Guest commentary by Donald J. Savoie, Canada Research Chair in Public Administration and Governance, Université de Moncton.
This commentary first appeared in the Telegraph Journal on Saturday, September 16, 2023. It has been shared with the author’s permission.
Several years ago, the federal government introduced the Atlantic Immigration Program. Ottawa recognized that “national policies” and “national programs” did not always work well at the regional level, at least in some regions.
Politicians from our region had been arguing this very point ever since Canada was born, making the case that “national policies” were code words for promoting the interests of Ontario and Quebec. The Atlantic Immigration Program has proven to be a resounding success, paving the way to welcoming 6,000 new Canadians every year in our region. This speaks to the need to tailor national policies to regional economic circumstances and to recognize Canada is home to several distinct reginal economies.
Accommodating different regional economic circumstances do not stop with immigration policy. Ottawa’s Clean Fuel Regulations and its carbon tax were not designed to accommodate regional circumstances, at least those in Atlantic Canada. Compared to other regions, Atlantic Canada has a heavy rural population. The rural population of the three Maritime provinces still hovers between 40 and 50 per cent. This is different from other regions. Ontario and Quebec were at the 50-50 urban-rural population split 100 years ago. Rural-based communities and their residents do not have access to mass transit systems and are particularly sensitive to sharp increases in the price of gas. Our region remains more rural than other Canadian regions because a good part of our economic structure is rural-based – difficult, for example, for fishers to pursue their livelihood in an urban setting. By one estimate, compliance cost in pursuing the Clean Fuel Regulations and implementing carbon tax is estimated to be nearly give times higher in Atlantic Canada than the Canadian average.
Our region, comparatively speaking, also remains highly dependent on refined petroleum as its energy source, at about 60 per cent. Nova Scotia, as is well known, continues to rely in part on coal to generate electricity and oil-fired furnaces to heat homes. The impact on homeowners does not tell the whole story. Out region’s businesses, from manufacturing, food processing to forestry, are both trade dependent and heavily reliant on electricity. Power rates constitute and important component of the cost of doing business and they have a substantial impact on our businesses’ ability to compete. It only takes a moment’s reflection to appreciate the impact on our regional economy if our businesses lose their competitivity. There is also a limit to how much our businesses can pass increased production costs to their customers.
Our region’s economic history has been a difficult one, going back to Confederation. Too many Atlantic Canadians had to go down the road to other regions in Canada and to New England in search of economic opportunities. However, the region now has wind in its sails, and we are going down the road no more. For the first time in generations, we are seeing populations growth everywhere in our region, in both urban and rural areas. Momentum in economic growth is never certain. History tells us that businesses will locate or re-locate to lower-cost areas. Our businesses, because of our geography and our economic structure, are heavy users of electricity and power rates have a strong impact on their ability to compete.
Climate change deniers are not only misinformed, they are also misguided. I recognize we need to do more, not less, to deal with the most important challenge of our time. My point is the Atlantic region economy has distinct characteristics that need to be taken into account when setting out to deal with climate change and reshape the energy sector from Ottawa. Some observers may well conclude Atlantic Canada constitutes a very small component of the national economy and federal transfer payments will deal with any fallout from the federal government’s Clean Fuel Regulations and its carbon tax. That is often how federal policies were shaped in years past. The region does not want more transfer payments but public policies that recognize Atlantic Canada’s economic circumstances are different from other regions. It can be done, and the Atlantic Immigration policy showed the way.
The region needs a well-informed debate on Clean Fuel Regulations and carbon tax and weigh all options. Should the region pursue national gas more aggressively? How best to pursue alternate forms of energy? The proposed Atlantic Regional Transmission Loop is viewed by some as the answer to our energy challenge. The proposal raises a number of question s- who actually benefits from the Atlantic Loop project, what is the financial cost, and who pays?
Atlantic Canada needs answers to these questions. After being tagged a have-not region for generations, the region has been registering solid growth in recent years. History holds an important lesson for our region: pursuing “national policies” with little regard for our economic circumstances does not work for Atlantic Canada.