceed their imports in value: B.C., Alberta and Saskatchewan. Two provinces, Ontario and Quebec control two-thirds of the seats in the House of Commons, Senate and Supreme Court. To change this to share power would require their consent, hence patronage and favourable decisions for Ontario and Quebec are inevitable and permanent. The problems of the bureaucracy of Canada, bilingualism, the cost of government, equalization payments, special status for Quebec and aboriginal peoples, the national debt of Canada, the power of Ontario and Quebec in the Commons and judiciary are only soluble with separation and Independence. A Western Canadian dollar, backed by Western Canadian resources would be worth twice what Canada’s currency is worth today. We could be a prosperous, debt-free and independent nation . . . but it’s up to you!
We Need You:
To join and support our cause with energy, time and money. To cause your friends to join and spread the word. To read and understand the cause in the Western Separatist Papers. To write letters occasionally to explain your views for publication. To arrange for and organize public meetings. To be a candidate in a federal or provincial election. To support, organize for, work for, or fund our candidates if you are not one yourself.
What we offer you
A clear understanding of our goals and how they can be achieved. Over 15 years of experience in advocating and organizing for independence. Monthly information for every member to educate, co-ordinate and advertise our message. The expertise to get the job done with a leader who knows where to go and how to get there.
Steps to Independence:
Membership
Advocacy
Leadership
Michael Trebilcock and Roy Hrab
May 29, 2003
National Post
Ontario government ‘solved’ a power problem that didn’t exist and got itself high prices and power shortages as a result.
On May 1, 2002, Ontario’s retail and wholesale electricity markets were opened to competition. Electricity charges were unbundled into separate components (i.e., transmission charge, energy charge, distribution charge, etc.). Consumers in the wholesale market were permitted to directly enter into bilateral physical or financial contracts with wholesale sellers and generators. Consumers in the retail market were free to enter into fixed-price contracts with retail intermediaries. Almost one million consumers entered into fixed-price contracts with retail intermediaries.
In April, 2002, the month before market opening, the Independent Market Operator, a government regulator, stated that “Ontario is expected to have reliable supply of electricity for the 10-year period [2003-2012] under a wide variety of conditions.” Initial prices following market opening were low. The weighted average hourly wholesale price was 3.01¢ per kilowatt-hour in May.
However, prices dramatically increased as the summer progressed and provincial generation capacity was unable to satisfy demand. The IMO made emergency purchases of imported energy 38 times during the summer to maintain system reliability. By September, 2002, the weighted average hourly wholesale price was 8.31¢/KwH. In October, 2002, the IMO stated that “[t]here is a serious shortage of generation capacity to meet Ontario’s growing demand for electricity. If steps are not taken to address this situation, Ontario could face even more serious reliability problems next summer, leading to the possibility of supply interruptions and continued upward pressure on prices during periods of peak demand.”
In response to mounting criticism of the high summer electricity prices, the government lowered and froze the retail price of electricity for low-volume consumers and other designated consumers (i.e., municipalities, universities and colleges, public and private schools, hospitals and registered charities) at 4.3¢/KwH until at least 2006. These consumers also received retroactive rebates for electricity prices paid in excess of 4.3¢ since market opening. In March, 2002, the retail price freeze was extended to consumers using less than 250,000 KwH/year.
The cost of the first 12 months covered by the price freeze is estimated at $1.5-billion. Approximately $950-million of the cost was covered by a pre-existing fund: the Ontario Power Generation (OPG) rebate fund (because of its market dominance, OPG is required to rebate consumers on 90% of its domestic sales where the wholesale price exceeds 3.8¢/KwH). The remaining $550-million was added to the debt of the Ontario Electricity Financial Corporation (OEFC), a government agency. Electricity ratepayers, and possibly taxpayers, will be responsible for repaying this debt.
The Ministry of Energy has stated that the price freeze will be “revenue neutral” and that the program will “pay for itself.” Virtually nobody in the industry believes the Ministry’s claims. With current gas prices, an efficient gas-fired plant cannot produce electricity for less than 6¢ to 6.5¢/KwH. The cumulative average price from market opening to the end of April 2003 was approximately 6¢/KwH.
Analysis by the IMO’s Market Surveillance Panel (MSP) found that the supply-demand imbalance during the abnormally hot summer was caused by “increased demand, a nuclear outage, deratings on fossil-fired generators due to environmental limits and less hydroelectric energy available.” The MSP concluded that there was no evidence of market power abuse. Other factors contributing to the supply crunch were constraints on import capability, the Pickering nuclear plant’s restart delay and a reduction in nuclear capacity prior to market opening. Data from the MSP also indicate that between May, 2002, and January, 2003, Ontario wholesale prices did not differ significantly from neighbouring jurisdictions (e.g., New York) except during September, 2002, when Ontario prices were significantly higher.
Therefore, despite claims to the contrary by some commentators and political parties, the price shock had little or nothing to do with deregulation or privatization. Transmission and distribution rates are regulated by the Ontario Energy Board. OPG’s wholesale electricity prices are subject to a price cap. Both Hydro One and OPG remain government owned and private-sector activity is minimal. All local distribution companies are either owned by Hydro One or independently owned by municipalities. The province has cancelled the privatization of Hydro One. OPG has sold only one generation station while leasing another. The province blocked the privatization of two coal-fuelled plants. The Pickering restart continues to experience delays and cost over-runs; the first Pickering reactor is not expected to return to service until July. Moreover, the provincial government is currently directing OPG to expand its generation capacity.
The frozen retail rate is distorting consumption decisions. Incentives to ration consumption in times of tight supply have been eliminated. This distortion will affect the wholesale market.
