Lions or Jellyfish: Newfoundland-Ottawa Relations since 1957 9781442622654

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LIONS OR JELLYFISH Newfoundland-Ottawa Relations since 1957

Asked in 2010 about his pugnacious approach to federal-provincial relations, Newfoundland premier Danny Williams declared, “I would rather live one more day as a lion than ten years as a jellyfish.” He was only the latest in a long line of Newfoundland premiers who have fought for that province’s interests on the national stage. From Joey Smallwood and the conflict over Term 29 of the Act of Union to Williams and his muchpublicized clashes with Paul Martin and Stephen Harper, Newfoundland and Labrador’s politicians have often expressed a determination to move beyond a legacy of colonialism and assert greater control over the province’s own affairs. Lions or Jellyfish examines the history of these federal-provincial clashes with both clarity and wit. Written by a noted expert on Newfoundland politics and intergovernmental affairs in Canada, this book studies a vital but frequently overlooked aspect of modern Canadian federalism. raymond b. blake is a professor in the Department of History at the University of Regina and the author of Canadians at Last: The Integration of Newfoundland as a Province.

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Lions or Jellyfish Newfoundland-Ottawa Relations since 1957

RAYMOND B. BLAKE

UNIVERSITY OF TORONTO PRESS Toronto Buffalo London

© University of Toronto Press 2015 Toronto Buffalo London www.utppublishing.com Printed in the U.S.A. ISBN 978-1-4426-5025-1 (cloth) ISBN 978-1-4426-2830-4 (paper)

Printed on acid-free, 100% post-consumer recycled paper with vegetablebased inks

Canadian Cataloguing in Publication Data Blake, Raymond B. (Raymond Benjamin), author Lions or jellyfish : Newfoundland-Ottawa relations since 1957 / Raymond B. Blake. Includes bibliographical references and index. ISBN 978-1-4426-5025-1 (bound). – ISBN 978-1-4426-2830-4 (pbk.) 1. Federal-provincial relations – Newfoundland and Labrador.  2. Newfoundland and Labrador – Politics and government – 1949–.  I. Title. FC2175.2.B53 2015   971.8'04   C2015-901019-5 This book has been published with the help of a grant from the Federation for the Humanities and Social Sciences, through the Awards to Scholarly Publications Program, using funds provided by the Social Sciences and Humanities Research Council of Canada. University of Toronto Press acknowledges the financial assistance to its publishing program of the Canada Council for the Arts and the Ontario Arts Council, an agency of the Government of Ontario.

University of Toronto Press acknowledges the financial support of the Government of Canada through the Canada Book Fund for its publishing activities.

For three scholars and friends – J.L. Granatstein, Peter Neary, and John Whyte. They each have been influential in shaping my views about how best to understand the historical process and have fostered within me the hope that a nation and its peoples will forever have the decency to search for accommodation and compromise that are the basic political principles of any virtuous nation state.

“I would rather live one more day as a lion than 10 years as a jellyfish.” Danny Williams, premier of Newfoundland and Labrador, on standing up against those who would take advantage of his province. November 5, 2010

Contents

List of Illustrations  ix Acknowledgments  xi Introduction 3 1 Smallwood, Diefenbaker, and Term 29: Failed Intergovernmentalism 21 2 Federalism for Bullies: Newfoundland, Quebec, Ottawa, and Hydroelectric Development in Newfoundland and Labrador, 1960–1970 58 3 Classic Federalism: The Resettlement of Fishing Communities in Newfoundland and Labrador to 1965  98 4 Cooperative Federalism: Newfoundland, Ottawa, and Resettlement after 1965  125 5 Unravelling the Question: Federal or Provincial Jurisdiction of Offshore Oil and Gas  152 6 The Nationalists: Trudeau, Peckford, and the Struggle for Offshore Oil and Gas  173 7 Reason, Passion, and Intransigence: Federalism, Clyde Wells, and Brian Mulroney  221 8 The Battle for a Fair Share: Danny Williams, Equalization, and Ottawa  275

viii Contents

Conclusion 314 Notes  323 Bibliography  395 Index  417

Illustrations

.1 Prime Minister Louis St. Laurent with his cabinet  27 1 1.2 View of a secondary road in very poor condition  42 1.3 Premier Joseph Smallwood on tour of Canada to condemn Prime Minister John Diefenbaker  51 1.4 Premier Smallwood greeting Prime Minister Diefenbaker on his visit to the opening of Memorial University  55 2.1 Premier Smallwood and Prime Minister Lester B. Pearson in Gander, July 1966 60 2.2 Hamilton Falls, 1954 (later renamed Churchill Falls)  65 2.3 Premier Smallwood with Quebec Premier Jean Lesage at a conference in 1964  69 3.1 Economist Robert Wells discussing resettlement with residents of Silver Fox Island, August 1961  115 3.2 Malcolm Rogers’ house, which was floated from Silver Fox Island to Dover  119 4.1 Newfoundland: Resettled communities  142 4.2 Pushthrough, early 1960s  147 5.1 Premier Smallwood and Prime Minister Pierre Trudeau at the 1968 Liberal leadership convention  157 5.2 Premier Frank Moores at the First Ministers’ Conference in Ottawa, 1978  168 6.1 Brian Peckford, the “bad boy” of Confederation  176 6.2 Breakfast meeting of eight dissenting premiers, 1981  186 6.3 Prime Minister Trudeau visiting Grand Bank, Newfoundland, 1971 204 7.1 Prime Minister Brian Mulroney and Premier Peckford at Meech Lake 228

x Illustrations

.2 Clyde Wells giving a speech in Ottawa, 1990  235 7 7.3 Premier Wells leaving the official residence of Prime Minister Mulroney in Ottawa  254 7.4 Prime Minister Mulroney addressing the Newfoundland Assembly 262 8.1 Premier Danny Williams in his office  280 8.2 Prime Minister Paul Martin and Finance Minister Ralph Goodale arriving to speak to the media at the first ministers’ meeting, October 2004  293 8.3 Chris Osborne lowers the Canadian flag at the Newfoundland House of Assembly  297 8.4 Premier Williams giving a thumbs up at the signing of a multibillion-dollar revenue-sharing deal  301

Acknowledgments

This book examines the relationship between Ottawa and Newfoundland and Labrador through the lens of federalism. It covers the period from 1957 to approximately 2010 and surveys relations between the province and federal government through the interactions between eight prime ministers and five or six premiers. All were strong-willed, determined individuals whose actions were shaped by national and provincial priorities as well as by their character and their views of Canada and Newfound­ land. They each had distinct personalities and unique political philosophies and often disagreed vehemently over the nature and shape of Canadian federalism and Canada itself. They all recognized the legacy of colonialism that plagued Newfoundland and Labrador but they also had a shared commitment to Canada. This book, then, is a study of how premiers and prime ministers struggled and quarrelled over how to make Confederation work better for Newfoundland and Labrador. They did not fight over Confederation itself and whether or not Newfoundland and Labrador was better inside or outside of it. That issue had been settled much earlier in 1948. This book is based primarily on archival research in several provincial capitals and in Ottawa. Despite cuts to archives at both the national and provincial levels across Canada, the archivists and other individuals who staff these important institutions remain the historian’s best friend. The joys of research are enhanced by the people I encountered in doing the research for this book. At Archives and Special Collections in the Centre for Canadian Studies (CNS) at Memorial University, Linda White was an historian’s dream. She knows the collections well and cares about history as well as historical sources. She and Paulette Noseworthy always made a visit to MUN rewarding. At The Rooms Provincial Archives of

xii Acknowledgments

Newfoundland and Labrador, Melanie Tucker was particularly efficient at both providing timely access to records and navigating through the process of accessing restricted materials. Library and Archives Canada has changed considerably since I first visited as a graduate student, but I found that if I planned well, the materials I wanted were always available and the staff friendly and accommodating. Sean Dutton, the deputy minister of Intergovernmental Relations and Aboriginal Affairs with the Government of Newfoundland and Labrador, provided timely access to records from the 1970s, as did former Premier Clyde Wells from the 1990s. Andrea Hyde graciously provided transcripts of debates in the Newfoundland House of Assembly. At the Diefenbaker Canada Centre at the University of Saskatchewan, Rob Paul was particularly helpful, as were various archivists at the Provincial Archives of Nova Scotia and the Provincial Archives Board of Saskatchewan. For the photographs that are included, thanks to Arthur Mills for assistance with photographs from the Right Honourable Brian Mulroney’s private papers at Library and Archives Canada; to Steve Bartlett, the managing editor at the Evening Telegram in St. John’s; and to Doug Wells and John Marsden for the photograph of Pushthrough. Thanks, too, to Julia Siemer for her map on Newfoundland resettlement. I was assisted in the research by several able and enthusiastic research assistants at the University of Regina, including Delaney Jackson and Liam Fitz-Gerald (who helped with the bibliography in the push to get the manuscript to the publisher) and Stephen Hodgson for preparing the index. Several friends and colleagues read various sections of the manuscript and offered insightful comments. Dr Reid Robinson is a chemist by profession but really a historian at heart; he offered wonderful advice throughout. I had many conversations in St. John’s with Dr Melvin Baker who has written extensively on Newfoundland and whose knowledge of the province is simply profound. Any coffee with John Whyte always turned to long chats about federalism and Canada. He and Melvin also read parts of the manuscript and offered perceptive comments and questioned assumptions that forced me to rethink aspects of this book. Brian Mlazgar read the complete manuscript and offered sage advice. Other friends and colleagues, notably Peter Neary, Penny Bryden, Ken Leyton-Brown, Cam Blachford, and George Hoffman, helped in various ways from offering support to simply talking about aspects of Canadian and Newfoundland history that helped me sort through the quagmire of Canadian federalism. So, too, did two anonymous and excellent readers selected by the University of Toronto Press where Len Husband did a

Acknowledgments xiii

superb job of shepherding the manuscript through the publication process. Gillian Buckley brought the keen eye of a copy editor to improve my prose and bring clarity to my thoughts, and Lisa Jemison, UTP’s managing editor, made publishing look effortless. I must also acknowledge the generous financial support of the Social Science and Humanities Research Council of Canada through its SSHRC Insight Grant, the Faculty of Arts at the University of Regina for its Dean’s Research Awards, and Christopher Pratt for permission to reproduce his 1997 serigraph print, The Raven, as the cover image for this book. I would also like to thank Acadiensis and the Canadian Historical Review for the earlier opportunity to present parts of chapter 1 and chapter 6, respectively, in essay form and for allowing me to use the material again. During one of my visits to Jack Granatstein’s home when I was a graduate student, I remember another friend talking excitedly of the joy of landing a salmon. Jack responded: “Wait until you publish your first book.” Jack was wrong. The excitement is not limited to the first book; it comes with each one. The joy and excitement of seeing in print the culmination of several years’ research and writing continues to be quite extraordinary, and having the support and love of a family along the journey makes it even more rewarding. Once again Ben, Robert, and Wanda have been tremendously supportive, encouraging, loving, and patient and for that I will be grateful always. Don’t believe anyone who tells you that being a historian and writing history is a solitary pursuit. I have found it is done best as part of a family.

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LIONS OR JELLYFISH Newfoundland-Ottawa Relations since 1957

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Introduction

Governing is often a messy and confrontational pursuit in federal states such as Canada where jurisdiction is divided between two orders of government. Canada has had long periods of strong central authority at the national level, but provincial governments have had an equally long history of resisting the centralizing tendency of the Canadian federation. All legislators have at one time or another lost sight of the common good and become fixated on issues of jurisdiction rather than what might be the best policy choices for the citizens who elected them. For­ mer New­foundland and Labrador Premier Danny Williams manifested that tendency when he told his party faithful at an annual premier’s dinner in St. John’s, “I would rather live one more day as a lion than 10 years a jellyfish,” while reflecting on his battles with Canadian prime ministers Paul Martin and Stephen Harper. Not a single premier or prime minister could ever allow him or herself to be the jellyfish in any of the federalprovincial battles that have marked the often bitter and protracted history of intergovernmental relations in Canada even though both premiers and prime ministers actively tried to solve national and provincial problems to provide social and economic security to all Canadians. A successful state must find within itself the capacity to find accommodation for all its members. Federal states have the added responsibility of finding accommodations among their constituent parts while managing successfully the competing national interests to ensure political stability and social and economic justice for all. The province of Newfoundland and Labrador is a relatively new entrant into Canada, one of the world’s oldest and most stable federations, and its first ministers have often been at the centre of the troubled relations between Ottawa and the provinces that began with Confederation

4  Lions or Jellyfish

itself and have been a common occurrence since then. When the British North American colonies came together to create a nation state in 1867, Newfoundland chose to remain outside the new union. Unlike two other maritime colonies – British Columbia and Prince Edward Island, which succumbed to imperial and Canadian pressures to join in 1871 and 1873, respectively – Newfoundland voted only in 1948 to become part of Canada and then only after a bitter and protracted internal debate. A National Convention had been elected in 1946 to consider various constitutional options that it would recommend that the British government place before the people in a national referendum to decide the country’s constitutional future. This was a part of the process to re-establish democracy and return to Newfoundland the self-government that had been surrendered amidst the fiscal and economic crisis of the Great Depression. Negotiations between Canada and Newfoundland began in 1947 when a delegation from the Convention travelled to Ottawa to investigate what Canada might offer if Newfoundland decided to join­the Confederation. The Canadian negotiators had decided long before they sat down with the Newfoundlanders that the new province had to fit into the existing political and constitutional model that had evolved since 1867. They could not offer terms that would create significant differences between Newfoundland and the existing provinces. Hence, the negotiations became largely an attempt to reconcile the demands of New­foundland with what Ottawa provided to the other provinces. The Canadians were prepared to offer to Newfoundland only what they believed would be acceptable to the other partners of the federation. The Newfoundland negotiators in 1947 – and again after a narrow vote in 1948 in favour of joining Canada – argued for the unique circumstances of Newfoundland, which had long remained outside of the Canadian federation. They were acutely aware of the economic and social disparities that existed between their country and Canada, even if the Second World War had restored to them some measure of prosperity, and they looked forward to the post-war period with considerable uncertainty and dread. Yet they insisted on the exceptionalism of their country – the belief that it was extraordinary and deserved special consideration because of its peculiar constitutional history and economic disadvantages. It is important to recall that before Confederation, Newfoundland had no experience with federalism, and it insisted that it should not have to conform to all of the normative rules and general practices of the Canadian experiment. The negotiators in particular hoped to win special concessions in fiscal matters. Ottawa was willing to concede a

Introduction 5

limited uniqueness but only in such subjects as denominational education, the production of margarine, and others falling within a purely local or provincial purview. The Canadians largely dismissed claims of New­found­land’s exceptionalism as a new province, especially in fiscal and financial matters, except, perhaps, for a brief transitional period. Yet, having invested all of their political capital in the importance of joining Canada, the Newfoundland delegation could hardly return home without a signed deal even if the Canadians refused to accede to their claim of special status entitling the province to extraordinary financial entitlements. And so the delegation returned to St. John’s in December 1948 with New­foundland’s status as Canada’s newest province assured. Despite Canada’s rejection of all pleas for special financial consideration, members of the Newfoundland delegation continued to believe that the new province constituted a special case within Canada.1 When the two countries joined just before the stroke of midnight on 1 April 1949, they shared the basic political goal of all liberal democratic states – that each should flourish under the new constitutional arrangement outlined in the Terms of Union. Although the union was premised on notions of fairness, prosperity, and stability, the two countries continued to harbour separate notions on how to best achieve their shared goals. In the moment of euphoria consummating the union, both New­ foundland and Canada ignored the long-held dictum that nation states negotiate and construct constitutional arrangements from specific and distinctive needs and interests that have emerged from particular political cultures. With a constitutional arrangement negotiated from different perspectives, strident conflict between the federal and provincial governments was inevitable if membership in the Canadian federation did not result in a rapid bridging of the gap in the standard of living and the level of public services that existed between Newfoundland and Labrador and the rest of Canada in 1949. It soon became evident that that disparity would prove to be a stubborn one to overcome. Since the early 1950s, Newfoundland and Labrador has been embroiled in conflict with Ottawa more frequently than any other province in Canada, with the exception perhaps of Quebec. The problems that the premiers over the years had with Ottawa revolved around how to make Confederation work better for Newfoundland and Labrador, not over Confederation itself as was oftentimes the issue in Quebec. A recent episode occurred in 2004 when Danny Williams lowered all Canadian flags on public buildings in Newfoundland and Labrador and packed them away. He was upset that Newfoundland would lose its equalization

6  Lions or Jellyfish

transfers as its revenue from offshore oil increased markedly, even though Prime Minister Paul Martin had promised him during a federal election campaign that he would ensure that such a thing never happened. Williams vowed that the flags would remain in storage until Martin and the Canadian government treated Newfoundland and Labrador with the honesty, respect, and integrity that Williams insisted it deserved. He was simply “Danny” both at home and throughout much of Canada and simultaneously admired and vilified for his belligerent and determined confrontation with Ottawa. After goring Martin and winning major concessions from the federal government in 2005, he found that Stephen Harper wanted to once again change the equalization agreement and limit the gains that Newfoundland forced from Martin. In the 2008 general election Williams launched a national ABC – Anything But Con­ servatives – campaign, claiming that Harper had broken his word on equalization just as Martin had. He bought space on a billboard in downtown Toronto, encouraged Canadians at every opportunity not to trust Harper, and campaigned as actively against the Conservatives as another premier – Joseph R. Smallwood – had done against John Diefenbaker’s Conserva­tives in the early 1960s. Williams’ rhetoric grew increasingly strident as Ottawa ignored his pleas for specific fiscal consideration. Williams was only the latest in a succession of Newfoundland premiers engaged in bitter confrontations with Ottawa. Since 1949 the premiers of Newfoundland and Labrador have attracted a level of attention that far outweighs their province’s influence at the national level, but New­ foundland politics has always been personalized and the provincial premiers have been at the centre of it all. Most of them charismatic and possessing colourful personalities, the premiers have displayed classic political skills and dynamic leadership to not only attract the Newfound­ land electorate to their crusade but also rally considerable national attention to their cause. They have all demonstrated a shared commitment to Canada and all of the province’s premiers from Smallwood on became household names throughout Canada. Canadians have often displayed a sense of equality and a commitment to social justice and for many, Newfoundland was aspirational, as it has real problems to be addressed. The premiers emerged not from a polarized politics stemming from long periods of class struggle, but from accepted and established patterns of political mobilization designed to give citizens of the province equal partnership in the Canadian political community. Some wished to use the power of the provincial state to do so, while others looked to the federal state. Joseph Smallwood, the province’s first premier following

Introduction 7

union in 1949, launched a bitter and acrimonious battle with Prime Min­ ister John Diefenbaker in 1959, after the Canadian government refused to provide a lifetime of financial assistance to the province after a royal commission had recommended such a policy. Brian Peckford, premier from 1979 to 1989, earned the moniker of “bad boy” among his peers for his antagonistic and pugilistic stance against Prime Minister Pierre Trudeau during the constitutional patriation process, and for Ottawa’s refusal to accept Newfoundland and Labrador’s demands for control over the offshore mineral resources. Peckford insisted that Canada had a claim to the offshore only because Newfoundland had brought the resource with it to the union in 1949. Premier Clyde Wells achieved almost rock-star status for his passionate defence of the equality of all citizens and all provinces during the Meech Lake Accord constitutional ratification process from 1989 to 1991. For him, federalism was more about representation in the national governing institutions than about jurisdiction. He was pilloried, however, by supporters of the Accord, and earned the scorn and antipathy of Prime Minister Brian Mulroney and most of the other first ministers, especially Ontario’s David Peterson and Quebec’s Robert Bourassa, for what they considered his total dis­ regard for Canadian unity and the well-being of the country. Wells withstood the onslaught and was applauded by many Canadians for his cogent, judicious, and reasoned arguments. He stood apart from other Newfound­land premiers in the use of histrionics, however. He did not declare days of official mourning or demand the wearing of black armbands, as both Smallwood and Peckford had done, nor did he resort to publicity-seeking events such as removing the maple leaf flag from government buildings. In other ways, though, Wells was remarkably similar to the other premiers and demanded that Ottawa heed the concerns of New­foundland and Labrador in making national policies. Newfoundland premiers were never hell-bent on destroying the federal state – only trying to design or redesign a system of statecraft that would work better for them. Collectively, they demonstrate that provincial loyalties can upset national unity in a federal state. The conundrum for all political leaders and policymakers has been how to ensure fairness and equity for everyone throughout the Canadian political community and to empower disadvantaged peoples and regions.2 The success and stability of the Canadian federal arrangement ­is premised on the ability of the state to provide economic security for all  provinces and all citizens regardless of place. But, as constitutional scholar John Whyte has argued in a slightly different context, states have

8  Lions or Jellyfish

had a penchant for restricting full membership to all groups found within them and for privileging some groups while exploiting others.3 Newfoundlanders often see themselves as having less than full membership in the Canadian family and being exploited by outsiders.4 From the time of Newfoundland’s union with Canada until quite recently, it has been the poorest partner in the federation with a standard of living well below the national norm. As a province of Canada it has not been able to bridge that economic and social gap. Newfoundland’s legacy of colonialism and the bankruptcy and financial collapse that led to a sundering of its democratic institutions in the 1930s has also exerted a strong hold on its provincial politics and political leaders. Confederation with Canada has been seen in some quarters as part of the continuum of exploitation and second-class treatment. Newfoundland’s history has often been that of dependency, first on London and, after Confederation, on Ottawa. As a result, its politics and its culture have been distinct from rather than a variant of Canada’s. Like Quebec, Newfoundland and Labrador was also culturally and – some would contend – linguistically distinct, and since Confederation, intergovernmental relations have become a subtext for the pursuit of economic security, justice, and equality. Since the earliest days of union, Newfoundland premiers have, not surprisingly, been concerned with questions of fairness, justice, and fiscal stability.5 They claim that for Canadian citizenship and notions of social justice to have any legitimacy, all citizens, including those in Newfoundland, must share in the social and economic benefits that their negotiators believed at the time of union would come from membership in the Canadian political community. Each of Newfoundland’s premiers who have fought for greater inclusion of the province in the Canadian community has encountered a prime minister who shared those same aspirations and even recognized the legitimacy of the Newfoundland claims, but disagreed with the various premiers over how best to achieve those shared objectives. And so, those periods of attempting to balance provincial and national interests and concerns have often been marked by considerable conflict. There have also been moments when provincial first ministers and their governments weaved a particular historical narrative as the basis to bring about a fundamental change in their province’s relationship with the federal government in hopes of securing a better economic future. In those instances, the approach to federalism and intergovernmentalism has been shaped by the province’s history and culture. The goal has been to redefine what is normative in that relationship. Those periods of strained and conflicted intergovernmental relations have had at their core a redefinition of the notions of economic and social security.

Introduction 9

When Canadian scholars have attempted to consider how the disparate interests within Canada are represented in the federal state, they have usually resorted to either the intrastate or interstate model of federalism. The intrastate, or institutional, model recognizes the capacity of national governments to incorporate the interests and territorial particularisms of the various provinces in a national decision-making process and find ways to harmonize and manage regional and provincial cleavages inside institutions of the national state. It is implicit in such a model that policy compromises occur among competing territorial and provincial interests and that the simple majority rarely prevails. In the case of Newfoundland’s relationship with Ottawa since 1949, there were episodes when the provincial interests were represented within the national government, such as when the province had strong and effective regional ministers at the seat of power at the federal cabinet. Jack Pickersgill, Donald Jamieson, and John Crosbie best represent these episodes.6 When they occupied Newfoundland’s seat at the national level, they played a role in governing Canada and protecting the Newfoundland interest nationally. Most scholars agree that intrastate federalism is weak in Canada, however, largely because of the ineffectiveness of the Senate and other parliamentary institutions in Ottawa to represent all regions of the country and manage conflicting interests effectively. All too ­frequently simple majoritarianism in the national parliament has meant that the interests of smaller and weaker provinces in the federation have been ignored while the populous provinces of Ontario and Quebec have attempted to create the illusion that they were governing in the national interest. Because Canada has not had great success with incorporating regional and provincial interests in the federal policymaking institutions, intrastate federalism has not enjoyed long periods of success. Instead, Canada is best described as an interstate federal model that recognizes dual jurisdictions where intergovernmental relations occur between the federal and provincial governments. Interstate, or executive, federalism can take many forms but at its core it tends to be either transactional or confrontational. Transactional federalism has been the focus of numerous studies of the workings of intergovernmental relations and federalism in Canada. It often occurs under the radar of public and media scrutiny and has resulted in an institutional framework that allows national and subnational states to avoid open conflict as they find solutions to the problem of cleavage and faction that has been so apparent in the Canadian federation. Accordingly, a number of policy issues have been dealt with at the level of transactional federalism and include such sectors as health care, labour mobility, post-secondary education,

10  Lions or Jellyfish

securities regulation, Aboriginal self-government and indigenous rights, and a myriad of others. Scholars of Canadian federalism have recently explored many instances of transactional federalism. These studies provide examples of how Ottawa and the provinces have not merely successfully managed some of the pressing issues in the federation but have also demonstrated how intergovernmental institutional frameworks have been used to recognize the diversity and pluralism of Canada while maintaining and fostering social cohesion within the country. In such circumstances, transactional leadership serves the nation well and has demonstrated that intrastate federalism can work efficiently and effectively. However, when interstate federalism fails to produce accommodation between the provinces and Ottawa, it often erupts as a federal-provincial donnybrook in the media and in the political arena. This has occurred most notably during the various constitutional battles in the 1980s and early 1990s, particularly between Ottawa and Quebec, but it has also ensnared all the provinces at various times. Of course, Quebec among the provinces has attracted most attention for its struggles with the constraints of Canadian federalism, but many of these confrontations were not to find ways to work within the intergovernmental regime that exists. Rather, Quebec’s primary goal has been to find ways to forge its own path in the Canadian federation, create a loose confederal arrangement of sovereignty association, or dissolve Canada and become a sovereign state. Under the stewardship of Peter Lougheed, Alberta came briefly into focus for those interested in confrontational federalism, but most of the other provinces, including Ontario, have been excluded in the study of this approach to federalism. Ontario’s relationship with Ottawa has been defined by attempts by successive provincial governments to limit the centralization of federal powers after 1945 while continuing to act in the national interest, to keep disgruntled Quebec in the federal family, and to save Canada and Canadian federalism.7 It was an important role but until the recent publication of P.E. Bryden’s excellent study of Con­ servative Ontario’s relations with Ottawa, it had been largely ignored by scholars. Bryden aptly observes that most scholars were interested in the “more flamboyant or bellicose participants in the intergovernmental battlefields” of Canadian federalism. Newfoundland has had its fair share of flamboyant and bellicose leaders and their troubled relationship with Ottawa has attracted the attention of journalists and pundits but less so of the scholarly community. On those occasions when political leaders and citizens alike in provinces such as Newfoundland and Labrador felt excluded from the centre

Introduction 11

of federal power, they turned to their provincial governments to redress their grievances. Only the province can protect their interests and this federal arrangement, best known as executive federalism, explores the relations between the elected leaders and bureaucrats of the two orders of government. In this relationship, accommodation was sometimes found between the provinces and Ottawa, but there were also many instances when it could not be reached, particularly when the provinces believed that the federal government was out of touch with their sensibilities and interests. On such occasions the federal government believed that to protect the national interest it had to resist policies advocated by what it considered greedy, self-interested provinces. In those moments of tension and conflict between the federal and provincial governments, the premiers and their governments believed that they were not only articulating and championing the special needs of the province and their own limited interests, but also that they were engaged in solving the problems facing the nation and reorienting the whole federation to provide social and economic security for all Canadians. There has been a tendency recently to dismiss interstate federalism and executive federalism. Its critics contend that such a focus on the persistence of conflicts and confrontation between the two orders of government privileges the role of elites and institutions, especially those of first ministers and their executive councils or cabinet governments. Admittedly, this approach to the study of federalism does have political elites – especially premiers, prime ministers, their executive councils, and the bureaucracies – and the relations between them as the primary focus, but as I argue in the pages that follow, these groups normally reflect and are shaped by the milieu in which they govern. A focus on political and bureaucratic elites does not minimize the role of societies, citizens, history, and culture in the investigation and scholarly analysis of federalism, as Bryden’s book amply demonstrates. In fact, the study of interstate and confrontational federalism must incorporate societal factors, history, political culture and myths, and other embedded ideas; they become as important to understanding the nature and dimensions of federalism and intergovernmental relations as economic, fiscal, and social realities. The actions of elites are shaped by issues that provincial and national societies have prioritized as well as by the character and philosophy of individual political leaders. This book also shows that the past exerts a strong hold on the present in Canadian and Newfoundland politics. First ministers and their coterie of officials understand and represent the particularisms of their province and their citizens.8 As this

12  Lions or Jellyfish

study shows, the major economic, political, social, cultural, and constitutional issues that were important in Canada and Newfoundland from the 1950s found their way into the negotiations between first ministers, their cabinet ministers, and senior officials that represented both the province and the federal government. Executive federalism has led to both cooperation and confrontation and it remains at the core of Canadian federalism. As the following chapters will make clear, cooperation has been possible when governments share common values and objectives but confrontation has often been the result when the stakes were high and political executives disagreed on major and substantive policy issues.9 This study shows that despite the rhetoric of the illegitimacy of executive federalism in Canada in the wake of the failed Meech Lake and Charlottetown constitutional accords, competitive and executive federalism remain a hallmark of the Canadian narrative. First ministers are critical to understanding the nature of not just Canadian federalism but Canada itself, and “federal-provincial diplomacy” is as relevant today to the workings of Canadian federalism as when Richard Simeon coined the phrase a generation ago.10 The role of first ministers at both the federal and provincial level has become presidential and their authority is rarely challenged in their respective legislative bodies even if 2014 witnessed legislative revolts that saw a newly elected premier toppled in Alberta and a long-term premier in Manitoba forced into a leadership review.11 Governments in Canada at all levels are executive centred.12 It is true that much of what transacts between the provinces and Ottawa on a daily basis often occurs at the level of low politics and without the involvement or concern of prime ministers and premiers. They are directly involved in important federal-provincial issues, however, particularly those that find their way into the media and occupy important positions in the political landscape. Their interactions have shaped the nature of Canadian federalism and of Canada itself. In the case of Newfoundland and Labrador’s relationship with Ottawa since 1957, Ottawa has held the lion’s share of fiscal resources and, at times, clear jurisdiction over contentious policy areas, but the federal government frequently found that it was largely powerless in getting the province to go along with its wishes. At other times, the province found that it was equally powerless in cajoling or forcing Ottawa to act to protect provincial interest even though the constitution gave it the power to do so.13 There were never clear rules or traditions for federal-provincial relations in Canada, but it has often been the first ministers who want most to ensure that citizens’ needs are met.

Introduction 13

This study of Ottawa-Newfoundland relations not only documents various episodes in the history of Canada and Canadian federalism, but collectively addresses important questions about the role of history and culture in policy formation and the nature of contemporary politics and government in Canada. Each episode considered in this book captures a real response by both orders of government to the economic and social realities of the period. It is not a chronology of federal-provincial developments but rather attempts to capture the vision of premiers and prime ministers. Each episode also sheds considerable light on the way in which political thinking and culture was evolving in Canada and Newfoundland, and how each premier and prime minister responded to the changing domestic priorities of the society and citizenry they believed themselves to be representing and defending. Smallwood became premier during the growth of the welfare state and he believed in a benevolent state to maximize citizens’ well-being. He believed that by acting as an active and autonomous agent, the government could bring the virtues and benefits of Canadian citizenship to New­ foundland. He had believed that the government of Louis St. Laurent shared his policy objectives and philosophical assumptions about the role of the state, but he was disappointed when he discovered the Liberals in the 1950s were not willing to embrace his demands for a greater state role, for instance, in fisheries development in Newfoundland and Labrador. Although the federal state had accepted some new responsibility for economic planning and for such social welfare initiatives as family allowances, old-age pensions, and unemployment insurance, St. Laurent was not prepared to embrace a level of coordination between province and national government to ensure efficiency and planning in an intergovernmental management of the Newfoundland fishery. Coop­ erative federalism and a really activist state were still a decade away, and Smallwood insisted in the 1950s that the federal state was not doing enough to help his province. Moreover, Ottawa worried that Smallwood’s approach to economic development was reckless and feared his reliance on the federal government was too great. Federal politicians and bureaucrats distrusted him and became guarded in their dealings with him and the Newfoundland government. By the time Smallwood’s hope to implement his vision for Newfound­ land and Labrador had exhausted the province’s fiscal capacity, John Diefenbaker had relegated St. Laurent and the Liberals to the backbenches. He had the political misfortune of having to try and temper Smallwood’s designs on Ottawa, and he discovered that there was a price

14  Lions or Jellyfish

to pay for saying no to Smallwood. Although Diefenbaker promised and promoted an activist government in such areas as a national power grid and better coordination in regional economic development, he also favoured a national and regional approach to addressing underdevelopment. Consequently, his government and its officials refused special status for any particular province. Accordingly, he did not wish to continue the practice of special arrangements for Newfoundland, as these set the province apart from others in fiscal matters. Diefenbaker wanted no province excluded, no orphan in federal-provincial relations in his quest for one Canada. When he denied Newfoundland’s request for special status under the Term 29 settlement, he unleashed the considerable demagogic rhetorical power of Smallwood, who turned his fury on the prime minister for not understanding the peculiar predicament of Newfoundland and Labrador and its difficult struggle in its quest for full Canadian citizenship. Joseph Smallwood and Lester Pearson both promoted the growth of the social service state in the 1960s and believed in activist government. Both embraced cooperative federalism as the best means of improving the lives of citizens and strengthening the power of the state as they attempted to modernize Newfoundland and Labrador. The intergovernmental system moved at an accelerated pace and was reflected in the federalprovincial resettlement program which began in 1965 and continued into Trudeau’s term as prime minister. St. Laurent had refused to participate in Newfoundland’s first resettlement scheme in the 1950s because doing so would involve the federal government in matters outside its jurisdiction. There were no such concerns expressed by the Pearson government, making it clear that Ottawa had a flexible approach to most issues of policy when it came to Newfoundland and Labrador. By the mid1960s and the arrival of state planners and the social service state, the federal-provincial initiatives in resettlement and their policy objective of rearranging the spatial distribution of people was accepted as an attempt to rationalize an activist government and to employ the power of the state to foster much needed change. Under Smallwood, Pearson, and Trudeau, the provincial and federal governments were engaged in a variety of complex programs to modernize and remake Newfoundland and Labrador economically and socially. Their approach to federalism meant that they would use the state apparatus to provide for its citizens. Even as the federal government worked with Newfoundland to deal with some issues, it refused to help it in areas where the interests of other provinces had to be considered. When tensions between Newfoundland

Introduction 15

and Quebec heightened over Quebec’s refusal to allow hydroelectric transmission through its territory to take Newfoundland power to markets in central Canada and the United States, Ottawa sided with the much larger province of Quebec. Pearson and the federal government believed that forcing a transmission line upon Quebec would incense the nationalist forces within Quebec and threaten national unity. New­found­ land paid a high price for helping to keep Canada united. By the 1970s, questions were being raised about the levels and efficacy of state activism. Federal intervention in Newfoundland and Labrador through such state agencies as the Department of Regional Economic Expansion had some pressing concerns about the fragmentation of governmental efforts, the inadequate coordination between federal and provincial agencies, and general federal intrusion into provincial society. Did the federal state have the ability to solve society’s economic problems? Moreover, questions were raised about the efficacy of the provincial state’s policy to industrialize and urbanize Newfoundland society and turn its back on rural peoples. Many in Newfoundland believed that both federal activism and Smallwood’s reliance on Ottawa had gone too far. The debate about the role of the federal government dates to Con­ federation, and Progressive Conservatives and Liberals have long-held party differences over the proper size and role of the federal state. Since 1867, there have been heated debates about the centralization and decentralization of power. Trudeau believed that the development of offshore oil and gas was in the national interest and should be controlled by Ottawa. Moreover, he believed that the greatest share of revenue from offshore oil and gas development should accrue to the national government and be for the benefit of all Canadians, though Ottawa also promised that Newfoundland would be a major beneficiary. Trudeau feared the withering of a national community and resisted all attempts to weaken the federal government in Ottawa. The decentralization of Canadian federalism long favoured by the Progressive Conservative party found resonance in its Newfoundland and Labrador chapter at the end of the 1960s, which mixed policy with history and culture and attracted provincial rights supporters. At its core it offered a nationalist-infused rhetoric that promoted the fear of the outsider and promised the return of democracy to provincial citizens who believed they knew how best to respond to the economic and social realities of the province. It also embraced the “take back” element in the province that wanted the provincial state to control the province’s destiny. Although Peckford did not fully embrace the policy of retrenchment that would later mark other

16  Lions or Jellyfish

Conservative governments, he questioned the role of the federal state in the management of provincial resources. He was determined to reduce the power and influence of the national bureaucracy in the period of political fragmentation that marked Canada at the time. Peckford’s solution to the national uncertainty and instability was to promote economically and socially vibrant provincial communities as the means to create a strong, united Canada. While Trudeau and Peckford fought throughout the late 1970s and early 1980s over who should ultimately control the pace and development of offshore oil and the type of federal arrangement they wanted, the national Progressive Conservative party promoted a more decentralized conception of Canada that gave the provinces much more control than Trudeau and other federalists committed to the concentration of power in Ottawa would ever accept. Brian Mulroney believed in a decentralized federation and the provinces were eager to have greater independence from Ottawa in areas of their own jurisdiction. Peckford welcomed such a philosophical approach to Canadian federalism but by the late 1980s, his government was on the verge of collapse. When Liberal Clyde Wells was elected premier in 1988 his philosophy of governance was aligned with that of Liberals Mackenzie King, Pearson, and Trudeau, not that of the ruling Conservatives. The result was a bitter feud with Mulroney and most of the other premiers. Wells was troubled about the promise of a more decentralized federal system and believed that provinces such as Newfoundland and Labrador needed a strong, activist government in Ottawa committed to institutional reform that would recognize the equality of provinces as well as the equality of citizens. Without such a system Newfoundland would be relegated forever to be among the poorest provinces economically. The economic security of Newfoundland and Labrador was threatened when the federal government promised to step back from a leadership role that might jeopardize Ottawa’s ability to provide funds and leadership to deal with economic disparity within the federation. Wells believed that constitutional change was necessary to create more vibrant provincial representation in the national community and an equal and fair Canada for all of the provinces. As I noted at the outset, Danny Williams, like his predecessors in the premier’s office, believed that he had to aggressively defend the provincial interest if he hoped to create a wealthy and vibrant community in Newfoundland and Labrador. Unlike other premiers, Williams ruled Newfoundland during a period of relative prosperity largely because of

Introduction 17

the development of offshore oil. As had been the Canadian model since the introduction of equalization payments in 1957, transfers from Ottawa tapered off as provincial revenue increased. Williams believed that oil and gas were the province’s last shot at prosperity and if the federal tradition continued, Newfoundland and Labrador would merely exchange federal transfers for oil revenue but would not bridge the economic gap with the rest of Canada. As Smallwood had argued over Term 29 in 1959, Williams insisted that Newfoundland needed special assistance and should be allowed to keep equalization transfers and the new oil revenue until it reached a standard of living and a level of public services that at least equalled the national average. The federal governments led by Paul Martin and then by Stephen Harper faced a conundrum and had to manage the demands of Newfoundland and Labrador with that of the situation in the other provinces. Both had initially refused special arrangements for Newfoundland and Labrador. Williams was irate and attacked both with a vengeance and determination that rivalled any episode in the troubled history of intergovernmental relations in Canada since 1867. Each chapter of this book comprises a case study of a particular issue that explores the unique relationship between Newfoundland and Ottawa. Chapter one examines Term 29 and how Ottawa and Newfound­ land differed over how best to deal with the fiscal pressures that New­ foundland faced in its transition from dominion to province. Chapter two looks at hydroelectricity and Ottawa’s role in Newfoundland’s attempt to develop Churchill Falls and transmit power across Quebec to markets in Ontario and the United States. Chapter three presents an overview of the early years of the provincial resettlement program when Ottawa declined to become involved in the spatial redistribution of New­ foundland’s population. Chapter four continues the theme of resettlement and examines the later years of the program when the interests of state planners in St. John’s and Ottawa aligned and there was initially, at least, a widespread demand for assistance from citizens who wanted to relocate. Chapters five and six deal with the long history of the quarrel between Newfoundland and Ottawa over ownership and control of offshore oil and gas. Newfoundland had insisted in the late 1950s that Ottawa’s acceptance of provincial control over the offshore would allow it to improve the province’s fiscal capacity and enable it to bridge the economic gap that existed between Newfoundland and the other Canadian provinces. However, Ottawa became increasingly worried about the challenges to the national community from the existing oil-producing

18  Lions or Jellyfish

provinces, and it was determined that any reserves found outside what it considered an already recognized provincial boundary would be used to strengthen the national community, not contribute to the further fragmentation of Canada. Chapter seven turns specifically to constitutional reform and examines the role of Premier Clyde Wells in the defeat of the Meech Lake Accord. Chapter eight turns to Danny Williams, Paul Martin, and Stephen Harper and examines the most recent period in federalprovincial acrimony. This book does not have separate chapters on either the fishery or Newfoundland and Labrador’s First Nations peoples. However, the fishery in the 1960s and early 1970s is discussed periodically during the book, notably in the discussion of the various resettlement programs from 1954 to the late 1970s. The fishery is also noted in the discussion in chapters five and six regarding the dispute over control of offshore mineral resources, when Newfoundland called for joint management and control of the fishery as well; however, neither Smallwood, Moores, nor Peckford took a hardline position on control of the fishery as they did with oil and gas. I considered the extension of unemployment insurance benefits to fishers – a pivotal event in Newfoundland’s relationship with Ottawa – in an earlier book.14 Yet, this approach does not diminish in any way the importance of the fishery to Newfoundland and Labrador. When Ottawa imposed the cod moratorium in 1992, nearly 30,000 workers or 12 per cent of the province’s workforce were displaced. The federal government quickly introduced financial aid packages for fishers and fish plant workers that saw it direct nearly $2 billion in compensation. However, as economist William Schrank has argued, the number of fulltime fishers remained largely unchanged in the decade following the moratorium although many part-time harvesters left the industry. Moreover, the values of fish landings actually increased during the moratorium. In 1990, for example, the total landed value of all species was $277 million, of which cod accounted for $134 million, or 48 per cent, and by the end of 1995 – three years into the cod moratorium – total landings had reached $321 million, despite the almost complete absence of codfish. By 2007, the provincial Department of Fisheries and Aquaculture reported $478 million in total fish landings. The dollar value of the fishery actually increased in the province during the moratorium, and the cod moratorium never became a point of major contention between the provincial and federal governments as other issues discussed in this book have. Moreover, Rosemary E. Ommer and others have considered the social, cultural, and ecological implications of the cod

Introduction 19

moratorium elsewhere.15 I appreciate that the relationship between Newfoundland and Ottawa over the fishery is a subject that requires a separate, detailed study, but it was not possible here. Similarly, the shifting fortunes and status of Newfoundland and Labrador’s First Nations peoples as the various groups negotiated new rights and recognition within the constitution is an important issue that is finally getting the attention it deserves and requires. This subject, like the fishery, is an important one, but it does not fit easily within the confines of the Ottawa-Newfoundland framework. The First Nations and Metis peoples in Newfoundland and Labrador have waged a long struggle with both the federal and provincial governments for recognition but that struggle has not been an important part of the federal-provincial dynamic considered in this study. The history of the province’s First Nations and Metis peoples in Newfoundland since 1949 is one that also deserves a separate scholarly study. The episodes discussed in this book are admittedly contingent and incomplete as each requires its own full-length study, but collectively they show the growing determination of Newfoundland and Labrador to move beyond a legacy of colonialism to assert greater control over its own affairs. Newfoundland’s political elite has asked that Ottawa recognize its distinct status within the Canadian federation which, it maintains, helps explain the province’s unique position of being a perpetual laggard in terms of economic and social development, until recently. The Newfoundland narrative and the political culture that developed have fuelled the province’s relations with Ottawa. It was never clear if Newfoundland politics and culture were a variant of Canadian politics or something distinct and contingent, but the legitimacy of federalism and Newfoundland’s place in that system has demanded the acceptance of a measure of asymmetry in its practice. In the first two decades of union with Canada, Smallwood argued that Newfoundland’s late entry into Confederation and its heavy reliance on the fishery, which dispersed citizens in small communities around the coastline, presented almost insurmountable odds that could only be overcome through the understanding and help of a generous and compassionate national government. By the 1970s, many in Newfoundland saw a strong national government as part of the problem and demanded recognition and greater control over their own provincial community, especially in areas of resource management. That notion had its critics, too, and led in the late 1980s and early 1990s to a serious questioning of existing federal institutions as well as how effectively the province’s interests were represented and heard at

20  Lions or Jellyfish

the national decision-making level. This had to change. Clyde Wells demonstrated that the province was an equal of all other provinces when it came to the constitution, and he was willing to use its position to try and win full membership in the Canadian political community. In that, he and others who occupied the office of premier of Newfoundland and Labrador have shared a common goal in the search for the justice, economic and social equality, and fairness that they believed was owed them. That search to share in the social and economic benefits of the Canadian state has brought several episodes of confrontation and conflict between St. John’s and Ottawa, and in each case the past exerted a strong hold on how the issues were approached. Each episode has also been an attempt to not only reshape the Newfoundland-Ottawa relationship but also Canada and Canadian federalism. Borrowing from Williams’ quote in the epigraph of this book, Newfoundland premiers, regardless of political affiliation, could generally be regarded as lions, not jellyfish, as they have actively tried to uphold the province’s interests in their negotiations with a federal government that had different, broader, concerns.

