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How the West is winning

By Roslyn Kunin

Special to the Advocate

It’s not your grandfather’s Canada any more. Maybe not even your mother’s, because the regional patterns that prevailed in the past no longer apply.

Loleen Berdahl, associate professor of political studies at the University of Saskatchewan, and Roger Gibbins, former president and CEO of the Canada West Foundation, examine the changes Canada has undergone in a new book called Looking West: Regional Transformation and the Future of Canada.

When Canada’s industrial economy began, its aim was primarily the development of a manufacturing base in Quebec and Ontario through the use of protectionist tariffs. Companies, mainly American, set up factories in Central Canada to get their products in over the tariff walls and to take advantage of the protected Canadian market where their goods could be sold at high prices.

The West and Atlantic Canada were treated as colonies of Central Canada. They were to provide the resources and raw materials that Ontario and Quebec needed, while, given the tariff barriers, being forced to buy expensive Central Canadian manufactured goods, even though they did not share in the jobs that manufacturing created.

This narrow-minded perspective — as exemplified by a senior Ottawa bureaucrat who not long ago referred to an Inner Canada and an Outer Canada (no prizes for guessing which is which) — still prevails, even though trade within Canada is now freer and its regional economies more integrated.

But that’s changing because of new global economic realities. First, manufacturing, unless very highly automated, has moved from Central Canada and other industrialized countries to mainly Asian nations with their lower labour costs. Second, trade and economic growth are thriving around the Pacific Ocean while stagnating around the Atlantic. Third, the world is teeming with cheap manufactured goods, while resources are become scarcer.

This had led, according to Berdahl and Gibbins, to a shift in the balance of economic power in Canada.

B.C., Alberta, Saskatchewan and Manitoba now generate as much of Canada’s output as Ontario, and almost double Quebec’s contribution. The four Western provinces have 31 per cent of the population, which is also growing faster in the West than the rest of Canada. And excepting Toronto, the most ethnically-diverse cities in Canada are all in the West; immigrants have recognized for a long time where the action is in Canada.

And much of that action centres on the Pacific. Canada’s non-U.S. international trade and investment are now Asian rather European and about 70 per cent of Canada’s Asian trade originates in the West. Most Asian investment in Canada is also in the West, attracted by its resources and facilitated by the people of Asian origin in our diverse population.

Turning from recent immigrants to those who have been here the longest, two out of three First Nation people in Canada are in the West. Their numbers are not large, but aboriginals make up 10 per cent of Saskatchewan’s population and five per cent of British Columbia’s. They are important because many are located in areas that are low in population and rich in resources and also because, unlike the rest of the Canadian population, they have a young demographic with more people entering the working years than leaving them. Corporations, especially in resources and outside the urban areas, are looking to the young aboriginal population to supply their labour force.

Finally, in what is sweet irony for many Western Canadians, three out of the four ‘have’ provinces are in the West and the fourth is Newfoundland. Quebec and now even Ontario have become ‘poor cousin’ recipients of interprovincial equalization payments, from the wealthy provinces in “Outer Canada.”

This shifting balance means Canada and all its regions must start answering some very important questions.

- How can we take advantage of the strength of our Western- and resource-based growth?

- Where do we find the adaptability and flexibility to meet changing demands for resources and shifting markets?

- Finally, and what can the West do to help the ‘have-not’ provinces in Inner Canada escape the 20th century manufacturing model and rejoin the prosperity of the rest of the country?

Troy Media B.C.’s business columnist Roslyn Kunin is a consulting economist and speaker (see more at www.troymedia.com).

 
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