The province is currently facing a number of substantial problems regarding electricity supply. Over the next 15 years, 40% of Ontario’s existing capacity will be retired from service or require substantial refurbishment. All political parties have made promises to retire the province’s coal-fuelled generators. However, policy uncertainty has chilled private sector investment in new generation capacity. In March, 2003, the IMO noted that only about 2,200 megawatts (MW) of approximately 8,800 MW of planned generation was under construction. The expansion of the province’s import capacity is also in doubt. Planned expansions of the province’s inter-tie capacity have been cancelled or delayed. Alternatively, proposals requiring the province’s 93 local distribution companies (LDCs) to enter into long-term fixed price contracts with generators to cover their demand would entail similar risks for the LDCs.
The present policy environment is highly politicized and imposes hidden costs on Ontario’s taxpayers and electricity ratepayers. The present government’s recent intervention, future governments’ potential interventions and the unresolved issue of OPG’s market dominance are jeopardizing the province’s future generation capacity by discouraging investment in new generation facilities.
The focus of policy must be redirected at the root problems if the province is to move forward. This requires renewed efforts to increase and diversify sources of supply by providing incentives for new generation and transmission capacity investment. The province must resist the temptation to directly construct new base-load generation capacity. Some industry participants recommend that the OEFC enter into long-term forward power purchase contracts with generators. These policies entail significant financial risks, chiefly the risk of entering into excessively long-term contracts at above market prices as observed in California following its electricity crisis.
Ontario policy should be directed at allowing supply and demand to interact and determine prices through full and effective market deregulation and privatization. This is the only environment that will create appropriate demand-side incentives to conserve and supply-side incentives to invest. In the transition period, there are a number of policies the province should consider pursuing. Such policies include those that would protect consumers from sharp price increases by allowing retail prices to incrementally rise to efficient levels, create “life-line” rates for low income consumers, create incentives for self- and distributed generation, harmonize market rules with neighbouring jurisdictions, expand inter-tie capacity to extend the scope of the regional market, and accelerate OPG’s decontrol program.
Michael Trebilcock is a professor and Roy Hrab is a research associate at the Faculty of Law at the University of Toronto.
Western Canada Concept
May 29, 2003
We the undersigned citizens of Western Canada, desire to escape the long-standing grievances which we have experienced by reason of the nation of Canada at the hands of its government at Ottawa.
Whereas, we the undersigned citizens of Western Canada, desire to escape the long-standing grievances which we have experienced by reason of the nation of Canada at the hands of its government at Ottawa;And whereas we have considered after a long period of serious reflection, and every reasonable effort at accommodation and co-operation, that these long-standing grievances do not exist for mere light, transitory or partisan reasons, but are indelibly imposed on the nature and fabric of the Ottawa government and will never be remedied, no matter how often we compromise to suit its needs;
And whereas we have concluded that the grievances are so serious and permanent as to be no longer tolerable because they tax us without benefit or real representation, they oppress us with unnecessary laws and destroy our freedom beyond endurance;
Therefore we are resolved to seek to achieve a greater and more perfect unity in a nation of our own, chosen by us in our own referendum in each Western Canadian province when a majority of us so desire;
And whereas the Government at Ottawa has, through its own act entitled “An Act to give Effect to the Requirement for Clarity as set out in the opinion of the Supreme Court of Canada in the Quebec Secession Reference” and passed in the 2nd session of the Thirty-Sixth Parliament and assented to on June 29th, 2000 A.D.;
And whereas by this Act, the right of self-determination by any province is affirmed if the government of any province of Canada consults its population by referendum on any issue and it is entitled to formulate the wording of its referendum question;
And whereas the said Act requires both a clear question and a clear majority;
And whereas we the undersigned desire clarity to be established on both issues;
We, the undersigned citizens, hereby petition and demand of our provincial government as follows:
(1. ) That immediately upon this petition being signed and delivered to the Premier by 10% of the population who voted in the last provincial election, the following question shall be put to all the electors of our provinces by a general referendum within 90 days of the ratification of this number of signatories to this petition by the Chief Electoral Officer of our province;
(2. ) That to satisfy section 1(1) of the aforesaid Act, we hereby demand that the government of our province, in our legislative assembly, forthwith upon receipt of this petition duly signed by us, table in the legislative assembly, the following referendum question for consideration by the House of Commons at Ottawa, and thereafter put the following question to the people of our province for consideration in a referendum:
“Question: Do you desire our province to cease to be a part of Canada and become an independent sovereign nation state?”
(3. ) That to satisfy the terms of Section 2(1) of the aforesaid act, our provincial government ratify, and we declare, that a clear majority shall consist of the number of 55% of all those persons who vote in the referendum to be held pursuant to section 1 hereof;
(4. ) That the legislative assembly of our province formally adopt and enact the terms of this petition with no unnecessary modifications, to achieve the spirit and intent of this resolution and petition, which is to clearly express a clear majority in favour of secession of our province from Confederation as soon as legally possible.
We the undersigned free men and women of Western Canada hereby declare our solemn oath that we shall persevere by all peaceful means to escape the political economic and social oppression of the unjust system of government created by Canada and to create our own new nation by the democratic process of a constitutional convention for the creation of a nation, for the freedom of our descendants, and the preservation of our land and heritage and to this end we pledge our best efforts and our most sacred honour.
Name (Print Clearly) Address (& Postal Code) Signature
1. ___________________________________________________
2. ___________________________________________________
3. ___________________________________________________
4. ___________________________________________________
5. __________________________________________________
6. __________________________________________________
7. __________________________________________________
8. __________________________________________________
9. __________________________________________________
10.
Return petition for assembly and delivery to: Western Canada Concept at P.O. Box 101, 255 Menzies Street, Victoria, B.C. V8V 2G6
For progress reports on the petition, check WCC website at: http://www.westcan.org
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