1 Smallwood, Diefenbaker, and Term 29: Failed Intergovernmentalism

By the early 1950s, both Ottawa and Newfoundland realized that the promise of Confederation in 1949 – that Newfoundland and Labrador would flourish under its new constitutional arrangement – would be a difficult and arduous process. In the early years of union, the Government of Newfoundland and Labrador and its energetic premier, Joseph R. Smallwood, sought special arrangements with Ottawa – for Newfound­ land’s fisheries, for local manufacturers facing competition from new Canadian imports, and for federal tax exemptions for the province’s pulp and paper mills, among others – because of the unique situation in the province. In each case, Ottawa refused to provide any assistance to Newfoundland that was not generally available to the other provinces. Although Smallwood was disappointed with each failure to convince the Liberal government in Ottawa of a peculiar difficulty facing Newfound­ land, he never lingered on any of them, as there were always new opportunities to pursue. By the mid-1950s, however, with the fiscal situation rapidly deteriorating and fading prospects of an expanding industrial sector based on manufacturing and the fishery, Ottawa’s generosity became critical to the continued prosperity and financial solvency of New­ foundland and Labrador. Smallwood had enjoyed a major victory when the federal government extended unemployment insurance to self-­ employed fishers in 1957, an arrangement not available to other independent commodity producers. The program resulted in a dramatic rise in income levels for fishers and a 25 per cent increase in their numbers within five years.1 Smallwood also placed great promise in Term 29, an article of the 1949 Terms of Union that called for an examination of Newfoundland’s financial position after eight years of union. Canadian and Newfoundland

22  Lions or Jellyfish

negotiators had had considerable difficulty in forecasting accurately the state of Newfoundland’s fiscal capacity as a province during the negotiations in 1947 and 1948. Consequently, they agreed in article 29 of the Terms of Union to appoint a royal commission within eight years of union to review the province’s financial position and make recommendations on the form and scale of financial assistance, if any, that Ottawa might provide to Newfoundland to allow it to maintain the level of public service reached after union. They also agreed that the maintenance of this level of public service should not result in Newfoundland having to impose levels of taxation more onerous that those levied in the Maritime provinces. Ottawa, Smallwood believed, would be his lifeline. When events surrounding Term 29 did not unfold as hoped, New­ foundland found itself engaged in its first of many bitter battles with the federal government. The failure of intergovernmentalism over Term 29 remains one of the most important episodes in the often-troubled relationship between Canada and Newfoundland. It is also one of the most vitriolic incidents in Canadian federalism. When the Newfoundland Royal Commission on Renewing and Strengthening Our Place in Canada issued its final report in June 2003, it noted that in the years following union Newfoundland had to rely “on the good faith, vision and courage of successive federal governments in addressing obstacles to its full participation in Confederation,” rather than constitutional guarantees. It described Ottawa’s refusal to meet Smallwood’s demand for generous federal payments under Term 29 as “one of the low watermarks of the province’s relationship with the federal government.”2 The royal commission adroitly avoided delving into why Ottawa and the Progressive Conservative government of John George Diefenbaker offered what it (the commission) considered an inadequate solution to Term 29 and Newfoundland’s first feud with Ottawa. Historians and journalists have seen the affair as one motivated exclusively by politics. In 1957, Diefenbaker and the Conservatives had replaced the Liberal government in Ottawa and many believed that Diefenbaker was hell-bent on punishing Newfoundland for several political slights. First, he was annoyed that Newfoundland and Labrador was the only province that had spurned his electoral sweep in 1958. Second, he resented Smallwood’s highly public campaign to have Ottawa provide a generous financial outcome to Term 29.3 Others have argued that Diefenbaker saw Term 29 as a promise made to Newfoundland by the Liberal Party of Canada at the time of Confederation. Because he had not participated in the 1949 negotiations, he saw no need to honour any “assurances given … by a

Smallwood, Diefenbaker, and Term 29  23

Liberal administration.”4 Richard Gwyn, Smallwood’s authoritative bio­ grapher, contends that Diefenbaker was out of touch with Newfoundland sentiment in the late 1950s; he never bothered, for instance, to consult the two Newfoundland Conservative MPs before he delivered a statement on Term 29 in Parliament.5 Some contend that Smallwood vigorously fought Ottawa over Term 29 in order to channel growing political discontent in Newfoundland against his anti-labour legislation away from himself and onto the federal government. Moreover, he desperately needed large pools of federal money to transform Newfoundland into a consumer society and continue his class warfare against the working people of the province.6 These explanations are not particularly satisfying even if they contain a kernel of truth. They do not move much beyond the apparent political animosity between Smallwood and Diefenbaker. They also ignore the growing tension between Smallwood and the previous federal government in the waning days of Liberal control in Ottawa before the party’s defeat at the hands of the Progressive Conservatives in 1957. Moreover, such explanations reduce the turmoil surrounding Term 29 to mere political machinations,7 leaving out more than they say. Term 29 must be considered within the sphere of intergovernmental relations and federalism in Canada. It must also be seen as an important part of the longer narrative of the troubled relationship between the provincial government of Newfoundland and Labrador and the federal government in Ottawa and as part of the long and often acrimonious history of federalprovincial relations in Canada.8 Scholars such as Richard Simeon argue that Canadian federalism was at its core a matter of federal-provincial diplomacy. Federalism works most effectively when it is the politics of accommodation and compromise.9 This was achieved most successfully in the realm of executive federalism, that is, in negotiations between first ministers who frequently found enough common ground to settle their differences and avoid public altercations. When the federal and provincial governments belonged to the same political party, a regional minister often intervened to help mediate intergovernmental conflicts.10 Both compromise and accommodation, so necessary to the smooth workings of federalism, were tossed aside in the case of Term 29. With­ out a strong regional minister to represent Newfoundland’s interest in Ottawa, the Diefenbaker government relied on the advice of senior officials in the Department of Finance for its dealings with Newfoundland. More­over, Ottawa and Newfoundland held quite different views on how to address Newfoundland’s relative economic and fiscal position within

24  Lions or Jellyfish

Canada. The inevitable result was a bitter war waged primarily by Small­ wood and the government of Newfoundland against the federal government. In choosing to confront Ottawa, Smallwood followed a long-­ established practice in Canadian federalism and demonstrated, once again, that provincial governments are aggressive actors with a particular historical narrative to tell in the pursuit of securing a better economic future for their provinces. Smallwood donned the mantle of a New­ foundland nationalist and invoked the exceptionalism of Newfound­ land as the newest entrant – and poorest member – of Confederation to demand special treatment for his province. The successful resolution of Term 29, he insisted, was not only Ottawa’s constitutional obligation resulting from the union of the two countries but also a measure of Canada’s generosity. Term 29 was also a political instrument to extract better terms from the federal government in the manner of Joseph Howe of Nova Scotia in the 1860s, and Mitchell Hepburn of Ontario and William Aberhart of Alberta in the 1930s. Smallwood was not engaged in province building – the process whereby provincial governments attempted to expand the scope and nature of their powers and responsibilities to play a greater role in the economic and social development of their provinces – in the manner of Quebec in the 1960s, Alberta in the 1970s, or Newfoundland itself under Premier Brian Peckford in the 1980s.11 For its part, the Diefenbaker government – as had the previous Liberal government – saw Term 29 as part of the transitional assistance provided to the new province that by the late 1950s had run its course. Newfoundland was then to be treated as one of ten equal provinces in Diefenbaker’s One Canada, with no particular claim based on uniqueness or exceptionalism. Diefenbaker and his government believed that Newfoundland’s demand for special assistance should be addressed through new federal-provincial financial arrangements, not special side deals. After all, Diefenbaker had demonstrated through various intergovernmental agreements, especially those signed with the Atlantic provinces, that he was sensitive to the fiscal needs of the economically depressed regions of Canada. The two levels of government approached Term 29 from completely different perspectives, and they never attached the same importance to it. The difficult situation was exacerbated by a strained political relationship between Smallwood and Diefenbaker, a relationship that would prove largely irreconcilable when the two first ministers fought over the role of the Royal Canadian Mounted Police in a labour dispute in Newfoundland. Accommodation and compromise had little chance of success in such circumstances.

Smallwood, Diefenbaker, and Term 29  25

Background to Term 29 The delegation from Newfoundland that negotiated the Terms of Union with Ottawa in 1948 had learned first hand the limitations and constraints of Canadian federalism. Although it had found Ottawa quite amenable to making special arrangements for the new province on such issues as the production of oleomargarine and enrichment of flour or even the placing of constitutional safeguards for denominational education in the courts rather than with the governor-in-council, it found that making a case for Newfoundland exceptionalism in fiscal matters was much more difficult. Throughout the negotiations, the federal cabinet noted that “the basic premise underlying the Canadian offer to New­ foundland was that no special terms could be offered … which any of the existing provinces could claim should be extended to them.”12 Any provision that was made for Newfoundland had to be of a temporary nature and aid only in its transition from dominion to province. At one point in the negotiations Smallwood and Albert Walsh, another member of the Newfoundland delegation and later the first post-union lieutenant governor, complained to P.A. Clutterbuck, the British high commissioner in Ottawa, that they had no success in convincing the Canadian officials of the necessity of providing generous financial terms to allow Newfound­ land to bridge the gap in the level of public services that existed between it and the other provinces.13 Canada clearly desired union with Newfoundland. Canada provided $42.75 million as financial assistance on a temporary basis,14 but it was impossible to predict with any measure of certainty the fiscal capacity of Newfoundland as a province. The Canadian negotiators recommended that a provision be made for either a joint commission or a royal commission to review the fiscal situation of Newfoundland after eight or ten years of union. The mandate of the commission would be to determine if Newfoundland was able to carry on its services at prevailing levels without having to endure a heavier combined provincial and municipal level of taxation than the average in the Maritime provinces.15 When Canadian officials first raised this matter, they suggested the commission consist of one nominee of each of the Newfoundland and Canadian governments and a chair selected jointly.16 However, when the final draft of the terms was completed by Smallwood and R.A. MacKay, special assistant to the Canadian undersecretary of state for external affairs, all references to a joint commission had been dropped. The arrangement subsequently proposed in 1947 for Newfoundland’s entry into Confederation left

26  Lions or Jellyfish

solely to the government of Canada the appointment of a commission to review the new province’s financial capacity after several years of union. It also added into the clause the important words “if any” to describe the form and scale of additional financial assistance that might be needed to maintain the level of public services reached within eight years of union.17 The delegation to Ottawa from the Newfoundland Convention debating the country’s constitutional future made several errors of judgment when it failed to safeguard a role for Newfoundland in any future federal commission studying the fiscal capacity of the new province. The delegation was uninterested in such matters in 1947, or it was outsmarted by the Canadian negotiators. Either way, the delegation failed to protect the fiscal interests of Newfoundland. Even when a Newfoundland delegation returned to Ottawa to negotiate final terms of union (after the country voted narrowly for Confed­ eration in a second referendum in 1948), it readily accepted the proposed royal commission even though the province was given no role in its appointment and Ottawa was left with all decisions regarding the implementation of the commission’s recommendations. The delegation never insisted that the commission’s recommendations be binding on the federal government. This is surprising given that Smallwood and other members of the delegation understood fully that for years the federal government had steadfastly refused to provide assistance to the provinces simply on the basis of fiscal need. In fact, on the same day early in the negotiations that the two sides agreed on the financial review as negotiated in 1947, Smallwood reminded his colleagues in the Newfound­ land delegation that “the Federal Government of Canada has consistently refused any request from the Provinces for additional monies for the express purpose of meeting their fiscal needs and would undoubtedly adopt the same attitude toward Newfoundland.”18 This was the time to demand and negotiate a better arrangement for Newfoundland and Labrador. That Smallwood and the other members of the delegation did not do so represents a failure in their fiduciary responsibility to the new province. Yet, when Term 29 emerged as the major irritant in Ottawa-Newfoundland relations in the late 1950s, Smallwood was adamant that “without that clause [Term 29], there would have been no Confederation.” Without it, he emphatically insisted, he, F. Gordon Bradley, the leader of the Confederate Association in Newfoundland, and all of the other members of the Newfoundland delegation would have refused to sign the Terms of Union. “Term 29 was the most important clause in the terms.”19

Smallwood, Diefenbaker, and Term 29  27

1.1  When the Terms of Union were signed in Ottawa on 11 August 1948, as pictured here, the Canadian and Newfoundland delegations had different perceptions of what the terms actually meant in the long term. By the mid-1950s, Prime Minister Louis St. Laurent (seated, left, with Albert J. Walsh, chair of the Newfoundland delegation) was warning his cabinet that Smallwood (second from the right) was demanding more than Ottawa could deliver. (Library and Archives Canada, PA-186927)

If this were indeed the case, one must wonder why it was among the first items settled – and with so little discussion. The Newfoundland politicians had obviously forgotten how quickly they had passed over questions about the province’s fiscal capacity within Canada while in Ottawa negotiating the terms of Confederation. Only Ches Crosbie, the former leader of the Party for Economic Union with the United States in the first referendum, argued that the fiscal terms were inadequate and that the promise of a royal commission failed to provide a sufficient measure

28  Lions or Jellyfish

of financial security for Newfoundland.20 So appalled was he with the financial uncertainty of Newfoundland as a province that he refused to sign the Terms of Union in 1948. The review of Newfoundland’s financial position eight years after union as agreed to in 1948 gave all the advantages to the Canadian government. The Newfoundland delegation surely understood in 1947 – and again in 1948 – that Newfoundland would be subject to the political will of the federal government. It had failed to seize the Canadian proposal that the federal and provincial governments each nominate a representative and jointly agree on a chair for the royal commission that was to examine Newfoundland’s fiscal capacity.21 The seeds of discord between Ottawa and Newfoundland that were to emerge over Term 29 were planted in the negotiations leading to the Terms of Union. All members of the Newfoundland delegation save Crosbie must bear responsibility for any financial harm that came to Newfoundland from the settlement of Term 29. The Royal Commissions Newfoundland had a cash surplus of more than $40 million at the time of union, but between 1933 and 1940, it had required considerable financial assistance from London to run the government. There were considerable demands on the surplus generated by extraordinary wartime spending. The new province had a small population dispersed over a huge territory and it increasingly faced demands for improvements in its health, education, and transportation systems, and the provision of public services. Citizens wanted to catch up to the rest of North America and do so quickly. As a result, the province invested heavily in public services and, together with its rash industrialization scheme of throwing thousands of dollars at a variety of investors, ran budgetary deficits in the range of $5 to $15 million throughout the 1950s.22 By 1953, with the province struggling with deficit financing, Smallwood came to regard Term 29 as essential to ensuring Newfoundland’s financial viability. Moreover, it would be through Term 29 that Newfoundland would secure the fiscal resources required to raise the level and standard of public services. Smallwood wanted to be ready when Ottawa appointed the constitutionally mandated royal commission.23 To that end, he appointed a provincial royal commission in 1954 to make Newfoundland’s case for revisions to the transitional arrangement that would come after 1957. Lawyer and former Liberal Member of the House of Assembly Philip J. Lewis was appointed chair, and Albert Perlin, Gerald S. Doyle, and Philip Gruchy were named

Smallwood, Diefenbaker, and Term 29  29

commissioners. Carl Goldenberg, a well-known Montreal Liberal, labour lawyer, and long-term consultant to Smallwood, was one of the economic advisors appointed to the commission. The Newfoundland royal commission sat from January 1954 to April 1957, held more than 400 meetings, and heard testimony from more than 100 individuals. It made two substantive recommendations: first, that Ottawa provide Newfoundland with $15 million annually to maintain its existing level of public services; and second, that Ottawa continue to periodically review Newfoundland’s fiscal situation and make additional payments to the province when necessary to ensure provincial prosperity. Smallwood believed he had in the Commission’s report the evidence to support a demand to upwardly revise the financial terms of union. If there was no extra money coming from Ottawa, he told a joint meeting of Atlantic premiers and the Atlantic Provinces Economic Council in Charlottetown in 1957, he would consider Confederation a failure.24 Even though the Newfoundland royal commission had reported and he awaited the appointment of its federal counterpart, Smallwood believed that all discussion of Term 29 had to occur within the realm of high politics – at the level of first ministers – rather than of sectorial, or low, politics.25 He had his evidence ready but Prime Minister Louis St. Laurent and the federal government did not seem to place the same importance on Term 29 as he did. The initial discussions occurred at the bureaucratic level or within the realm of low politics. Even R.M. Burns, the senior official in the Department of Finance responsible for federalprovincial relations, had trouble getting his political masters to take the issue seriously. In 1956, he reminded K.W. Taylor, the deputy minister of finance, that the federal government was constitutionally obligated to appoint a royal commission under Term 29 by the end of March 1957.26 Smallwood grew increasingly impatient with Ottawa’s tardiness on the matter and appealed directly to St. Laurent on several occasions dur­ ing 1956 and 1957. The royal commission was vital to the future of New­ foundland, he reminded him, and urged him to appoint Canadians of “high distinction, broad vision and sympathetic understanding” of the matter.27 Finally, at the end of February 1957, St. Laurent selected John B. McNair, the Chief Justice of New Brunswick; Albert Walsh, by then the Chief Justice of Newfoundland; and Queen’s University economist John J. Deutsch as members of the royal commission. Following the advice of his officials in the Department of Finance, St. Laurent tasked the commissioners that their purpose was not to investigate the general economic situation of the Atlantic Region, as some had suggested; rather,

30  Lions or Jellyfish

he asked them for “recommendations [that] will be strictly in accord with the terms of union.”28 He had also warned his cabinet that the government might reasonably expect a major quarrel with Newfoundland over Term 29 because Smallwood was expecting more than was provided in the Terms of Union and more than Ottawa could justify to the other provinces. St. Laurent lamented to his colleagues, quite prophetically, that Newfoundland “would be disappointed eventually” with the outcome of the royal commission.29 Premier Smallwood had already aroused concerns in Ottawa when he threatened on several occasions to lead Newfoundland out of Confederation if the federal government did not act soon to improve the economic and financial situation in the four Atlantic provinces.30 He was nonetheless “delighted” with St. Laurent’s selection for the royal commission. He described McNair as a “long personal friend” and “a famous fighter for Maritime rights and after we [Newfoundland] went in for Atlantic provinces’ rights.” Deutsch was “a great friend of Newfoundland and … a man of great sympathy for Newfoundland.” Of Walsh he said that “we would not find a better man to represent Newfoundland on this royal commission.”31 The Department of Finance took the lead in all matters relating to the royal commission in Ottawa. This can be seen, for instance, in the discussion around how the federal government should be represented at the commission hearings scheduled to begin in St. John’s on 19 June 1957. J.W. (Jack) Pickersgill, Newfoundland’s representative in the federal cabinet and private secretary to Prime Minister Mackenzie King during the negotiations between Newfoundland and Canada in the late 1940s, had opposed the appointment of federal counsel to represent Ottawa’s interests, as this would have suggested that the financial provisions of union were subject to litigation. Moreover, it would also have indicated Ottawa’s proclivity to confront Newfoundland. Yet, Smallwood had been lobbying and building a case for several years for a generous subsidy from Term 29, and the Department of Finance warned that the New­ foundland government was already misrepresenting the meaning of Term 29 to press and public alike. Smallwood was insisting that Ottawa had no choice but to provide generous financial assistance to bring the level and standard of services in Newfoundland to those of the other Atlantic provinces, and even to those in Canada as a whole. If Ottawa simply stayed on the sidelines and watched the proceedings, the deputy minister warned the cabinet that there would be no one to remind the royal commission of its limited mandate and to challenge Premier Small­ wood if he made preposterous requests such as demanding that Ottawa

Smallwood, Diefenbaker, and Term 29  31

improve the transportation facilities and make other improvements to public services in Newfoundland.32 St. Laurent and his cabinet were worried that Newfoundland might attempt to broaden the terms of reference of Term 29 to include, for example, a comparison of the level of public services in Newfoundland and Labrador with those in the other Atlantic provinces. While the cabinet acknowledged that the disparities in Newfoundland were troubling, these concerns could not be addressed through Term 29. The federal counsel had to manoeuvre gingerly through the public hearings but St. Laurent insisted that Ottawa’s legal counsel had “to object to any attempt or tendency to broaden the scope of inquiry beyond the precise terms of reference.”33 The federal counsel would be worth the gamble of antagonizing Newfoundland if it helped to avoid problems later on. The Order-in-Council (P.C. 1957–27) appointing the Royal Commis­ sion on Newfoundland Finances asked commissioners to review the financial position of the Province of Newfoundland and to recommend the form and scale of additional financial assistance, if any, that may be required by the Government of the Province of Newfoundland to enable it to continue public services at the levels and standards reached subsequent to the date of Union, without resorting to taxation more burdensome, having regard to capacity to pay, than that obtaining generally in  the region comprising the Maritime Provinces of Nova Scotia, New Brunswick, and Prince Edward Island.34

Although the federal government rarely presented briefs to the royal commissions it appointed, it thought one might be necessary in this instance to rebut the evidence that it expected Newfoundland to bring forward at the hearings.35 Such extraordinary measures demonstrate the federal level of distrust for Smallwood. St. Laurent’s cabinet gave no indication that it would negotiate and compromise to meet Smallwood’s goals on Term 29. Deputy Minister Taylor told his minister that it has been this Department’s view that if this [Newfoundland’s fiscal capacity] must be considered it must be within the broad matter of FederalProvincial fiscal relations and not in connection with the specific and limited terms of Section 29 of the Terms of Union.36

It was such a policy that would eventually embroil a future prime minister in a bitter feud with Smallwood.

32  Lions or Jellyfish

John Diefenbaker and the federal Progressive Conservatives won a surprise minority government on 10 June 1957, and the first public hearings of the royal commission were cancelled to allow the new government to prepare for the commission’s work. Even with the change of government, the Department of Finance continued to be the federal window on the royal commission. Roland A. Ritchie, a Second World War veteran and Halifax lawyer, was subsequently appointed federal counsel. Although his was a Conservative appointment, his instructions had not changed from those drafted under the Liberal government for the federal counsel. Ritchie was simply to correct any misinformation that was presented by Newfoundland.37 Finance also sent R.M. Burns and J.E. Howes, the department’s experts on federal-provincial relations, to assist Ritchie.38 The hearings began in St. John’s on 22 July and the commission heard Newfoundland’s case first. Premier Smallwood was the first witness and he left little doubt about his expectations for the commission. “My Lords,” he began, “you will by your recommendation write the final, fateful term of the terms of Union.” He stated that he had done everything possible to raise the level and standard of public services in Newfoundland, including imposing high rates of taxation and spending the $42 million surplus that the province brought into Confederation. Still Newfoundland had only been able to reach where Nova Scotia and New Brunswick had been in 1920 in terms of the level of public services. Newfoundland had no more financial resources to tap and the hopes of all Newfoundlanders now rested with the royal commission. It had no option but to recommend to Ottawa that it provide the struggling province with a generous transfer of cash under Term 29.39 Philip J. Lewis and H. Carl Goldenberg presented the details of New­ foundland’s case. Using an array of statistics in support of their submission, they asserted that Newfoundland was already subjected to levels of taxation higher than those of the three Maritime provinces as it struggled to improve public services. Their argument rested on four suppositions: first, personal incomes and personal incomes per capita were lower in Newfoundland than throughout the Maritimes; second, the cost of living was 12 per cent higher in Newfoundland than in the rest of Atlantic Canada; third, the level of taxation was greater on a proportional basis in Newfoundland than in the Maritimes;40 and fourth, the level and standard of public services – transportation infrastructure, education, health, public welfare, and local government services – were lower in Newfoundland than in the Maritimes. The cost of maintaining

Smallwood, Diefenbaker, and Term 29  33

public services was $41.1 million but when depreciation and the an­ ticipated expenditures for population growth were factored in, the cost rose to $53 million. Revenue from a variety of provincial and federal sources came to $38 million, which left the province with a budgetary deficit of $15 million. Because Newfoundland taxpayers were already subjected to a higher level of taxation than those in the Maritimes, Goldenberg told the commissioners the province needed millions of dollars under the Term 29 settlement to cover its projected budgetary deficits and continue existing levels and standards of public services. He also demanded that Ottawa continue to review the province’s financial and economic position and, when necessary, provide additional financial aid under Term 29.41 Federal officials were dubious of the claims made by Newfoundland’s representatives. They considered much of the provincial presentation an enquiry into the social and economic conditions in Newfoundland, which was clearly outside the royal commission’s mandate. Ritchie intervened several times to remind the commissioners that any discussion of the alleged deficiencies in the level and standard of provincial government services in Newfoundland, and the cost of improving these, were clearly outside their terms of reference. Burns agreed that examining Newfoundland’s social and economic situation was not the purpose of the review. Rather, it was the financial position of the province that was under review. If the commission adhered to a strict interpretation of its mandate, Burns reported to Minister of Finance Donald Fleming, it had no choice but to agree that Newfoundland had failed to show in its submission that additional federal subsidies were required. Burns maintained that while there should be some federal assistance for Newfound­ land on a limited term because of the province’s particular circumstances, this could not be managed through Term 29, which had a very clear set of parameters. Federal officials also dismissed the provincial request for further reviews – beyond the present royal commission – of Newfound­ land’s fiscal capacity stemming from the Terms of Union. They fully understood the difficulties and inequities that would result in Ottawa’s handling of the federal-provincial file if Newfoundland, alone of all the provinces, had the right to have its fiscal situation reviewed by a succession of royal commissions. Ritchie argued that the royal commission constituted the final disposition of Terms of Union, and he reminded commissioners of the “finality of the [their] recommendations.”42 When the royal commission moved to Ottawa in early October 1957, Robert Duffy, a columnist for Toronto’s Globe and Mail, described the

34  Lions or Jellyfish

two-day hearings as the federal government’s attempt “to bring some pretty fanciful Newfoundland economic thinking down to earth.”43 Officials in the Department of Finance prepared Ottawa’s submission; there is no indication that Diefenbaker was involved in any of the discussions surrounding it, nor that he ever saw the report. The sixty-fivepage federal submission began by expressing sympathy with the general problems of the development of public services in Newfoundland, but it reminded the commission that its particular task was not to solve all the problems facing the province. If the commission accepted New­ foundland’s position, the federal government would become “shackled by a fixed formula that is based upon a combination of uncertain statistics, unprecedented economic theories, constructed figures and future predictions.” It again urged the commissioners to maintain a strict interpretation of the Terms of Union and to focus on what was necessary for Newfoundland to continue to provide the level and standard of public services reached since union in 1949; the commissioners could not allow themselves to be driven by any sense of what they thought these should be in the province in an ideal world.44 Ottawa also insisted that the commission’s recommendations represented the final act under the Terms of Union. There was no provision in either the Terms themselves or the commission’s mandate to recommend further review of the issues raised by Term 29 at a later date.45 The Department of Finance had insisted on the “finality of any settlement under Term 29” since the issue had been first discussed in 1956; any additional payments had to be linked to the period of adjustment of Newfoundland becoming a province of Canada and had to be considered part of the transitional assistance provided.46 However, Goldenberg insisted to the commissioners that the government of Canada had accepted a unique and special arrangement for New­ foundland at the time of Confederation in 1949 that had to be continued. Smallwood had the last word when the hearings concluded on 2 August in Ottawa, and he again pleaded with the royal commission to be generous in its recommendation of a federal grant. He also reminded Ottawa that the commission’s recommendations were morally binding on the Canadian government.47 Report and Reaction The McNair Commission presented its report in July 1958. It acknowledged Newfoundland’s long history of poverty and recognized the difficult task of modernization that the province had faced since 1949.

Smallwood, Diefenbaker, and Term 29  35

Confederation had helped to “remove the edge of poverty” through transfers to individuals, which supplemented and stabilized incomes of many Newfoundlanders. Moreover, Ottawa provided special transitional grants (until 1962) to facilitate the adjustment of Newfoundland to prov­incial status. The McNair Report also raised questions about the province’s use of public funds. In its rush to industrialize, the Smallwood government sank large amounts of its pre-Confederation surplus into manufacturing and processing plants with indifferent success, and the McNair Report questioned the prudence of such a strategy: “To a considerable extent, this direct financial commitment was undertaken at the expense of greater progress in the provision of basic facilities,” and the result was that the province remained far behind the Canadian average on any measure of income and wealth.48 On the important issue of taxation levels, the commission concluded that the burden imposed in Newfoundland was approximately equal to that of the Maritimes in a “mathematical sense.” The commission showed some compassion for Newfoundland and noted that the burden of taxation could not simply be measured in statistical terms; it had to consider how the “special factors” of Newfoundland’s situation impacted on the burden of taxation in the province and the adequacy of future revenue to meet financial needs. In doing so, it noted several factors. First, the greater dependence of Newfoundland’s economy upon exports than the economies of the other Atlantic provinces; this meant a great variation in annual taxation revenues. Second, lower levels of accumulated wealth and capital in Newfoundland compared to the Maritime provinces. Third, lower per capita incomes in Newfoundland. And fourth, a higher cost of living in Newfoundland. Because of those special factors and the uncertainties in Newfoundland’s economy, the royal commission recommended that the government of Canada provide additional financial assistance of $8 million per annum, minus the transitional grants provided at the time of union, for fiscal years 1958 to 1960, and, thereafter, $8 million.49 The commission’s choice of the word “thereafter” presumably meant in perpetuity but its failure to be precise would be the cause of much controversy later on. The report pleased neither the federal nor the provincial government. Smallwood was devastated. The royal commission had let him down. He had told Newfoundlanders repeatedly in the years leading to the review that Ottawa would provide the financial resources the province required to meet future needs. As he had forecast in both the 1956 and 1957 budget speeches, “Newfoundland faces the future with unwavering hope

36  Lions or Jellyfish

and confidence. She is part of the great Canadian nation and she will go up with that nation. Great Canada wanted Newfoundland, and Great Canada will treat her now with justice and generosity.”50 Smallwood saw little of that attitude in the commission’s report. It was “trash” he told the legislature, adding: “The Commission was a dead loss. The Commis­ sioners were a dead loss. God help me, I had something to do with choosing them.”51 Ottawa was no more impressed with the commission’s report than was St. John’s but for different reasons. Burns, who managed the file in the Department of Finance, was “completely unimpressed” with the document and the “cavalier manner” in which the commissioners treated the federal submission. While acknowledging the difficult task of the commissioners, he concluded that they had made their recommendations more out of a “feeling of sympathy” for Newfoundland than from the sound financial reasoning he had expected. The report was flawed both on principle and on technical grounds, and if the federal government accepted it uncritically it would surely cause problems with the Maritime provinces, especially Prince Edward Island, which was the poorest province in the region. With that in mind, Burns reminded Fleming that “the cloudiness of Term 29 would seem to make an arbitrary decision unavoidable and under the circumstances it must, in the final analysis, quite properly be a political one based on an assessment of what appears fair and equitable not only in Newfoundland, but to the rest of Canada as well.” As least, he added, the decision on Term 29 brought “finality to the terms of union between Newfoundland and Canada.”52 The Diefenbaker government was fundamentally opposed to special deals for individual provinces, however. Instead, the government had embraced a regional approach to addressing economic disparity and had made its elimination a national policy objective. The Conservatives supported the principle of equalization that had been introduced in 1956 by the Liberals as one way to address social and economic disparity across the country. They realized, nonetheless, that regional agreements were necessary to deal with economically depressed regions of Canada. At the Dominion-Provincial Conference in 1957, when Diefenbaker raised the matter of adjustments to the general financial arrangements between the federal and provincial governments, some of the provinces opposed what might be called side agreements with individual provinces. Douglas Campbell, the premier of Manitoba, represented that view and reminded Diefenbaker that the federal government must ensure the equitable treatment of all provinces. A national agreement was

Smallwood, Diefenbaker, and Term 29  37

first necessary, he insisted, but once such an agreement was in place, the national government should provide additional financial aid as it was needed to certain depressed regions of the country.53 First ministers agreed that the economic conditions and the fiscal situation in the Atlantic provinces lagged behind those of the rest of the country and special grants were justified for them.54 The federal government subsequently provided an adjustment grant of $22.5 million for the Maritime provinces in the Federal-Provincial Tax-Sharing Arrangements Act for four fiscal years beginning in 1958. Those special grants were provided to raise public services to a level comparable with those existing in the other provinces. Newfoundland was not originally included in those grants, as it was understood that a separate arrangement could be offered once the McNair Commission completed its report. After considerable lobbying by Premier Smallwood and Nova Scotia Premier Robert Stanfield, however, Newfoundland was included and the adjustment grants were increased to $30 million. The four provinces agreed on a formula that saw 30 per cent of the adjustment grants going each to New Brunswick, Newfoundland, and Nova Scotia, and 10 per cent to Prince Edward Island. Therefore, beginning in 1958 Newfoundland’s particular situation was addressed as part of a regional strategy within the larger context of a new federal-provincial fiscal arrangement. The Conservative government believed that when Smallwood accepted the new tax-sharing arrangement he had abandoned the notion of additional and special arrangements between Newfoundland and Ottawa.55 He had not. Still, the federal cabinet realized that it had to respond to the recommendations of the royal commission but it feared – as the St. Laurent government had when it appointed the commission – that whatever it offered to Newfoundland would not be enough to please Smallwood. When Fleming first brought the subject forward to cabinet in August 1958, he warned that whatever the government decided would be a source of controversy, not only in Newfoundland but possibly in other parts of Canada as well. Fearful of a federal-provincial quarrel with Smallwood, procrastination seemed a logical policy. Eight months passed before Ottawa seriously considered its options again and when it did, it was clear that whatever emerged from the discussion would be the final settlement on the Terms of Union.56 In cabinet, W.J. Browne, the minister without portfolio and Newfoundland’s representative, insisted that the general backwardness of public services in Newfoundland in relation to those in other provinces made it a special case for federal help. He pleaded with his colleagues to provide the $8 million award that McNair

38  Lions or Jellyfish

had recommended. To do otherwise would signal a refusal to help New­ foundland and release the powerful anger of Smallwood. Smallwood’s public denunciation of the McNair recommendation, however, presented a problem for Ottawa. He would consider anything less than $15 million as insufficient and insulting. Yet, he had shown “absolutely no thanks” for the recent Atlantic Province Adjustment Grants of $9 million annually. His demands for federal transfers and assistance seemed insatiable. Moreover, he seemed to have no sense of financial probity as he had spent the province’s pre-Confederation surplus recklessly. Some ministers insisted that the federal government “should do nothing to strengthen” and encourage such profligate and reckless fiscal tendencies by providing additional funds. Others suggested that the McNair Commission’s recommendations were unclear and that if they acted quickly to provide the $8 million recommended it would be extremely difficult to reduce the amount later, even if a reduction were justified. In typical Diefenbaker fashion, the cabinet procrastinated and decided the matter required still further study.57 Diefenbaker’s procrastination allowed Smallwood time to build his case against the McNair report and mobilize the political forces in New­ foundland to his side to demand a more generous award. Conserva­tive party leader Malcolm Hollett and also the Leader of Her Majesty’s Loyal Opposition in Newfoundland joined him to denounce the inadequacy of the recommended $8 million award. They both saw Diefenbaker’s delay as a sign of Ottawa’s disappointment with McNair and convinced themselves that the federal government was sweetening the arrangement for Newfoundland.58 The prime minister “is as deeply conscious as we all are, of the fact that what is involved in this matter is the final writing of the Terms under which Newfoundland gave up her independence within the Commonwealth and threw in her lot with Canada,” Smallwood remarked. He appealed to Diefenbaker for “big-hearted visions,” and asked for an interim payment of $8 million as McNair had recommended so that the province could avoid making drastic cuts to public services as a cost-saving measure in a difficult financial year. The Newfoundland House of Assembly unanimously passed a motion requesting the interim payment, hoping that it would be just an instalment on a larger grant to follow.59 Diefenbaker’s response to the interim request foreshadowed the final federal position on Term 29. He reminded Smallwood of the monies Ottawa had already given in special grants (Atlantic Province Adjust­ ment Grant and a transfer in tax revenues) in the two years since the

Smallwood, Diefenbaker, and Term 29  39

Conservatives came to power – which, he also reminded the premier, exceeded the amount McNair had recommended. Those payments should, Diefenbaker believed, enable the province to meet its current fiscal conditions. The federal government also realized that any interim payment would have tied Ottawa to that amount as a minimum going forward, and so the cabinet decided there would be none. After all, Diefenbaker told the premier, there had to be a discussion about the amounts involved and that was a matter for the minister of finance and officials in his department. In essence, Diefenbaker relegated the matter to low politics and away from first ministers. It would be handled at the ministerial and bureaucratic level as were other fiscal arrangements. At the same time, Diefenbaker and his cabinet were warned by some in Newfoundland that Smallwood had squandered the province’s fiscal resources after Confederation even as he had insisted there was a “universal expectation” in Newfoundland that Ottawa would be more generous than McNair had recommended. Arthur E. Harnett, the private secretary to W.J. Browne, reported that Smallwood had “total control of the province and no more funds should be placed at his disposal,” as they would be used to pursue Smallwood’s personal agenda for growth and development. The Newfoundland Board of Trade wrote to the prime minister that infrastructure improvements were more important than any financial arrangement between Newfoundland and Ottawa.60 Respected Newfoundland Senator F. Gordon Bradley and Smallwood’s former political partner echoed these sentiments, describing Diefenbaker’s refusal to provide the level of financial support that Smallwood demanded as “sound and practical.”61 For Smallwood, the McNair recommendations were an issue that could only be discussed in the realm of high politics, that is, between premier and prime minister. It was not a matter for mere officials. He never considered the primary issue of Term 29 as simply continuing the level of services reached since 1949 and dismissed any notion of adhering to a strict interpretation of Term 29. He made this clear in his 1956 Budget Speech when he emphasized the inadequacy of Newfoundland’s public services compared to those in the Maritime provinces and said that the differences illustrated “the fundamental character of our need for substantial improvements in the amount we are to get each year under Term 29.” Only he and the prime minister could resolve these matters, even if he believed that an additional financial award was the province’s constitutional and provincial right under the Terms of Union of 1949.62 Later, Smallwood would insist that the Terms of Union could not be

