Douglas Brown (updated, October 2010)

1. Between a Rock and a Hard Place:The Report of the Newfoundland and Labrador Commission on Our Place in Canada Douglas Brown (updated, October 2010)

2. Our Place in Canada: Outline of Presentation • A Case study in Regional alienation • Royal Commission Mandate • Process • Framing of the Issues • Conclusions and Recommendations • Post-Commission developments

3. A Case study in regional alienation • A struggling province still trying to find its place • A weak government searching for a new intergovernmental strategy (pre Danny Williams) • A uniquely comprehensive analysis of a single province and its relationship in the federation. • Useful benchmarks for measuring NL progress since 2003

4. The Royal Commission’s Mandate • To return to 1949: what were the expectations on joining Canada? • To be comprehensive: examine all aspects of NL relations with Canada • To be forward-looking: how to renew and strengthen “our place” in Canada • Somewhat open-ended: how to increase “prosperity and self-reliance” for NL

5. Commission Process • Appointed May 2002; reported July 2003 • Three Commissioners: Vic Young, Elizabeth Davis and James Igloliorte • Small staff • 25 public meetings, dozens of private ones • Research program of 30 studies • budget of only $2.3 million

6. Why a Commission? • General malaise due to long-term effects of 1992 cod moratorium, out-migration and federal budget cuts of 1995 • A specific political rationale to give the Grimes government a boost, to find new ideas for intergovernmental strategy • Political risks: “creating a monster” of raised expectations, no new solutions, too big a mandate, not enough time

7. Framing the Issues • Trying not to blame Canada • Facing hard truths • Embracing a sense of place • Seeking a “new way of relating” • Devising an integrated strategy

8. Hard truths • Economic disparity…still in last place • Fiscal crisis…again • Fisheries teetering on the brink • Rural communities in sharp decline • Severe out-migration • Weak constitutional position

9. Key conclusions and recommendations • No to separation, no to the status quo • Need for collaborative federalism • To be the “principal beneficiary” of offshore oil revenues • Concerted effort to restore the fisheries • A new partnership for hydro development • Putting the fiscal house in order • Facing up to rural sustainability

10. 1. No to separation… • NL’ers proud to be Canadian • Only 12 percent want independence • But huge level of dissatisfaction with how Canada works • Terms of Union cannot be amended

11. 2. Collaborative Federalism • Need collaborative, not competitive federalism • Need respect for NL as a province • Need more federal presence • More flexibility and accommodation to unique needs • Senate Reform • Support a Council of the Federation

12. 3. Offshore Oil • The Atlantic Accord, negotiated by Mulroney and Peckford governments in 1985: NL was to be the “principal beneficiary” in fiscal terms • Initial fiscal projections of Accord were unrealistic • From 1985-2004 Government of Canada reaped 75 to 80 percent of total revenues • Conclusion: strike a new deal.

14. 4. Last Chance for the Fishery • The devastation of the groundfish (cod etc.) moratorium of 1992 • Too much fed-prov squabbling • Need an action plan to address stock rebuilding, prevent foreign over-fishing, have joint management of licensing.

15. 5. Churchill River Hydro • Churchill Falls contract of 1969 with Hydro Quebec still costs NL an estimated $800 million a year in lost profits • But forget about linking new “Lower Churchill” project with renegotiated deal on Churchill Falls • Instead get other partners (e.g. Feds, Ontario) to promote an equitable new development

16. 6. Provincial Fiscal Reform • Unsustainable fiscal deficit • Offshore oil revenues not going to close the gap [or so they thought then] • Need to balance the budget, engage in program review (i.e. can’t do it all) … and address unfunded pension liabilities

17. 7. Rural Sustainability • Survival of rural Newfoundland is at stake • No one wants to discuss the issue • Commission failed to get consensus • Need for a sustained public dialogue or deliberation • There is a cross-Canada search for solutions (we’re not alone in this…)

18. Impact of Commission • NL is here to stay in Canada • Confident sense of place: something to build on • Greater sense of realism • Portrays urban-rural gaps in cohesion as a community • Some said report was not bold enough • Provided a good foundation for a fresh approach [which Danny Williams took up soon after]

19. Developments since 2003…1 • Williams government gets elected November 2003, program very similar to Commission report • Williams takes aggressive line with: • the feds over equalization and the fishery • with business over oil, hydro and mineral developments • With Quebec over hydro, oil • Province pursues cooperative, multilateral strategy – strong participant in new Council of Federation and in the Council of Atlantic Premiers.

20. Developments since…2 • Paul Martin and Stephen Harper both promise a new deal on the offshore – Martin government delivers, Feb. 2005 – but Harper restricts the benefit of the agreement in 2007. • Williams runs “ABC” (Anybody but Conservative) campaign in federal election, 2008. • April 1, 2009: NL officially becomes a “have” province…no longer qualifies for Equalization.

21. Developments Since 2003…3 • Budgetary position of province much improved: • Offshore oil revenues exceeded income tax revenue for first time in 2007-08 ($1billion) • Debt/GDP ration in decline • Surplus budgets • Oil-driven economy pushes NL into 5th largest economy per capita among provinces • Unemployment rate lowest in 20 years • However…rural out-migration continues