40  Lions or Jellyfish

changed except by agreement between Newfoundland and Ottawa – anything less was “unconstitutional and even immoral.”63 Smallwood fired off a series of telegrams and letters to Diefenbaker, asking for an opportunity to present a formal submission on the inadequacy of the McNair recommendation. His request to lead a delegation to Ottawa arrived in the fall of 1958 as Diefenbaker was leaving for an extended tour of the Commonwealth. Diefenbaker asked Smallwood to send to Fleming any materials that would help them understand Newfoundland’s position and urged him and his officials to meet with Fleming and De­ partment of Finance officials. Smallwood refused; he would wait until the prime minister’s return to Ottawa. This caused further delay in settling the dispute.64 Smallwood might have fared better with the minister and his officials in Finance than by waiting for the prime minister. While Finance officials continued to insist that the McNair recommendation was flawed and had not been supported by the facts presented to the commission, they understood better than most of the cabinet that Term 29 had the potential to disrupt relations between St. John’s and Ottawa. Burns reminded Deputy Minister Taylor that the department would have to deal with the situation in Newfoundland eventually, and advised that if the federal government accepted the McNair recommendation it would do the “least harm” to relations between the two governments; it might even strengthen Ottawa’s position in Newfoundland. Burns noted, too, that Smallwood – like the Newfoundland Royal Commission – saw the financial compensation from Term 29 as the only possible way of improving public services in Newfoundland and as a way of dealing with the current fiscal crisis in the province. He thought that accepting the McNair recommendation, even if it was excessive, would result in the least controversy: “anything less,” he advised, “might do more harm to the long-term relations with the Province and its attitude toward Confederation, than the money would be worth.” Burns also wondered if it were proper for Ottawa to amend or alter the McNair recommendation. The royal commission was constitutionally mandated and had a “quasi-sacrosanct nature,” even if its final report was economically and financially suspect. With that in mind, Burns recommended that Ottawa accept the McNair recommendation beginning in 1957–58 for a limited period, ending in either 1962 or 1967 to coincide with the quinquennial renegotiations of the principal federal-provincial fiscal arrangements. Even as he made this recommendation to the deputy minister, Burns admitted to having some “natural disinclination to provide additional unconditional funds to the

Smallwood, Diefenbaker, and Term 29  41

Province in view of its record of financial profligacy.”65 Officially, Ottawa was wary of Smallwood but it realized that a limited financial support might avoid a catastrophic financial collapse in Newfoundland and vastly improve the level of public services. Burns and others in the Department of Finance, worried about the precarious fiscal situation in Newfound­ land, realized that the province needed more money and they recommended what was essentially a political solution. Fleming forwarded Burns’ recommendation to the prime minister, but neither Fleming nor Diefenbaker saw the matter as particularly pressing, though they would eventually accept the Department of Finance’s recommendation. The department, however, became increasingly worried with the delay, and on 2 January 1959, nearly five months after the subject was first considered in the cabinet, Taylor urged Fleming to make a decision on the McNair Report, suggesting that the issue “may become an embarrassing constitutional matter … [and] it will be difficult to justify giving less than what the Report recommends.” To do otherwise would result in a “rather nasty row” with Newfoundland. However, the government had to fix a terminal date for the award and Taylor recommended 31 March 1967 rather than 1962, which had also been considered, as that was when the Federal-Provincial Tax Sharing Arrangement Act was to be renegotiated. Newfoundland’s situation would then be reviewed and considered alongside that of the other Atlantic provinces.66 Fleming urged Diefenbaker to accept the department’s advice. Diefenbaker raised the matter with the cabinet on 13 January 1959 but a decision was deferred until after he met with Smallwood who had requested an urgent personal meeting.67 Smallwood came to Ottawa with a sense of optimism and a hope for federal magnanimity in the early months of 1959. He tilled familiar terrain and reminded Diefenbaker of Canada’s constitutional obligation under Term 29 and remarked that the resolution of the matter was “a final act in the Terms of Union with Canada and that generosity on the part of Canada would pay dividends in the more whole-hearted acceptance of Confederation in the Province.”68 Yet Smallwood was also on the prowl for a deal, and offered a compromise on Term 29: if Ottawa could not meet Newfoundland’s demands of $15 million within the McNair recommendation, then perhaps it might consider some in-kind contribution that would help Newfoundland improve its infrastructure. Would Diefenbaker, Smallwood wondered, assume responsibility for a public service that was particularly burdensome to the province, perhaps assuming the full cost of the Trans-Canada Highway and the cost

42  Lions or Jellyfish

1.2  Premier Smallwood often pointed to the lack of infrastructure in Newfoundland and the poor condition of secondary roads, as illustrated in this photograph, as sufficient grounds for increased transfers from Ottawa to Newfoundland during the discussions over Term 29. (Library and Archives Canada, e01109317)

of constructing new roads? Federal officials dismissed such overtures as they would surely create problems in Ottawa’s relations with the other provinces; Diefenbaker refused to negotiate on such matters but was left wondering if Smallwood’s earlier demands on Term 29 had been more bluster than substance. Smallwood continued to insist on additional reviews of his province’s fiscal situation, which Ottawa quickly dismissed.69 Cabinet Decides on Term 29, Finally Fleming and Diefenbaker took Finance’s recommendation on Term 29 to the cabinet again on 5 March 1959. The first order of business on

Smallwood, Diefenbaker, and Term 29  43

the agenda that day was a labour dispute in Newfoundland that further heightened the cabinet’s suspicion of, and antipathy towards, Smallwood. The International Woodworkers of America (IWA) had organized loggers in Newfoundland and had launched a legal strike on New Year’s Day against the Anglo-Newfoundland Development Company, which owned the paper mill in Grand Falls. On 7 February, after more than five weeks on the picket lines, strikers raided a logging camp for contractors hired to cut pulpwood and sent loggers scrambling into the winter night. A few days later, on 13 February, Premier Smallwood unleashed the might of his government against the union, which he castigated as “outsiders” intent on destroying the peace and tranquility of Newfoundland. He announced plans to decertify the IWA and establish his own state-run loggers’ union that would then negotiate sensibly with the paper company. The legislation was among the most punitive in Canada in recent memory, and the Canadian labour movement appealed to the federal government to disallow it. Justice Minister Davie Fulton informed the cabinet that the Canadian Labour Congress intended to formally request that the federal government instruct the lieutenant governor of New­ foundland to either disallow or reserve the Newfoundland legislation proposing to decertify the IWA and bar the International Brother­hood of Teamsters from the province.70 The Diefenbaker government condemned Smallwood’s legislation as reprehensible and unjust. That Conservative members of the Newfound­ land legislature had supported Smallwood in his attack on labour was an embarrassment that Diefenbaker had to endure.71 The federal cabinet discussed using its constitutional privilege to either reserve or disallow the legislation but after a protracted discussion decided against any formal action. The Progressive Conservatives had traditionally been the party of provincial rights and most ministers realized that the provinces jealously guarded their powers; federal use of the increasingly archaic powers of reservation and disallowance of provincial legislation would surely come at immense political cost. Reluctantly, the cabinet decided to wait but the episode served as another indication for Ottawa of how ruthless and undemocratic Smallwood and his government had become.72 With its decision on the Newfoundland labour legislation rendered, the cabinet turned to the McNair Report, which it regarded as simply another federal-provincial fiscal arrangement. Diefenbaker and Fleming reported that their latest meetings with Smallwood had failed to find any accommodation on Term 29. Moreover, Diefenbaker concluded that

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during the past eight months, while Smallwood had relentlessly pursued Ottawa on Term 29, he must have realized that the federal government would reject his demands for an annual grant of $15 million. Perhaps his offer to Diefenbaker of a compromise over Term 29 was a desperate grasp as he realized that the best he could hope for was what McNair recommended. Perhaps he was no longer committed to the issue as a matter of principle. Diefenbaker surmised that any reasonable premier had to understand that his Conservative government had already demonstrated its commitment to dealing with national and regional disparities and that he had made the issue a national priority. Diefenbaker’s assumptions, however, revealed the prime minister’s naivety and just how much he misunderstood and underestimated Smallwood. The cabinet saw two options: recognize its obligation under Term 29 and pay the amount McNair had recommended, or refuse the commission’s recommendation. Diefenbaker played a minor role in the debate but he supported Fleming’s argument that the federal government had no alternative but to implement the recommendations of the royal commission if they were to “keep faith with the Terms of Union with Newfoundland.” Fleming proposed that Cabinet authorize the $8 million annual payment as the royal commission had recommended and the Department of Finance had endorsed. The award would continue without any conditions until 1966–67. Newfoundland had to understand, however, that no further supplementary or transitional benefits would be forthcoming or even considered. The grant was a “final and irrevocable settlement of Term 29, and any future payment to Newfoundland [was to] be divorced from the Terms of Union and considered as part of a general fiscal arrangement between Ottawa and the provinces.”73 The cabinet is the pinnacle of executive political power in Canada and it is there that public policy and politics often intersect. Fleming’s proposal generated considerable debate as the cabinet laboured to find an acceptable balance between what the bureaucrats in the Department of Finance had proposed and what ministers believed would be accepted in the other provinces. Politics was a factor, of course, as all members of the cabinet fully understood that Smallwood was “politically hostile” to them and the Conservative Party.74 If they gave Smallwood the full amount he requested, he would take full credit for Ottawa’s generosity; the Conser­ vative government would receive scant praise for any Term 29 award and there would be no political gain for the Conservatives in Newfoundland. The cabinet never seriously entertained Smallwood’s demand for a $15 million award. Rejecting that demand was easy, as the Department of

Smallwood, Diefenbaker, and Term 29  45

Finance had earlier dismissed it as well. The cabinet also discussed Finance’s concern over Smallwood’s apparent recklessness with New­ foundland’s financial resources after 1949. Browne, Newfoundland’s representative at the table, only accentuated these worries among his colleagues. He reported that Smallwood had stated publicly that he would use the McNair award, if granted in perpetuity as he had demanded, to borrow an additional $175 million and repay the loan over a fifteenyear period. The cabinet believed that if it limited the term of the financial award that Fleming recommended under Term 29, it would be  more difficult for Smallwood to increase the indebtedness of New­ foundland, an issue that increasingly worried the federal government. If the McNair award were given in perpetuity, it might also mean that the Newfoundland government would see the federal treasury as its fiscal protector no matter how it squandered its revenue. Payment in perpetuity would surely not encourage prudent financial management in the province. Only the payment of the Term 29 award for a limited term might accomplish that.75 Yet, Diefenbaker and the cabinet realized that they could not punish the people of Newfoundland for Smallwood’s profligacy.76 In the longterm interest of promoting Newfoundland’s integration into Canada they had to provide some measure of financial assistance based on McNair’s recommendation, if only on a temporary basis. The Conservative ministers believed they had addressed the wider issue of regional inequities in Canada in a number of federal-provincial fiscal arrangements adopted since taking over the government; Newfoundland’s position could be accommodated within those new fiscal agreements. Given this, the cabinet accepted Fleming’s recommendation. However, it insisted that Smallwood should be admonished for his alleged financial waste and his apparent mismanagement of public funds. It set 1962 as the termination date – an alternative also offered by the Department of Finance – rather than providing the award until 1967. From that point forward, New­ foundland would participate in the federal-provincial fiscal arrangements on the same basis as all the other provinces. Such an arrangement would signal the integration of Newfoundland into Canada. Fleming and Diefenbaker both agreed that Newfoundland had “fared well in financial assistance from the federal government since we [the Conservatives] took office.”77 Surely, Smallwood would understand that. For Diefenbaker and the federal government generally, it had become an accepted principle of Confederation that Ottawa would extend financial assistance to the provinces for a variety of public policy issues. As the

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Atlantic Province Adjustment Grants demonstrated, Diefenbaker and his ministers hoped to bridge the gap between wealthier and poorer regions of the country through special fiscal arrangements. They were committed to the reshaping of Canadian federalism that had begun during the Second World War. There was a recognition, borne out in the Royal Commission on Canada’s Economic Prospects (the Gordon Commission) that disparity was not simply apparent between individual Canadians but also between provinces and regions, and that the federal government had to introduce policies to deal with the problem of regional economic disparity.78 For Diefenbaker, social welfare was only one aspect of social justice: improving incomes in regionally depressed areas through special programs to encourage development and to raise incomes and living standards were rights that all Canadians should enjoy regardless of where they lived. Diefenbaker and his Conservatives finally had the opportunity to demonstrate that they, like the Liberals, were firm believers in positive government and would treat seriously the provinces’ demands for a new federal-provincial fiscal arrangement, especially for the have-not provinces. This new approach to federal-provincial fiscal relations meant that the amount and nature of the aid had to be modified from time to time to meet changing priorities of government and changing conditions throughout the country. Diefenbaker’s government considered itself particularly sensitive to the fiscal needs and the economic plight of Atlantic Canada when it introduced the special grants for that region. Including the McNair award, unconditional payments and conditional grants paid by Ottawa to New­ foundland increased from $24.4 million in 1956–57 to $55.4 million in 1958–59.79 Diefenbaker and his government believed that the financial position of Newfoundland would be considered judiciously and fairly when a new fiscal arrangement was renegotiated in 1962. The financial position of Newfoundland should not be considered separately from that of the other provinces after 1962 when the existing federal-provincial fiscal arrangements were set for renegotiation. The cabinet also maintained that there should be no exceptions made for New­foundland, nor should it be “treated as an orphan in perpetuity”; it was agreed that the province should “join” the rest of Canada in 1962 and be part of the  national process that decided financial assistance to the provinces.80 Diefenbaker and his government did not reject the notion of accommodation with Newfoundland but they thought singling out any province in a side deal would invite instability and disorder in negotiating federal-provincial fiscal relations and might lead to resentment and

Smallwood, Diefenbaker, and Term 29  47

political splintering. In Diefenbaker’s vision of “One Canada,” regional differences and economic disparities could be best addressed if done as part of a national political undertaking; in this way, special arrangements would have the legitimacy that they required in a political community that had competing interpretations of national need and national wellbeing. Diefenbaker thought that it was inappropriate for one province to have a special arrangement in perpetuity when, as the special Atlantic adjustment had demonstrated, the federal-provincial fiscal arrangement could be negotiated in a spirit of fairness and equity.81 What Diefenbaker did not understand was that many in Newfoundland believed that treating the province equally with the others, without taking its background into consideration, was really to discriminate against it.82 The Diefenbaker government has rendered its decision on Term 29 and the McNair recommendations, but before it publicly announced its decision, new developments in the IWA strike further strained relations between St. John’s and Ottawa. Diefenbaker came under mounting pressure from labour groups and elements in the press to either disallow or have the lieutenant governor reserve the new labour laws passed by the Smallwood government. As much as Diefenbaker wanted to do so, his government had decided that it was political suicide to get involved in matters that fell within provincial jurisdiction. Federal intervention smacked of a centralization of power in Ottawa, something that Diefenbaker had railed against for years. Although Diefenbaker was able to skate around Smallwood’s labour legislation, he soon became embroiled in another controversy with Newfoundland. Smallwood had requested additional Royal Canadian Mounted Police (RCMP) officers to deal with the insecurity created in Newfoundland by the IWA strike. Under the terms of the policing contract between the federal government and the province, a request could not be legally denied unless the attorney general of Canada determined that the RCMP was unavailable because of a crisis elsewhere. Both Fulton and RCMP Commissioner L.H. Nicholson – as well a cabinet committee appointed to study Newfoundland’s request – argued that the federal government had no legal option but to agree to Smallwood’s request. The commissioner threatened to resign if Ottawa refused to send additional officers. Diefenbaker stood alone in the cabinet; he believed that Smallwood was playing politics with the IWA strike, and he insisted that the RCMP could not be seen to be engaged in a labour dispute where they might be regarded – or used – as strike-breakers. Smallwood had created the problem by getting personally involved in the labour dispute, and Diefenbaker was adamant that the integrity of

48  Lions or Jellyfish

the RCMP would not be compromised, even if Ottawa had to break a contract with the province to do so.83 Diefenbaker’s decision on the RCMP was purely political, but the Liberals who had attacked him so virulently on practically every decision he made fell silent on this one. Lester B. Pearson was clearly embarrassed by Smallwood’s actions.84 Smallwood was outraged, however, and so was much of Newfoundland. He turned Ottawa’s decision on the RCMP and the widespread condemnation throughout Canada of his intervention in the strike into a struggle of Newfoundland against the outsider, once again releasing the old shibboleths of conspiracy and local nationalism. An Evening Telegram headline proclaimed “They Do Not Understand,” a cry that was later echoed by Fred Rowe, Smallwood’s minister of education. Don Jamieson, a prominent broadcaster and later Liberal MP, similarly told the Toronto Star, “They just don’t understand us … after ten years, Canadians haven’t a clue about us.” The Daily News, a strong Liberal supporter, resorted to what it described as “The Inadequacies of Mr. Diefenbaker” as it defended Smallwood and charged that the prime minister could not possibly fathom the situation in Newfoundland. Where did he get the audacity, it asked, to declare that the premier had gravely aggravated the labour dispute? The Daily News listed Diefenbaker’s perceived shortcomings: he had unduly and excessively delayed on implementing the McNair recommendations; he had failed to appoint a new Chief Justice of the Newfoundland Supreme Court; and he had refused to send reinforcements to provide peace and security in Newfoundland.85 Term 29 Award and Reaction It was in this vortex of poisoned politics and fervent nationalism which Smallwood had whipped up in Newfoundland that Diefenbaker rose in the House of Commons on 25 March 1959 – just six days before the tenth anniversary of Confederation – to announce his government’s decision on Term 29. He reviewed the significance of Term 29, the work of the royal commission, the government of Newfoundland’s opposition to the McNair recommendation, and his government’s study of the report. Parliament would be asked to authorize a special annual payment of $8 million until 1962 under Term 29, as McNair had recommended. Diefenbaker’s speaking notes, which had been prepared in the Depart­ ment of Finance, stated that the payment was “final and irrevocable”; to  the department’s bureaucrats, those words had simply meant there

Smallwood, Diefenbaker, and Term 29  49

would be no further review of Newfoundland’s fiscal capacity as Small­ wood had demanded. Yet, more incendiary language could not have been chosen, given the situation then existing in Newfoundland. No one cared that the precise phrase had been part of the vocabulary in the government around Term 29 for several years: “The proposed payments will be unconditional and will be in final and irrevocable settlement of the provisions of article 29 and the contractual obligations of the union consummated in 1949.”86 As he sat down, Diefenbaker realized his error even if the decision followed the policy and practice that had been in place in Ottawa since 1949 in its dealings with Newfoundland. Smallwood had failed several times after union in 1949 to convince the federal government to provide special treatment to Newfoundland. He had failed to secure special deals on fisheries development, concessions and special assistance for local manufacturers that faced stiff competition from Canadian imports, and special tax arrangements for the province’s pulp and paper manufacturers, among others. He had argued each time that Newfoundland constituted a special case because of its late entry into Confederation and its poor economic and fiscal position relative to that of the other provinces.87 Ottawa consistently dismissed his claims, insisting that Newfoundland could not be afforded any special consideration that was not available to the other provinces. Still, Smallwood could not be dissuaded of his belief in the exceptionalism of Newfoundland in its dealings with Ottawa. The Diefenbaker cabinet also maintained that there should be no exceptions made for Newfoundland, that it not be singled out for special treatment, and that in 1962 it would “join” the rest of Canada and participate in the national process that decided financial assistance to the provinces. The decision was not a political one as had been the case with the refusal to dispatch RCMP officers to the province. It had emerged from within the bureaucracy and was essentially approved by the cabinet with very minor changes. The government maintained that the financial position of Newfoundland should not be considered separately from that of the other provinces after 1962 when the existing federal-provincial fiscal arrangements were to be renegotiated.88 Yet, when Diefenbaker made the announcement, he did so without explanation or empathy. Moreover, he had failed to realize the importance of the tenth anniversary of union to Newfoundlanders, especially to Premier Smallwood. He also underestimated the extent of Smallwood’s determination to exploit the situation if he did not get the concession

50  Lions or Jellyfish

from Ottawa he had demanded. Diefenbaker foolishly ignored the advice and warnings from Fleming and the Department of Finance that Ottawa take the high ground over Term 29. He might have avoided a confrontation with Smallwood if he had acted on Term 29 earlier, as Finance had insisted, and used the award from Term 29 to strengthen the positive attitude in Newfoundland towards Confederation. He had followed the advice of his cabinet rather than that of the bureaucracy and perhaps either way, he would have run afoul of Smallwood. The fact that W.J. Browne had never been a strong regional minister for Newfoundland exacerbated the situation. Browne had never made a passionate and convincing case for his province in the cabinet and he failed to warn Diefenbaker and the cabinet of how Smallwood had successfully manipulated much of the population into believing that the IWA dispute was an epic struggle with an outside organization that threatened to destroy the peace and tranquility that Newfoundlanders believed existed within their province. Browne failed to warn his colleagues that Smallwood had already launched a nationalist campaign in the wake of the IWA strike to convince Newfoundlanders that the rest of Canada simply did not understand them, and that not giving him what he wanted from Term 29 would only inflame the situation and make the Conserva­ tives an even larger and more attractive target. In his memoirs, Donald Fleming admits that his government’s decision on Term 29 was a mistake, and the government would have been better off to have accepted his recommendation to continue the payment until 1967, even though Smallwood would have likely denounced as insufficient any payment less than the $15 million recommended by the Newfoundland royal commission.89 With his announcement Diefenbaker handed Smallwood a bludgeon with which to beat the federal government. The press across Canada expressed sympathy for Newfoundland and expressed bewilderment both for Diefenbaker’s timing and his cavalier and supercilious handling of the announcement, even if many supported the principle behind the federal position. Toronto’s Globe and Mail best captured the sentiment outside Newfoundland: it “is an example of doing the right thing in the wrong way, at the wrong time.”90 Years later, Gwyn held that “Mystifyingly, Diefenbaker had staked out all the low ground for himself.”91 The reaction in Newfoundland was as fierce as it was predictable. Smallwood was already smarting over Diefenbaker’s decision to refuse additional RCMP officers to deal with the IWA strike and his portrayal by the federal government and in the Canadian press as a dictator intent on

Smallwood, Diefenbaker, and Term 29  51

1.3  After the Diefenbaker government announced its plan to limit the payments under Term 29 to 1963, Smallwood was outraged and launched a speaking tour of Canada to condemn Diefenbaker and explain Newfoundland to Canadians. “They just don’t understand us,” he told an Ottawa audience on 8 April 1959, though he refused to meet with Diefenbaker while in the nation’s capital. (Duncan Cameron/Library and Archives Canada, PA-113253)

using the power of the state to crush the loggers’ union. Term 29 became, just like the IWA situation, another issue of the failure of outsiders – this time, the prime minister of Canada – to understand how the historical and comparative circumstances of Newfoundland made it not just different, but extraordinary and exceptional. He launched a full-pitched

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battle to bring the prime minister to heel, and blamed him for turning the joyous celebration of the anniversary of Confederation into one of sorrow and despair. Ottawa’s decision was an “unspeakable betrayal of Newfoundland” and Smallwood ordered three days of official mourning. Flags hung at half mast and the doors around government buildings were draped in black. Smallwood himself donned a black frock and black hat to lead the mourning and promised to excoriate the province’s new enemy. Students at Memorial University took to the streets in anger. When they arrived at the Colonial Building, the famed home of the Newfoundland assembly, carrying placards that read “Secede,” Small­ wood told them that “the rest of Canada is ready to rise up in ­rebellion against Mr. Diefenbaker’s betrayal of Newfoundland.” That night they burned Diefenbaker in effigy.92 The formal dinner to mark the tenth anniversary of union was cancelled and a banquet was held in Smallwood’s honour instead. The St. John’s Daily News marked the occasion with an editorial entitled “Unhappy Anniversary” wherein it wrote: We have been betrayed many times in our history. We are shocked and angered today by the greatest betrayal of all. And while others have shared the responsibility for his decision, the focal point of Newfoundland contempt and scorn at this moment is John George Diefenbaker.93

Smallwood’s reaction to Diefenbaker’s decision was not without an eye to political opportunism, but it was also based on his staunch Newfound­ land nationalism. For Smallwood, it was an issue of “us against the rest of Canada – the people of Canada just don’t understand Newfoundland.”94 Ottawa was expected to accept the exceptionalism of Newfoundland within Canada. Diefenbaker, he charged, had not understood the province’s historical development outside of Canada, nor the tremendous odds that the province faced even within Confederation. The prime minister had failed to understand that special fiscal arrangements were ­essential for Newfoundland to develop and catch up with the rest of Canada. Newfoundland cried that not only was its prosperity threatened but justice and fairness were also being denied. Smallwood insisted that the underlying value of accommodation between the two countries that had been the basis of union in 1949 had been torn asunder.95 Moreover, he maintained that the federal government had broken the promise implicit in the constitutional understandings reached in 1949 that the federal government was concerned for the well-being of the most vulnerable member of the Canadian political community. The Canadian

Smallwood, Diefenbaker, and Term 29  53

government had in 1947, and again in 1948, he maintained, committed itself in the act of union to specific obligations and entitlements that recognized Newfoundland’s exceptional and distinctive place in Con­ federation. If all went extraordinarily well it would have taken perhaps a generation for Newfoundland to bridge the gap in public services that existed between it and the rest of the country. Canada had desperately wanted Confederation and the treaty to bring Newfoundland into the fold, Smallwood maintained, came with an implicit promise to make life better for Canada’s newest citizens. Diefenbaker had broken a promise that was spelled out constitutionally and was also implicit in the Con­ federation agreement in 1949. It was not Canada that had treated New­ foundland so shabbily; it was Diefenbaker who had betrayed it. Even though Diefenbaker told CBC’s The Nation’s Business that he regretted the “misunderstanding that may have arisen” and offered to meet Smallwood to discuss the matter and consider a “compromise settlement,” Smallwood refused. Diefenbaker also reassured Newfoundland that its financial situation would be considered in a “spirit of fairness and equity” when the next federal-provincial fiscal agreements were negotiated.96 Smallwood wanted the constitutional rights of Newfoundland restored and the McNair award to continue in perpetuity. Only then would Newfoundland prosper and contribute properly to the Confederation. At the dinner held on the anniversary of Confederation in his celebration, Smallwood pointed out that Newfoundland was a have-not province, but that could have changed if Diefenbaker followed the proper course. Smallwood now believed that federal-provincial relations would improve only with the removal of Diefenbaker. Smallwood’s goal became the destruction of the Progressive Conservative Party in Newfoundland and the defeat of Diefenbaker nationally. Only then, he believed, would his basic political goals of presiding over the prosperity of Newfound­ land be realized; only with the removal of Diefenbaker would justice and stability for Newfoundland be achieved. When Malcolm Hollett, the provincial Conservative leader, later attempted to argue in the assembly that Newfoundland had benefited tremendously under Prime Minister Diefenbaker, he was shouted down and told that a loyal Newfoundlander would immediately leave the Conservative party; two of Hollett’s colleagues quit the Conservative party and created the United Newfound­ land Party (UNP).97 Smallwood took his campaign against Diefenbaker to Ottawa to convince the press, and Canadians too, that Diefenbaker didn’t care about his province. The press seemed to have forgotten about Smallwood’s

54  Lions or Jellyfish

involvement in the IWA strike, though it was the subject of his address to the largely business audience at the Canadian Club in Ottawa on 8 April 1959. He seemed to revel in the spotlight and seized every opportunity to embarrass the federal government. He launched several lawsuits against Ottawa, including one in the Exchequer Court for breach of contract over the federal refusal to send RCMP reinforcements to Newfound­ land and another to prevent the federal government from placing its nominees on the St. John’s Housing Authority. The federal government retaliated and ordered Smallwood out of Canada House, the former residence of the high commissioner to Newfoundland, which he had established as the unofficial residence of the Newfoundland premier, and refused to back down on Term 29.98 An Act for the Payment of Additional Grants to the Province of Newfoundland, which became known as the McNair award, was introduced in Parliament on 13 July 1959. This time, Ottawa was careful to avoid any further incendiary language. W.J. Browne was asked to approve the draft bill and the minister’s statement when the legislation was introduced. Donald Fleming described the bill as the completion of the provisions of Term 29 and promised Newfoundland that it would be treated fairly in any comprehensive renewal of federalprovincial fiscal relations. During the debate on the legislation, Lester Pearson said Diefenbaker’s government might have been correct that it was under no legal obligation to accept the McNair recommendation – as Prime Minister St. Laurent had said earlier – but it was the moral and constitutional responsibility of the government of Canada not to change Term 29 without agreement from Newfoundland. Pearson then promised that he would restore the annual payment to Newfoundland when the Liberals regained power.99 “It was a sad day for all Newfoundlanders,” Smallwood declared. In his words, Newfoundland had been “brutally violated.”100 He capitalized on the anger vented towards Ottawa, dissolved the provincial legislature a short time later, and called an election for 20 August 1959. Smallwood campaigned on Newfoundland’s victimization, exceptionalism, and betrayal. “All down through our history we Newfoundlanders have been made to suffer injustice” by outsiders, he reminded voters. Term 29 had guaranteed Newfoundland special rights that recognized its uniqueness, but “Mr. Diefenbaker ha[d] betrayed Newfoundland.” He called upon Newfoundlanders to “Stand up for Newfoundland. Stand up for New­ foundland’s rights.”101 For Smallwood, the election was also a means to confirm his political legitimacy both in Newfoundland and on the

Smallwood, Diefenbaker, and Term 29  55

1.4  Although Smallwood had vowed to defeat Diefenbaker, he invited him to attend the official opening of the new campus of Memorial University in October 1961, which Smallwood saw as a major feature of the new Newfoundland; Diefenbaker was reluctant to attend given Smallwood’s attack. The premier was on hand to greet Diefenbaker and his wife, Olive, as they stepped off the plane in St. John’s. Despite the furor over Term 29, Diefenbaker’s government did not punish Newfoundland for its premier’s attacks on him. (University of Saskatchewan, University Archives & Special Collections, Diefenbaker fonds, JGD 1411)

56  Lions or Jellyfish

national stage. In the short election campaign, Smallwood did not run candidates against the two members of the UNP, but chose to run himself against Conservative leader Malcolm Hollett in a seat that had been gerrymandered earlier. Smallwood won handily but to his disappointment the Conservatives still managed to win three seats and 25.6 per cent of the popular vote. Diefenbaker never trusted Smallwood after their fight over Term 29, but in 1961, during the federal-provincial conference on fiscal arrangements between the provinces and Ottawa, Diefenbaker extended the McNair payments to Newfoundland for an additional five-year period to include the fiscal year 1966–67 as part of the Federal-Provincial TaxSharing Arrangements Act.102 Smallwood wrote in his planner that the offer was “not too bad for Newfoundland.”103 Yet, the quarrel between Diefenbaker and Smallwood continued, and became public at times, particularly over the ownership of Fort Pepperrell, the abandoned American military base in St. John’s, and the appointment of the province’s lieutenant governor. Both issues were eventually resolved and Smallwood abandoned his legal proceedings against Ottawa. During this period, the federal government funded major harbour developments in St. John’s, provided three-quarters of the cost of building technical schools and trade colleges in Newfoundland, funded major initiatives in public housing, created the Terra Nova National Park, provided a ferry to run between Portugal Cove and Bell Island, and provided millions of dollars in capital spending throughout the province. Still Smallwood never forgave Diefenbaker and made the prime minister’s defeat one of his most public and determined goals; Smallwood reportedly telephoned Jack Pickersgill each day offering advice on how to bring down the Diefenbaker government. In perhaps an ironic twist, it was also during those years (1960–63) of extreme tension between Ottawa and Newfoundland that the province enjoyed its greatest economic growth since Confederation.104 During the 1962 federal election campaign, Liberal Opposition leader Lester B. Pearson promised to enshrine in the statutes the permanency of the special payments to Newfoundland. Smallwood delivered six of seven seats to the Liberals, but Diefenbaker hung on with a minority government, only to be defeated a year later when the Liberals claimed a slim minority, helped in no small part by winning all seven Newfound­ land seats. Delighted that Diefenbaker was finally defeated, Smallwood travelled to Ottawa to watch gleefully from the public gallery as Pearson

Smallwood, Diefenbaker, and Term 29  57

and his government took their seats in Parliament on 27 May 1963. Pearson kept his election promise and introduced legislation in Bill C-111 for the annual payments to Newfoundland out of the consolidated revenue fund.105 These payments continued until a cash-strapped New­ foundland government in 1996 negotiated a lump-sum payment of $50 million “in light of its unique economic and financial circumstances” that relieved the federal government of its obligation until 2016 when the payments will be resumed.106 One federal row was resolved but another was about to begin.

2 Federalism for Bullies: Newfoundland, Quebec, Ottawa, and Hydroelectric Development in Newfoundland and Labrador, 1960–1970

Introduction Convinced that personal relationships were the primary catalyst for decisions made in government, Newfoundland Premier Joseph R. Smallwood was adamant that Prime Minister John Diefenbaker’s lack of familiarity with Newfoundland, and personal animosity towards Smallwood himself, explained Ottawa’s policy on Term 29. For Smallwood, the public was intertwined with the private, and he committed himself to driving Diefenbaker from office and restoring to Ottawa a Liberal party that he  believed had a much better understanding of Newfoundland and Labrador and brought it much greater benefit. The province would fare better with Lester B. Pearson as prime minister and Smallwood’s friend J.W. Pickersgill occupying the province’s seat at the federal cabinet table. Campaigning doggedly for Pearson in the 1963 general election Small­wood delivered the province’s seven seats to the Liberals. He fully expected a better federal understanding of Newfoundland’s needs and priorities given that he had helped to return to Ottawa a friendly Lib­ eral government. Ironically, the injustice inflicted upon Newfoundland and Labrador during the Pearson period was greater than at any time since 1949. At stake over Term 29 had been an $8 million annual transfer as the final settlement of the Terms of Union between the two countries. The financial rewards were much higher over the hydroelectric project at Churchill Falls,1 which was located near the Newfoundland-Quebec border in Labrador and which Newfoundland had hoped to develop since the mid-1950s. Because the power generated in Labrador had virtually no local market, the most economical and practical way of transport

Hydroelectric Development, 1960–1970  59

was across Quebec to markets in either southern Canada or the United States. Through a contract negotiated in 1969, however, Quebec became the only buyer of the resource when it refused to allow the transmission of hydroelectricity from Newfoundland across its territory, effectively creating a monopsony and placing Newfoundland at its mercy. Smallwood’s Liberal friends in Ottawa offered little assistance as their interests lay elsewhere. For them, the stakes were also high, dire even. When they returned to power in 1963, they realized that a new kind of federalism had emerged. Unlike Diefenbaker, who was concerned with inequalities across the nation and the struggles that farmers and rural people generally experienced, Pearson discovered a new Canada had emerged – one where language and culture took centre stage and were the greatest threat to national unity. The fate of Canada seemed to hinge on how Pearson handled the growing nationalist sentiment in Quebec. The federal Liberals sought greater favour with that province especially as nationalist and terrorist groups such as the paramilitary Front de libération du Québec (FLQ) became increasingly militant and bold in their condemnation of Canada and in their demands for an independent Quebec. If Ottawa enforced the economic union that had been created in 1867, and confirmed in various court rulings since then to protect Newfoundland’s constitutional rights to transport its electricity unimpeded across the Quebec border, the Liberal government feared that it might incite violence and fuel the forces of separation in Quebec. Section 92.10(a) of the Constitution Act, 1867, which gave the federal government jurisdiction over “Lines of Steam or Other Ships, Railways, Canals, Telegraphs, and Other Works and Undertakings Connecting the Province with Any Other or Others of the Provinces, or Extending beyond the Limits of the Province” was ignored in Liberal Ottawa in its practice of federalism, even though doing so did irreparable harm to Newfoundland and Labrador.2 In Pearson’s search for accommodation with Quebec,3 he conveniently ignored the assurances he had given Smallwood following the election in 1963: “to recognize the special difficulties of [his] historic province and the necessity of helping her achieve the highest possible standard of prosperity and self-­pride confederation had to offer.”4 Instead, the accommodation and promotion of biculturalism and bilingualism had become paramount to achieving social cohesion and political integration in the ­Canadian federation. Smallwood could not possibly have foreseen the extent of the financial injustice that has been perpetrated on Newfoundland and Labrador

60  Lions or Jellyfish

2.1  Smallwood placed great hope in his relationship with the Liberal Party in Ottawa and worked assiduously to return Pearson and the Liberals to power after their defeat by John Diefenbaker in 1958. Here, Smallwood and Pearson share a happy moment in Gander in July 1966 to mark the completion of the Newfoundland section of the TransCanada Highway, which was funded largely from federal dollars. However, Pearson refused to support Smallwood in his quarrel with Quebec over the Churchill Falls project. (Smallwood Collection, photo 5.04.592)

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since the Churchill Falls project commenced operations in 1972. Through­ out the 1960s, he spoke often of the important revenues from the project to his province. He fully believed at the time, however, that the federal government had the constitutional obligation to protect Newfoundland from the predatory politics and rapacious policies of the government of Quebec. Several years before a contract on the matter was finally signed with Quebec in 1969, Smallwood wanted Ottawa to intervene to allow Newfoundland to transport its energy across Quebec. Pearson and the Liberal government failed, however, to defend Newfoundland’s right to engage in interprovincial trade through Quebec in the same manner as oil and gas moved seamlessly across provincial borders from Western Canada to markets in the East. Ottawa’s turning a blind eye to Quebec’s obstruction of interprovincial trade and commerce was a clear policy decision; it was federal capitulation to the fear of what a row with Quebec might do to national unity and the electoral fortunes of the Liberal Party of Canada in that province. Only once in the twentieth century had the Liberals failed to sweep the province in a federal election and in 1965 Quebec contributed 56 of the 131 seats that the Liberal minority government held in Ottawa. A contract for the power generated at Churchill Falls was signed in 1969 between Hydro-Québec and the Churchill Falls Labrador Corpo­ ration (CFLCo) whose parent company was Brinco, the corporation Smallwood had trusted to develop the mighty falls. Smallwood understood that the price of the power being sold exclusively to Hydro-Québec was extraordinarily cheap, even by the price regimes then existing in Newfoundland and across Canada, and far cheaper than that from any other energy source available to Hydro-Québec at the time and in the foreseeable future.5 Moreover, it was a lengthy contract, spanning some forty-four years, from 1972 to 2016, followed by an automatic extension of an additional twenty-five years to 2041. The disparity in the capture of economic rents from the resource soon became evident. Within a decade, Quebec was earning about $600 million a year from Churchill Falls compared to $23 million for Newfoundland and Labrador; by 2010 Quebec’s grab was $1.7 billion annually versus $63 million for Newfound­ land and Labrador. After the renewal clause in 2016, Quebec will purchase Newfoundland and Labrador power at the pre-set 1969 price of $2 per megawatt hour (MWh); in 2010 Quebec earned on average $85 per MWh on its electricity exports and in 2011 domestic power users in St. John’s paid $104.07 per MWh. During the renewal phase Newfound­ land and Labrador might not earn enough revenue to cover the costs of

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operating and modernizing plant facilities at Churchill Falls even as Quebec continues to reap billions in the resale and export of Newfound­ land’s hydroelectricity.6 There was no conspiracy of silence aligned against Newfoundland and Ottawa during the negotiations in the 1960s. Public opinion, media commentators, opposition politicians, government officials, and business leaders throughout Canada all condemned Quebec’s treatment of New­ foundland and called repeatedly upon Pearson and the federal government to intervene and uphold the constitutional protection of interprovincial trade. Smallwood’s failure to demand that Ottawa do so, and ensure Newfoundland’s constitutional right to export power across interprovincial borders, was his greatest failing as premier, and Pearson’s failure to protect Newfoundland’s constitutional interest shows that Canadian federalism works best for bullies. Smallwood and Pearson both understood that the covenant of Confederation had been broken over Churchill Falls. Pearson satisfied himself that his choice preserved national unity. Smallwood reacted with quiet indifference and resignation – a different response than he had chosen when he believed the constitutional covenant had been broken over Term 29, even though the financial rewards paled in comparison. He never publicly condemned or vilified Pearson as he had Diefenbaker; he was too trusting of his Liberal colleagues and friends in Ottawa and the private investors in Churchill Falls (which also included a number of Liberals such as former cabinet minister Robert Winters) to do anything but watch events unfold, perhaps with considerable regret, as the Brinco officials had reassured Small­ wood that they would protect Newfoundland’s interest. He allowed Newfoundland’s interests to be sacrificed for the benefit of the Liberal Party of Canada and some Chamberlain-esque notion of keeping the peace with the province of Quebec for the benefit of all Canada. New­ foundland paid the price of a dysfunctional federalism, and for Premier Smallwood, injustice, like beauty, was clearly in the eye of the beholder. It was a low, dishonest episode in the history of Canadian federalism.7 Private Capital Trumps State Capital: The Creation of Brinco Newfoundland historian Peter Neary observed more than thirty years ago that the nature of Canadian federalism, which left responsibility for economic development with the provinces, was largely to blame for Newfoundland’s inability to take greater control over its resources and the way they were exploited. Only the federal government had the

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capital necessary to facilitate “an alternative strategy of public ownership and development [but that option] was never contemplated either in St. John’s or Ottawa,” Neary wrote.8 Smallwood had promised in 1949, however, that Newfoundland would employ state capital and create a public electric utility modelled on those in Ontario, Quebec, and Manitoba to generate, transmit, and distribute electricity for domestic and industrial use. Even New Brunswick recognized the importance of public control of electrical development in its promotion of industrial development through the 1950s and 1960s.9 Two years after Confederation the Newfoundland government signalled its embrace of state capitalism when it created the Newfoundland and Labrador Corporation (Nalco), which was 90 per cent state-owned and 10 per cent controlled by private interests, notably Harriman, Ripley, and Company of New York and Wood Gundy of Montreal. It was given water-power rights to huge tracts of Newfoundland and Labrador, including Churchill Falls in Labrador, as well as the rights to develop mineral and timber resources. It was an auspicious beginning for those who favoured state capitalism, but Small­ wood soon lost interest in this mode of development. He dismissed a report from consultants hired from Ontario Hydro who recommended that the province directly control the generation and distribution of electricity. Even when he created the Newfoundland Power Commission (NPC) in 1954, Smallwood gave it the authority to negotiate contracts with private utilities to supply electricity throughout the province and refused to have the state develop the province’s hydroelectric potential.10 Smallwood turned instead to private and foreign capital in London, England. Through British Prime Minister Sir Winston Churchill, Small­ wood invited financier Edmund de Rothschild to assemble a consortium to develop Newfoundland’s natural resources. He lured twenty-­ four British and North American firms, including the English Electric Company, Rio Tinto–Zinc Corporation Ltd., the Anglo-American Corpo­ ration of South Africa, Frobisher Limited, Bowater Paper Corporation, and Anglo-Newfoundland Development Company, under the leadership of N.M. Rothschild and Sons, to create the British Newfoundland Corpo­ ration (Brinco) in 1953.11 He transferred many of the assets from the provincially owned Nalco to Brinco, including extensive land and water rights throughout the province and large tracts of Labrador, including Churchill Falls.12 Harriman, Ripley’s George M. Mackintosh cautioned Smallwood against the deal he had made with Brinco. First, there would be little in the way of royalties for the province. Second, the awarding to Brinco of land and resources in fee simple meant that long-term control

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passed from the state to the private corporation.13 Smallwood ignored the warnings and embraced Brinco as an “imperial concept” to rival the East India Company and the Hudson’s Bay Company. Even the incorporated name sounded oddly anachronistic, especially at a time when Canada and much of the Commonwealth were beginning to assert their independence from Britain in a broad process of decolonization. The Canadian government did not play any direct role in the creation of Brinco, but followed its birth closely. C.D. Howe, the powerful minister of trade and commerce in Louis St. Laurent’s government, had told A.W. Southam, the managing director of Brinco who had visited him in Ottawa in 1953, that the federal government was anxious to find new sources of hydroelectricity; he offered to facilitate any attempts to generate new supplies of power in eastern Canada. With demand accelerating, especially in Ontario, Howe and the federal government regarded Churchill Falls as of primary importance for continued national industrial expansion. His encouragement was important in Brinco’s decision to initiate plans for the development of Churchill Falls in 1954. Jean Lesage, the minister of northern affairs and national resources from 1953 to 1957 (and later premier of Quebec), received regular updates on Brinco’s operations.14 In 1958, Brinco established the Hamilton Falls Power Corporation (renamed the Churchill Falls Labrador Corporation [CFLCo] in 1965) as a private corporation to develop Churchill Falls. Eighty per cent of the company was owned by Brinco and the remaining 20 per cent by Shawinigan Engineering Company of Montreal. Because Churchill Falls was located some 320 kilometres from the Labrador-Quebec border, Brinco realized that Quebec was crucial to the development of the project: either Quebec would have to purchase much of the power generated or it would have to pass through Quebec on its way to markets. There was little progress on the development of the project in the 1950s as Quebec Premier Maurice Duplessis had little interest in it. Fiercely nationalistic, he even refused to accept the decision of the Judicial Committee of the Privy Council that had awarded Labrador to New­ foundland when it arbitrated the boundary dispute between the Domin­ ions of Canada and Newfoundland in 1927. Duplessis was attempting to use Quebec’s geographical position to extort concessions from New­ foundland, and Smallwood came to the realization that he might have to address the boundary issue with Quebec if he wanted Churchill Falls developed. In 1956 he approached Duplessis, offering to meet “for a discussion of the boundary” between the two provinces. On 2 February 1957, when Smallwood went to Quebec City to celebrate St. Laurent’s

Hydroelectric Development, 1960–1970  65

2.2  Later renamed Churchill Falls to commemorate the life of Sir Winston Churchill, Hamilton Falls (pictured here in 1954) had the potential to be one of the largest hydroelectric developments in North America; however, it was located more than 1,500 kilometres from where the power was needed. To reach markets in Ontario and the United States, the power had to pass through Quebec. Quebec refused to allow such a transmission corridor, and the federal government refused to get involved to ensure that the riches of Churchill Falls could accrue to Newfoundland. (Library and Archives Canada, e011093116)

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seventy-fifth birthday, he and Duplessis agreed to each appoint “a trusted official” to discuss boundary issues in secret. Smallwood named his official; Duplessis did not as he had his sights on the development of the Manicouagan and Outardes Rivers in Quebec, not on Churchill Falls in Newfoundland.15 National Energy Policy: Smallwood and Diefenbaker The opportunity for the development of Churchill Falls improved considerably when the Progressive Conservatives formed the government in 1957. They saw hydroelectricity as a national resource, crucial to their plans for a new national policy for Canada and essential for the continued industrial expansion of central Canada. Hydroelectricity would, more­over, stimulate growth in economically depressed and remote regions of Canada and, if developed properly, would promote greater economic equality for all Canadians. It would also strengthen national unity. The Conservatives believed that the federal government had to be involved in assisting the development of hydroelectricity and coordinating its transmission across Canada. Hydroelectricity became a national priority in Diefenbaker’s activist state.16 At the basis of the Conservative strategy was state support for the generation of power. It was first implemented in the Maritime provinces, a region of Canada that the government identified for special assistance early in its mandate.17 By increasing energy capacity in low-growth areas, the government hoped to foster economic development through the provision of cheap and accessible power, one of the key inputs for industrialization. Numerous initiatives were undertaken to develop power in the region – including major support for the Beechwood hydroelectric development in New Brunswick, and the introduction of the Atlantic Provinces Power Development Act to provide financial assistance to provincial governments.18 Although Newfoundland had opted to develop its hydroelectric resources through private rather than public capital, the federal government was nonetheless keen to assist the province with the Brinco-owned Bay d’Espoir site on Newfoundland’s south coast.19 When Smallwood insisted that the province could not afford to repay any loans guaranteed under the Atlantic Provinces Power Development Act that would have been essential for the project to go ahead, Alvin Hamilton, the minister of Northern Affairs and National Resources, asked the cabinet to consider “a gesture of magnanimity” towards Newfoundland, as it was the “poorest and neediest” of the provinces. He suggested that

Hydroelectric Development, 1960–1970  67

Newfoundland be either offered a federal grant of half the cost of the transmission facilities or it be permitted to use a part of the “Road to Resources” aid to assist with the transmission lines, as cheap power was perhaps the most effective means of encouraging economic development in the province. The cabinet approved funding under the Atlantic Prov­ inces Power Development Act and informed the Newfoundland government that it was prepared to discuss various ways of providing additional financial assistance to the project. In late 1959, however, Bowater’s pulled out of the consortium for developing Bay d’Espoir and the project was temporarily shelved.20 Yet, the Conservative government had been willing to assist Newfoundland in the generation and transmission of electricity when it asked for assistance. The second plank in Diefenbaker’s national energy policy was a national energy grid that would move power from those areas with surplus capacity to those that needed it for industrial expansion.21 A national power grid would also bind the nation together as the transcontinental railways and the CBC had done earlier.22 Jurisdictional complications had impeded the earlier development of resources such as hydroelectricity, but Diefenbaker promoted greater cooperation between the various provincial authorities and between the federal and provincial governments. Ottawa had a responsibility to promote the most efficient use of the country’s natural resources, though he understood fully that power generation was a provincial responsibility.23 The National Energy Board that Diefenbaker established in 1959 was intended to regulate the interprovincial transmission and international export of energy as part of his plan to promote more intensive development and more effective use of Canada’s energy resources.24 Surplus capacity, particularly in British Columbia, Manitoba, Quebec, and Newfoundland, could be moved along a national grid to offset deficits in other regions; a national grid could take advantage of time zone differences across the country and also deliver excess capacity to the United States.25 “We feel that there are substantial advantages for the nation as a whole that could be achieved in the development and use of electric energy if it were approached on a regional and national basis,” Diefenbaker suggested to premiers in a 17 Jan­ uary 1962 letter inviting them to Ottawa to consider a national strategy for the use and development of Canada’s electric energy resources. The 1962 Speech from the Throne promised a national electricity grid as an integral part of his national development strategy.26 Smallwood never supported Diefenbaker’s national power grid even though it might have linked Churchill Falls to a national market. His and

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other provincial interests derailed Diefenbaker’s plans, which encountered stiff opposition from several provinces, especially those with the greatest potential for hydroelectric development.27 Quebec Liberal Premier Jean Lesage, who was elected in 1960 after years of Union Nationale dominance of the province, was incensed over the proposal, feeling it was an intrusion into provincial jurisdiction. Lesage had no intention of participating with the federal government; rather, he would pursue the matter only with his colleagues at the interprovincial level. Assuming the mantle of the Canadian nationalist, Diefenbaker reminded Lesage that, indeed, the development of power sites was a provincial matter, but the transmission of power between provinces was of “interest and concern to the Federal government.” Lesage refused to attend Diefenbaker’s conference on the national power grid or even to send a representative, claiming he would never work “under the tutelage of the Federal Government.” Other provinces accepted Diefenbaker’s invitation, but British Columbia’s W.A.C. Bennett and Manitoba’s Dufferin Roblin were the only two premiers who attended the meeting on 19 March 1962. W.J. Keough, the minister of mines, agriculture, and resources, represented Newfoundland; he made it clear at the meeting that he was an observer only and had no authority to make any comments or to support any decisions on long-distance transmission.28 Diefenbaker needed provincial allies and he had few. As Louis O’Sullivan, a representative of Hydro-Québec, later wrote the chair of Manitoba Hydro, Quebec was interested only in using its power to attract large steel and manufacturing industries and would never participate in any scheme that would transfer its energy to the power-poor provinces to give them an advantage.29 Diefenbaker’s proposed national grid collapsed under the weight of provincial self-interest. Into the Fray with Lesage and Quebec Why did Smallwood not support the proposed national power grid, given that Newfoundland had to ship its power to markets across Quebec, which had steadfastly refused to even discuss the matter with him? When Diefenbaker launched his dialogue on a national power grid, Smallwood had just begun discussions on the development of Churchill Falls with Jean Lesage, the new Quebec premier. After failing to make any progress on the development of Churchill Falls with Duplessis, Smallwood was excited by Lesage’s victory in Quebec. A firm believer in the art of high politics and the importance of informal personal relationships and

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2.3  Premier Smallwood with Quebec Premier Jean Lesage at a conference on fiscal federalism in April 1964. Smallwood had earlier thrown his lot with the Liberal premier of Quebec believing that the two “Liberal provinces” could develop Churchill Falls. In doing so, he rejected Diefenbaker’s plan for a national power grid that might have provided Newfoundland a corridor to move power from Churchill Falls unmolested by Quebec. (Duncan Cameron/Library and Archives Canada, PA-117105)

connections, Smallwood believed that his friendship with fellow-Liberal Lesage would surely mean the days of difficulty with Quebec were now over. Moreover, Lesage was already familiar with Churchill Falls from his term as minister of northern affairs and natural resources in Ottawa. He understood the potential – and importance – of the project, and he had even indicated during the Quebec election campaign that he would work with Newfoundland for the joint development of Churchill Falls.30 Smallwood feared that participating in a federal initiative on a national power grid that Lesage vehemently opposed would surely jeopardize

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their relationship and threaten the prospects of getting a deal with Quebec. Moreover, he had no desire to follow Diefenbaker’s lead, harbouring as he did a profound dislike of the Conservative prime minister. Smallwood’s opposition alone did not scuttle Diefenbaker’s plan for a national grid, as British Columbia, like Quebec, was also opposed.31 How­ ever, in supporting his fellow Liberal premier in Quebec rather than Diefenbaker in Ottawa, Smallwood demonstrated very poor judgment. If he had elected to work with the Conservative government in Ottawa, it is possible that Diefenbaker may have committed federal support to Churchill Falls and placed Ottawa on record as supporting the interprovincial transmission of power. If Diefenbaker’s proposal to promote hydroelectricity as a national resource and his plans for a national power grid had been accepted as federal policy, it might have been more difficult for Pearson to reverse that policy once he became prime minister, and it might have facilitated the movement of Labrador power unimpeded across interprovincial borders to the Canadian and American markets.32 Smallwood chose not to support Diefenbaker for personal reasons. Smallwood, like Lesage, saw Labrador power going to American markets and not being used as a resource for Canadian development; he took great pride in telling Newfoundlanders their power would run the subways of New York. Like other premiers, he considered electricity as a provincial, regional, and continental resource rather than a purely national one as Diefenbaker did. When Smallwood refused to embrace a national power grid under the auspices of the federal government, he unwittingly placed himself at the mercy of Quebec.33 As Karl Froschauer has convincingly argued, after 1960, provinces like Newfoundland opted for independent roles in the planning of provincial power systems to generate new supplies of power for industrial expansion and export revenues. Any cooperation between the provinces had been to create regional networks that would be linked to exporting power to the US. Although Diefenbaker was insistent that Ottawa create – through a federal-provincial arrangement – a national power grid that would harness the water power in the northern regions of Canada, including those at Churchill Falls, Smallwood placed much greater faith in a Pearson government. However, Pearson never committed to a national approach to hydroelectric development and never considered hydroelectricity a national resource. Instead, he promoted the continentalization of hydroelectricity through its sale to the US utilities (through the granting of export permits) as he did with the auto sector in the Canada-United States Automotive Product Agreement, or Auto

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Pact. His search for accommodation with Quebec, which saw electricity as its symbol of economic liberation, meant that he would refrain from confronting that province as Diefenbaker might have done. Moreover, Pearson – and Smallwood, too – never envisioned the hydroelectric resources of Newfoundland and Labrador in the manner that Diefenbaker had, as a resource that could be developed for transport across Canada.34 Newfoundland was left to its own devices and had to make its own deals on the transmission of the hydroelectricity it developed. It rejected the opportunity to throw in its lot with Ottawa and with Diefenbaker to develop Churchill Falls through the use of public or state capital. Small­ wood’s allegiance to the scions of private enterprise had terrible consequences as it left Newfoundland captive to the interests of Quebec, which, ironically, had fully embraced the state as its preferred mode of development. The Canadian federation was a political union, and the economic bonds across provincial borders remained weak. Provinces were largely left on their own for economic development. Smallwood’s Negotiations with Quebec Smallwood’s hope for an early agreement with Lesage on Churchill Falls was soon dashed. The project had the potential to deliver six million horsepower of hydroelectricity, but the costs were enormous: more than $700 million to generate the power and nearly $1 billion when the cost of transmission lines was included, making it one of the most ambitious industrial undertakings in Canadian history. To go ahead Quebec had either to permit Brinco to transport the power through its territory to markets in southern Canada or in the US, or it had to purchase the power from Brinco at the provincial border. Either way, Quebec’s involvement was crucial; the arrival of a new premier did not eliminate any of the lingering issues that had plagued the project during the Duplessis era.35 Smallwood’s first discussions with Lesage and René Lévesque, the minister of hydroelectric resources and public works (1960–1) and later minister of natural resources (1961–5), revolved around the possibility of Quebec purchasing Labrador from Newfoundland. This notion was quickly dismissed when Smallwood realized that his cabinet was vehemently opposed, but even his brief flirtation with unloading resourcerich Labrador in exchange for a quick infusion of cash demonstrates his eagerness for the funds to remake Newfoundland. Smallwood then suggested that “two of Canada’s Liberal provinces should collaborate to develop Labrador.”36 Lesage seemed to agree: at the Premiers’ Conference

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in Victoria 7–8 August 1962, he reported that he and Smallwood had discussed Churchill Falls a number of times and that Smallwood wanted “Quebec Hydro to go in fifty per cent in the cost of the development” of the project.37 Yet, Lesage had made it clear that Quebec intended to reap what benefits it could from Churchill Falls power: he would buy it as cheaply as possible and sell anything surplus to Quebec’s needs to the power-hungry electric utilities in New York – at a profit.38 The government of Quebec increased its stake in the development of Churchill Falls when Lesage nationalized Shawinigan Water and Power in 1962. In that transaction to expand Hydro-Québec and establish state control over a major natural resource, the provincial government acquired a 20 per cent equity stake in Churchill Falls, as Shawinigan owned one-fifth of the Hamilton Falls Power Company, the Brinco subsidiary established in 1958 to develop the falls. Lesage had insisted that Quebec retain Shawinigan’s share in Churchill Falls, even though it divested itself of most of the company’s other assets. Smallwood bristled at the thought of Quebec owning such a sizeable share of Churchill Falls: he feared it would leverage its stake in Hamilton Falls Power to usurp control of parts of Labrador. He dispatched Robert Winters, a former Liberal cabinet minister and, at the time, a member of Brinco’s board, to persuade Lesage to surrender part of Quebec’s equity to Newfoundland, giving each province a 10 per cent share in Hamilton Power.39 Lesage dismissed Smallwood’s request, telling Winters he wanted to increase his equity share, not reduce it.40 Smallwood was outraged. Proposal on Churchill Falls, 1963 The federal government’s announcement in 1962 (to try and convince BC Premier W.A.C. Bennett to sign on to the national power grid) that it would repeal legislation – first enacted in 1907 – requiring licences for the export of power to be renewed annually, proved a major impetus for the development of Churchill Falls. The new legislation allowed largescale, long-term contracts for the export of power to the United States. Representatives of Consolidated Edison Company (Con Ed) of New York immediately expressed an interest in Churchill Falls, and in late Decem­ ber Smallwood passed this information along to Lesage, who was also excited about the project moving forward. Brinco moved into full gear and announced plans for the maximum economic development of the site, given the promise of long-term export contracts.41 Quebec’s expertise in the long-distance transport of power was crucial for getting the

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power to the US, and within weeks, Edmund L. de Rothschild and Brinco chair, H. Grenville Smith, met with Lesage, who now saw tremendous benefits for Quebec: first, the power from Churchill would attract secondary industry to Quebec; and second, Hydro-Québec would purchase power from Churchill Falls at the Newfoundland border and resell what it did not need to New York and Ontario.42 Premier Lesage was intimately involved in the negotiations, led by Hydro-Québec President Jean Lessard, a former federal deputy minister, and Brinco officials. Hydro-Québec had realized that Churchill Falls offered the most cost-effective means for meeting the province’s electrical needs after 1968. This made a deal possible. Brinco and Hydro-Québec negotiated on 7 October 1963 a “Basis for Proposed Agreement between Hamilton Falls Power Corporation Limited and the Quebec Hydro Electric Commission” that they hoped might serve as the basis of a contract. It provided for a long-term agreement with Quebec purchasing approximately 30 million megawatt hours at a price range of 2 7/8 to 3 mills at the interprovincial border. Quebec would take the power on a take-or-pay contract, as Con Ed had tentatively agreed to offer HydroQuébec a similar deal. A renewal provision was included in the proposal to extend the contract for an additional twenty-five years at a price to be mutually agreed upon. An American consortium headed by a New Yorkbased financial services company, Morgan Stanley, would secure the necessary funding.43 However, there was strong opposition in Lesage’s cabinet to the proposal, led primarily by Lévesque. He pressured Lesage to appoint a task force led by Roger Létourneau, a Quebec lawyer and veteran of the Shawinigan nationalization process, to review the proposal. Several others who had been involved in the nationalization of the private power firms were included in the review. So, too, was Doug H. Fullerton, a Newfoundland-born independent financial adviser with close ties to Lévesque. Lévesque also sought the advice of Eric Kierans, Quebec’s minister of revenue, who had his own reservations about the proposal.44 Fullerton reported for the task force several weeks later and subsequently prepared a memorandum that Lesage and Lévesque took to cabinet. In it, they laid out their major points of objection. The first was one of ideology: the development of Churchill Falls, they insisted, should be led by public/state rather than private capital. Lévesque and his officials in the ministry of natural resources, fresh from the nationalization of the private power companies, had no desire to return to outside capitalists to lead the development of any hydroelectric project in which Quebec

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participated. The proposed development of Churchill Falls as a private corporation could not be accommodated within the nationalist slogan of “Maîtres chez nous” that had taken firm grip of Quebec. At a time when the province was looking to rid itself of foreign capitalists and had launched an assault on private ownership of hydroelectricity, there was little appetite for Smallwood’s using British capitalists to develop Churchill Falls.45 Lévesque often referred to Brinco as “a medieval Hudson’s Bay kind of operation,” lamenting it as a costly anachronism that added as much as one-third to the total cost of the project.46 Fullerton noted that the proposed mode of development was clearly out of step with current trends in public policy across Canada and warned that if Quebec participated in such a venture, “the Province will be open to the charge … it has fostered an expensive anachronism.” He warned that having Quebec participate in a project led by private capital, especially one with foreign and British connections, would be politically problematic for the government. The task force recommended a joint QuebecNewfoundland initiative to develop Churchill Falls through public ownership and the ditching of the private equity firm.47 The Toronto Star later called Quebec’s demand “extra-territorial nationalization.”48 The second obstacle was price, though it, too, was shaped by ideology. Quebec officials believed that the costs of the project increased significantly if left to private capital. Not least were the costs of raising and servicing the capital necessary for the project. Federal taxes also had to be paid by private corporations. Quebec officials calculated that costs rose by about 40 per cent or close to one mill per kwh in the estimated selling price of the energy at the Labrador border by opting for private development.49 Brinco’s proposal simply included too large a profit for the corporation. If Quebec and Newfoundland developed the project jointly, then Quebec could purchase the power for less than two mills rather than the proposed three. Lévesque recommended that Brinco’s profit could not exceed that of a publicly regulated private utility. That view became entrenched in Quebec’s negotiating strategy until a final contract was signed some years later. Quebec also maintained that it should be compensated for investing its resources into a project being developed outside its borders without garnering the benefits that such an investment normally brought to a province.50 The third objection focused on risk.51 The Quebec government would be assuming most of the risks associated with the project, not Brinco and certainly not Newfoundland.52 Building the facility at Churchill Falls, Lévesque maintained, was pretty standard and simple; he insisted that

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Hydro-Québec was assuming all the risk: building and maintaining a 600-kilometre transmission line to carry the power required pioneering technology as it had never been done commercially. Quebec had to be rewarded for its risk taking. “All this nice, beautiful talk about private enterprise developing new empires demands some explanation,” he told Michael Wardell, “particularly when there is no risk at all, and they are trying to make as much profit as possible on as little equity as possible.” Lévesque was particularly critical of Smallwood and Newfoundland’s political culture, rebuking the province for its lack of concern about the private gains being made from a public utility. “It is against the normal trend of political thought everywhere that private entrepreneurs, promoters, if you like, should make a profit out of public utilities.”53 The final difficulty was the lingering anger in Quebec over the Privy Council’s 1927 decision that had awarded Labrador to Newfoundland.54 Like Duplessis, Lesage had not accepted the boundary line between Quebec and Newfoundland. It was “a problem to be solved”, he insisted, before serious discussions could begin. Quebec had wanted to develop the power potential of five rivers in southeastern Quebec but to do so economically required flooding parts of Labrador which it could do only if Newfoundland agreed to change the Quebec-Newfoundland boundary. The 1963 proposal did not mention any changes to the boundary and Lesage feared that if Quebec approved the project without securing a modification of the boundary it was de facto signalling its acceptance of a perceived injustice. Moreover, Daniel Johnson, Quebec opposition leader, continued to demand that there be no agreement on Churchill Falls unless Quebec received a satisfactory resolution to the Newfoundland-Quebec boundary.55 The Quebec cabinet knew it had a “strong hand” in its negotiations with Brinco and Newfoundland. Churchill Falls was remote and it was unlikely that it would find an industrial customer that would require 32 billion kwh annually on the Hamilton River. The energy had to find a market and the only way of doing so was by moving it through Quebec, leaving that province in the driver’s seat. Lévesque had earlier told the National Assembly that Quebec would never allow power from Churchill Falls to be transmitted through Quebec unless it participated in the development.56 Only when Quebec guaranteed safe delivery of the power could the financial backers sell the bonds to finance the project, and here the Quebec cabinet saw opportunity. It would propose a joint Quebec-Newfoundland Crown corporation to develop Churchill Falls that would be exempt from federal taxation. Fullerton and the task

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force realized that Premier Smallwood might be reluctant to nationalize Brinco, given that he had worked assiduously to attract British investors to develop Newfoundland’s resources. Still, they hoped that Brinco might be convinced with sufficient cash and agreed to offer it $25 million as compensation for its original investment, plus a royalty for fifteen to twenty-five years on the power generated at Churchill Falls.57 This strategy became part of the Quebec government’s negotiations with Brinco and Newfoundland. Lévesque and Lesage agreed, perhaps reluctantly, that Newfoundland owned Churchill Falls, but they were determined to have it developed only if Quebec’s interests were served. To strengthen Quebec’s hand in its dealings with Smallwood and Brinco, Lévesque dispatched officials from Hydro-Québec to Ottawa to discuss the feasibility of building a nuclear plant in Quebec along the lines of an agreement negotiated earlier between Ontario Hydro and Atomic Energy of Canada Limited. If that were to happen, Quebec would not require any of the power from Churchill Falls.58 It is worth noting that in 1963 Smallwood had purchased Brinco shares totalling between $1.5 million and $1.6 million just as it seemed the project would go ahead. This was never revealed during the negotiations and only came to light after Smallwood’s political defeat in 1971 by the Progressive Conservatives under Frank Moores. Shortly after, it was  discovered that the Newfoundland Liquor Commission was being charged exorbitantly high rents for buildings leased around the province. The new PC government appointed a royal commission led by former Lieutenant-Governor Fabian O’Dea to investigate. The Report of the Royal Commission to Enquire into the Leasing of Premises for the Use of the Newfoundland Liquor Commission discovered that the buildings were owned by Oliver Vardy, Smallwood’s deputy minister of economic development; Arthur Lundrigan, a prominent developer and close friend of the former premier; and Smallwood himself through a company known as Investment Developers Limited (IDL). O’Dea contends that between April 1963 and the end of 1965, the shares of the IDL were used as collateral to borrow money from the Bank of Montreal – which, incidentally, was also the official bank of the province – to purchase Brinco shares. This occurred at the time that Smallwood and Brinco were negotiating with Quebec over the development of Churchill Falls. Later, the royal commission also alleged, the Bank of Montreal forgave the interest owed on the loans when Brinco shares did not perform as expected. Because the province of Newfoundland had no conflict-of-interest legislation at the time, the

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matter was never pursued, but Smallwood’s personal financial interest in the development of Churchill Falls cannot be ignored.59 On 13 February 1964, Lessard informed Brinco that its proposal was unacceptable, and suggested that Smallwood meet with Lesage to discuss the two governments developing Hamilton Falls as a joint project in order to avoid the federal corporation tax.60 Four days later, Lévesque and his advisor met Winters and other Brinco officials and presented their demands. When Winters relayed the news to Smallwood, who was then travelling in Europe, he was furious. He later wrote in his memoirs: “I was convinced that if we nationalized the project and entered into partnership with Quebec, Newfoundland would truly get the rotten end of the stick.”61 Smallwood rejected Quebec’s proposal. He never envisioned an indigenous class of entrepreneurs and professionals and the use of state capital to realize his goal of economic diversification for Newfound­ land as Lesage and Lévesque did for Quebec. He squarely placed his faith in outside capital and expertise and as a result Churchill Falls never became for Newfoundland what the Barrage Daniel-Johnson and the Manicouagan project became for Quebec. There was no new Newfound­ land nationalism spawned by the development of Churchill Falls as had occurred in Quebec with its state-owned hydro projects. Although Smallwood, like Lesage, was searching for full inclusion in the Canadian federation and to be treated fairly within Canada, he never seriously considered the model being pursued in Quebec that was also attempting to deal with a long history of neo-colonialism. Smallwood’s approach was diametrically opposed to Quebec’s blend of doctrinaire socialism and Québécois nationalism that promoted a new brand of state economics to deal with perceived past injustices. Quebec never hesitated to play the national unity card when it suited its interests to do so but under Smallwood Newfoundland went out of its way to demonstrate its commitment to the unity of Canada.62 Smallwood and Lesage met several times over the following months, but failed to find a solution to the impasse. One of the meetings, which included Lévesque, discussed ceding portions of Labrador to Quebec in  exchange for its approval of an agreement on the development of Churchill Falls. The changes to the Labrador boundary would have given Quebec the headwaters of five rivers flowing into the St. Lawrence River that it had long coveted. Before Smallwood could consider the matter, Time magazine reported that Newfoundland was about to cede portions of Labrador to Quebec in exchange for the latter’s approval of

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an agreement on the development of Churchill Falls. Smallwood denied the report of any cessation of territory to Quebec though he admitted that he had discussed the issue with Lesage.63 On 8 July 1964, Premier Lesage telegraphed Smallwood that discussions between the two sides had reached an impasse and it was “impossible, at the present time, to reach an agreement.” As a parting shot, he reminded Smallwood that Churchill Falls had to be developed for the benefit of the people of both provinces and reminded him, once again, that his government remained interested in the project but such large-scale power productions were generally undertaken by publicly owned corporations.64 The Montreal Star reported that Eric Kierans, who played a key role in the negotiations, attributed the stalemate not to the price of the power but to the question of whether the development should be done by private or public capital. Quebec argued that the savings would be considerable, between $18 and $20 million, because publicly owned utilities did not pay federal taxes and there would be no shareholders to pay.65 Smallwood insisted that if the project were nationalized, “Quebec would show neither scruple nor conscience in its treatment of Newfoundland – that we [Newfoundlanders] would be victimized at every turn.”66 Ottawa had been monitoring the negotiations between Newfoundland and Quebec closely but there was no consensus on what approach should be taken. Ottawa wanted the project to move forward because of the economic stimulus it would provide in eastern Canada, both through the creation of jobs and the potential for economic development. It would also ease Canada’s balance of payments with the US once power started to flow south of the border. When talks collapsed between Brinco and Quebec, both sides turned to Ottawa. Brinco officials, led by former cabinet minister Robert Winters, immediately asked Walter Gordon, the federal minister of finance, to change the income tax law to allow provinces with privately owned utilities the same benefits under the tax system as those which were publicly owned. The Toronto Star reported that Lesage and Lévesque lobbied senior federal officials and politicians in Ottawa on the need to nationalize the project.67 Philip Smith contends that Gordon, a close friend of Winters and a strong Canadian economic nationalist, telephoned Winters in March 1964 with a suggestion that Brinco sell the power to the federal government which should then build the transmission lines across Quebec to the New York border. When Winters reminded the minister that Quebec would never agree to such interference, Gordon insisted that the federal government had overriding power to act accordingly.68 Gordon later met with Bob Winters, Jean

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Lessard, and Jean Lesage, reminding them that the federal government was most anxious for the project to go ahead. He promised to make changes to the National Energy Board Act to extend the term of export permits for power from twenty-five to thirty-five years. Lesage continued to insist that Smallwood would first have to settle the Quebec-Labrador border question.69 Others in Pearson’s cabinet, such as Mitchell Sharp, the minister of trade and commerce, expressed some concern that Churchill Falls was being “frustrated by provincial restrictions on the transmission of power.”70 After consulting with Smallwood, Jack Pickersgill, the transport minister, reminded Pearson that the project was in the national interest and could not be abandoned because of either Quebec’s demands or its intransigence. Like Gordon, he favoured Ottawa building the transmission line, preferably in partnership with Quebec. “We would not seek,” Pickersgill wrote in a draft letter for Pearson to send to Premier Lesage, “to do this [build a transmission line] under the constitution by declaring the line a work for the general advantage of Canada, but only by agreement with the government of Quebec.” When he was consulted on the matter, Gordon Robertson, the clerk to the Privy Council and secretary to the cabinet, considered that even the mention of Ottawa’s constitutional power would be interpreted in Quebec as a threat. More­ over, Robertson warned, the letter gave the appearance of Pearson siding with Smallwood against Lesage and Quebec and if the federal government ever decided to become formally involved in the dispute “as a last resort, it should not show its hand too soon.” Pearson chose not to send Pickersgill’s letter to Lesage.71 Reports soon leaked that Ottawa was anxious to have Churchill Falls move ahead quickly, but that Pearson had no intention of trying to pressure provincial authorities in Quebec to allow the transmission of power across its territory or to interfere in any way with such an autonomyminded province.72 In an editorial entitled “The National Interest,” the Globe and Mail criticized Lesage and the Quebec government for using its territory as a “powerful leverage” to subvert the national interest. “This is not satisfactory to the rest of the country,” it wrote.73 Claude Ryan, the editor of Le Devoir, responded with an editorial of his own that was later reprinted in the Globe and Mail. He dismissed the Globe and Mail as hankering for the “good old days” when Quebec’s interests were surrendered for what others considered the national good. According to Ryan, Quebec had a competent government with a mandate to protect the “real interests” of the people of the province. The major obstacle to the

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development of Churchill Falls, he concluded, stemmed from Small­ wood’s decision to give the rights to Churchill Falls to a private company, thus driving up the cost of the project. Quebec was not responsible for the additional costs, which should be borne either by the Newfoundland government or by the company itself. “In Quebec … we no longer live in a time when the barons of finance easily created reputations for genius by putting their hands in the public till under the complaisant eye of public opinion.” He dismissed the Globe and Mail’s sermons as “impertinent and irritating.”74 There was clearly emerging in Quebec a view of what mode of development should be used to develop hydroelectric resources. Smallwood shared the Globe and Mail’s position and his irritation grew into one of personal animosity and anger as he faced an increasingly intractable Quebec that had broken off talks to force his and Brinco’s hand. Throughout the summer of 1964 he repeatedly said he was not the least bit interested in talking with Quebec about Labrador power. He described Quebec as attempting to hold Newfoundland “prisoner” in its negotiations over Churchill Falls, and at one point vowed to never reopen negotiations with Quebec. When he and Eric Kierans were both in London in October 1964, a reporter asked him if he would be meeting with Kierans, the Quebec minister. “Kierans?” Smallwood replied, “I never heard of him. Who is he? I can’t see him if I don’t know him, can I?” Kierans was not to be outdone: Premier Smallwood was “an unabashed bigot on the subject of Quebec, and French Canadians,” he retorted, claiming that Smallwood had told Quebec journalist Solange ChaputRolland: “The French Canadian is one of the most lovable human beings in Canada, but collectively he deserves a swift kick.”75 Tempers were running high on both sides and Smallwood sharpened his tongue in lambasting Quebec at every opportunity, as he had done with Diefenbaker over Term 29. He described the battle with Quebec as second in im­ portance only to the Confederation fight. “It was,” he told Bren Walsh in a special article for the Globe and Mail, “like the Confederation fight, a  battle in which powerful forces were lined up against us.”76 After a meeting with Smallwood, Edmund Rothschild reported to Winters that the premier had described Quebec politicians as “sick, that they [i.e., the Quebecers] were a sick people.” He added that all alternatives must be considered to avoid Quebec and vowed he would never “crawl on his belly to the people of Quebec.”77 Similarly, Henry Borden, the chair of Brinco, recalled that “all during the summer of 1966, we had been fending off Smallwood. He seemed to hate Quebec, Quebecers and distrusted

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everything connected with them and their government.”78 There were even reports that members of the Quebec government feared that Smallwood’s attack would escalate interprovincial frictions and ignite another anti-Quebec backlash across the rest of Canada.79 Smallwood later told the Newfoundland legislature that negotiating with Quebec was “the most maddening … infuriating … exasperating … unendurable experience a Premier of a sovereign Province [could] have,” adding that Quebec was totally devoid of any sense of Canadian patriotism and “thoroughly, wholly, completely, exclusively selfish.” 80 In a deliberately provocative gesture, he changed the official name of the province to Newfoundland and Labrador on 15 May 1964, adding “we want the world to know that Labrador belongs to us.”81 It was at this point that a frustrated Smallwood first contemplated asking Pearson to declare the development of Churchill Falls to be in the national interest. If Ottawa agreed, this would have allowed Newfoundland the right to transport hydroelectricity from Churchill Falls to markets without having to sell the power to Quebec. However, Smallwood realized that Newfoundland’s constitutional rights would have clashed with the rise of militant nationalist group in Quebec, such as the Front de libération du Québec (FLQ), that had already resulted in the destruction of federal property, bank robberies, kidnapping, and murders that reached its zenith with the bombing of the Montreal Stock Exchange in 1969, which injured more than twenty people, and in the kidnapping of British trade commissioner James Cross and Pierre Laporte, a cabinet minister in Robert Bourassa’s government who was executed in October 1970.82 Smallwood mused in the House of Assembly about the efficacy of such a request and acknowledged that while the federal government had the constitutional right to act, he questioned how pragmatic it would be to ask Ottawa to overrule the objections of Quebec, given the volatile political situation in that province.83 At the same time, however, Robert Winters again approached Pearson about seeking a right of way through Quebec.84 He complained that Lesage would not “play” on Churchill Falls unless the project was nationalized. He also poured out his frustration with Lesage to Pearson, reminding him that the country had faced similar difficulties before when large sources of energy were available in one province but needed in others. Saskatchewan apparently had been reluctant to allow Alberta gas across its borders but the federal government had stepped in to resolve the matter. Winters stopped short of asking Pearson to get involved but his intent was clear: “I wonder,” he wrote later, “if there is any feasible way whereby this power [Churchill Falls]

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might be brought across Quebec.” He expressed Brinco’s willingness to negotiate with Quebec but added that he would be “glad to build our own transmission line if we could get a right-of-way.”85 Ottawa had the constitutional authority to force such a corridor. At the end of July when all hope vanished for a deal with Quebec, Winters wrote Pearson directly and told him that a right of way through Quebec was the only option. “The tactics of the approach are something on which I would like to have the benefit of your views and judgment,” he wrote, adding: Iron ore from Labrador passes through Quebec via rail to the markets of the world. Power in the form of coal from Nova Scotia passes through Quebec to Ontario by rail and water. There are myriads of other examples of commodities and power in one form or another moving between and across provinces by highway, rail, pipe line, water and wire. The B.N.A. Act guarantees the “free” admission of articles of growth, produce or manufacture from province to province and I presume this could include power. Under the circumstances I should think the Quebec government would regard it as quite normal for power to be transmitted from Hamilton Falls to, say, the state of New York. However, we cannot count on that sort of normal reaction from Quebec in the light of statements that have already been made by Mr. Lévesque and others to the effect that they will not provide a right-of-way if they do not choose to use the power … After you have had an opportunity of turning this over in your mind, would you mind having your office let me know when I might discuss it briefly with you? 86

There is no evidence that Pearson replied to the letter. It was the contemptible intransigence of Quebec and the refusal of Ottawa to intervene that forced Smallwood to search for another route to transmit power out of Labrador. He hired the British engineering firm of Preece, Cardew, and Rider to investigate the economics and technical aspects of sending the power from Churchill Falls south to the Strait of Belle Isle. From there, it would move through a 24-kilometre submarine cable to Newfoundland, along a coastal transmission line, and then across the 120-kilometre Cabot Strait (again, by submarine cable) to markets in Nova Scotia, New Brunswick, and the United States. Smallwood also suggested that the Atlantic Coast transmission route would provide low-cost electricity to the Atlantic provinces and give the area “far, far greater economic strength and make them more important in the whole Canadian economy.”87 Unlike the initial plans to work with Quebec,

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which would have fed “the fat sows so to speak,” Smallwood told reporters that a line through the Atlantic provinces “will certainly help to redress the economic imbalance that exists in Canada today.”88 Also known as the “Anglo-Saxon” route (or in Quebec as the “WASP line”89), the plan was ambitious and prohibitively expensive. Smallwood told the House of Assembly that the greatest advantage of this route was that it did not have to be controlled by a single authority outside of Newfound­land: “We have escaped the clutches of Quebec.”90 He told Winters that if the economics of the alternate route proved practical, his desire was to make Newfoundland power available to the Atlantic provinces even if the province could have gotten a better deal with Quebec.91 A short time later, Nova Scotia Premier Robert Stanfield wrote Smallwood a confidential note that he would have the Nova Scotia Power Commis­sion assist in any way it could to facilitate the movement of power through his province.92 When the British engineers estimated the cost to be $550 million, Smallwood immediately called Pickersgill, seeking federal support for his new interprovincial project. He hoped that Ottawa would fund the alternate route, which Lesage had insisted should never be allowed to happen.93 Pickersgill took the matter to R.B. Bryce, the cautious deputy minister of finance, who identified several problems in a memo to his minister. First, the federal government could only provide a loan at 5  3/8  per cent, as Ottawa had done for transmission lines between Nova Scotia and New Brunswick, amortized over forty years. Second, the federal government had to avoid the impression that Ottawa was conspiring with Smallwood to outflank Quebec.94 When Smallwood discussed the matter with Pearson and Gordon in Ottawa in February 1965, they offered no financial assistance and advised him to work with Lesage to resolve their differences.95 Ottawa had to keep the peace with Quebec and it was prepared neither to confront Lesage nor finance an alternate route that cut Quebec out of the action. Ottawa’s decision narrowed Newfoundland’s choice to two options: negotiate with Quebec or leave Churchill Falls undeveloped, neither of which Smallwood found particularly palatable. Pearson’s decision strengthened Quebec’s hand, even though Small­ wood continued to insist throughout the latter half of 1964 that he had “nothing to discuss with Quebec.” As if taunting Smallwood, Lesage repeatedly told the press that he was in regular contact with Brinco executives who, he insisted, held the rights to the power, not the provincial government of Newfoundland.96 Moreover, Brinco had no interest in the Anglo-Saxon route and it tried to assure Smallwood that Newfoundland

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would have the first claim on Churchill Falls power even if Quebec was involved. Smallwood realized, too, that the alternate route was impractical, and he adopted a new nationalist discourse – perhaps to mask his anger with Quebec – and started talking of using Labrador power to benefit the five eastern provinces. Begrudgingly, he accepted the reality that Newfoundland and Quebec had to cooperate.97 Pearson, meanwhile, was being pushed from several quarters to take a greater federal role in the development of low-cost energy. R. Gordon Robertson, the former deputy minister of northern affairs and natural Resources, who Pearson appointed as clerk of the privy council and secretary to the cabinet in 1963, reminded him that the “wrangle” between Newfoundland and Quebec over the development of Churchill Falls was a discouraging indication of how “interprovincial jealousies and fears” had prevented any rational development of hydroelectricity for the national good. While he advised Pearson to proceed cautiously with the provinces, he recommended “some catalytic actions by the federal government” to foster cooperation between them. Robertson warned that Ottawa had to be careful not to threaten to assert its jurisdiction over interprovincial power arrangements, but it had obviously failed to foster an approach to electric energy that would improve Canada’s economic competitiveness. Pearson then suggested that the provinces be canvassed on the matter,98 and Mitchell Sharp, who had discussed the issue with Robertson, asked Scottish-born Ian Mackinnon, chair of the National Energy Board (NEB), and board member H.L. Briggs to investigate the possibility of developing Churchill Falls as a federal government project under the B.N.A. Act relating to the general good of Canada. The results of the preliminary report, which were communicated to Sharp on 25 May 1965, pointed out that the project would have to be reconceptualized from what Brinco and Hydro-Québec had been considering and would necessitate making Ontario Hydro a key player and Ontario a key market for the power. The NEB reported that if the government favoured the project it was certainly practical from an engineering and economic viewpoint.99 Pearson, however, was attempting to mediate the dispute between the two premiers, pushed in no small measure by Robert Winters.100 In early May, he invited both premiers to Ottawa for separate discussions. Lesage insisted that he would never permit Brinco to construct the transmission line through Quebec as it was openly promoting: “We will never ever allow anyone to rent our means of transmission” and “with things the way they are in Quebec, this [Brinco building its own transmission lines in

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Quebec] would be unthinkable,” he told Pearson. He also warned him against considering the use of federal power to force a solution to the problem. Pearson lied and reassured Lesage he had not given that option a thought. Pearson’s discussions with Smallwood offered some hope for a resolution as Smallwood assured the prime minister that he would work with Quebec on the interprovincial development of other rivers along the Quebec-Labrador boundary if Churchill Falls went forward.101 Pearson continued to try and convince the two premiers to bring the matter to a satisfactory resolution. He was kept abreast of developments over Churchill Falls.102 The Conservative party as well as much of the national media was growing impatient with Quebec and with Pearson, whom they believed should have acted to protect the national interest in Newfoundland. Diefenbaker harassed Pearson on the matter in the House of Commons, asking him if he considered Quebec’s refusal to allow power from Labrador to cross its territory as interference in interprovincial trade by a provincial government.103 Pearson dismissed the notion. The Toronto Star, usually sympathetic to Pearson, criticized him for admitting that he had not given the matter a “thought” and for failing to insist that Quebec had no legal right whatever to block transmission of power from Labrador. The newspaper suggested that Pearson should have reminded Quebec – long before the two sides reached such an impasse – that the federal government had the constitutional power to induce the province to make a “reasonable” settlement. “Canada cannot function as an economic entity,” the Toronto Star wrote, “if provincial governments are, in effect, allowed to put up toll roads between the producer of a commodity and the potential market.”104 Jack McArthur, the financial editor of the Toronto Star, wrote that “Quebec is, in effect, blackmailing New­ foundland.”105 The paper wrote a number of pieces on the subject over the following months, often referring to particular articles of the constitution and various Supreme Court rulings on interprovincial trade to suggest that Ottawa had the constitutional right to intervene in the matter. On each occasion, though, it acknowledged that while Ottawa had the constitutional authority to “tell the Quebec Government to go fly a kite,” the political realities were such that “it probably won’t.”106 The Financial Post and other newspapers agreed, concluding that “Quebec has no more right to fix the terms of Newfoundland’s export of power than Ontario has to fix terms for British Columbia’s exports of salmon or apples.”107 Similarly, The Calgary Herald demanded that Ottawa confront the “obstructive provincialism of Premier Jean Lesage” and

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remind “Quebec that it is still subject to the laws of Canada.”108 Letters to the editor in many Canadian newspapers similarly condemned Quebec’s actions, labelling them in many cases “extortion.” One letter from a Quebec writer warned that “[a] Lesage victory over Newfoundland will be a setback for Canada as a whole, for the federal government will have shown itself incapable of protecting the minimum of national rights.”109 Letters to Smallwood from across Canada advised him to stand up to Lesage; one writer assured him that Canadians supported his determined stand and wished “that the prime minister of Canada had equal guts to stand up to the demands of Lesage and his supporters.”110 Lesage aggravated the situation throughout as he vowed publicly to hold up the development until the Quebec and Newfoundland governments reach an agreement in principle over the boundary problem.111 Tax Changes A deal on Churchill Falls became possible in mid-1965, when Ottawa changed its corporate tax policy to allow Brinco to lower the purchase price for the power it offered Quebec. Lesage, Winters, Pickersgill, and Smallwood had all pressured Pearson and Finance Minister Walter Gordon to amend the Public Utilities Income Tax Transfer Act to treat private utilities as though they were public ones.112 Both Alberta and Nova Scotia, which depended on private corporations to produce their power, had also lobbied for the removal of the federal tax from investorowned electrical utilities. When Gordon amended the act to rebate to the provinces 95 per cent of the corporation tax paid by the private utilities, Ottawa could claim that the revisions had not been made solely for Newfoundland and Quebec.113 Newfoundland turned its share of the new revenue over to Brinco, which in turn passed on it to Hydro-Québec in the form of a lower price for Churchill Falls power.114 The legislation had been changed to accommodate Quebec and allowed Newfound­ land to sell electricity to Quebec at a cheaper rate. Smallwood had earlier agreed that Brinco could reduce the price that Hydro-Québec paid for Labrador power if federal income taxes were either eliminated or reduced. However, the change did nothing to improve the financial benefits to Newfoundland.115 Comptroller and Deputy Minister of Finance W.M. Marshall expressed his reservations about turning over to the electrical-generating companies all of the “largesse from Canada.” In his comments on a letter, sent by Henry Borden, Brinco chair, to

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Smallwood, Marshall expressed “absolute shock” that Newfoundland would consider providing such a generous tax advantage to Quebec. His warnings were ignored.116 The taxation deal was enough to secure a draft agreement between Hydro-Québec and Brinco. Earlier in 1965, Lesage had appointed a new negotiating team, exclusively from Hydro-Québec, although he remained very much involved in the talks. Smallwood had insisted that a deal would not be possible if the border question was included, and he had tremendous media support on that issue. An editorial in the Toronto Daily Star is indicative of that support: it called Lesage’s insistence that Newfoundland agree to cede territory to Quebec before Lesage would agree to sign an agreement on developing Churchill Falls a “Balkan-style territorial grab.” It also called upon Ottawa to step into the dispute to prevent Quebec from extorting a boundary change out of Newfound­ land.117 During the negotiations that ensued, Smallwood often chastised Winters for not keeping him up to date: he wanted details about the project to take to his cabinet.118 Pearson again met separately with Lesage and Smallwood during this period, encouraging them to consummate a deal.119 Brinco and Hydro exchanged a draft letter of intent in early June 1965.120 The letter, subject to the approval of the government of Quebec, had included an average price of 2.25 mills per kwh and authorized Quebec to flood Labrador territory to create the reservoirs to develop five rivers in Quebec which had their headwaters in Labrador. Although Smallwood had not relented on the boundary, Quebec secured what it wanted in Labrador.121 Still, the Quebec government refused to ratify the letter of intent, and Smallwood became increasingly annoyed. Pearson and his officials continued to pressure the two sides to bring the matter to a satisfactory resolution. Gordon and Bryce met regularly with Brinco’s financial advisers, and Bryce, Pickersgill, and Smallwood engaged in many “informal” conversations on how to get Quebec to sign the letter of intent. On the advice of Jean-Luc Pépin, the minister of mines and technical surveys, it was decided that Pearson would deny that Ottawa was involved in any of the discussions over the matter.122 The Quebec cabinet had still not ratified the tentative agreement when Lesage called a provincial election for 6 June 1966, which saw his party defeated by Daniel Johnson and a rejuvenated Union Nationale. During the election campaign Johnson had said that his party would never recognize the Newfoundland-Quebec boundary, vowing to undo the injustice rendered by the Judicial Committee of the Privy Council

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(JCPC) in 1927. The party platform had long rejected the JCPC ruling, and some of Johnson’s cabinet rejected an arrangement between HydroQuébec and Brinco simply on that basis. The nationalistic Federation of St. Jean Baptiste Societies repeatedly called upon the government not to recognize Newfoundland’s control of Labrador; it even demanded that Brinco be incorporated under Quebec law and that permits for development in Labrador be issued by Quebec.123 Johnson, however, favoured a deal; after he became premier he attempted to change the rhetoric around the arrangement with Brinco and started referring to it as “a commercial transaction.” He also tried to disassociate the power deal from the issue of the boundary and was convinced that the engineers and economists in Hydro-Québec had protected the province’s interests.124 Le Devoir reported that Johnson’s government was torn between a nationalist ideal and pragmatic realism: buying power from Newfoundland was much more economically sound and financially advantageous than developing its own rivers, but signing the letter of intent signified Quebec’s acceptance of the Labrador-Quebec border, which had long been condemned by Quebec nationalists.125 After the election Lesage claimed that the deal had been finalized in the last week of the election campaign and if elected he would have signed the letter of intent immediately.126 Smallwood Confronts Pearson … Meekly Several months after being defeated as Quebec premier, Lesage urged Johnson to finalize the arrangement with Brinco over Churchill Falls. Lesage warned that if Quebec did not settle the matter quickly the federal government might step in and build its own power lines across Quebec, which it had the constitutional authority to do. That possibility had been discussed within the federal government and several ministers were pushing Pearson to resolve the dispute between Newfoundland and Quebec. Lesage feared that the longer Quebec delayed the project, the greater the possibility that Ottawa would declare it in the national interest and undertake the transmission lines itself.127 Shortly after Lesage’s intervention, Premier Daniel Johnson announced that his cabinet would make a decision on Churchill Falls by 6 October.128 Two days after Johnson’s announcement of an impending decision on Brinco, Smallwood decided to increase the pressure on Quebec. He told Donald J. McParland, the president of the Churchill Falls (Labrador) Corporation and Brinco’s lead negotiator with Hydro-Québec, that he

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was considering asking the federal government to declare the project to be in the national interest.129 On 23 September Smallwood’s cabinet agreed that it would ask Ottawa to do so if Quebec refused to ratify the agreement that Hydro-Québec had negotiated with Brinco. In his autobiography, Smallwood acknowledged that even if Ottawa granted his request, it might have been impossible to secure a transmission line through the wilderness of Quebec: “How safe would a transmission line built through Quebec by BRINCO be … A well-placed bomb here and there would put the line out of commission for days at a time,” he lamented. Brinco would end up in a game of cat and mouse of trying to keep the power flowing. Smallwood fully understood that an appeal to Ottawa was not in itself a solution, but he hoped that the “threat might, however, be more effectual than the reality: Not for a moment did I suppose that designation of the project as national would be a solution of itself.” In other words, his threat to formally ask Ottawa to get involved might force Johnson to approve the proposed agreement. Once the cabinet approved his plan, Smallwood relayed his intentions to Pearson through Pickersgill130 and phoned McParland, who then informed Premier Johnson.131 Smallwood’s tactics appeared to work: in a conference call with Brinco executives, Smallwood was told that all points in the letter of intent had been fully agreed to, and once it had been translated into French it would be presented to Johnson’s cabinet.132 Even though McParland had told Smallwood that Johnson had informed him that the Quebec cabinet had given the project the “green light,” Smallwood had experienced too many delays to trust anyone. On 28 September, Smallwood wrote his letter to Pearson and read it to Pickersgill before signing it.133 He had made an important decision – he would formally ask Pearson to invoke Paragraph (c) of Clause 10 of Section 92 of the British North America Act. If the Government of Canada would proceed forthwith to build a transmission line from Churchill Falls to a point where it would tie in with power grids in Eastern Canada it would ensure an immediate start on the construction of the Churchill Falls power project itself. In that case the power would be in production and available to consumers in Canada in 1971.134

After signing the letter, he wrote in his diary, “Hope I don’t have to send it.” The next day he flew to Montreal on his way to London and then New Delhi. He took the letter with him to drop off to Pearson.135

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What Smallwood then did with the letter remains a mystery. He himself offered two different scenarios. First, he claimed – and this is supported by Henry Borden – that en route to deliver the letter to Pearson, he meet three of the Brinco principals in Montreal: Borden, McParland, and Sir Val Duncan, who had just come from a meeting with Premier Johnson. They had told Johnson that Smallwood was becoming increasingly difficult and they were afraid that they would not be able to “keep him from blowing his top publicly and in such a way as would deeply embarrass Johnson politically and ruin any chance of the project going ahead.” Johnson had requested that Smallwood wait until after the Quebec cabinet met on 6 October before making his request to Pearson. Brinco officials and Smallwood both claimed he agreed to wait until 7 October to deliver his request to the prime minister. Smallwood further claimed that if Johnson failed to make the announcement as promised, that he had arranged for a trusted envoy to deliver the message to Pearson while he, himself, left on a trip around the world.136 Some years later in 1983, when the federal government asked the Supreme Court of Canada to intervene in dispute over the ownership of the offshore, Smallwood recounted a different story to Cabot Martin, who was senior policy advisor to then-Premier Brian Peckford. Martin maintains that after the Supreme Court rejected Newfoundland’s case, he sought out Smallwood and “after a glass or two of sherry” asked him why he didn’t ask Ottawa to intervene. Smallwood told Martin that he had flown to Montreal and driven to Ottawa so that no one would know that he had met with Pearson and two of his cabinet ministers to discuss his request for federal intervention. As he recounted this version to Martin, Smallwood said “And before I could say a word, Mr. Pearson said, ‘Joe, I know why you are here and if you ask me I’ll have to say yes, otherwise we would not really have a country. But I’m asking you not to ask me because we will not be able to keep the towers up.’” Smallwood paused, Martin claims, “then looked at me as if to ask, What would you have done? Smallwood said, ‘So I didn’t ask him.’”137 As Memorial Uni­versity economist James Feehan, who has written perceptively about the Chur­ chill Falls contract, has pointed out, Smallwood had the constitution on his side and Pearson would have obviously known that. Section 92.10(c) of the Constitution Act, 1867 gave Ottawa override powers to intervene in areas of exclusive provincial jurisdiction for “Such Works as, although wholly situated within the Province, are before or after their Execution declared by the Parliament of Canada to be for the general Advantage of Canada or for the advantage of Two or more of the Provinces.”138 There

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is no record of the meeting with Smallwood in Pearson’s personal papers at Library and Archives Canada; even in Pearson’s meticulous ­calendar, which includes all visitors to 24 Sussex Drive, there is no indication that Smallwood called on him in either September or October 1966.139 Neither does Smallwood include in his personal diary any meeting with Pearson or even a visit to Ottawa during his layover in Montreal at that time.140 A week later, on 7 October, Smallwood got his wish as the Quebec cabinet approved the project in a twenty-one-page letter of intent agreement.141 While Newfoundland expressed delight about having the project move ahead, Quebec seemed less than happy. Johnson might have been playing to the hard-core nationalists in his party, but he told the press that he accepted the deal because the government was forced into it. He condemned Hydro-Québec for getting the province into such a situation that it had to depend on power from Churchill Falls rather than from sites within Quebec’s borders. Yet, by opting for Churchill Falls, even Johnson understood that Quebec had saved millions of dollars annually in the costs of producing electricity. Moreover, Johnson was aware that Smallwood was about to pressure Ottawa to intervene and declare the project to be in the national interest. Johnson was not particularly celebratory and told the press that “The government did not like being grabbed by the throat.”142 This attitude might explain some of the changes that were made to the letter of agreement over the following two years that advantaged Quebec. Because of the nature of its agreement with Brinco, the government of Newfoundland did not have to approve the draft agreement. The machinations leading to the final version of the contract and the details contained therein are beyond our purposes here. It might be sufficient to note that even when the agreement in principle was signed in 1966, Jean Lessard told a Montreal press conference that Hydro-Québec – in spite of Johnson’s apparent disappointment with the terms – had succeeded in obtaining “one of the great sources of hydro-electric power in the world … to serve Quebec and provide the energy needed to stimulate and sustain industrial growth.”143 It was largely left to the Globe and Mail to raise a number of issues about who were the primary beneficiaries from the development of Churchill Falls. In an article, “Sold Down the River and Over the Falls,” Langevin Coté pointed out that Quebec had priority in labour and materials and a beneficial price regime. The province stood to save between $400 to $700 million between 1966 and 1976 by not having to develop its own resources. Churchill Falls, Coté

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concluded, was essentially “a domestic supplier” for Quebec, minus the cost involved. Coté wrote that if Newfoundlanders had been present at the news conference they “might well have wondered whether it was not they who had been sold down the river and over the falls.”144 Smallwood had already been warned about the deal by the people he supposedly trusted in Newfoundland. George P. Hobbs, whom he had appointed as chair of the Newfoundland and Labrador Power Commis­ sion and as a board member of Brinco, expressed his concern in a private and confidential letter a few days after Premier Johnson authorized the letter of intent. “It would now appear to me,” he wrote Smallwood, “that the [Brinco] Board’s definition of the rights of Newfoundland and my definition are entirely different. The obligations of the Board are basically to the equity shareholders of the Corporation.” Hobbes pointed, in particular, to the reduction of electricity available to Newfoundland from 360 megawatts to 300 megawatts. Moreover, he told Smallwood, he believed that “Quebec is in full control both as to the engineering of the project and its operation” and he feared that Hydro-Québec would “completely dominate the engineering, production and marketing of the power to be developed at the Upper Churchill Falls.”145 Smallwood ignored such pessimist warnings and insisted that New­ foundland would benefit significantly from the project both in the construction phase and after. Assuming the patron-client relationship, Smallwood took to province-wide radio and television to advertise the jobs available at Churchill Falls, telling people throughout the province that if they wanted to work there, “Write to me.” Within weeks he received more than 14,000 applications.146 When officials gathered at Churchill Falls on 7 July 1967 to officially launch the project, Smallwood left no doubt about ownership of the site: “This is our land. This is our province. This is our river. This is our waterfall. And we shall forever make sure that it shall be developed primarily for us.”147 Still, Smallwood was not even convinced of his own rhetoric. After a visit to Brinco corporate headquarters in Montreal in the fall of 1967, he wrote a strongly worded letter to Donald Gordon, Brinco chair, criticizing the corporation for paying “altogether too much attention to the role of the Province of Quebec and Hydro Quebec in the Churchill Falls development.” Too often, he fumed, they saw Churchill Falls as a joint Newfoundland and Quebec project, a viewpoint that he “categorically” rejected: Quebec has no rights in this Province. Quebec has no rights in Labrador. Quebec is not going to have any rights in this Province or in the Labrador

Hydroelectric Development, 1960–1970  93 part of this Province. We are not going to have the project done by Quebec workers. We are not going to allow the French language to enjoy equal status with the English language. We are not going to allow equality of Quebec citizens with Newfoundland citizens. The Churchill Falls project is an exclusively Newfoundland project.148

Following the departure of Winters and his team, the new executives at Brinco did not have the political connections and friendships with Smallwood that had marked the early years of that relationship. The new arrangement was one Smallwood was not comfortable with.149 It would take nearly three years before the final agreement on Churchill Falls was signed with Quebec. During that time, Smallwood continued to be consulted by Brinco officials but the intricate details were largely kept from him during the negotiations, and when the details were available his options were limited: he had to accept the deal or reject it. He was, however, fully aware that Brinco had agreed to further reduce the price of power to Quebec and had lengthened the terms of the contract from thirty to forty-four years. Because the deal was so favourable to Hydro-Québec, the Quebec Crown corporation agreed to share some of the risk in financing the project and agreed to guarantee as much as $109 million if there were cost overruns and Brinco could not raise additional capital. This became known as the completion guarantee and was initially suggested by Lesage and became possible when Quebec started to receive substantial funds from the new Québec Pension Plan. Newfoundland and Brinco were both strapped for cash.150 More­ over, Smallwood amended provincial legislation to shield the company from any new provincial taxes or tax increases during the term of the contract. In 1968 the Trudeau government exempted non-resident and foreign investors from the 15 per cent withholding tax normally paid on interest from bonds. This was done, Finance Minister E.J. Benson said, to avoid increases in the cost of the power sold to the Quebec and New­ foundland power commissions and to facilitate the billion-dollar financing of Churchill Falls.151 As Brinco was starting to run out of cash to develop Churchill Falls in 1968 and 1969 and was encountering difficulty arranging long-term financing, Hydro-Québec demanded substantive changes to the letter of intent, including further significant reductions in the price.152 Before the contract was signed on 14 May 1969, Lessard wrote Quebec Premier Daniel Johnson that “The rate of 2.0 mills [2.0 mills per kilowatt hour is equivalent to $2 per MWh] is very low in itself and considering the

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way in which the purchasing power of money has declined since the beginning of the century, it is an extremely advantageous rate for HydroQuébec, even at this time.”153 Feehan and Newfoundland historian Melvin Baker have concluded in their research on the financial arrangements that “it is inconceivable that any party to a commercial transaction would knowingly and willingly agree today to sell its services some 50 to 75 years in the future at a price fixed below the current price, except if either forced to do so or given commensurate compensation.” They also raised the issue of conflict of interest, as Lessard sat on the board of Brinco while it was negotiating with Hydro-Québec, where he was also president. They, alone, have also introduced the question of business ethics related to such issues of corporate governance and questions of economic duress: CFLCo was in finance distress and given the interconnections between the corporations, they wondered if Hydro-Québec used its inside knowledge to force concessions from Brinco.154 The St. John’s Evening Telegram asked on its editorial page on 16 July 1968, “What’s in it for us?” It noted since the signing of the letter of intent, Hydro-Québec had obtained “some pretty substantial concessions.” It pointed to the lower cost of the power; at $2 per megawatt hours, it was half a mill cheaper than the Newfoundland government was selling the power that had recently come on stream from a new development at Bay d’Espoir. The newspaper claimed that there were so many uncertainties in the arrangement between Brinco and Hydro-Québec that the legislature should be recalled to discuss what was really going on over Churchill Falls power. “A lot of questions need to be answered,” the editorial concluded, “and soon.”155 Charles Devine, a former independent and Progressive Conservative member of the Newfoundland Assembly, charged that Smallwood had been “outsmarted” by Quebec and that all the advantages of Churchill Falls had gone to Hydro-Québec. H.W. Kitchen, candidate for the leadership of the Progressive Conservative party, warned that Newfoundland’s gain of $27 million in royalties would pale in comparison to Quebec’s $2 billion gain.156 A few weeks later, Hydro-Québec announced plans to sell surplus power to Ontario, prompting further outrage from the Evening Telegram. It wondered how well Newfoundland’s interests were protected and concluded that Newfound­ landers are “merely spectators of a development that is so crucially important to us.”157 The Newfoundland government did not participate in the negotiations – as the government of Quebec had – but it was regularly updated by Brinco and CFLCo officials. They told Smallwood only what they

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considered important to him until the deal was done. Several years earlier, when Quebec resources minister René Lévesque had said that New­ foundland had no part of the negotiations, Smallwood retorted that Brinco “couldn’t raise a finger” without consulting Newfoundland.158 Surely some of this was Smallwood’s arrogance, but it is hard to believe he was not aware of what was happening with the negotiations. Earlier, Gordon Pushie had discussed Smallwood’s role with senior Brinco officials and they agreed that Smallwood was particularly interested in the project. “To a far greater degree than with any other corporation, he [Smallwood] feels that Brinco is his creation and he is keenly interested in its progress. His desire to be fully informed … is also in the present instance related to his fear that others will take credit for the big development.”159 When Quebec agreed to proceed, Donald Gordon, CFLCo board chair and president and chief executive officer of Brinco, called to let Smallwood know that Churchill Falls was finally going ahead. He informed him of the renewal clause, which Smallwood remarked looked like pretty cheap power. According to Gordon, Smallwood seemed “quite relaxed” about it all and neither he nor any other cabinet ministers protested at the time.160 Smallwood had invested too much politically into the project to walk away.161 Perhaps fittingly, the contract between CFLCo and Hydro-Québec for the development of Churchill Falls was signed in Montreal at the Hydro-Québec office. Newfoundland was left out of the celebrations. Conclusion The Churchill Falls deal has continued to irritate Newfoundland since the early 1970s. In 1974 the government of Newfoundland and Labrador purchased Brinco’s shares in CFLCo and today owns 65.8 per cent of the company through the publicly owned Newfoundland and Labrador Hydro Corporation; Hydro-Québec owns the remaining shares. CFLCo offices were relocated from Montreal to St. John’s, and on 25 October 1977, the St. John’s Daily News ran a full page ad from the Newfoundland Action Committee calling on Premier Frank Moores to “cut off the power” if Lévesque, then premier of Quebec, would not negotiate a “mutually satisfactory deal.” Newfoundland has appealed to the courts and to the court of public opinion and has asked the federal government for help, but all for naught.162 The Churchill Falls hydroelectric project has become for many in New­ foundland an important part of the exceptionalism of Newfoundland

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akin to what Smallwood had articulated during his fight with Diefenbaker over Term 29. In the case of Churchill there is ample blame to go around, but at the bottom of it all is the question of the operation of Canadian federalism. Smallwood and his government had long dreamed of exporting the resources of the mighty Churchill Falls to markets in Canada and the US. When Quebec refused to allow power from Newfoundland and Labrador to be transmitted across its territory, Newfoundland became a prisoner of its own geography and was placed at the mercy of its jailor, which then abused its strategic and geographical position with scarcely a  word from the government of Canada. The government of Canada ­refused to participate in finding any means of accommodating the conflicting interests of the two provinces and allowed the larger, more populous one to triumph. It was, to put it crudely, a classic case of intimidation and bullying: give me what I want or suffer the consequences. To be sure, Smallwood could – and might – have chosen a different way to develop the resource rather than granting the territory in freehold to a group of British, Canadian, and American business interests. Even when he lobbied Ottawa for tax changes to facilitate the development of Chur­ chill Falls, he simply turned those financial incentives over to CFLCo which passed them along to Hydro-Québec through a lower mill rate for the power. Smallwood made more than his share of mistakes. In the final analysis, though, Newfoundland’s predicament came from two sources: one, Ottawa’s refusal to protect the interests of a weaker province, and two, Smallwood’s approach to federalism, which relied on the personal relationships that he had built with Pearson and the Liberal Party of Canada. Pearson’s primary objective was to pacify Quebec, and he refused to pursue any policy that might antagonize that province. Forcing a power corridor through the province would undoubtedly have done precisely that. Smallwood was complicit in that policy of kowtowing to Quebec, and he accepted it without as much as a public tantrum. Pearson’s accommodative federalism was designed exclusively to avoid antagonizing Quebec and to keep Canada united, not to mediate conflicting and divergent interests. Uncle Ottawa, Smallwood reasoned, could not be challenged and Newfoundland lost as a result. This episode demonstrates that in Canada, federalism works best for bullies and Smallwood fully understood that. When Pierre Trudeau burst onto the national scene as a strong contender for the leadership of the federal Liberals in 1968, insisting that Quebec had to be treated the same as all of the other provinces Smallwood quickly embraced him for the top job. He turned his

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back on his old friend Robert Winters, who had failed to protect New­ foundland from Quebec as he had promised. Always the pragmatist, Smallwood believed that his best hopes for Newfoundland lay with a prime minister who was not afraid of Quebec. Even so, Newfoundland’s feud with that province over the development of the hydroelectric resources in Labrador continued and it would not be until 2013 when Newfoundland entered into a partnership with Nova Scotia, underwritten by loan guarantees from a Conservative federal government, to finally move power from Labrador through Newfoundland to Nova Scotia via an underwater channel. Only then did Newfoundland “escape the clutches of Quebec” on new hydroelectric development but that may be cold comfort as Quebec will continue to harvest most of the economic rents from Churchill Falls until 2041.

3 Classic Federalism: The Resettlement of Fishing Communities in Newfoundland and Labrador to 1965

Introduction The intraprovincial migration of more than 25,000 people in New­ foundland and Labrador from nearly 800 small, isolated, primarily fishing villages (or outports) into larger towns after Confederation in 1949 was one of the largest migrations of people in the history of Canada. Many of those communities that dotted the province’s almost 10,000 kilo­ metres of coastline at the time of union with Canada in 1949 had only a handful of people. Resettlement or centralization – the two terms used most frequently to describe this migration – is wrought with emotion and sentimentality. For some, it is today a symbol of much that went wrong in Newfoundland and Labrador after union with Canada. It has become largely the domain of songwriters and artists whose works now shape public memory of the migration.1 Its critics see it as a failed policy of social engineering and interference that the people affected neither sought nor wanted. Callous state elites and misguided, powerful politicians intruded into the lives of ordinary, hard-working people to transform their land into a modern industrial society characterized by an educated and specialized proletariat labouring in highly capitalized industries dependent on the ever-increasing use of technology and innovation. Such pursuits ravaged a way of life, with outport fishing communities abandoned as the state sought to elevate and improve the level of social and public services in the province to something comparable to a North American standard. Resettlement had been designed to improve conditions for people living in isolated communities, but in 1971 the Evening Telegram, the major St. John’s daily, compared it to the Nazis’ relocation of the Jews. Two professors at Memorial University composed a ballad to

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their colleague, Parzival Copes, an outspoken economist and proponent of resettlement, promising his executioners safe passage through the pearly gates of heaven.2 Resettlement became a cause célèbre of what Sandra Gwyn has called the Newfoundland cultural renaissance that blossomed in the late 1960s and early 1970s. Just as Smallwood had earlier charged Diefenbaker and mainland Canada for their failure to understand the cultural uniqueness and exceptionalism of Newfoundland, the opponents of resettlement, especially those with a nostalgic sense of romance for the small, isolated outports, turned the tables and charged the long-serving premier for his  own failing to understand the uniqueness of Newfoundland and Labrador. In their view, Smallwood expunged the virtuous and unwitting Newfoundlanders from their outport communities in a relentless search for modernity and thrust upon them a North American way of life. The state’s attempt to change the spatial patterns of settlement in New­foundland and Labrador did not simply threaten the physical and social landscapes of the past but was paramount to destroying a people by obliterating their culture, their history, and their traditions.3 As historian Jerry Bannister, a perceptive and astute observer of contemporary as well as historic Newfoundland, observes: “At the heart of this perspective was the belief that the island’s golden age lay not in a modern future of material wealth but in an idyllic past of outport culture.”4 My purpose in this chapter and the one that follows is not to engage either the detractors or supporters of resettlement, but to consider resettlement policy in the light of Canadian federalism and through the prism of federal-provincial relations. In the first resettlement phase to 1965, Ottawa insisted on a classic interpretation of federalism and refused to participate in Newfoundland’s resettlement program because it operated solely within the provincial purview. By 1965 when the second phase was launched, Ottawa was eager to participate. I should be clear here that I was part of the resettlement exodus. My mother harboured few sentimentalities of a romantic life raising a family largely as a single mom in one of those isolated fishing communities. My father had died in an industrial accident in 1966 as he followed droves of other men who fled the uncertainties of fishing for a regular paycheque on the Bay  d’Espoir power development site. I spent my early childhood in Pushthrough, a fishing outport of nearly 200 people on Newfoundland’s ruggedly beautiful south coast. In 1969 my family joined the migration of people to larger centres throughout the province. I was too young to remember much of the community discussions that occurred in the

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months preceding our move to Hermitage, a mere 16 kilometres across the bay, but I recall vividly my mother later talking about her delight in having a school with qualified teachers for my brothers and I and access to better medical facilities even if it was just a lone doctor at the community health clinic. Modern conveniences such as running water instead of buckets on the porch filled daily from the community well, electric lights that replaced our temperamental oil lamps, an indoor flush toilet rather than a white enamel pail perched at the top of the stairs that had to be dumped every day, and a hot water tank rather than a large cast-iron boiler simmering all day on the wood-burning stove surely made her life easier. My grandmother, however, never adjusted to life in Hermitage, even though she had moved several times throughout her life, most recently shortly after the First World War to Pushthrough from Saddle Island – a bleak pimple of an island a half mile to the west. Resettlement was not kind to the elderly, and the whole episode calls for much further study. Displacement is, of course, not merely physical relocation nor is it always detrimental. While it involved the uprooting and dismemberment of the social, cultural, moral, and economic webs of life that had been built up over generations, resettled peoples confronted their challenges and adopted sustainable and successful rehabilitation strategies. Moreover, many recipient communities experienced a new dynamism and enjoyed greater prosperity and diversity with the arrival of newcomers.5 Modernization and Citizenship Newfoundland represents only one example of state manipulation of communities of largely uneducated people following the Second World War, where state planners attempted to transform what they considered inefficient and backward economies to provide people with a better standard of living. Such examples of social and cultural engineering in the pursuit of greater economic rationalization represented the supposed imposition of the process of modernization upon a passive rural population. State planners and politicians often saw no virtue, value, or future in the isolated communities where citizens had fished for decades.6 It has been argued that these communities became victims of the march of the interventionist state, as capitalist elites dispossessed local communities and left their leaders powerless. The hegemony of those elites – to borrow Antonio Gramsci’s etymology of the ideological relationship between state, power, and society – was clearly established when the

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goals of the capitalist elite found acceptance among politicians and state planners and became a universal truth among the citizenry.7 These groups were wedded to the utility and efficacy of state planning and came to believe that their model for fishery development in Newfound­ land lay in  mechanization, centralization, and the industrial model of development. The fishery practiced in the outports of Newfoundland in the 1940s and 1950s was deemed inefficient and pre-industrial; it had to be transformed. One essential element in that transformation was state-directed centralization, which saw a modern, urban, industrial, and mechanized fishery consolidated in a limited number of communities known as “growth poles.” State-led economic development was nothing novel in Canada or Newfoundland, even if the arrival in the 1950 and 1960s of the new mandarin state planner was. Since Confederation in 1867, the state had played pivotal roles in economic development at both the federal and provincial level, through what H.V. Nelles labelled the politics of development.8 John A. Macdonald’s National Policy and Ontario’s use of hydroelectric power, the regime of stumpage fees in the forestry sector, and the Prairie Farm Rehabilitation Act of the 1930s (to stabilize farming in the wake of successive disasters in Western agriculture and put it on a sustainable foundation to allow it to provide economic security for those in the sector), are all examples of state intervention and planning. Regional economic development was given elevated status with the election of John Diefenbaker in 1957 and would remain a priority for federal and provincial governments for decades. Even if we accept notions of modernity and modernization theory as contributing to the impetus for post-war resettlement policies in New­ foundland and Labrador, the decision-making process that resulted in the policy at both the provincial and federal level cannot be divorced from the social, cultural, and economic imperatives that existed at the time in Newfoundland and Canadian society. It is advanced here that the state’s policy on resettlement can be understood only within the very context of the broader societal, technological, and economic imperatives that existed at the time and in which politicians and bureaucrats operated; resettlement cannot be reduced solely to an economic model or questions of hegemony. Nor can the rural people be seen as victims or as passive in the whole undertaking. An analysis of the political process that involved federal and provincial politicians and bureaucrats demonstrates that the policies they articulated and implemented were an attempt to deal rationally with the demands of citizens who lived in

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Newfoundland and Labrador in the 1950s and 1960s. The rationality policy model implies that there is an orderly and incremental path from problem to solution and that policy outcomes are purposefully chosen because they are judged better than other alternatives. In this method of public policy decision-making, different options or approaches to problems are identified and the costs and benefits of various solutions are assessed and compared with others. The policy that is considered most rational and promises to yield the greatest net benefit – and achieve the goals and objectives as articulated by the state and citizens – is selected. There is a sequence of steps that invariably involves a consideration of the role of political leaders, of the bureaucracy, the intellectuals and social scientists, the media, and the people. Information is gathered for analysis during the decision-making process and continually reassessed. The options chosen by citizens are often in agreement with the preferences and beliefs of the decision-makers although information, of course, is never truly objective or unbiased.9 Resettlement was the more or less purposeful policy to deal rationally with the social and economic conditions existing in Newfoundland in the 1950s and 1960s and the people most affected often determined the outcome even if they did not set the agenda. Resettlement cannot be separated from the state of the fishery that was the sole source of employment in virtually every community that disappeared during the resettlement program. Many of the thousands engaged in the fishery had to deal with persistent poverty as measured by a modern society and the people who lived in it. How to improve the economic well-being of those engaged in the trade had stymied political leaders and citizens for decades.10 Politicians and state planners in the 1950s and 1960s did not necessarily consider the fishery as an archaic industry that had to be cast aside; however, the technology used by many fishers at that time was believed to be archaic, offering little hope of leading to the increased productivity and thus higher incomes which were considered essential to raising living standards in Newfoundland and Labrador. State planners considered the markets for salt and dried cod – the staple product of the industry since the first Europeans arrived in the sixteenth century – as rapidly disappearing in the modern era, to be replaced by the fresh and frozen product destined for North American, not European, markets. F. Gordon Bradley, Newfoundland’s first minister in the Canadian cabinet, like so many others who had been in­ volved in the fish trade for decades, believed that the catching capacity

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of the individual fisher had to be dramatically increased, and the time-­ consuming manual task of drying cod had to be mechanized and shifted from the family unit to large processing firms. He proclaimed that the problem of the Newfoundland fishery was to be solved by scientists and engineers in the laboratory. Over time, this view became dominant both in Ottawa and throughout the Newfoundland fishing industry itself. Even among fishers, there were many who deserted their boats for other employment as soon as it was available. When Smallwood announced in 1968 that the Churchill Falls hydroelectric development was to begin, some 14,000 Newfoundlanders wrote him directly seeking employment. Many of them were fishers eager to leave the fishery in hopes of a better way of life and a more stable income in construction. Both the provincial and federal governments – and many fishers, too – identified the persistence of low incomes in the fishery and the lack of public services in rural Newfoundland as their greatest challenges in the post-Confederation period. After weighing various options and considering the costs involved, they believed resettlement was the best policy to meet the challenge of improving the level of public services available to citizens and developing the fishery to improve incomes and increase the industrial capacity of the province. In turn, this would provide regular and steady employment opportunities for a growing labour market. The province concluded that the benefits of resettlement outweighed the costs involved in leaving people where they then resided. It was also an effective means of achieving the government’s goals and objectives of improving the level and scale of public services throughout the province; the federal government came to the same conclusion, but later than the province. Modernization theory can only provide part of the explanation for the impetus behind resettlement in Newfoundland. What cannot be denied is that after the end of the Second World War, Newfoundland, like societies and states elsewhere, was driven – perhaps consumed – by the insistence that citizenship in liberal democracies had to bring real material benefits and include all citizens in the mainstream of society. Notions of inclusion meant that the state had an incorporative capacity to tackle and resolve problems of inequality and access.11 This idea that social citizenship is the right of all was reflected in the Atlantic Charter – which, incidentally, was proclaimed in 1941 in Placentia Bay, Newfoundland, by American President Franklin D. Roosevelt and British Prime Minister Winston Churchill.12 As T.H. Marshall and others have demonstrated,

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the expansion of social rights became an important identifier in the reinvention of citizenship in the period following the Great Depression and during the Second World War. Since the Age of Revolution and the Enlightenment of the late eighteenth century, citizenship had long been associated with civil, legal, and political rights. In the twentieth century, social and material dimensions were added: people insisted that they enjoyed certain social and material rights by virtue of their common status as citizens.13 In Canada, both federal and provincial governments embraced that new philosophy, driven in large part by demands from citizens themselves – that the state had to address the social and economic injustices they faced. There emerged in Canada a commitment to notions of social rights, that all citizens should enjoy a reasonably common set of social welfare programs, a reasonably similar standard of ­living, and similar access to modern public services. This would all strengthen the level of attachment to the nation.14 Scholars such as Keith Banting have defined social rights in terms of access to health care and the provision of public pensions, or what might be broadly defined as the benefits of the social welfare state, but social citizenship was much more variegated and discursive: it included access to such public services as electricity, running water, schools with qualified teachers, and modern communication technology – amenities no modern, progressive society could leave its citizens without. Newfoundland’s union with Canada and the various resettlement schemes that followed in the succeeding twenty-five years must be considered as part of the changed notions of citizenship that emerged in mid-twentieth century. The search in Newfoundland for a better way of life and expanded social citizenship – in essence, the pursuit of economic and social security – provided the impetus for the fierce constitutional debates that animated politics in the country after the Second World War. That included the bitter political strife from 1946 to 1948 over its constitutional future, which stemmed not from esoteric and philosophical quarrels over whether Newfoundland would reclaim its constitution and assert its independence in the tradition of Canada, Australia, or other members of the Commonwealth, or become a province of Canada, or retain the Commission of Government.15 Rather, these debates were animated by what the different constitutional options would provide to citizens, what a new constitution would bestow in material, social, and economic terms, and which of the options would bring relief from the poverty of the past, such as that experienced during the Great Depression.

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Underlying those constitutional debates, then, was the larger question of social citizenship: which of the proposed constitutional options would build most effectively on the prosperity and steady employment that many Newfoundlanders had enjoyed when they deserted the fishery in droves to work on British, Canadian, and American military bases during the war? Canada, I suspect, had little real appeal to many in Newfoundland, other than perhaps the fact that it maintained a British connection; even that, surely, had little resonance with the many descendants of those who came from Cork, Galway, and elsewhere in republican Ireland, who harboured few sentimentalities of anything British. The attraction for most of those who favoured union with Canada was not the great philosophical attraction of being Canadian – as most would not have had any notion of what that entailed. Rather, it was the promise of a better life as part of the Canadian state. Reverend Lester Burry, the United Church clergyman who represented Labrador in the National Convention, reflected that notion well. In debate, he reminded other delegates what it was like to go into the homes of people in Labrador, “seeing their bare cupboards and hearing the cries of hunger, cries that never leave you once you have heard them.” He feared the return of responsible government and independence to Newfoundland as it “might bring back those conditions again … and I don’t want to take a chance on it.”16 For Burry and many others, Canadian citizenship was presented as a promise for a more secure economic and social future, and a slim majority voted for it. People in rural Newfoundland, especially, were excited about the prospects of the better life that Smallwood and proponents of Confederation had promised them as Canadian citizens. They were the ones who faced a most uncertain future in post-war Newfoundland, and throwing in their lot with Canada showed that they demanded and expected more from the state than they had received under Newfoundland’s previous constitutional regimes. While rich in resources, Newfoundland and Labrador had failed to provide most of its people with a decent standard of living; poverty, hardship, and deprivation were widespread throughout the country in the previous decades and in 1948 the leaders of organized labour joined with rural people and voted for Confederation. Canada offered the best option for renewed social citizenship and the provision of government services in the post-war period.17 To suggest that voters in Newfoundland and Labrador were bribed or bought by promises of family allowances and old-age pensions is an insult to the intelligence of the women and men who voted in the two referenda

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during the summer of 1948.18 Citizens rationally weighed the options presented to them, and their embrace of the benefits of a burgeoning social welfare state in Canada suggests that they, too, participated in a reinvention of concepts of citizenship in the post-war period. Like citizens in Britain, Australia, Canada, and elsewhere, they wanted their state to provide a measure of social and economic security. Newfoundland quickly availed itself of the benefits of social citizenship in Canada when it became a province in April 1949. Family allowances, old-age pensions, unemployment insurance (UI), and other federal social security benefits became an important source of income in the new province. Political leaders never tired of telling the electorate of the benefits of union, but those very benefits led to demands for even greater support from the state. Herman W. Quinton, Newfoundland’s minister of finance in Smallwood’s first government, stated in his budget speech in November 1949 that the social security payments from the government of Canada “are so numerous and varied [that] it is unpleasant to contemplate the position of Newfoundland as it would be if those payments were not received by the thousands of families.”19 The benefits of Canada’s social citizenship soon found their way to fishers who accounted for approximately 20 per cent of Newfoundland’s labour force. Ottawa’s extension of UI benefits to them in 1957 is the best example, but there was also interregional redistribution of wealth through such programs as equalization and various attempts after the late 1950s to deal with regional economic inequality.20 Federal-Provincial Investigation into Newfoundland Fisheries When Newfoundland joined Canada there were approximately 19,000 fishers (down from more than 40,000 in 1914) engaged in the inshore salt fishery in hundreds of communities spread along the coastline. Starting from the time Smallwood was elected to the National Convention in 1947 and continuing after he became premier in 1949, these citizens were his primary audience and key supporters. In perhaps one of his most eloquent speeches to the National Convention he described the history of Newfoundland as an “unbroken history of struggle” – a theme to which he returned frequently. Workers’ earnings never provided sufficient income to sustain a standard of living considered comparable with the rest of North America and were certainly never sufficient to maintain a government that was able to provide the public services citizens deserved and demanded. Smallwood often described his administration

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as “His Majesty’s Outport Government” and was determined to deliver a better life to fishers, whom he frequently referred to as “the toiling masses of Newfoundland.”21 The federal minister of fisheries, R.W. Mayhew, and many in Ottawa shared Smallwood’s assessment. Mayhew commented shortly after Confederation that “Notwithstanding ready access to the resources, which are the greatest in the world, the industry has been unable to provide a dependable living for the people directly employed by it.”22 Newfoundland lacked the financial resources necessary to oversee a revolution in the fishery, but Smallwood had convinced Ottawa in 1951 to create the federal-provincial Newfoundland Fisheries Development Committee. The committee, comprised of representatives from all sectors of the industry and chaired by Sir Albert Walsh, the first lieutenant governor of Newfoundland, was tasked with devising a development program for the inshore and offshore fisheries that the two orders of government might implement to create an efficient and rational industry.23 In April 1953, the Walsh Committee reported. It was a damning review of the industry but its analysis was widely praised. The industry was inefficient, lacking in capital investment, and low in productivity. The typical family enterprise provided enough work for all members of a large extended family but sufficient pay for just one person at best. Most fishers harboured little interest in prolonging the difficult, time-consuming, and tedious work of curing their catch as their forefathers had. They wished to dispose of it fresh to a processing facility. They wanted a reformed fishery to provide a decent income and working conditions as attractive as those in other sectors of the economy. The typical family enterprise, where men caught the fish and women and children tended to the curing, was considered a relic from an earlier era and the Com­ mission found in those fishing communities an unyielding desire to flee the servitude that had marked the outport fishery for decades and to join the mainstream of North American life. The Commission accepted the gendered notion of separate spheres and believed that Newfoundland women wanted to escape the drudgery of the flakes and fish making and “devote their time to their household duties and to live in an atmosphere of human dignity as wives and mothers.” Similarly, Walsh believed that children had to be “liberated” from the drudgery and poverty of the unpaid task of drying the fish so they could pursue their education and enjoy “equal opportunity with all other children” in Canada. The best means of accomplishing this was to change the mode of production and increase productivity levels for all fishers through the better use of

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technology, mechanization, and centralization of the industry. Individual fishers’ stages would be replaced with community premises, and artificial or mechanical drying facilities would substitute for natural ones to ensure a uniform and quality-controlled product. Walsh also recommended the establishment of processing plants capable of diversified production and economic operation that could handle the increased catch from fishers. These changes, it was held, would increase productivity and, hence, raise income levels. The Walsh Committee understood, too, that changes in the fishing industry could not be separated from the living conditions that then existed in the communities where the fishers lived; it called for intensive community development that would provide roads, modern houses, electricity, water and sewage, schools, and medical facilities. Walsh found little support for what we now refer to as the pluralist economy where fishers were enslaved by their trade and became essentially “jacks-of-alltrades,” supporting their meagre fishing incomes through a variety of means, including subsistence agriculture, hunting and gathering, and periodic work outside the industry. The emergence of full-time professional fishers was the only way forward. However, the proposed reforms necessitated a withdrawal of some fishers and their families from the industry and from the widely scattered outports. The Newfoundland fishery would be centralized at a comparatively small number of locations around the coast.24 Classic Federalism The Walsh Report called for massive intervention from the federal government to transform the Newfoundland fishery, but Ottawa refused to participate even as Keynesian principles were in the ascendency there. Relying on what might be considered the classic model of federalism, Ottawa made it clear that it had no intention of moving beyond its jurisdictional responsibility to assist Newfoundland in modernizing its fishing industry. It refused to become involved in any initiatives in New­ foundland in which it did not participate elsewhere in the country; there would be no special legislation or programs to rehabilitate Newfound­ land’s fishery. To do so would arouse considerable opposition in the neighbouring provinces. Intruding too vigorously in Newfoundland might establish a precedent for federal involvement beyond what was mandated by the constitution. It offered support for infrastructure ­improvements and participated in a number of demonstrations and

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experimental projects, principally through the federal Department of Fisheries, but it left the provincial government to implement much of what the Walsh Report had recommended. Smallwood had hoped for a different outcome. In the 1953 federal election he had assured fishers that a vote for the seven Liberal candidates in Newfoundland was “a vote for vast and wonderful development of our fisheries, a vote for making our fishermen prosperous.”25 Ottawa also refused to become involved in any attempt to substantially reduce the number of fishers in Newfoundland or to cooperate with St. John’s in centralizing the province’s population as Walsh had recommended. It agreed, nonetheless, with the gradual depopulation of small, remote settlements in favour of the centralization of the fishery at modern industrial bases that it hoped would produce an acceptable standard of living for fishers and provide a sustainable mode of development for the industry. Yet, the federal cabinet feared that the whole issue of resettlement would be a sensitive one in Newfoundland and decided to leave the matter to the province. Even so, many officials in Ottawa believed that the exodus of fishers from outport locations was inevitable. Ottawa’s refusal to participate in the Newfoundland resettlement program did not mean that it was unconcerned about the plight of fishers and their families living in outport communities, but only that it did not consider the problem to be within its jurisdiction. Numerous federal documents during this period expressed concern over the economic and social conditions for the 50–60,000 men, women, and children who depended on the salt fish industry for their survival, but Ottawa realized that there was little it could do in the short term. Given the lack of alternative employment opportunities in Newfoundland, the transition out of the traditional fishery would occur very slowly and in the meantime, the federal government’s response to the persistent low incomes in the fishery was to consider the problem as a social rather than an economic one. Throughout the 1950s and well into the 1960s, its policy was, in the view of one senior official, “to administer palliatives based solely on humanitarian considerations.” It subsequently implemented a variety of programs, such as price support for fish, a salt-assistance program, and various make-work projects to raise income levels without addressing any of the structural problems that Walsh had identified in the fishing industry and in outport Newfoundland. Ottawa’s decision to change the rules regarding UI to include fishers in 1957 was the pinnacle of this policy approach, as it represented one of the largest federal fiscal transfers to individuals engaged in the fishery. Together with other income-support

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programs, UI succeeded in raising income levels for those who remained in the fishing industry. However, such policies did little to solve the structural and systemic issues confronting the industry. Ottawa’s goal was the amelioration of poor living conditions in fishing communities through a variety of social measures to improve the standard of living and raise the level of public services in the communities where fishing was the only occupation, rather than intervention to solve the systematic issues and finding a lasting, long-term solution.26 At times, adherences to the principles of federalism allowed Ottawa to avoid provincial entanglements. Ottawa’s approach to fisheries development angered Smallwood. Although he never articulated issues of regional disparity in the manner that some of his successors would, he believed, nonetheless, that the federal government had responsibility for promoting economic growth in the provinces. Eliminating economic disparity was national policy. He wanted Ottawa to use its resources to implement change in Newfoundland but he never asked for greater provincial control of the fisheries as others would do later. Smallwood told the provincial legislature that “Ottawa seems to have virtually no realistic understanding or appreciation of the almost incalculable importance of the fisheries in the economy of Newfoundland, and the economy of Canada … Union with Canada must always be something less than a success so long as the Government of Canada fails to do for the fisheries a fair fraction of what has been done for other primary industries and is being done.”27 Later, he told the Toronto Daily Star that he was “ashamed and angry to say it, but the altogether stupid, bungling, inadequate effort of Great Canada to assist the Atlantic fishing industry … is a reproach to a great and progressive country. The whole policy of the Department of Fisheries of Canada,” he added, “is to drive the fishermen away from fishing.”28 Smallwood subsequently established the Newfoundland Fisheries Development Authority and provided millions of dollars to private enterprise and to individual fishers to modernize and develop the Newfoundland fishery through the construction of fresh-frozen plants and the purchase of vessels and other equipment, a process that had begun in the 1930s under the Commission of Government. Ottawa refused to be a part of the agency as Smallwood had hoped.29 Regional development policies at the time were considered local politics by Ottawa. Federal mandarins and politicians alike expressed no desire to become embroiled in such matters; they were interested in what they considered national policies, not regional ones, and in their view the Newfoundland fishery was a provincial matter.30

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Demands of Citizenship and the First Resettlement Program Smallwood was determined to make good on his promise made in the first post-Confederation election that “it is time for our fishermen to get their share of the good things of life.” His objective, he promised, was to give fishers their share without delay, even if he had to do so without Ottawa’s help.31 Of primary concern at the time to many fishers was improving their living conditions through higher wages, the provision of public services, and an end to their isolation. Many of the fishing communities were without electricity and other amenities that had come to be considered the norm throughout Canada. After Confederation, New­ foundlanders had come to expect – even demand – better. “With a suddenness that is startling,” Newfoundland’s minister of finance, Gregory Power, wrote in his budget speech shortly after union, “our people in all sections of the Province seem to have awakened to a keen realization of the many ways in which Newfoundland has been lagging behind in the march of progress for most of the present century.” Their wants had expanded enormously.32 Less than 50 per cent of households in the province had electrical service, for instance; in rural areas, less than 26 per cent had electricity, far fewer than in either Nova Scotia (79 per cent of households) or New Brunswick (74 per cent).33 The statistics were similar for indoor plumbing and running water in schools and medical facilities. Many communities depended on the sea as their only mode of transportation, and they were isolated from advanced medical facilities in the larger centres for much of the year when ice and stormy weather prevented travel. There was a “deep-seated desire to bridge the gap with the rest of North America,” Power suggested, demonstrated by the hundreds of petitions flooding in to the House of Assembly demanding new roads to end isolation, modern health services, and more and better schools. A new consciousness emerged throughout the province as people came to believe that as citizens they deserved something better than they had. In Power’s view it was “a new and urgent demand for progress.”34 The Walsh Committee had confirmed again for the provincial government that fishing families were clamouring for an improvement in the level of public services and amenities. The government soon realized, however, that satisfying the demands of the hundreds of communities would be difficult and expensive even with Ottawa’s help. Within the first years of union, the province had expended much of its pre-Confederation surplus in meeting the growing demand to improve the provincial level

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of public services, such as the building of new roads to end what Smallwood often referred to as “the curse of isolation.” Within a few years of union, the government was incurring annual deficits in the range of $5–$15 million and its investment in public infrastructure could not be sustained.35 One solution was to centralize the population into locations where public services already existed or could be provided to larger groups of people as a cost-saving measure. Some of the smaller communities took the initiative and moved on their own volition to towns with better economic and social opportunities. Only when these families could not afford the costs of relocating did they ask the province for help, launching what was in fact the most recent iteration in a long history of migration and resettlement that had started much earlier, in the late nineteenth century. That had largely been a haphazard process, driven by family members themselves moving from outlying fishing areas to new fishing grounds or to larger villages, often as a result of poor catches or, in the case of my family, when the 1929 tsunami destroyed much of their fishing premises on Saddle Island and they decided to rebuild in nearby Pushthrough. There were also incidents of state-supported resettlement: in the latter part of the nineteenth century, when the fishery collapsed, the government offered fishers bounties to relocate from the headlands to the bottom of bays to log and farm and, again in the 1930s, when the Commission of Government encouraged the establishment and settlement of agricultural communities.36 Frederick W. Rowe, a long-serving politician and, from 1966 to 1967, the minister responsible for the resettlement program in the Department of Community and Social Development, noted that forty-six communities relocated between 1946 and 1953, when families left for economic, educational, or medical reasons. These families had approached the government seeking technical assistance, and the Department of Public Works provided heavy equipment to move houses to new communities or helped families find suitable housing when it was not possible to transport their homes. The government did not have a formal policy for providing relocation assistance and acted only in response to citizens’ requests.37 Resettlement Is Launched Formally The Department of Public Welfare assumed responsibility for a resettlement program introduced in 1954, an indication undoubtedly of its ­social rather than economic dimensions. The cash grants were modest – initially limited to $150 per family but increased incrementally to $600

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by 1958 – and paid when 100 per cent of households in a community expressed their intention to relocate. The government went to great measures from the launch of its centralization program to insist that it had left to the people all decisions about vacating their communities and placed no restrictions on where people might move. Some families relocated to communities that were only marginally better in terms of public services than those they had vacated. The government wanted to avoid, however, providing public services for even smaller communities, which is why it insisted that only communities where all households had left were eligible for government assistance. One can only imagine the debates such a policy must have prompted in many isolated communities, but it allowed the government to claim that it was simply providing assistance to people who expressed a desire to relocate.38 The dilemma facing the government on the provision of public services can be seen in its approach to the south coast of Newfoundland, one of the most isolated and sparsely settled areas of the province: some 180 settlements were scattered along 300 kilometres of coastline and many had fewer than 100 people. The Commission of Government had considered the region among the least developed in the country and believed that the region would benefit both from a resettlement program and an intensive program of local infrastructure improvement. The region had been staunchly confederate, and in 1956 the provincial government convened a conference of representatives from communities along the coast to discuss how best to handle the obstacles confronting the people living there. The delegates agreed that resettlement and centralization of the fishery and those engaged in it was the best way to remedy the adverse conditions throughout the area, an argument that found support from the St. John’s newspapers. The Daily News described that part of Newfoundland as “bleak and inhospitable with many settlements so poor in resources that it would be better if a planned migration to better areas could be arranged.” Public services could only be improved through “assisted centralization of the population” and a modernized fishery.39 A commission of inquiry, subsequently appointed to investigate conditions in the area and make recommendations for how best to develop the region, agreed. After extensive consultations with residents of communities along the coast, the commission, chaired by J.T. Cheeseman, a local businessman and later politician, found the prospects bleak for many of the communities. On average, 400 fishers were abandoning their trade and moving from the coast each year. Unable to justify government expenditure in all communities to provide much

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needed public services, Cheeseman concluded that “some relocation of population [was] desirable and essential.” He recommended additional financial support for resettlement and rehabilitation and called upon the federal government to assist.40 The commission’s report confirmed two of Smallwood’s beliefs: one, public services could best be provided to people by consolidating the smaller communities into larger ones; and two, mechanization and centralization were the only options for a profitable, sustainable fishery.41 Smallwood found further support for his centralization program a short time later, when the federal Royal Commission on Canada’s Eco­ nomic Prospects presented its final report. Like others, Walter Gordon, the commission chair, drew a clear distinction between the inshore fishery, “using primitive, inexpensive and manually-operated equipment from a one-man dory,” and those operating on a 200-ton offshore trawler equipped with the latest electronic navigating and fish-finding equipment. The prospects for the outport salt fishery were meagre: the net value of production of the average Atlantic fisher was about one-third that of the average worker in Atlantic Canada and only one-sixth of that of a worker in Ontario. Gordon suspected that the steady decline of the number of individuals engaged in the Newfoundland fishery – down 40 per cent from 1947 to 1956 – would continue as the industry transitioned to modern boats and improved refrigeration both ashore and at sea. More­over, the low level of capital investment throughout Atlantic Canada, and especially in Newfoundland, was largely responsible for the persistence of a subsistence economy in some of the resource sectors and the disproportionately large number of people engaged in marginal activities such as fishing and farming. However, people living in isolated localities were becoming increasingly aware of the alternative employment opportunities that paid regular and higher wages than those earned in the fishery. Many were “anxious to move to places where social and cultural activities [were] greater.” Gordon recommended that the federal state assist those who wished to relocate to become established in other industries.42 Ottawa refused. These two reports provided a powerful message for Smallwood. Many of the small, isolated communities had lost their raison d’être. Individual fishers in those communities, relying on their traditional catching methods, could not possibly hope to earn an adequate income to sustain a family. Even if some could eke out a subsistence living, they could not “collectively support the services which are part of the way of life in centralized communities.” Moreover, their geographical location made such

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3.1  Government of Newfoundland economist Robert Wells discussing resettlement with residents of Silver Fox Island, many of whom later resettled to Dover, in August 1961. Wells found that by the mid-1950s many residents in isolated communities were no longer satisfied with the level of services they had in their communities. (B. Brooks/National Film Board of Canada/Library and Archives Canada, PA-211661)

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services as electricity, roads, telephones, and adequate schools and medical facilities impossible except at exorbitant costs that the province could hardly afford. In a statement issued in February 1957, Smallwood said: It has long been felt by thoughtful people that the terribly scattered nature of our population has made it very expensive for the Government to provide public services to all the people, such as post offices, telegraph offices, telephones, coastal boats, hospitals, roads, snow clearing, schools and many other services. Many people have felt that there are hundreds of settlements more than there should be, and this feeling has been expressed by a great many people in recent years.43

He had said on a number of occasions that the provision of transportation and educational and medical facilities in all of the outports was beyond the resources of the province and had warned that a large proportion of the isolated settlements had to be abandoned if their inhabitants wished to obtain a modern standard of living.44 Smallwood appointed a special committee of the cabinet that included the ministers of Public Welfare, Municipal Affairs, Education, and Health late in 1957 to investigate the whole process of relocation as the government started to exert more control over it. It wanted a better indication of the number of communities throughout the province that might find it hard to survive with a small number of families, whether other towns had sufficient infrastructure to handle an influx of people, and whether the receiving towns would be able to provide sufficient opportunities for employment. The subcommittee sought the assistance of the province’s professional welfare officers who subsequently identified 200 communities that they believed “had no great future.” The communities identified lacked essential public services, particularly schools and medical facilities, and the welfare officers reported that in the communities with ten to fifteen families, most of the children and adults were illiterate. Some 10,000 people might be relocated if the government provided the proper support and leadership.45 The government then asked Professor Gordon Goundrey of Memorial University to prepare a detailed inventory of communities lacking suitable amenities that might wish to locate, and it asked people to express their views on resettlement. Even as the government increased the funds available to households to relocate and slowly developed a resettlement strategy, it continued to insist that “there will be no force or compulsion in any resettlement plan.”

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Following the subcommittee’s report, the government adopted new rules: it would provide relocation assistance only if people moved to settlements that were larger and better equipped with a decent level of public services than those they were vacating. The government insisted that it would offer financial assistance only if every household in a community chose to relocate but it was moving incrementally towards narrowing the number of recipient communities.46 Yet, as provincial economist Robert Wells concluded in his report, the desire to centralize has come from the social consciousness of the many Newfoundlanders living in comparative isolation. The desire for more remunerative employment and better living conditions has initiated in New­foundl­ and a surge towards resettlement which exists independently of Government. In assisting resettlement [the] Government is directing its powers to the task of assisting Newfoundlanders to adjust themselves in a society of which the economic basis has changed.47

Still, the government realized that there was a measure of coercion involved. “It is obvious that some people may be persuaded against their will by the more zealous and perhaps younger and more energetic residents,” William N. Rowe, the minister responsible for resettlement, later admitted to the St. John’s Rotary Club.48 Cooperative Federalism and a Return to High Politics Between 1954 and 1965 some 115 communities, comprising 504 families and 7,500 people, had been relocated through the province’s centralization plan. Of these resettled communities, most were in Bonavista, Notre Dame, and Placentia Bays and along the south coast; the average number of families living in resettled communities was fourteen.49 The administrative responsibility and the costs for the program were borne by the Department of Public Welfare, an indication no doubt of the social imperative implicit in the program. While the initiative had succeeded in providing better public services to a larger number of people, it had done little to transform the inshore fishery, which remained one of the state’s priorities. Although the number of fishers had reached an historic low in 1956 (14,956), the introduction of unemployment insurance and a general decline in other employment opportunities throughout the province after the end to the post-Confederation construction boom resulted in the return of a large number of workers to the industry. The

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introduction of social security measures likely served as a brake on the centralization that had occurred in earlier times. By 1963, there were nearly 22,000 fishers in the province – an increase of nearly 50 per cent in a mere seven years – suggesting that the introduction of unemployment insurance brought many back to the fishery; the movement away from the fishery evident in the other eastern provinces and New England had not occurred in Newfoundland. Incomes from fishing remained low and the total catch of inshore fishermen had not increased. The increase in the numbers participating in the industry continued to worry the provincial and federal governments as they had hoped for the development of a modern, industrialized, and technologically advanced industry to replace the traditional inshore salt fishery.50 The average income for fishers in the 1960-1961 fiscal year was $1,025, compared to the provincial average of $2,962; fishing families had an average income of $2,047 while the provincial average family income was $4,294.51 A 1963 study of 419 fishers from throughout the province showed an average total household cash income of $2,114; of this, $987 (46.7 per cent) came from fishing, another $336 (15.9 per cent) from other employment, and $791 (37.4 per cent) from federal and provincial transfers.52 These persistent low incomes for fishers became an added impetus for resettlement in the 1960s. Smallwood realized that the prospects facing many in outport communities were not particularly promising and, despite his election-style bravado over the massive improvements in the province since 1949, as measured by the number of indoor toilets in schools or the increase in the number of university-trained teachers, 45 per cent of the population continued to live in communities of less than 1,000 people. In 1966, there were 467 unincorporated communities with fewer than twenty families. Many of these communities were isolated, with no connection to the outside world except by water. The lack of electricity and telephone infrastructure continued to be widespread and the use of outhouses and local wells was still common. Educa­ tion was often provided in one-room schools with poorly qualified teachers. Even though Memorial University had launched its teachertraining program with considerable optimism and success, teachers educated at MUN had no intention of graduating and returning to isolated communities to pursue their career. The lack of teachers was often the major reason for a community’s decision to resettle.53 More important still were the changing attitudes and rising expectations increasingly evident in outport Newfoundland by the early 1960s. Historians might quarrel about when consumerism emerged as a social

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3.2  Before 1965, many of the householders who relocated moved their homes through their own initiatives. Here, Malcolm Rogers’ house that has been floated from Silver Fox Island waits at low tide while the residents place heavy timbers to form a skidway up the beach at Dover. (B. Brooks/National Film Board of Canada/Library and Archives Canada. PA-211653)

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phenomenon and question its utility, but a “consumer society” was clearly in the ascendency during the first phase of centralization.54 Like elsewhere in Canada and the United States, the “good life” in Newfoundland was defined largely through consumer values and a desire for more leisure and larger incomes. Newfoundlanders, too, craved the outward signs of material progress in the form of televisions, appliances, and other accoutrements of consumer society. Consumer values came to dominate the economy and culture, and as Copes has argued, “the people [of outport Newfoundland] lost their ignorance of the outside world. Television,” he wrote, “has shown the outport people how the rest of the world lives and how short they are, still, of realizing the full measure of prosperity that other Canadians take for granted.” Resettlement was a success when measured in terms of ending the isolation of thousands of people and providing better access to public services. Yet Newfoundland could not provide employment to all who needed it, and Copes alienated many when he proposed an interprovincial labour mobility program to encourage outmigration as a way of reducing unemployment in the province.55 Other social scientists who studied outport communities also remarked on the transformation occurring in Newfoundland: Jane Abramson noted that “the penetration of urban values and consumption aspirations has tended to undermine contentment with, or resignation to, a subsistence level of living.”56 A resident of Fogo captured the sentiment of many when he said: “Before T.V. and such we didn’t know what we were missing. Now, all hands want what the others have … There’s a hospital here but you have to leave the island for anything serious … We deserve better.”57 Smallwood recognized the changing attitudes, and in the early 1960s he vowed with a renewed vigour to change the fishing industry and the spatial distribution of people throughout the province. An annual unemployment rate in excess of 17 per cent between 1958 and 1962, and the persistence of low incomes in the fishing industry, provided further rationale for his new policies as he pursued more aggressively the recommendations from the Walsh and Gordon commissions. The fishery had to be expanded to provide profitable employment to Newfoundland’s growing labour force. Smallwood sought federal involvement in reshaping Newfoundland. As a first step to convince Ottawa to participate, he organized a fisheries conference in 1962 that brought together all sectors of the trade to discuss how best to move forward. There was a general acceptance of the proposal to abandon much of the inshore salt fishery in favour of a modern industrial expansion of the Newfoundland fishery, based increasingly on the shift of resources to the offshore sector and the centralization

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of the salt fish trade, though the level of federal and provincial support for the offshore industrial fishery would prove much greater than for the inshore sector. Smallwood’s plan necessitated a gradual transition away from the individual production of salt fish to a much more capital-intensive frozen-fish industry. The Newfoundland fishery would follow an industrial model of development that had been adopted in other sectors of the economy. Such a strategy necessitated the centralization of the fresh and frozen fishery in a few locations throughout the province and a heavy reliance on technology and science to increase productivity, rationalization, and efficiency in the hopes of creating a viable industry that would bring prosperity to those engaged in it. This Fordist approach to the fishery left it in the hands of private capitalists, but the state exerted considerable influence through financial support for the construction of processing facilities and expanding the offshore fleet, and through infrastructure investment, scientific research and experimental projects, promotion and advertising, and education.58 The second step was the publication of the preliminary report of the Newfoundland Fisheries Conference shortly before a provincial election Smallwood had called for 19 November 1962. He accepted all the report’s recommendations and asked Ottawa to provide $37 million of the projected $70 million needed for fisheries development.59 Smallwood saw great potential in such federal programs as the Agricultural and Rural Development Act (ARDA), which had been introduced by the Diefenbaker government in 1961 to have federal officials work with their provincial counterparts and local committees to increase the productivity of marginal farm land and raise the income level of farmers.60 With a fifth majority government, Smallwood trained his focus once more on Ottawa. Although he had committed himself to Diefenbaker’s defeat – and had delivered his province to Pearson and the Liberals in a failed attempt to unseat the Conservatives in 1962 – he now appeared willing to work with Diefenbaker, although his nemesis had been reduced to a minority position in June 1962 and the curtain was falling quickly on the Conservative’s tenure in Ottawa. Smallwood called for a national development policy for the fishery. Ever the pragmatic strategist, he invited M.W. Menzies, Baldur Kristjanson, and D.W. Carr – Saskatchewan economists whom Diefenbaker had earlier brought to Ottawa to prepare his regional development strategy – to assist the Newfoundland government in preparing its pitch to the federal government. In February 1963, just as a federal election campaign began, Smallwood released National Fisheries Development: A Presentation to the Government of Canada by the Government of Newfoundland. Its focus was

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threefold: first, to demonstrate the fiscal injustice perpetrated on New­ foundland because its meagre agricultural sector had prevented it from participating in the vast financial resources that the federal government had made available to agriculture across Canada; second, to show how an investment in the fishery, similar to what had happened in agriculture, was necessary to compensate Newfoundland and revive another great natural and national resource – fish; and third, to rejuvenate the inshore salt fishery through an ARDA-style approach, a federal-provincial initiative to stimulate development in depressed rural areas to increase productivity and introduce a variety of measures to support incomes. Smallwood wanted a national strategy for the development of the fisheries. He reminded Diefenbaker, who had proclaimed in 1957 the need for a new frontier policy for Canada, that the ocean represented one frontier that had for too long been ignored by the federal government.61 Smallwood believed that his best hope lay with the Liberals, but even they were not prepared to provide the financial support he demanded. Nonetheless, he convinced Pearson in the midst of the 1963 federal campaign – as Danny Williams would do on fiscal transfers some forty years later – to commit the government of Canada to “a federal-provincial program for fishery development to be founded on the principle that national action for the fishery should parallel the action already being taken, and action to be taken, for agriculture,” and to convene a federalprovincial conference to work out a program of national fisheries development.62 Several months after his minority victory, Pearson delivered and convened a federal-provincial conference on fisheries development. Even before the conference began Smallwood learned of the difficulty he would face in Ottawa. The federal Department of Fisheries had no intention of endorsing his plans for the scale of development and support he sought. He could hardly control his anger after reading the draft agenda prepared for the national fisheries conference: “what you have planned,” he wrote H.J. Robichaud, the federal minister of fisheries who Pearson put in charge of designing a program of development, was nothing more than a “study club … it contains no remote suggestion of action.”63 Smallwood travelled to Ottawa, hoping, no doubt, to win converts to his initiatives. “The Newfoundland fishery is moving deeper and deeper in the direction of an insuperable welfare problem,” he told the opening plenary. “Low incomes, lack of alternative opportunities, lack of capital, lack of equipment and supplies – all lead inevitably to lower production and a gradual deterioration of the human resources. Year by year, the industry and the people engaged in it are further demoralized

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and depressed,” he lamented. The situation was dire. Rationalization could be achieved only through massive federal aid as Ottawa had done for farming. He demanded equal treatment for the fisheries and called for the unilateral extension of the 12-mile territorial limit to protect fish stocks from foreign trawlers fishing off Canada’s east coast and to preserve the resource for Canadian fishers, a variety of bounties for equipment and boats, price guarantees, a credit and insurance program, and a national marketing agency patterned after the wheat board.64 Beyond platitudes emphasizing the urgency of the need to modernize the industry to increase productivity and efficiency, the conference accomplished little. Its call for the infusion of state and private capital in establishing a coordinated and comprehensive development strategy was largely ignored.65 A decade earlier, following the Walsh Report, the federal government had seen little hope of a revitalized salt fish trade; since that time the Department of Fisheries officials had become even more convinced that the traditional sector in Newfoundland could not be saved. Smallwood’s bleak portrait of the industry only served to confirm for them the hopelessness of the situation. Yet, Smallwood embraced federalism as a way to deal with lingering economic, social, and political problems in Newfoundland and Labrador. He had embraced a modern, fresh-frozen fishery and favoured the centralization of the fishing outports. However, his goals could only be achieved with federal funding. He had orchestrated an offensive to save the inshore fishery through a highly publicized series of events (fisheries convention, fisheries ­commission, fisheries manifesto) designed to embarrass the federal government for neglecting Canada’s fisheries (while strongly supporting farming). He had succeeded in having Pearson convene the first ever national fisheries conference and had encouraged him to include in the 1963 Speech from the Throne a promise to work with the provinces to establish a program of national fisheries development. It was all for show. Ottawa refused to provide the massive support for the development plan Smallwood had advocated for the inshore fishery in the same manner it had rejected a similar plea in the early 1950s. Smallwood pushed forward with his own plans for a rationalization of the industry along the lines he had accepted shortly after Confederation. Ottawa had agreed, however, that it would establish a federal-provincial working party to consider a master plan for the centralization of households in Newfoundland.66 Even though Ottawa refused to join with Newfoundland in design­ ing  a development plan for the inshore fishery, it provided financial

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assistance for a variety of specific projects that allowed Smallwood to claim some success. In the years following the federal-provincial conference, Ottawa and Newfoundland – often collaboratively – introduced a variety of programs to provide credit to fishers to purchase equipment and boats, to explore new fishing grounds, and to study the marketing of salt fish.67 Both levels of government saw a future in the expansion of the offshore fleet, but the inshore fishery whereby fishers travelled to the fishing grounds and returned home at the end of the day had seen the catch per person halved between 1956 and 1966. Subsidies and unemployment benefits brought more income into fishing communities than did the catching of fish itself.68 Although the offshore fishery represented only 5 per cent of the total number of fishers engaged in the industry, it was responsible for 44.5 per cent of the total fish landed by weight. In the mid-1960s, the net average income for Newfoundland fishers was $678, but the net income in the offshore fishery was more than six times greater at $4,237.69 By the time of the 1966 provincial election, Smallwood was aggressively promoting the offshore fishery, promising to quadruple the number of trawlers from about 50 to 200. Both levels of government as well as provincial, national, and international fish processing companies turned their attention to the offshore fishery resource even though Newfoundland and Ottawa realized that many of the thousands engaged in the industry would remain in the inshore sector, and they agreed that the number of communities throughout the province had to be significantly reduced. This was a development strategy on which the federal and provincial governments could agree and it meant, too, that Ottawa was willing to participate in the resettlement program as one way to contribute to the development of Newfoundland’s fisheries.

4 Cooperative Federalism: Newfoundland, Ottawa, and Resettlement after 1965

Introduction When the provincial government first launched its centralization program in 1954, the federal government had refused to participate. It saw Newfoundland’s resettlement as an instrument of social welfare rather than a strategy of economic development.1 Much in Canada had changed within a decade, however, particularly in the role of the state in providing assistance and support to the less economically developed regions of the country. Simply put, regional economic development had become an important area of public policy and was driven in no small part by the provinces which were intent on aggressively pursuing opportunities for economic development within their provincial boundaries. In 1957, the federal government itself finally accepted regional economic disparity as a Canadian reality. As an initial step, it introduced a program of fiscal equalization designed to provide provincial governments with the necessary revenues to establish a national standard in the provision of public services across the country. As we saw earlier, Walter Gordon, in the final report of the Royal Commission on Canada’s Economic Prospects, rebuked the federal government for its failure to adequately address regional economic inequalities and imbalances, especially in Atlantic Canada. He called for “a bold and comprehensive and coordinated approach” from Ottawa to deal with low productivity and low incomes in the regions. The Diefenbaker government was particularly moved by the ­persistent and unacceptable levels of underdevelopment and poverty in farming and rural areas across Canada and introduced a variety of ­programs (such as the Agricultural and Rural Development Act and the Atlantic Development Board) to facilitate structural change in

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slow-growth areas as a means to combat regional disparity. Premier Joseph Smallwood saw these initiatives as one of the benefits of federalism, and he attempted to pry funds from Ottawa to address systemic underdevelopment in Newfoundland.2 In the early 1960s state planners in Ottawa – and, increasingly, their political masters – realized that the state had a national responsibility to intervene in areas of the country that were lagging and had little hope of ever bridging the economic divide alone. The state moved to improve the economic and social circumstances of those citizens in a general policy of social betterment that is reflected in such programs as comprehensive health insurance and public pensions.3 Another of their strategies was the embrace of spatial planning as an important lever in promoting economic development and improving the quality of life of people living in depressed rural areas. Economic potential and social development, they insisted, could be maximized when development in rural areas was concentrated and of a scale and nature appropriate to fulfil the needs of local communities for employment and services. In many cases the quality of rural life could be enhanced if people were relocated from small communities to large ones where development was more likely to occur. Unlike the first post-Confederation resettlement plan in Newfoundland, which focused almost exclusively on the lack of amenities and social conditions in the communities that people were vacating, the second phase focused on creating conditions for greater economic opportunity and development as well as ameliorating living conditions.4 To that program, Ottawa and Newfoundland were both committed. State planners concerned with regional development in the 1960s were inspired by the “growth pole” concept, an idea first articulated by the French economist François Perroux. He argued that growth does not appear everywhere at once but tends to concentrate at particular locations. The resettlement program was one way to strengthen these focal points, or communities, that might sustain economic growth. Donald Savoie, a Canadian expert in regional economic development, contends that the approach is much better understood as the promotion of growth centres (rather than a single location) that would contribute to the growth of a larger region. This model of development anticipated longterm structural change and promised a logical and flexible path for a sustainable and equitable future for peoples and communities, especially in terms of human and infrastructure developments. Governments understood that this was a process that might break the long cycle of

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poverty and regional inequality. The goal was clear: maximize economic growth and provide fair access to a range of services for rural citizens that included leisure, community, civic, health, and educational facilities. Its success depended, however, on a “multidimensional intervention by government” (to use Savoie’s phrase) that included a sufficiently large population base, the encouragement of capital accumulation, an adequate industrial infrastructure, good transport links to surrounding towns, an increase in educational levels of the workforce, and the promotion of new technology and innovations. Such intervention within a region would enhance the potential for social, economic, and human development.5 Newfoundland’s policy of resettlement, designed to encourage the growth of larger towns with the necessary infrastructure to develop a centralized, industrial fishery, proved a timely match with Ottawa’s new thinking on how to deal with the pressing national issue of regional disparity. Resettlement fit nicely with the theories and thinking that formed the basis of regional development programs at the state level by the mid-1960s. Both federal and provincial state planners readily accepted the notion that they had to intervene when the markets failed to correct regional disparities. Moreover, they had long insisted as well that good access to public services should be provided to all citizens.6 The federal government became interested in Newfoundland’s resettlement scheme during discussions in 1963 and 1964 between federal and provincial bureaucrats over fisheries development. Ottawa had accepted since 1949 that the inshore salt-based fishery as it was practised at the time of union had failed to provide an acceptable standard of living for those engaged in the industry. For more than a decade, however, it had insisted that solving the problem of the Newfoundland fishers was outside its constitutional bailiwick. With the arrival of the social service state and an acceptance of the state’s role in fostering economic and social development and improving the lives of citizens throughout the country, the federal government realized that many of those people who lingered in the isolated communities with poor living conditions and substandard public services could no longer be simply left alone. As the economy became more highly developed, citizens living in those isolated areas often remained without the skills and knowledge necessary to transition to the modern economy. Without state intervention they would remain vulnerable to underemployment, unemployment, and, invariably, poverty. Officials and politicians understood, too, that those who participated in the fresh-frozen fishery in the larger fishing centres with offshore fleets of modern trawlers enjoyed much higher incomes than

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those in the inshore sector. They and their families also had access to better education for skill training and knowledge. Given the shifting view in Ottawa, it was perhaps inevitable that the federal government became interested in resettlement as a way to deal with the large number of fishers engaged in an industry where productivity was declining and the cost of serving a scattered population rising.7 Resettlement was a public policy option that would serve a variety of needs but, as events were to show, the state planners never considered all of the social consequences of their plans. Even so, the relocation of fishers and their families from the sparsely settled outports of Newfoundland became one of the exemplary examples of cooperation between St. John’s and Ottawa. To that point, there had not been any real federal-provincial coordination of the resettlement of peoples in Newfoundland. On 23 December 1964, Smallwood’s request that Ottawa assume full responsibility for the centralization program was brought before – and rejected by – the federal cabinet. A provincial contribution was necessary to enlist the full cooperation of the federal government.8 The federal cabinet authorized, nonetheless, a federal-provincial working group to consider a long-term plan for the centralization of fishers, including the direct federal financial contributions which Pearson had earlier promised Smallwood. The working group of senior officials met in St. John’s from 2 to 5 February 1965 to review the available data on the fisheries resource and the economic aspects of the sector. It approached resettlement from both the perspective of welfare and fishery development and considered the program an “opportunity for improvement of income and living standards of fishermen.” The working group recognized the public cost to both the federal and provincial governments in providing public services to fishers who remained dispersed around the coastline as “exorbitant in relation to the present and potential productive capacity of such communities.” It discussed how only fifteen fishing communities in the province had a total population in excess of 600 in 1961 and agreed that public expenditure should be concentrated as much as possible on improving facilities in various “growth points.” For Ottawa, resettlement was a long-term socio-economic investment designed to facilitate the transfer of human resources from non-viable outlying communities to more favoured communities as a means of rationalizing the primary fishing industry and providing a better standard of living to people in outport Newfoundland.9 The program could serve a variety of policy needs.

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The working group relied on expertise already developed in the New­ foundland government on the spatial distribution of fishers in the province and tentatively identified several “growth points” that held potential for development as fishing harbours. These areas had already received substantial federal, provincial, and private investment for public services such as roads, marine facilities, schools, fish processing plants, and medical facilities. They also had a reasonable possibility of further growth and development, and the working group decided that fishers should be encouraged to relocate there. The group also compiled a list of eightythree communities that, based on the data, did not appear to have a stable economic future; these communities “should be given every reasonable encouragement to move to designated growth points where employment is available.” However, there should be no attempt on the part of either government “to close out communities or to black list them.”10 When the Rural Development Branch of the Agricultural and Rural Development Act (ARDA) later looked at the report of the Interdepart­ mental Committee on Centralization of Newfoundland Communities, it saw “a golden opportunity to plan for economic and pleasant settlements.” It envisioned well-planned communities emerging from the spatial reorganization, although it also realized that relocation might create a “very delicate and difficult situation,” since many people would be “totally unprepared sociologically and psychologically to live in large settlements where they [would] be strangers to their own neighbours and where they [would] have new commodities they [had] never dreamed of.” It suggested that a number of “social animators” and counsellors be dispatched to the remote communities and “prepare these people for the move, using all the techniques of social animation and information available.” The Rural Development Branch of ARDA suggested using the stick as well as the carrot to ease the transition to new communities. “We should strive to close down completely the small settlements and destroy the buildings to prevent people from squatting back in,” but people should be compensated for their losses. It was suggested that the state might even expect “requests to remove the dead from the cemeteries [as] these people feel strongly about these things.” For most, ARDA demanded too much state control and there is no indication that their recommendations were ever considered, though they asked to be consulted as the centralization schemes were implemented. Because they were largely ignored by both levels of government, Rural Develop­ ment officials within ARDA constantly criticized the federal-provincial

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centralization scheme throughout the late 1960s because it failed to adopt a “Master Plan” in favour of “traditional ad hoc cataplasms [poultices] which will not solve the problem at all.”11 The basic tenets of the centralization program had already been worked out when Ottawa became involved: first, priority should be given to isolated communities with only a few families and, second, responsibility for the administration of the program was to be left to the province even if Ottawa provided much of the cash. Although the cabinet authorized the establishment of a federal-provincial working group to formulate a broad, long-term plan for the centralization of fishers and worked to complete a formal federal-provincial agreement, the cabinet was uncomfortable with aspects of the proposed agreement.12 First, it was particularly worried that the proposal called for Ottawa to contribute 75 per cent of the funding for the scheme, with the province providing the other 25 per cent. Walter Gordon, by then the minister of finance in Pearson’s government, expressed considerable doubt about the proposed division of costs. Most cost-shared federal programs, such as ARDA and hospital insurance, had been negotiated on a 50–50 basis. Gordon feared that deviating from the standard might create a precedent in federal-provincial funding arrangements, even if his colleagues agreed that Newfoundland deserved special consideration, as it had not enjoyed the benefits that had been accruing to other provinces before 1949. Second, the cabinet wondered if Ottawa might have ventured further into the broader issue of labour mobility with Newfoundland than it was prepared to go with other provinces. The federal government had long assisted with moving expenses and resettlement grants elsewhere in the country, but its proposed involvement in the centralization policies in Newfoundland was much more invasive and costly than anything Ottawa had done previously. As for establishing a precedent for any future programs of labour mobility, federal fisheries minister H.J. Robichaud insisted that the resettlement scheme could be sold to the rest of Canada as merely a pilot project for such plans on a national basis. To preserve the existing 50–50 cost-sharing principle, however, Newfoundland agreed to boost its contribution so that the costs were shared more equitably. The cabinet also agreed that it could respond to any criticism from the Maritime provinces that the bilateral arrangement provided special assistance to Newfoundland by pointing to the special aid that had been earmarked for the Maritime provinces in other areas, and by emphasizing the necessity of coordinating and integrating all initiatives by both

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levels of government to deal with regional development.13 In the end, Ottawa contributed roughly 70 per cent of the cost of the new program. The objectives of the federal and provincial governments were clear when Robichaud and his provincial counterpart, C.M. Lane, announced the program in March 1965: the state had plans to redesign the spatial distribution of people in Newfoundland and Labrador to deal with persistent underdevelopment. Between four and five thousand households were to be relocated from small fishing villages where economic opportunities were limited to communities likely to provide both opportunities for employment and training and improved social and public services. Fishers were their intended target; the plan was to centralize the industry and it was supported by senior officials in both the federal and provincial departments and agencies. All agreed, it seemed, that “opportunities for improvement of income and living standards of fishermen would continue to be limited so long as fishermen remained dispersed in several hundred small fishing settlements.”14 The Royal Commission on the Economic State and Prospects of Newfoundland and Labrador came to a similar conclusion when it issued its final report in 1967. It accepted the withdrawal of people from smaller, isolated communities and encouraged the growth of the offshore fishery through centralization in a smaller number of communities: “the policy for declining areas was to reduce the number of people dependent upon the inshore fishery and increase the specialization and productivity of those remaining. Surplus labour would be encouraged to move under group resettlement programs to the offshore sector, other sectors of the Newfoundland economy or labour-short areas in other parts of Canada.”15 Although the provincial government steadfastly refused the notion of people migrating out of the province, there seemed to be a ready acceptance among many in Newfoundland and in Ottawa that there ­was a single or optimal policy choice within the province: resettlement. To these state actors, a rational decision had been made. Ottawa and Newfoundland believed that the policy they had agreed upon would create opportunities throughout the province and provide for essential educational, medical, communications, and social facilities, which were non-existent or maintained at critically inadequate levels in the non-­ viable outlying communities scattered along the coast. Moreover, both governments maintained that financial assistance and encouragement were needed for those families living in many isolated communities where they had little education and obsolete skills, both of which

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perpetuated subsistence-level survival and unrelenting poverty. There seemed no way in those communities to break the vicious cycle of poverty based on persistent low income and their dependence on transfer payments from the state. The movement of people would facilitate the rationalization of the primary fishing industry and provide a “necessary and logical development stage to enhance the economy of the province and region by encouraging the effective transition away from the primary industry.”16 On 16 July 1965 the governments of Canada and of Newfoundland and Labrador formally signed the Newfoundland Fisher­ ies Resettlement Program, a five-year cost-shared agreement to run until 31 March 1970. It was a long-term socio-economic investment plan that had two objectives: first, to facilitate the transition of human resources and movement of social capital from disadvantaged isolated communities to areas of greater opportunity for economic, social, and cultural benefit; and, second, to rationalize and develop a viable and dynamic twentieth century fisheries industry. Newfoundland Fisheries Resettlement Program, 1965 The program was to be administered by the Household Resettlement Division of the provincial Department of Fisheries rather than the Department of Public Welfare as was the case with the first iteration of the resettlement initiative. The agreement outlined the procedure for resettlement. Any settlement considering relocation had to convene a public meeting to discuss the matter, at which time the features of the program were to be outlined. If more than 50 per cent of the people attending the meeting expressed interest in relocating, a local committee of three, including a chair and a secretary, was to be elected and authorized to negotiate with the Resettlement Division of the provincial government. A petition had to be circulated in the community to obtain the signatures of the householders who wished to resettle. If 80 per cent of the householders agreed to relocate, a report of the meeting with the clear intentions of the community had to be sent to the director of the Resettlement Division. Those who signed the petition had to complete a “Notification of Intent to Relocate/Request for Employment” and on the basis of this information, the Household Resettlement Committee might approve in principle the resettlement of a community. However, before any firm commitment was made to individual families to allow them to access the funds available, a field worker from the division visited each family in the community; once his report had been submitted,

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the committee had to approve the community to which householders wished to move. Once it was determined that proper procedures had been followed, and the households were moving to an approved community, the Household Resettlement Committee approved the relocation of the community and each householder was sent through the chair of the Community Committee a “Resettlement Assistance Claim” Application. The application had to be returned, together with receipts for travel and removal expenses, after the move had been completed.17 A basic grant of $1,000 was available to each household and an additional grant of $200 for each member of the household. The basic grant comprised a resettlement grant of $400 and a fisheries readjustment grant of $200 from the federal government, plus a relocation grant of $400, the cost of which was shared equally with the province; the additional grant of $200 for each member of the household was also shared equally between the two governments. The federal government also covered the actual travel and removal expenses, as well as the cost of moving personal effects (upon the provision of receipts showing the expenses incurred), all fishing equipment, and other means of earning a living. The program did not provide compensation for the cost of the movement or replacement of real or immovable property, and any property abandoned, including the land and all structures that had not been removed, became the property of the Crown, except when fishers continued to use the premises for the purpose of carrying on their work.18 The agreement later permitted needy householders, such as widows and persons with disabilities, who wished to relocate from isolated communities to apply to the Fisheries Household Resettlement Committee on an individual capacity, in the same manner as individual applicants wishing to resettle to fisheries growth centres for employment purposes.19 The earlier provincial plan had been largely an unorganized movement of families and had resulted in the haphazard construction of houses in receiving towns that later made the installation of services such as water and sewage difficult and expensive. Under the new federal-­provincial scheme, the government exerted greater control over town planning and through the provincial housing authority created serviced townsites in at least eight locations designated as growth centres. These serviced lots were much more expensive than Newfoundlanders had been accustomed to paying for land on which to construct a home. Building a house had traditionally been a family affair where members of an extended family worked together to cut the wood and saw their own lumber to build their own homes, often on land owned by the family. New construction,

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however, had to conform to a National Building Code, and with the cost of serviced lots averaging between $3,500 and $4,000 – plus an estimated construction cost of $12,000 – the price of housing emerged as a potential deterrent to the government’s centralization plans. With annual family incomes averaging around $3,600, many households could not sustain the mortgage necessary to purchase a home. As Albert Vivian, the Newfoundland commissioner of housing, reminded the government after studying the issue, “such a price is beyond what the average [fish] plant worker can afford, or is prepared, to pay.” If not quickly resolved, the expense of housing might force many of those vacating isolated communities to smaller settlements where housing costs were considerably more affordable (in the range of $5,000–$7,000) but where community facilities were lacking and employment opportunities fewer.20 Without a solution to the housing crisis, not only was the resettlement program in jeopardy, but Smallwood also believed that the high cost of housing might force people out of the province. Since Confederation, net outmigration had become the norm as many Newfoundlanders sought better employment opportunities in mainland Canada. During the 1950s, the province experienced a net outmigration well in excess of 10,000, and that number more than tripled to 30,000 during the decade of the 1960s.21 People were abandoning the isolated communities where the prospect of employment was minimal and, if housing costs were considered exorbitant in Newfoundland outports, they might be tempted to follow their friends and family to mainland cities. “The people are going to move,” Smallwood said in a radio broadcast, “and without opportunity in Newfoundland, they will move out of the province.”22 Smallwood turned once again to Ottawa for a solution. He asked Prime Minister Pearson to arrange a meeting with federal and provincial ministers and officials to discuss how Ottawa might provide special financing to alleviate housing problems in the fishery growth areas. Smallwood reminded Pearson that Ottawa and Newfoundland shared a common goal in improving the standard of living of all Canadians and their working together to do so was an excellent example of “co-operative federalism in a very practical way.” The lack of affordable housing threatened both the resettlement program and the expansion of the fish processing facilities that had been established in the larger growth centres to service the expanding offshore fishing fleet. “We have,” Smallwood wrote, “an anomalous situation in which there are large numbers of unemployed and underemployed people [in isolated outports] and at the same time large scale unmet labour demands [in the growth centres].” Without a

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solution, he warned Pearson, the joint federal-provincial efforts to develop a modern fishery might come unravelled: “It provides the means whereby thousands of people can enter more fully into the social, cultural and economic life of this Province” while reducing the cost of maintaining a variety of services that would no longer be needed for the abandoned communities. Moreover, he had established a new Depart­ ment of Community and Social Development that would manage and oversee the introduction into Newfoundland of a variety of federal programs such as, through ARDA, the Fund for Rural Economic Development (FRED) to provide for rural development in designated areas, the Fisheries Household Resettlement Program, and the Company of Young Canadians. The province wanted to ensure that it created a structure that would be compatible with the projects developed by the federal government as these programs were “primarily directed to help people adjust to a new way of life in a modern industrialized society.” Housing was essential to all those initiatives, however, and Smallwood suggested a number of measures that Ottawa might offer to solve the immediate problem: the provision of an additional $3,000 grant under the federalprovincial resettlement program; the development of serviced land under a federal-provincial cost-shared agreement with Ottawa committing 75 per cent of the costs; the construction of rental accommodations; and a subsidy to individuals to bridge the gap between the financial resources available to them under the federal-provincial resettlement agreement and the cost of building or buying their homes on serviced land.23 Smallwood’s description of the problem found a sympathetic ear in Ottawa; most of his proposed solutions did not. As the Special Planning Unit in the Privy Council Office noted, the state has never subsidized individual house purchases with the occupant having the right to dispose of the dwelling as she or he saw fit. The cabinet refused to authorize any special supplementary housing grants to individuals to offset the cost of homeownership that Smallwood sought from Ottawa. It did, however, amend the 1965 resettlement agreement and authorized supplementary assistance of up to $3,000 for the purchase of a serviced lot for a household moving from a designated outport to an Approved Land Assembly Area in a designated fishery growth centre. A special grant of $1,000 was provided for a building lot outside Land Assembly Areas in other approved resettlement centres.24 The major fisheries growth centres were the eight towns around the province that were, historically, major fishing ports in which both levels of government saw increased fishing activity from the offshore sector; the approved resettlement areas were towns

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that the state believed had a favourable potential for development and employment opportunities. The Frozen Fish Trade Association made it clear that it considered the success of the resettlement program essential to the continued expansion and success of the fishery.25 The Newfoundland Fisheries Household Resettlement Program was administered by the province, but overseen by a Federal-Provincial Fisheries Resettlement Subcommittee consisting of five representatives from the federal government and ten from the provincial government. The joint committee was mandated to recommend on overall policies, including reviewing and approving applications from communities wishing to resettle; the selection of communities for those resettling who ­intended to continue in the fishing industry; projected dates for the commencement of removals from communities selected for resettlement; and administrative policies and procedures. It was also to settle any disputes arising from the administration of the program. In Ottawa, the Industrial Development Branch of the Department of Fisheries and Forestry assumed responsibility for the program, which was driven largely by the province, particularly those officials in the Office of the Premier and the Department of Fisheries, before responsibility passed to the Department of Community and Social Development.26 Both levels of government continued to emphasize that the program was to be voluntary on the part of the households. In 1968, when Jack Davis, the federal minister of fisheries, referred to a list compiled by the government of Newfoundland of communities to be evacuated, Premier Smallwood was appalled and angry. He asked K.M. Harnum, the director of the Resettlement Division of the Department of Community and Social Development, to explain. Davis had also said that between 70,000 and 80,000 people would be resettled in Newfoundland by 1980, although there does not seem to be any government directive to substantiate such a claim. The Federal-Provincial Resettlement Subcommittee had appointed a small group to review all settlements in the province and to report to the main committee of officials on their viability. It compiled a list of about 100 settlements that, in its view, were candidates for relocation. However, the Federal-Provincial Resettlement Subcommittee rejected the list. Harnum wrote the premier that it was “decided that as the question of resettlement was one entirely for the people themselves, it would not be possible to draw up any list of places, and still more it would be undesirable to do so.” Harnum also insisted that the FederalProvincial Subcommittee had rejected the suggested list and it was never put before the government or adopted as policy.27 The first steps had to

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be taken by the community in the form of a petition and the government offered guidance and support only when a community decided to consider relocation. However, the discussion and planning within a community often took on a life of its own and events sometimes quickly overtook a community and, frequently, in a short period of time most people had opted to leave.28 Smallwood was opposed to creating any lists of towns that had to be relocated, and as late as 1970 Ottawa expressed its frustration with his insistence that it should be the people’s choice to relocate. Writing the criteria for providing state support for resettlement to satisfy Smallwood, Tom Kent, the deputy minister of the Department of Regional Economic Expansion (DREE), lamented to his minister, Don Jamieson, was nigh impossible as Smallwood wanted a policy that essentially meant that “anyone could apply [for assistance] from anywhere in the province” and get it while placing few restrictions of who moved where.29 For example, in the case of Pushthrough on Newfound­ land’s south coast, residents there approached the provincial government about relocating and it was only after that initial contact that resettlement officials visited the community. To date, there has been no thorough study at the local level to determine exactly how the process of resettlement began in most communities. Although the cost-shared federal-provincial agreement was amended several times during the five-year period, its goals remained essentially unchanged: one, it was designed primarily as a long-term socio-economic investment to facilitate the transition of human resources and the movement of social capital from disadvantaged outlying communities to areas with greater opportunities for economic, social, and cultural benefits; and, two, to help rationalize and develop a viable and dynamic fisheries industry for the twentieth century.30 Both the federal and the provincial governments were keen to encourage the movement of people from isolated fishing communities to address labour shortages in some of the larger fishing communities where the offshore fleet was growing and to promote broader social and economic development of the province, especially through the promotion of education and skill training.31 To do so, the two governments together spent nearly $7.5 million during the life of the first agreement, with Ottawa contributing 67 per cent and St. John’s 33 per cent. Because of the voluntary nature of the program, both levels of government were worried about its momentum and the federal government in particular wanted to slow the pace of the requests for relocation to keep the program within its budgetary limits.32 The average level of assistance under the federal-provincial

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program was $2,295 compared to a maximum of $600 per household under the original provincial initiative of the 1950s.33 There was little opposition to resettlement as the two governments considered its renewal for an additional five years. Noel Iverson and D. Ralph Matthews, professors at Memorial University, concluded in their study of resettlement two years into the federal-provincial program that “it is not surprising that almost no one disagreed with the idea of resettlement per se, though admittedly there were some who disagreed with certain aspects of the program.” In many respects, they concluded, “resettlement is an absolute necessity if future generations of Newfoundlanders are to keep pace with the changing employment requirements of the province.”34 Federal-Provincial Resettlement Agreement Renewed, 1970 The federal government’s support for the resettlement program was only one of many ways that Ottawa injected both financial resources and influence into Newfoundland and Labrador. The federal presence was extensive, as Ottawa had made available, through government departments and various federal agencies, considerable sums of money for social and economic development in the province. Ottawa often had a hand in areas clearly under provincial jurisdiction such as road construction, investment in the forestry sector, and assistance to fishers to construct new boats and purchase modern equipment. There was, however, little coordination of activities within federal departments and agencies and perhaps even less between the federal and provincial governments. There was never a coordinated strategy with a coherent set of federal and provincial objectives and priorities that agreed on the issues facing the province, let alone on how best to address them adequately. In Newfoundland, “the Premier is the sole fountainhead for most, if not all, major and minor decisions concerning Newfoundland.”35 As the 1965 federal-provincial agreement on resettlement was about to expire, there emerged in Ottawa at both the level of state planners and politicians a policy to integrate federal priorities with provincial ones through three interrelated programs of industrial incentives, infrastructure assistance, and social adjustment. This aligned with the creation of the Department of Regional Economic Expansion (DREE) in 1969. Although it never achieved the level of federal-provincial understanding and cooperation that was essential for real success, it represented the first attempt to coordinate the federal regional development strategy and to work closely with the provinces to promote economic expansion and social adjustment in disadvantaged areas of Canada such as Newfound­land and Labrador.36

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Regional economic development also became a matter for high politics. We often forget that Pierre Trudeau insisted when he became prime minister that economic disparity was as great a threat to national unity and social cohesion as the French-English linguistic and other cultural cleavages. He believed a degree of economic equality was necessary for a strong, cohesive federal union; when the Constitution was amended in 1982, Trudeau committed Ottawa to promoting equal opportunity for all Canadians, furthering regional economic development, and providing essential public services of reasonable quality to all Canadians. The De­ partment of Regional Economic Expansion attempted to stimulate the growth of employment in economically challenged regions through incentive grants for private investment and, indirectly, through the creation of special areas as centres for potential development.37 This was done by tackling long-standing structural weaknesses in the economies of the lower-income provinces. The federal-provincial resettlement program fit neatly into DREE’s mandate when the program came up for renewal in 1970, and on 1 April of that year, DREE took responsibility for the federal portion of the resettlement program from the Department of Fisheries. The focus at DREE, unlike some of the earlier regional development programs, was not primarily directed to improving living standards and opportunities for particular workers (such as farmers or fishers) in economically depressed rural Canada per se, but in providing infrastructure and strategic investments to facilitate and encourage development and industrialization in those parts of the country that lagged economically.38 In fact, the federal government had lost interest in rural rehabilitation strategies, which had begun in isolated cases with the Prairie Farm Rehabilitation Act in the 1930s to promote sustainable rural farming communities in Western Canada and was continued, more generally, under the Diefenbaker and Pearson governments after 1957. Under Trudeau, Ottawa opted instead to provide increasing aid to industrial promotion and expansion in special areas where a high degree of success was believed likely. Ottawa wanted to pull people more aggressively out of rural areas into growth centres where prospects for employment were greatest, and it embraced resettlement as a way to move householders to communities with better access to health and other social services, educational facilities, and employment opportunities. Interestingly, the Department of Fisheries and the Department of Manpower and Immigration surveyed 19,000 workers at the Churchill Falls hydroelectric site in 1968 and found that only 2 per cent of workers were interested in obtaining employment in the fishing industry when the construction ceased in Labrador and most workers

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returned to their communities in Newfoundland. Low wages, poor working conditions, a lack of housing, and negative publicity regarding the industry were the most common reason offered for the growing disenchantment with the fishery.39 The challenge would be great, then, to rationalize and revive an industry in which many workers in Newfoundland expressed little interest. The goal was not to equalize economic opportunity across all the land mass of Canada, but to promote economic activity in locations that state planners believed had opportunity for success. The Department of Regional Economic Expansion was willing to subsidize industries and industrial development in Newfoundland so that workers there would have employment opportunities at home. The goal was to encourage the establishment of industry in areas where certain efficiencies were met and not simply to promote primary industries and the initial processing associated with them. Under this regional development model, the resettlement plan was decoupled from fishing. The emphasis was placed on industrialization and manufacturing (even the petrochemical industry proposed for Come By Chance was a good example of this).40 Ottawa favoured population concentrations and the provision of public services or improvements in social capital (particularly education and other skills training) in large urban industrial centres. Federal government planners believed that people should move from areas of high unemployment and underemployment to those areas of Canada where there were employment opportunities. Newfoundland never accepted Ottawa’s encouragement of inter­ provincial migration, in spite of generous mobility assistance designed to improve the productivity and efficient use of the Canadian labour force by balancing supply and demand.41 Officials in Trudeau’s FederalProvincial Relations Secretariat in the Privy Council Office often expressed regret that under Smallwood’s regime the province had contri­ buted little to joint planning: there was a “lack of conviction on the part of [Smallwood’s] Ministers that planning should be undertaken seriously, given top priority, and coordinated by a central agency with authority to decide and act.” Even the Department of Community and Social Development, whose authority it was to provide leadership for the provincial planning function, lacked a mandate to exercise authority over provincial line departments.42 They hoped that DREE might change all of this. The first federal-provincial agreement on resettlement gave individual households considerable choice over where they would move. As a

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result, state planners failed – if that was their intention – to encourage families to move to areas they believed had the greatest potential for economic growth and prosperity (see image 4.1). Between 1965 and 1970, of all households that relocated under the federal-provincial agreement, only 12.7 per cent moved to designated major fishery growth centres; 10.7 per cent moved to other fishery growth centres, 11.0 per cent relocated to other designated growth centres, 28.1 per cent moved to approved organized reception centres (usually small local trading centres), and 37.4 per cent moved to communities not designated under the agreement. As Copes pointed out, “it appears that the great majority of resettlement moves were made to relocation centres of low priority – or none at all.”43 This also meant that families moved into communities that could not provide sufficient housing, adequate schooling, and other community services or employment opportunities. This deficiency in the program had to be rectified but the planners in Ottawa realized this might be impossible: “we delude ourselves if we believe we can plan in fine detail for the pace or place of resettlement. In a free society people will move when they feel it is advantageous to them, and on the basis of the information that they have available, to where they feel they will maximize their advantage … the choice is [their] own.”44 The Department of Regional Economic Expansion would have a difficult time changing all of this. Years of state-assisted and state-controlled resettlement had not resulted in a more stable fishing industry. Beginning in the spring of 1966, when catches declined from overfishing and international prices collapsed as currency devaluations and government subsidies in Scandinavian and European countries led to a glut of fish on the American market, the Newfoundland fishery entered another period of prolonged crisis. The offshore fishing sector, at one time considered the saviour of New­found­ land, faced a bleak future, though many thought that if Canada asserted its control over the entire continental shelf and removed foreign fleets so that Canadians could harvest the resource all would be fine. However, the processing sector was suffering from overexpansion and the provincial and federal governments had to prop up the fish processing plants with direct operating loans or guaranteed operating loans from the banks.45 The situation was so dire for a number of companies – including Fishery Products Limited and North Eastern Fish Industries, Ross Steers Limited, Bonavista Cold Storage Limited, and Atlantic Fish Pro­cessors Company Limited – that Smallwood and Aidan Maloney, his minister of fisheries, met with representatives of the companies to discuss nationalization into

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4.1  Newfoundland: Resettled Communities, 1968. As a result of the federalprovincial program, nearly 150 communities and some 20,000 people were resettled between 1965 and 1975. The main areas affected were the islands of Placentia Bay, Bonavista Bay, and Notre Dame Bay, as well as communities on the southwest coast. Source: Copes, The Resettlement of Fishing Communities in Newfoundland, 111. Map provided courtesy of Maritime History Archives, Memorial University, St. John; cartography by Julia Siemer, University of Regina.

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a provincial Crown corporation that would acquire the processing plants and trawlers of the various companies. The government did not proceed because it was uncomfortable with nationalizing the province’s fishing industry and then having to be in the awkward position of negotiating the price of fish with fishermen and labour negotiations with plant workers. Several international companies that had recently established operations in Newfoundland, including the British-based Ross Group and Birds Eye, pulled out or sold their establishments to local operators. There were still too many fishers involved in the industry, and E.M. Gosse, the federal deputy minister of fisheries, stated that the fishery could sustain only one-fifth of those engaged in it in 1969. He wrote to his counterpart, Z.W. Sametz in the Department of Community and Social Development: Every effort in the past twenty years to siphon off the inshore fishermen to other vocations have [sic] completely failed and it should be assumed that the existing numbers will continue to eke out a bare existence augmented by welfare under the present system. Since the average age of our fishermen is approximately 40 years, we can only reach the conclusion that their plight will continue for at least another twenty years unless there are radical changes to modernize the industry.46

Rather than a small, elite corps of professional fishers operating with modern and sophisticated technologies both in the inshore sector and in a productive fleet of offshore trawlers, there were still more than 18,000 fishers in the trade. Gosse believed that the unemployment insurance system encouraged the continuation of the salt fish sector: fishers who sold their fish in a fresh state were required to fish a minimum of fifteen weeks to qualify for UI benefits but those who salted their catch were eligible for benefits regardless of the number of weeks they fished. Such a practice encouraged people to remain in the industry.47 In May 1970 the provincial government released a White Paper entitled “A Social and Economic Development Program for Newfoundland and Labrador in the 1970’s.” It acknowledged the province’s disparity with the rest of Canada as measured, for example, in labour force attachment, unemployment rates, productivity levels, and personal income per capita which was less than 62 per cent of the Canadian average. It also admitted that the “Provincial Government has long recognized that it is unable by itself to provide the scope of expansion in financial activity that is required,” but was “pleased” that Ottawa had established DREE as “a new Federal concept of providing assistance to help meet

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Newfound­land’s development requirements.” The Smallwood government made it clear that it needed the assistance of the federal government if it hoped to bridge the economic and social gap with the rest of Canada.48 When the federal-provincial agreement on resettlement expired on 31 March 1970, Ottawa and Newfoundland negotiated the Second New­ foundland Resettlement Agreement, which called for a much broaderbased program of development. The new agreement, slated to run until 31 March 1975, dropped the word “fisheries” from the title of the agreement, suggesting that it was designed to link the social adjustment program as directly as possible to the economic development of the whole province. In the previous five years, 140 communities had been evacuated, with 3,242 households and more than 20,000 residents resettled; Ottawa paid approximately 70 per cent of the cost.49 Ottawa had become worried about costs during the final year of the initial agreement with the number of requests from communities to relocate. It wanted to keep the program within its projected budgetary limits. With the new agreement the federal government was to pay a substantially greater proportion of the resettlement costs. The Second Resettle­ ment Agreement continued to pay to eligible householders the actual cost of removal, a slightly enhanced relocation grant of $1,200, and an additional relocation grant of $200 for each member of the household. The new agreement called for a Resettlement Committee of Newfound­ land (nominally known at the Joint Planning Committee), composed of four representatives each from the government of Canada and the government of Newfoundland. The committee – significantly smaller than the original committee of 15 people – was to review and make recommendations on administrative policies and procedures, and determine the merit of applications from householders and other persons who applied for assistance under the program for removal costs. The change in committee structure reflected Ottawa’s desire to see the ministers responsible for the program exercise greater control, rather than a group of bureaucrats. The objective going forward was not simply to encourage fishery growth centres but to assist the development of all central locations in the province that had a viable industrial future. This would have included towns such as Grand Falls and Come By Chance, which did not depend on the fishery. Householders were eligible when relocation promised to improve their employment prospects; widows or people with disabilities who relocated to improved circumstances were also included. The new agreement provided for advance payment to facilitate the process of resettlement.50

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In keeping with the new philosophy as articulated in DREE, the federal government became more generous and increased its share of the standard relocation grants from 50 to 75 per cent, thereby reducing the provincial obligation from $100 to $50 per household. As part of the DREE strategy it created twenty-two “special areas” across eight provinces, including eight areas in Newfoundland (St. John’s, Corner Brook, the Burin Peninsula, Grand Falls and Gander, Stephenville and St. Georges, Hawke’s Bay, Come By Chance, and Happy Valley-Goose Bay in Labrador). These special areas received assistance to promote economic expansion and social adjustment, and because employment opportunities were exceptionally inadequate in the case of Newfoundland, six additional areas were designated as “receiving centres” under the federal-­ provincial resettlement program.51 Ottawa was particularly generous with householders who moved to a special area. The special areas were provided with new water and sewer systems, roads, and often schools. Ottawa provided 90 per cent of the relocation grants of $3,000 for serviced building lots approved by Newfoundland and Labrador Housing and the federal minister and a maximum of $1,000 towards the cost of a building lot in other areas. Ottawa wanted people to move into organized, serviced lots in the special areas. The federal government also agreed to reimburse the province for 75 per cent of the cost of acquiring house-moving equipment up to $150,000 annually, which Newfoundland insisted was essential for the success of the program. Ottawa increased its contribution from $1.4 million in fiscal year 1969–70 to $2.5 million a year later; Parliament voted on the federal contribution annually. The program was administered by the province, and it would make payments to those who relocated; Ottawa would reimburse the province for its share of the costs, including 100 per cent of the amounts expended for travel and removal expenses and 75 per cent of the relocation grants. William N. Rowe, the provincial minister responsible, informed the cabinet that the new agreement was better than the initial one and he hoped that it could be improved further once DREE became more experienced with the program.52 Smallwood’s Approach to Federalism Challenged By the time the resettlement agreement had been renewed in 1970, the political situation – as well as the political culture – in Newfoundland was showing signs of change if not of revolution. At its core was a new way of thinking about the province’s relationship with Ottawa. Many were beginning to resent the paternalistic relationship created between Ottawa

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and Newfoundland during Smallwood’s twenty-year tenure. His view of Canadian federalism was increasingly out of touch with that of many Newfoundlanders. At the First Ministers’ Conference on a proposed Charter of Rights and Freedoms and Constitutional review held in Ottawa from 5 to 7 February 1968, for instance, Smallwood articulated forcefully the necessity of a strong central government that would address the needs of have-not provinces like Newfoundland. However, many in Newfoundland were increasingly uncomfortable with Small­ wood’s interpretation of what a strong central government actually entailed. For Smallwood, it was all about transfer payments and the perpetual reliance on “Uncle Ottawa”: “the more money that is made in Ontario, the better for Newfoundland,” Smallwood remarked at the conference. “We joy in it! We take sheer delight! I sit up and chuckle to myself over all the money that is being made in Ontario because equalization means that the Government of Uncle Ottawa collects it where it is made and passes back to those provinces that have less … We are weaker when Ontario is weaker.” Smallwood believed that Ottawa was the protector of the economically weaker provinces like Newfoundland, and that any attempt to reduce Ottawa’s role – as argued for by Quebec Premier Daniel Johnson – was striking a blow to Newfoundland.53 William N. Rowe gave an example of Ottawa’s reach when he applauded the creation of DREE in 1969 to stimulate development in economically depressed areas. He insisted that only Ottawa could bridge the gap in the standard of public services that existed across Canada. Only through massive federal expenditure could Newfoundland hope to achieve the level of public services that other, wealthier provinces enjoyed. He believed the right to a national standard of public services should be enshrined in the constitution, as it was the right of all Canadians to have equality of economic development, living standards, and public services.54 However, many in Newfoundland and Labrador no longer wanted their leaders to go, cap in hand, and beg Ottawa for help. Two decades of union had left many of them disillusioned, believing that Confederation had not lived up to the expectations of 1949. The high levels of outmigration, the mounting level of public debt and increased levels of taxation, systemic problems in the fisheries that seemed to result in one crisis after another, and the disparity in wages and living standards compared with the rest of the country created a sense of despair. But there was also a sense of hope, spawned in part by the growing urgency of what James Overton labelled a neonationalist movement based on the romanticism of the traditional ways and led by the growing urban middle classes.55

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4.2  Pushthrough, early 1960s. It was resettled in 1969 when families relocated primarily to Fortune, Hermitage, Milltown, and Gaultois. (Photo by Conrad Hiscock; image provided courtesy of John Marsden)

Open dissent in Smallwood’s cabinet over continued – and generous – state support for questionable industrial development, such as a phosphorous plant at Long Harbour that threatened the local environment and the petrochemical facility at Come By Chance, and the resignation of two young and popular cabinet ministers (Clyde Wells and John Crosbie) were all indications that political change was imminent. The federal Liberals – which were seen as little more than an extension of the Smallwood-dominated provincial Liberal party – first felt the wrath of the angry Newfoundland electorate in the 1968 general election when all but one of the seven federal constituencies voted Progressive Conservative.56 Only Donald Jamieson managed to hold his seat and even then with a substantial reduction from his previous 1966 by-­ election victory. The Liberal Party of Newfoundland and Labrador realized that resettlement had become a lightning rod for the province’s dissatisfaction. At its 1970 convention it pledged support for development in communities that resisted resettlement and preferred “to live where they have always lived, to follow the pursuits in which they had grown up, and yet at the same time to be able to afford some of the improved standards of living that hitherto have gone only to ‘centralization’ that some individuals and families do not want.” The party later introduced a Rural Community Development Program and provided financial support to the newly created Newfoundland Council for Rural Development.57 But it was too late

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to save the Liberals. After winning six consecutive majority governments, Smallwood refused to surrender the Liberal party to a younger generation of politicians. A very public and nasty leadership battle with former cabinet minister John Crosbie in 1969 demonstrated Smallwood’s megalomania and his thirst for power. Combined with growing opposition from the new labour movement, notably teachers and fishery workers, Smallwood’s embrace of flamboyant and shady promoters to develop ever-more ambitious mega-projects, the continuing economic malaise, and the growing opposition to resettlement, Newfoundlanders were ready to look elsewhere for political leadership.58 Federally, they briefly found it in the 1968 election with the Progressive Conservatives, then led by former Nova Scotia premier Robert Stanfield. But their real hopes lay with the provincial Progressive Conservatives under Frank Moores. He campaigned in the 1971 provincial election on the theme of change. Promising new policies on resources and economic development and new money for rural parts of the province, he captured 51 per cent of the popular vote in an electoral system that was weighted in favour of the rural vote. The PCs bettered Smallwood by one seat, sending twenty-one members to the House of Assembly followed by twenty for the Liberals and one for the New Labrador Party. Smallwood refused to resign until judicial recounts confirmed the results and even then he went reluctantly. The Conservatives won a decisive majority five months later with more than 60 per cent of all votes cast. Rural devel­ opment was one of their key policy areas, perhaps to capitalize on the growing resentment towards Smallwood’s embrace of urbanization and industrialization. When Moores became premier, he created a Depart­ ment of Rural Development and eventually established rural development associations in every region of the province. Moores later told his biographer that resettlement started the generational cycle of dependence on welfare in Newfoundland and it “did more to suck the moral fibre out of Newfoundlanders than any other single thing.”59 In July 1972 he announced a thorough review of the federal-provincial resettlement plan. Shortly thereafter he introduced several changes that effectively nullified the federal-provincial resettlement program. Compensation for relocation would be based on individual circumstances and the regulations mandating that whole communities had to agree to relocate were quickly dropped. Communities would no longer be designated as “receiving” and “leaving” and no one would ever again be forced to leave their homes, Moores said, because a community had decided to relocate.60 The federal government agreed with this new policy and Donald Jamieson, then the

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federal minister from Newfoundland, noted in a speech in St. John’s that Ottawa was also willing to assist individual families to relocate rather than require a substantial portion of all people in a community to move before assistance was provided.61 The number of families relocating dropped off precipitously after the Conservatives came to office: 381 families had moved in 1970–1, 253 in 1971–2, 82 in 1972–3, 99 in 1973– 4, and 28 in 1974–5, although an additional 79 households had been approved for relocation before the federal-provincial agreement was to expire. A further 38 applications were awaiting review by the federalprovincial Resettlement Committee. During the Second Resettlement Program, 29 communities were relocated compared to 119 between 1965 to 31 March 1970. The two programs had seen 20,656 people relocated from 312 communities.62 By 1972, both Ottawa and St. John’s had made considerable improvements in reducing the level of isolation throughout the province. More than 95 per cent of the population then had a road connection to the provincial grid and enjoyed electricity, some form of water and sewage services, telephones, and radio and television. Moreover, with the growth of federal and provincial income maintenance programs and a variety of employment creation opportunities, many rural residents were enjoying a reasonable year-round income. A Report of the Joint Planning Committee from the Newfoundland Resettlement Committee completed in 1973 noted that these factors contributed to the decline in the numbers being assisted but it expected that more than 500 additional families would be relocated before the program expired in 1975.63 In 1974, the Moores government renamed the Resettlement Program as the Community Consolidation Program and assigned responsibility to the Department of Rural Development.64 As the second agreement was about to expire, the Moores government created an Advisory Committee to review the program and to advise the cabinet on whether it should be continued and, if so, in what form. Because of declining interest in the program, the committee recommended that the Resettlement Agreement as it then existed be discontinued when the agreement expired. It recommended a phase-out period to 31 December 1976 to allow all those approved for relocation to complete the process. To help understand the rationale for residents still seeking assistance to relocate, the committee surveyed the 420 applicants who had applied between 1 January and 20 November 1974. More than 75 per cent indicated that they moved for employment reasons and the remaining 25 per cent for social reasons. The committee recommended

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that those moving for employment reasons receive assistance under the federal Canada Manpower Mobility Assistance Program. If support was not available through the federal government, applicants applying for relocation assistance were considered on an individual basis – not on a community level – and the new regulations required that an individual had to demonstrate that he had assured employment in an area or community other than where he was then residing before a relocation grant was approved. The main objective became assisting families to relocate to secure employment. The government nonetheless realized that when families vacated their homes in many rural communities there was little opportunity to recover any of their investment in housing; the provincial relocation assistance was seen as a form of reimbursement to the householder for his real estate loss.65 Moreover, the committee realized that there might still be a “social” need for resettlement, as approximately 400 settlements with a limited population continued to lack some basic services such as electricity, water and sewage, health care, and adequate educational facilities. It also noted that in many of those rural communities homes were located at the base of steep cliffs and mountains “presenting extreme hazards from rocks and landslides.” Several children had been killed in a landslide in Harbour Breton in 1972, and some twelve homes were relocated to a safer location as a result. The Advisory Committee recommended that the government continue to respond to the social needs of these citizens if they asked to be relocated. The cabinet accepted the committee’s report and agreed to discontinue the Canada-Newfoundland Resettlement Agreement at the end of March 1977 to ensure that all commitments made in 1976 to householders could be honoured during the fiscal year. That effectively meant that the Resettlement Program that had begun in 1954 was over. The cabinet agreed that if there should be a “significant demand” at some future date for relocation, it should be handled within an existing program such as the Canada Manpower Mobility Program or through the provincial Department of Social Services. Both orders of government agreed that they would continue to provide assistance for people to move from completely isolated communities to those with a road connection and to provide access to employment, medical attention, and schools.66 James Reid, the provincial minister responsible – and the Moores government generally – wanted it known that the resettlement program of relocating whole communities was gone forever. Yet, Reid realized that some communities had much brighter futures than others. As he noted in a letter to Newfoundland federal MP James McGrath, “there are communities in

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Newfoundland that can use people from outlying and isolated areas” even if those communities were not designated as growth areas by the state. While some DREE officials believed that the resettlement program had ended prematurely, they had no choice but to accept the wishes of the Newfoundland government. The Federal-Provincial Resettlement Committee met for the last time on 29 March 1977. Its only item of business was to approve the minutes of a meeting held two weeks earlier. The federal-provincial resettlement program was over. The Newfoundland government adopted new nomenclature of “community consolidation” and continued to assist households with their relocation plans, but did so in a much more muted manner than had been the case under the previous federal-provincial arrangement.67 Conclusion Newfoundlanders had come to realize by the late 1960s that the solutions to their troubles lay not in Ottawa, as Smallwood had told them for more than two decades, but with themselves. His brand of federalism – based on the generosity of a benevolent uncle with whom they had to maintain good relations – had become anachronistic in the modern society that had matured in Newfoundland since the end of the Great Depression. Among the newly educated elites – most of whom, ironically, had passed through Memorial University, which Smallwood had established and promoted – there was a belief that the time had come for them to manage their own affairs. The electorate that could recall the pre-Confederation days had lost its control over Newfoundland politics and the province was ready to embark on a new post-Confederation era. Perhaps the province’s future lay not with the industrialization and urbanization that Smallwood sought and the resettlement program had come to increasingly represent, but through greater control of the province’s natural resources. In an act more of symbolic than economic importance, in 1974 the province nationalized Brinco, the private utility that had developed Churchill Falls. The province had matured. It now believed it had the capacity to manage its own affairs. It was a belief that would place it on a collision course with Ottawa and usher in an extended era of acrimonious federal-provincial relations.

5 Unravelling the Question: Federal or Provincial Jurisdiction of Offshore Oil and Gas

Introduction A new breed of politician emerged in Newfoundland and Labrador in the early 1970s, who held that the province’s long history of underdevelopment and poor economic performance was attributable to a succession of unscrupulous developers and industrialists who had pillaged the province’s resources in their own interests. They also believed that much of that development had occurred with tacit state support, a trend they were determined to reverse in order to assert greater control over the development of the province’s natural resources. This new political class believed that the provincial government could best ensure that the citizens of Newfoundland and Labrador reaped the full benefits of all ­future resource development, which would have to provide a better social and economic return for everyone. However, as political leaders in Newfoundland and Labrador increasingly looked to the provincial state to play a greater role in the exploitation and management of the province’s remaining resources, Canada’s new prime minister, Pierre Elliot Trudeau, and his key advisors were becoming increasingly wary of the tendency among the provinces to challenge Ottawa’s capacity to govern in the national interest. Ottawa saw recent attempts at province-building as an attempt to diminish the role of the national government. Even so, the new players within both the federal and provincial states heaped considerable scorn on the practice of cooperative federalism that Prime Minister Lester B. Pearson had promoted in the name of national unity and social citizenship and that Premier Joseph Smallwood had embraced as Newfoundland’s best chance of catching up to the rest of Canada. Frank Moores and Brian Peckford, the most representative and prominent

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Newfoundland politicians of the new era, saw Pearson’s and Smallwood’s cooperative federalism as paternalistic and disparaging of the province while offering little prospect of bridging the economic and social gap that existed with the rest of Canada. Pierre Trudeau, who became Canada’s fifteenth prime minister in 1968, saw Pearson’s federalism, at best, as accelerating the descent towards a more decentralized and weakened nation-state and, at worse, as leading to the annihilation of Canada. Together with many of the new politicians and mandarins he recruited to Ottawa, Trudeau was committed to reversing the decentralist tendencies in Canadian federalism by enhancing the economic powers of the federal government, just as the first post-Confederation generation of political leaders in Newfoundland came to office committed to a more activist provincial state and demanding greater control over resource development and the well-being of Newfoundlanders and Labradorians. It was perhaps inevitable, then, that the 1972 provincial election, which ended the twenty-three-year rule of Joey Smallwood and handed power to Frank Moores and the Progressive Conservatives, ushered in a period of acrimony with Ottawa not seen since the late 1950s, when Smallwood waged all-out war on then-Prime Minister John Diefenbaker. The conflict between Newfoundland and Ottawa that marked much of the 1970s and early 1980s did not begin as a partisan war of the kind waged by Smallwood against Diefenbaker; it began as a disagreement between two conflicting visions of Canada and Canadian federalism. But it, too, eventually degenerated into a prolonged period of bitterness, distrust, and acrimony of the type that has periodically marked Canadian federalism. To Trudeau, unscrupulous and greedy premiers threatened to destroy Canada as a national community; it was his duty to save the country from such avaricious, irresponsible, and reckless provincials. Brian Peckford, first as Newfoundland’s minister of mines and energy and later as premier, had a different conception of Canada than Trudeau. Provinces had to manage their resources – even those for which Ottawa claimed exclusive control – as the provincial state was primarily responsible for the social and economic well-being of its citizens. The strong central governments that had held power in Ottawa since Newfoundland joined Canada in 1949 had not succeeded in narrowing the economic and social gap between Newfoundland and the other provinces. Only the provincial government could foster a sustainable economic and vibrant social community in Newfoundland and bridge those gaps with the rest of Canada. A strong national community was possible only if Canadian federalism provided a fair measure of equality among the provinces. The conflicting

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philosophies of national development marred relations between New­ foundland and Ottawa from the mid-1970s, and the acrimony that resulted can best be seen in the confrontation over the ownership of the mineral resources on the continental shelf off Newfoundland.1 Ownership of Offshore Oil and Gas: A Long-Standing Question The history of oil and gas in Canada has been one of struggle between governments for control.2 The Constitution Act, 1867, gave the provinces control of natural resources within their boundaries but left interprovincial and international trade and taxation to the federal government. With the discovery of potentially huge reserves of oil and gas offshore in the 1950s and 1960s, a new vexing question emerged: did provincial boundaries extend to the outer limits of Canada’s territorial sea, or was this area the preserve of the federal government? The provinces were the first to claim the offshore. In 1959, Nova Scotia granted exploration permits for Sable Island. As international interest in the oil and gas potential off Canada’s east coast accelerated, the Atlantic premiers staked their claim to the subsoil and seabed under the continental shelf. The subject dominated discussion at the 1959 and 1960 conferences of the Atlantic premiers, and Professor Gérard V. LaForest, special adviser to the Maritime provinces, concluded they had a strong legal case for control based on their pre-Confederation rights. When provincial ministers of mines met in Quebec City in October 1960, they adopted a unanimous resolution claiming offshore mineral rights to be within their jurisdiction.3 The federal government saw things differently, however. It had issued its first permits for offshore exploration in 1960, only a year after Nova Scotia had done so, and it subsequently staked its claim to the whole offshore mineral resource in the Canada Oil and Gas Land Regulations it enacted on 6 June 1961. These regulations were designed to stimulate the search for oil not only in the submerged lands beyond the low-water mark on the east and west coasts but on all Canadian lands. This included all territory in Canada not within provincial boundaries. The federal regulations also served as a reminder to the provinces that Ottawa would fight for control of development over the continental shelves.4 With companies focusing their search for oil and gas off the coast of British Columbia in the early 1960s, and all coastal provinces aggressively staking their claim to the lucrative resource that might lie beneath the seabed, Ottawa moved to establish its own claim to the offshore. Following their annual meeting in September 1964, the four Atlantic premiers

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issued a statement asserting their provinces’ jurisdiction over all submarine minerals underlying their territorial waters, including those on the offshore banks. British Columbia made similar claims. The Atlantic premiers had decided to introduce a motion claiming provincial jurisdiction over the offshore at the 1964 federal-provincial conference, hoping, no doubt, to win the support of other premiers and forcing Pearson into accepting their position.5 Wanting to avoid a confrontation with the premiers, the prime minister short-circuited the provincial initiative and asked the Supreme Court to adjudicate the question of ownership of the offshore. Although other federal countries had followed a similar route, Pearson’s decision, coming just before a first ministers’ conference, was clearly politically motivated as it removed an emerging irritant in federal-provincial relations from the political forum.6 As development was moving most rapidly on the West Coast and as Ottawa believed that British Columbia had the weakest legal case of all the provinces, it asked the Supreme Court to decide whether Canada or British Columbia owned the offshore and who had the right to exploit the mineral resources in Canada’s territorial sea. A win there, the federal government hoped, would establish a precedent for the whole country.7 Pearson thus successfully nullified an attempt by the Atlantic premiers to secure a political solution to the thorny question of ownership. Still, at the federal-provincial conference held in Ottawa in October 1964, Atlantic premiers presented their joint statement outlining their claim, requesting that Ottawa accept provincial control of submarine mineral resources.8 As chair of the committee of Atlantic premiers, Small­wood resorted to Atlantic exceptionalism as a primary reason why Ottawa should set aside the uncertain legalities of the issue and extend the boundaries of the Atlantic provinces to include the submarine lands. Had Ottawa not nearly tripled the size of Quebec, Ontario, and Manitoba when it handed them northern lands in 1912? Had it not in 1930 rectified the inequities on the prairies when it transferred to Alberta and Saskatchewan ownership of the natural resources within their bound­aries? The Atlantic provinces had had no such benefits bestowed upon them. “We received no recognition when huge sections of Canada were added onto the older and more powerful provinces,” Prince Edward Island Premier Walter R. Shaw added. Moreover, it was the wealth generated by Atlantic Canada that had helped finance the westward and northern expansion of Canada after 1867. It was finally their turn, Smallwood argued, and he called on Ottawa to recognize Atlantic Canadians’ right to the new offshore frontier. Further, this would also be a means of addressing the

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perpetual regional disparities and the economic imbalance in the federation that existed between that region and the rest of Canada and help to socially and economically transform his province. Federal magnanimity would also go some distance to removing the sense of historical grievance that the Atlantic provinces had long felt against the central government.9 For Pearson, however, the potential financial gain to the national treasury was too great to allow the offshore to pass into provincial hands. The revenue could be used to meet Ottawa’s increasing obligations in social policy, for instance, but he reassured Smallwood that Newfoundlanders would share in the benefits of the offshore along with all Canadians.10 Smallwood was unconvinced, however, and he continued to work towards establishing provincial control over the offshore. In 1965, the year before the Pan American-Imperial Oil consortium confirmed the presence of hydrocarbons on the Grand Banks, Newfoundland passed the Petroleum and Natural Gas Act, requiring oil companies exploring for petroleum on land and under the seabed to obtain provincial permits. On 4 February 1966, Smallwood announced that deep-sea drilling would begin on the Grand Banks.11 From then until 1987, when the regulations under the Atlantic Accord took effect, all oil companies required permits from both the federal and provincial governments to explore offshore. The issuance of permits by St. John’s was part of the provincial strategy to assert exclusive jurisdiction over the offshore just as Ottawa’s introduction of its regulations had been part of its strategy to strengthen the federal claim. Smallwood dispatched divers to walk the ocean floor and lay a plaque, claiming the territory for Newfoundland. Not even the Supreme Court’s 1967 ruling, dismissing British Columbia’s claim to the offshore, diminished the optimism in Newfoundland. The Supreme Court could not have been clearer in the case of British Columbia, however: “There is no historical, legal or constitutional basis upon which the Province of British Columbia could claim the right to explore and exploit or claim legislative jurisdiction over the resources of the continental shelf.” Still, the decision offered considerable hope to Newfoundland as it suggested that provincial histories determined ownership of the territorial seas and subsurface rights on the continental shelves.12 New­ foundland believed that it controlled the territorial seas prior to union and that its pre-1949 rights to the offshore were preserved in the Terms of Union. The Supreme Court’s dismissal of British Columbia’s claim had clearly strengthened Ottawa’s hand in the offshore sweepstakes, but Newfoundland held that if it had not joined Confederation in 1949, Canada would have little claim to the continental shelf.

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5.1  Although Smallwood supported Pierre Trudeau at the 1968 Liberal leadership convention, he soon found that Trudeau dismissed Newfoundland’s claim to the mineral resources beneath the continental shelf. Smallwood dispatched divers to the Grand Banks to lay a plaque, claiming the territory for Newfoundland. Here, Premier Smallwood and Prime Minister Trudeau share a laugh at the Liberal leadership convention on 6 April 1968, which Trudeau won. (Photo by John McNeill/The Globe and Mail [Smallwood and Trudeau: CP 01690215])

Is Newfoundland’s Offshore Different? The Supreme Court’s decision delighted the federal government, which insisted that the judgment was equally applicable to the East Coast. In the aftermath of the ruling, Ottawa turned immediately to deciding how potential revenues from oil and gas development in the Gulf of St. Lawrence and the Atlantic Ocean should be shared. Should revenues accrue exclusively to Ottawa or should they be shared with the provinces? If the latter, should all provinces reap the benefits or only those contiguous to the resource?

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Unlike Pearson, who had promised in 1964 that he wanted to negotiate revenue sharing and the scale and pace of development with the provinces even as he moved the issue to the court,13 Trudeau believed that Ottawa alone should decide all matters of administration and management and the dispersal of revenue from offshore mineral resources. With a favourable Supreme Court ruling on the West Coast, Trudeau hoped that the first big oil strike would be off British Columbia as he believed that would force the eastern provinces to fall into line and accept Ottawa’s authority over the offshore.14 Although he would become much more interventionist in regulating and controlling the oil and gas industry in Canada after the oil shock of 1973, Trudeau, from the time he became prime minister, keenly asserted federal dominance in the offshore despite opposition from the provinces, who continued to demand that they should play an equal role in any development that would considerably affect them. For Trudeau, Ottawa’s share of the revenue was never as important as establishing provincial recognition of federal dominance in the jurisdiction and administration of the offshore, even though he recognized that offshore oil and gas development could have a “uniting effect.”15 He agreed that all of the provinces should share in the revenue collected from offshore development, but he believed that for all the provinces, including Newfoundland, the only issue that mattered was securing revenue from the resource and that ownership and control were of secondary importance. However, it would be the struggle to control the pace and method of development that would be the major point of contention between Newfoundland and Ottawa for nearly two decades.16 Trudeau asked the Cabinet Committee on Federal-Provincial Relations to bring forward a proposal on revenue sharing, which he announced in Parliament on 2 December 1968. A few days earlier, he had outlined his plans in a letter to the four Atlantic premiers. Despite his feeble attempt to please all interested parties, the letter was actually a unilateral federal declaration, rendered without any consultation, let alone negotiation, with the provinces. It was also an attempt to divide the provinces. That approach itself was enough to seal the fate of Trudeau’s proposal in Atlantic Canada. First, Ottawa proposed to establish “mineral resources administration lines” to administer the politically alienated continental shelf on a functional basis.17 Lines were to be drawn 5 kilometres offshore from the Atlantic coastline to politically divide the territorial sea on a functional basis between federal and provincial authorities. Ottawa made it clear that all submarine territory beyond the low-water mark

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seaward belonged to the federal government, and that it alone had exclusive jurisdiction over the whole continental shelf. It would, however, permit the provinces to develop the area on the landward side of the mineral resources administration lines and collect all revenues from oil and gas development in that zone. The federal government would have exclusive rights on the seaward side. Under such a regime, the provinces controlled a meagre 9 per cent of the nearly 52 million square kilo­ metres that made up the continental shelf. Moreover, early surveys had shown little promise for oil and gas near shore, except around Sable Island. Second, Trudeau proposed the sharing of all resource revenues on a 50/50 basis between Ottawa and the ten provinces (the territories were excluded) because he believed the continental shelf belonged to all Canadians and not only to the residents of coastal provinces. He insisted that such a distribution was “both important and equitable” in a national community, and that it would help to maintain social cohesion and unity across Canada. However, to avoid the heavy hand of Ottawa in deciding which provinces received what share of the revenue, he left it to the ten provinces to decide how they would divide their share of the revenues from the national pool, with the caveat that if the provinces failed to reach an arrangement within two years, Ottawa would impose one.18 The eastern provinces saw his actions as a clear example of federal arrogance and categorically rejected his proposal The Atlantic premiers were still considering their strategy on how best to deal with Ottawa in light of the Court’s ruling when Trudeau’s proposal arrived. It had to be studied, they told him, noting that it was “somewhat more unilaterally definitive than we might have expected.”19 Although that provincial process had hardly begun, the premiers agreed on two things: first, the ruling on British Columbia did not apply to them; and second, Atlantic Canada had to be the main beneficiary of oil and gas development in the region. After decades of being second-class provinces in the federation, they had no interest in sharing the new revenue with the other wealthier provinces.20 What would also become clear over the next several years was that the interests of the Atlantic premiers were too varied and divergent to allow even the four of them to maintain a common front in their negotiations with Ottawa, although their first attempts to do so showed some promise. On 16 July 1968, the eastern provincial energy ministers formed the Joint Mineral Resources Commit­tee (JMRC) with a mandate to make recommendations on how best to “initiate and foster co-operation among the provinces” to resolve the management of mineral resources in the submarine lands in

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the region.21 It was a modest beginning at cooperation and coordination of effort in a region where hostility and jealously had long been the hallmarks of previous interactions. Just two years previously, Smallwood had withdrawn from the Atlantic premiers’ conference, claiming that he preferred to deal directly with Ottawa. Since then, the tension had intensified as Nova Scotia and Newfoundland became embroiled in a bitter dispute over boundaries as they jockeyed to expand their claims over the offshore.22 At the same time, Smallwood had John C. Doyle, the president of Canada Javelin Limited who was keenly in­ terested in expanding his operations offshore, solicit an opinion on Newfoundland’s legal claim to the continental shelf from the New York law firm Diamond Colomb and Steel. The law firm’s response confirmed LaForest’s earlier assessment that since Canada derived its claim to the offshore from its union with Newfoundland, and because New­ foundland had never surrendered such rights to Canada, the province retained ownership of the offshore. Smallwood and his successors maintained that Newfound­land’s case on the offshore was stronger than that of any of the other Atlantic provinces.23 With the longest coastline and the strongest claim to the offshore, Newfoundland believed it had more at stake than the other Atlantic provinces and was worried that collaborative action with its eastern neighbours might jeopardize its rightful claim. For instance, Prince Edward Island, with little prospect for significant oil and gas discoveries off its coast, favoured the pooling of revenue as Trudeau had proposed, even if it insisted that the revenues be shared regionally rather than nationally. Nova Scotia and New Brunswick were willing to consider Trudeau’s proposal. Newfoundland had no intention, however, of sharing the offshore with those who held weaker claims to the potential revenues.24 When the JMRC discussed the creation of an eleven-person federal-provincial administrative agency to supervise the exploration and exploitation activities offshore, Newfoundland was to be allotted two members, the same as Quebec and Nova Scotia, but less than the three proposed for Ottawa. Nova Scotia agreed that Newfoundland could have a slightly higher share of revenue from its adjacent continental shelf, but refused to afford any special role to Newfoundland in the administration of the offshore. It insisted that the issuance of permits and other management decisions could not be delayed by a particular province for ­“political and economic goals.”25 It became clear to Ottawa that the Atlantic premiers had no intention of sharing the revenues from offshore development with the other

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Canadian provinces, except through the standard revenues collected by the national government. The provinces were interested only in increasing their share of any revenues coming from the offshore. Trudeau chafed under those demands, describing them at one point as attempting to exact “special preferential entitlement,” something that he found abhorrent in the Canadian federation even as his chief legal adviser, Ivan Head, advised that the Atlantic provinces had a strong legal case. He told Trudeau, “if I was asked to advise Newfoundland of its legal position, I would have to say, having regard to the potential amounts of money involved, that it should contest Ottawa’s claim.”26 Trudeau hoped to take advantage of the divisions among the Atlantic premiers to establish Ottawa’s claim and, on 2 December 1969, revised his offer. Although none of the premiers had bothered with a formal reply to his initial proposal, he urged them to accept the federal proposal in principle and promised flexibility as they negotiated a final agreement. Realizing that each province was worried that another might secure a more lucrative agreement if it finalized an agreement too quickly, he tried to reassure the premiers they would not be penalized for being the first to come to terms with Ottawa: I can appreciate that a Province might hesitate to reach a settlement with the Federal Government before other Provinces have done so, in case one of more of the later settlements might involve significant changes in the administration lines. I believe it would facilitate reaching bilateral arrangements with individual Provinces if we were in this particular case to adapt to federal-provincial use the principle that has been utilized for many years to enable governments on the international scene to reach agreements in matters of trade. This principle assures participants to an agreement that if one of them gives more advantageous terms to any party later on, then all parties to the original agreement will receive similar benefits.27

Trudeau was also prepared to separate the issue of jurisdiction from that of administration and proposed that a federal-provincial board be appointed to jointly administer the offshore. Nova Scotia and New­ foundland, as the two provinces holding the greatest oil and gas potential, were most vehement in their opposition to Ottawa’s earlier proposal, but they found the revised offer a little more appealing.28 Even so, a day after receiving Trudeau’s second offer, Smallwood declared Newfound­ land’s ownership of the mineral rights on the continental shelf in the 1970 Throne Speech.29 Still, some common ground was emerging.

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William R. Callahan, Newfoundland’s minister of mines, agriculture, and resources and chair of the JMRC, wrote federal energy minister Joe Greene that he might be willing to discuss the offshore if Ottawa agreed to three conditions: first, set aside the question of ownership; second, accept joint and equal administration of the offshore; and, third, abolish the proposed mineral administration lines as unworkable.30 The Atlantic provinces were prepared to drive a hard bargain. Discussion continued in Trudeau’s cabinet, which realized that it had to improve its offer if it wished to reach a deal with the Atlantic provinces. If it were flexible on the financial arrangements, it might split what it called the “common front” of eastern premiers. During the summer and fall of 1971 the federal government considered several options, beginning with reducing its take from 50 per cent of offshore royalties to 30 per cent and offering the adjacent provinces 50 per cent to be divided according to provincial negotiations. It would still allocate 20 per cent to a national pool shared by all provinces. If this proved unacceptable to the Atlantic premiers, cabinet then proposed a complicated scheme to create three offshore zones for revenue-sharing purposes. The first two zones would each be about 80 kilometres wide and the third would extend all of the way to the end of the continental shelf. Within each zone revenues would be shared three ways: an all-province pool, a federal share, and a share for the coastal provinces. In the near zone 10 per cent was proposed for the all-province pool, 30 per cent for the federal government, and 60 per cent for the coastal provinces; in the middle zone, the share would be allocated (in the same order) 10–50–40; and in the far zone, 10–75–15. The farther the development occurred offshore, the greater would be Ottawa’s take, clearly cementing its claim to ownership. After considerable discussion, however, the cabinet realized that such a complicated arrangement was unworkable and dropped it. It also considered dispensing with the idea of a national pool of revenue to be shared by all ten provinces that the Atlantic premiers had found so reprehensible. Cabinet instructed Greene to explore with the provinces a revenue-sharing formula that gave 40 per cent to those provinces adjacent to the development and a further 20 per cent to be placed in a pool to be shared in some equitable fashion by the four Atlantic provinces. Ottawa would retain the remaining 40. The minister was to make it clear that Ottawa would not relent on the question of ownership and any agreement that the provinces negotiated had to recognize federal ownership of the offshore.31 At the same time, the cabinet considered raising the provincial share closer to the 70 per cent that both Nova Scotia

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Premier Gerald Regan and Smallwood had indicated was the minimum necessary for a settlement. It also agreed to accept Nova Scotia’s claim to the submerged mineral rights off Sable Island. Regan had written Trudeau earlier that if awarded full economic and financial benefits of the Sable Island development, he might “be more flexible on subsequent negotiations relating to the underwater area.” If Ottawa could get one province to finalize an offshore deal, the others might be forced to follow suit.32 Newfoundland Makes a Case for Its Exceptionalism and Rejects Atlantic Alliance When he became premier in January 1972, Frank Moores insisted that control of Newfoundland’s natural resources would no longer be surrendered to outsiders, as had happened with hydroelectric development in Labrador and in some of Smallwood’s industrialization schemes. The idea of blaming outsiders was not new to Newfoundland; it was a political strategy with a long pedigree in the province. And, of course, blaming external actors and forces was a much more enticing political strategy than placing responsibility within the province.33 Moores’ focus was on resource development – especially the utilization of the oil and gas industry, which many regarded as Newfoundland’s final frontier resource – and the promotion of small- and medium-sized businesses. Trudeau’s declaration of federal sovereignty over the offshore threatened those hopes and raised the ire of many Newfoundlanders who were demanding greater control over the development of the province’s natural resources. This was particularly galling to the Moores government because it believed Ottawa had already mishandled the offshore file. Between 1968 and 1970, the federal government had granted exploration permits to approximately 80 per cent of Canada’s eastern continental shelf at exceedingly low rates; the province, on the other hand, had awarded interim permits with production rights to only 10 per cent of the continental shelf. The federal permits were non-negotiable until 1996, and they were given with royalty rates at between 5 and 10 per cent – the lowest in the world according to Newfoundland energy minister Leo Barry. Newfoundland vowed never to grant production rights at such lax terms. It was another “giveaway,” as Ottawa had made no serious attempt to determine the value of the resource and seek a fair value for it. The New­ foundland government argued that one way out of the predicament was for Ottawa to recognize the province’s constitutional rights to manage the

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offshore resources. This would allow it to impose new regulations and rectify the mistakes already made by Ottawa and protect the resources in the best interests of both Newfoundland and Canada.34 Such demands from Newfoundland were unusual. In a 1974 report submitted to Prime Minister Trudeau on the state of federal-provincial relations it was observed that Newfoundland now approached Ottawa with more self-­ assurance than the “so-called sheikdom of Alberta,” and that it was taking “Ontario-like” positions on issues. “It may be that Newfoundland, after 25 years of all-too-obvious dependency on Ottawa, wants, among other things, to find a more respectable basis for its relationship with the federal government.”35 Moores was not at all convinced that he could work with the other eastern premiers as he pushed Newfoundland’s demands on the offshore. Since 1968, the JMRC had failed to agree on a common strategy for the region; it had become little more than a debating club. C.W. Doody, the province’s new minister of mines, wrote to the JMRC in April 1972 asking if the five eastern provinces were “still approaching the matter of offshore mineral rights as a joint venture.”36 The interprovincial JMRC met a month later, in May 1972, and reiterated its commitment to a common front in the federal-provincial offshore negotiations.37 Meanwhile, Moores advised Donald Smith, the federal minister of energy, mines, and resources, that Newfoundland would like to work in concert with the Maritime provinces and Quebec, but he could not promise that it would not pursue an independent course of action. Although he instinctively favoured bilateral negotiations with Ottawa, Moores attended a two-day meeting of the Atlantic premiers and the Quebec vice-­premier in June 1972 and was convinced to continue the multilateral approach to Ottawa. The premiers had rejected Trudeau’s proposal for a 50–50 revenue-­ sharing agreement and reassured Moores that they were committed to winning provincial ownership of mineral resources off the Atlantic Coast and in the Gulf of the St. Lawrence.38 There were several advantages in working together. First, it allowed the region to speak with a single voice rather than a fragmented one, and if the five provinces remained united Ottawa would not be able to play one against the other. Second, Quebec’s presence strengthened the voice of the Atlantic premiers in Ottawa. With the Trudeau Liberals heavily dependent on Quebec for electoral support, Moores hoped that having that province onside strengthened the region’s hand in any negotiations with the federal government. Third, he had nothing to lose by continuing to work with the other eastern premiers. If the negotiations resulted in any agreement that he

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considered unsatisfactory, Moores believed that because his legal claim to the offshore was much stronger than that of the other eastern provinces he could always reject it.39 The Newfoundland government believed that it was a sovereign coastal state at the time of union in 1949, and the Terms of Union had made it clear that the British North America Acts from 1867 to 1946 applied to Newfoundland as if it had been one of the original provinces, except for any special provisions contained in the Terms of Union. The Terms, then, became critical to the question of ownership: did the minerals of the continental shelf belong to Newfoundland on 31 March 1949? Term 37 protected all the mineral rights that it owned before it joined Canada; there had been no transfer of mineral rights from St. John’s to Ottawa. The Terms also recognized the boundaries that existed before Confed­ eration to allay any fears in Newfoundland about Labrador, which Quebec also claimed. Newfoundland had insisted that “the island of Newfound­ land and the islands adjacent thereto, the Coast of Labrador … and the islands adjacent to the said Coast of Labrador” included the continental shelf and all minerals that might be found in the subsoil. This threw the matter into the realm of international law and whether territorial control by coastal states was recognized in international law before 1949, when Newfoundland entered Confederation. If so, Newfoundland would have had control of the continental shelf by virtue of being a sovereign international actor and recognized as such in international law prior to union with Canada.40 The question was not if coastal states controlled minerals on the adjacent seabed, but when exactly did the continental shelf doctrine become recognized as part of international law. Newfound­ land’s case rested on the argument that it occurred before union in 1949. In early August 1972, Newfoundland and Quebec issued a joint statement making it clear that they would accept nothing less than Ottawa recognizing provincial jurisdiction over the offshore and both provinces effectively opted for bilateral negotiations with Ottawa.41 An appeal to the courts was an increasing possibility given that both sides in the offshore dispute had become intractable. In a letter to Nova Scotia Premier Regan, chair of the premiers’ meeting, Trudeau wrote that he would not meet the premiers to discuss ownership and jurisdiction. Unless the courts ruled otherwise, Ottawa would “have to insist on federal administration.” He would, however, meet to discuss the division of revenue that would come from offshore development. If the premiers continued to insist on provincial ownership of the mineral resources on the seabed, he threatened to refer the issue to the Supreme Court, a

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threat he used repeatedly both to reinforce the federal position and as a negotiating tactic. Trudeau also reminded Regan that Nova Scotia was seeking federal assistance for a variety of initiatives, including the Glace Bay Heavy Water Plant, and he should “review his relationship with Ottawa on offshore mineral rights in a broad context” of federal aid.42 Moores immediately dismissed Trudeau’s bravado, as he believed that Ottawa wanted a negotiated settlement, especially with Newfoundland.43 At the same time Moores harboured a growing unease with Nova Scotia as that province had become more aggressive in its dispute with New­ foundland over their interprovincial boundary (which was only settled by an arbitration tribunal in 2001). Doody wrote his Nova Scotia counterpart shortly after the premiers’ meeting in 1972 that if oil and gas were discovered in the disputed areas, it would place a “severe strain” on any regional and interstate consensus.44 Moores soon dropped any pretense of regional solidarity and dismissed the notion of a regional approach on the offshore as he opted to proceed alone. The growing gulf between Newfoundland and Ottawa, and Newfound­ land and the other members of the JMRC, was evident in a meeting between Trudeau and the Atlantic premiers and the vice-premier of Quebec on 9 April 1973. Federal and provincial officials had made substantial progress after Regan had suggested to Trudeau earlier in the year that a joint board with a provincial right to veto certain management decisions might break the impasse between Ottawa and the provinces. At the meeting, Newfoundland insisted that the adjacent province should have the policy and administrative controls necessary to ensure that the maximum possible revenues and economic spin-offs would accrue to it; Moores could not see a regional board such as the JMRC protecting Newfoundland’s interest in the offshore. While it was willing to consider a joint federal-provincial management arrangement, Newfoundland insisted on having veto powers over a variety of matters, including: disposition of mineral rights; setting royalty rates; the approval of transfers of mineral interests (farm-outs, etc.); marketing and processing of crude; and the use of the federal government’s discretionary powers to extend and amend permits. Both Newfoundland and Quebec demanded that revenues be split 90 per cent to the adjacent province and 10 per cent to Ottawa. The federal cabinet agreed that 75 per cent of revenues might accrue to the provinces, but it was unwilling to surrender to Newfound­ land’s demands. Ottawa grew increasingly weary of being able to satisfy provincial demands while protecting federal interests.45

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A few months later, Newfoundland effectively killed any hope of regional cooperation and signalled to Ottawa that it would settle for nothing less than an equal voice in the management of the offshore. Parallel to the interprovincial negotiations, Newfoundland had earlier insisted on proposed bilateral discussions with Ottawa. In September 1973, just days before the energy crisis spawned by the Yom Kippur War, which began on 6 October 1973,46 Newfoundland presented Ottawa with a detailed proposal for a political solution to the offshore. It was based on an Australian agreement that settled the offshore jurisdictional dispute in that country. Actual day-to-day administration would be centred in St. John’s, but major management decisions would be subject to a federal veto when there was a conflict with federal jurisdiction as defined by the Constitution. There would be a 90–10 split in the sharing of revenue, and Newfoundland laws would govern the offshore during exploration and development as if the activity in question had taken place within the province and under full provincial jurisdiction. The proposal was consistent with the present conception of federalism in that it recognizes that a Province’s ownership of and jurisdiction over natural resources provides the primary means whereby a Province obtains the revenue and industrial base necessary … to discharge its constitutional duties of providing for the general economic and social needs of its citizens.47

Moores’ dismissal of the interprovincial, multilateral negotiations surprised the other eastern premiers, who continued to advocate a joint approach to the federal government. The Council of Maritime Premiers, which had been created by Nova Scotia, New Brunswick, and Prince Edward Island, was angry, as was Trudeau, but Regan asked Trudeau for a most-favoured nation treatment should Newfoundland later prove successful in its claim to the offshore. An indignant prime minister told the cabinet not to waste much time studying Moores’ proposal and wrote  Moores, characterizing the Newfoundland proposal as seeking “unilateral authority over offshore mineral resources with some territory which is beyond the boundaries of the Provinces.” The proposal was “unacceptable,” Trudeau wrote, and “could not be used as a basis for future discussion.” Newfoundland might be given an advisory role in mana­ gement decisions but the offshore development was essentially federal because of its “national character.” It required uniform and efficient management throughout Canada, standardized policies for resource

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5.2  Premier Frank Moores at the First Ministers’ Conference in Ottawa in 1978. He rejected all notions of federal control over offshore oil and gas development and also refused to participate in interprovincial, multilateral negotiations than the other Atlantic premiers preferred. He negotiated directly with Ottawa on the offshore but without success. (CP 712736)

management, the enforcement of federal conservation practices, the provision of Canadian criminal and civil law, and negotiated agreements with foreign states. Ottawa would lose all sense of national control if the provinces had jurisdiction; moreover, provincial control would lead to five separate offshore policies and administrative regimes in the Atlantic region. The cabinet decided that Trudeau would advise Moores that if Newfoundland could not accept the federal position and continue to

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negotiate together with the other four eastern provinces, then there was no alternative but to settle the matter through the courts. Newfoundland refused to fall in line and withdrew from joint negotiations through the JMRC. Ottawa now had to deal with competing interests on the East Coast. The region became even more factious when Quebec later disassociated itself from the Maritime provinces.48 For Newfoundland, the issue was control over the pace and mode of development, not revenue. That demand for control became more untenable for Ottawa after the outbreak of the Yom Kippur War in 1973. Even before the ensuing energy crisis, the minority Liberal government (which depended on the support of the left-leaning New Democrats) had embraced a program of economic nationalism and was forced to pay attention to the necessity of energy security. A new energy policy was designed to curb oil and gas exports and to regulate prices for Canadians outside the oil-producing provinces. Trudeau’s plan to reduce Canada’s dependency on foreign suppliers and embark on a nationalist energy strategy worried Moores. In 1974, when Ottawa created Petro-Canada as a state-owned oil company to participate directly in exploration and development of Canada’s oil and gas reserves in areas of federal jurisdiction, Moores feared that Ottawa had become so consumed with supply that it would rush the development of offshore reserves without considering the disruption such a strategy would cause in Newfoundland and Labrador and how it would impact the province’s long-term future. He told Trudeau at the opening of the First Ministers’ Conference on Energy held in Ottawa on 22 January 1974 that Newfoundland did not “expressly or by implication relinquish any rights to offshore resources” at Confederation. He demanded that Ottawa recognize Newfoundland’s right to manage and derive revenues from natural resources, and he fully supported the constitutional right of Alberta and Saskatchewan to capture the full economic rent from the sale of oil and gas at market prices during the rapid increase in world price.49 In response to Trudeau’s dismissal of his proposal, Moores replied “I regret even more … not having the opportunity of a discussion with you ... prior to your response to it.”50 Cabot Martin, the legal advisor to the Newfoundland minister of mines and energy, observed that the federal government had been too generous with the exploration companies to secure production as quickly as possible for consumers and industry in eastern Canada. The Newfound­ land government was sadly aware of its lack of political influence in the federation, and it knew that its seven federal seats (four of which were held by Progressive Conservatives) were little match for the political

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power wielded by Ontario and Quebec, which demanded a secure supply of oil. If control of the offshore remained in the hands of Ottawa politicians and bureaucrats, Newfoundland could not possibly hope to maximize the benefits for the province. Without provincial control the pace and nature of development would be in the hands of Ottawa and the oil companies – a development that Moores had vowed to reverse when he became premier. Few in the province wanted its rate of social and economic change determined by Ottawa. As Martin frequently pointed out, the provinces had been given control of natural resources in 1867 as a means of fostering economic development. Yet, with the concentration of industrial and political power in central Canada, which relied heavily on the exploitation of natural resources in the regions, Ontario and Quebec saw provincial control over those resources as contrary to the national interest. The “federal” interest, Martin insisted, had been created as a way to guarantee raw materials at reasonable prices to feed the insatiable demands of Ontario and Quebec. In the process, Ottawa – and, seemingly, now Trudeau – had forgotten about the national goal of “eradicating regional economic disparity.”51 Shortly after he became premier, Moores had created a Department of Mines and Energy and established the Energy Resources Division to monitor the ongoing offshore exploration. He was more concerned than the other premiers with the social impact of offshore development, and his government launched a series of studies to investigate the impact of oil and gas in other countries, particularly around the North Sea, and realized that development would bring serious social and economic dislocation as well as benefits, especially if there was rapid and uncontrolled development. The province wanted to avoid the problems that had plagued other oil-producing areas. It also believed that revenues from the offshore had to protect and enhance rural Newfoundland and that this could be achieved only if the province controlled the pace and nature of exploration and development. The government proposed a highly interventionist approach to the development of the offshore resource along the lines pursued by the North Sea countries.52 For Moores, it was more about control over development than capturing resource rents. With the federal government refusing to give Newfoundland little more than an advisory role in offshore development, Moores knew that the province would be powerless to control the things that it felt mattered. It eventually adopted what might be termed the North Sea model with a greater emphasis on state control than was the case in the development of the industry in Alberta. As Martin pointed out:

Jurisdiction of Offshore Oil and Gas  171 Federal management of Newfoundland’s offshore petroleum resources … would place Ottawa in an overwhelmingly dominant position with regard to determining the rate of social change within the province … The rate, and perhaps the direction, of social change will be determined in part by the rate and type of offshore development permitted, and control of these parameters is inexorably related to control of offshore management generally.53

Some in the local St. John’s business community were also worried about outside control of the oil and gas development. Harold Snyder, the director of engineering firm C-Core, told the St. John’s Rotary Club that the federal government had already sold out both Newfoundland and Canada in its rush to develop the offshore oil field: We are witnessing the geology of our [continental] shelf being interpreted in Calgary, the engineering performed in Paris, the operations directed from Houston, the regulations being developed in Ottawa and economics dictated by the Middle East.54

Others insisted that Ottawa was under tremendous pressure to find the oil resources to “light Toronto and Montreal homes.”55 The Evening Telegram supported Moores, claiming that if we establish title and jurisdiction we will be making decisions on exploration and exploitation. If we have a good stock of oil and gas we don’t want it scooped out in a few years leaving us with a busted economy and a hole in the ground … So we say fight on.56

The Moores’ administration did not look to “Uncle Ottawa” for leadership as Smallwood had; it was determined to share in the control over the offshore and it vowed never to agree to a mere consultative role. After winning the 1975 provincial election, Moores’ administration became more aggressive in asserting its claims over the offshore even though Ottawa had offered to give Newfoundland 75 per cent of the revenue from any offshore oil development. Premier Moores even raised the sceptre of separation as a way to push Newfoundland’s case: We have oil, that’s been proven. Every time they stick a well in the ground, it produces. The problem is getting control of it. It’s our oil, but Ottawa wants it. If the Supreme Court decides against us, we will not accept the decision. We will secede from the Confederation, if necessary, and come

172  Lions or Jellyfish back in on our own terms. We don’t need a lot of offshore oil and gas to satisfy the needs of our small population, but we want the first shot at what we have.57

Leo Barry and John Crosbie had set the province’s agenda on the offshore as ministers of energy and resources, and both believed that the issue would only be settled through the courts.58 When Crosbie resigned in September 1976 to enter federal politics, Moores appointed Brian Peckford, at the time the relatively obscure minister of municipal affairs, to charter the course for the emerging oil and gas industry as well as Newfoundland’s long fight with Quebec over hydroelectricity. Three years later Peckford would replace Moores as premier, determined to change the nature of Canadian federalism.

6 The Nationalists: Trudeau, Peckford, and the Struggle for Offshore Oil and Gas

Introduction The relationship between Ottawa and Newfoundland changed dramatically in 1977 when the three Maritime provinces briefly agreed to a political settlement that accepted Ottawa’s control over the offshore. In February 1977, New Brunswick, Nova Scotia, and Prince Edward Island signed with the federal government an agreement entitled the “Adminis­ tration and Management of Mineral Resources Offshore of the Maritime Provinces.” The proposed agreement provided for joint management of offshore mineral resources for the Maritime provinces through the Maritime Offshore Resources Board. It was given exclusive management authority by both levels of government and was to set the terms for exploration, issue permits for exploration and development, receive and distribute revenues from the resources, and ensure that economic benefits accrued to the three provinces. Ottawa assumed all operational costs of the agency but it also controlled the board, which was comprised of three federal appointees and one from each of the Maritime provinces. In the event of a deadlock in the joint federal-provincial agency, the final decision was to be vested in the federal minister of energy, mines, and resources. The Council of Maritime Premiers that negotiated the deal did not want to “draw attention” in the agreement to the fact of Ottawa’s control, but Ottawa had demanded that Nova Scotia Premier Gerald Regan (as chair of the Council of Maritime Premiers) indicate in a separate letter that the final agreement would include a clause acknowledging Ottawa’s ultimate responsibility and authority (or federal paramountcy) over the offshore. The revenues flowing from the resources (excluding export, commodity, or income tax) would be divided

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between the two levels of government with 75 per cent going to the provinces. All revenues from development within five kilometres of the shoreline would go exclusively to the provinces, and all economic rent from the development of Sable Island reserves would accrue to Nova Scotia. It was also agreed that if another coastal province (specifically, Newfound­ land) negotiated a better deal with Ottawa, then the Maritime provinces would be offered similar concessions; however, this would not apply if Newfoundland, for instance, won a “better” position through the courts than those accorded to the Maritime provinces.1 Prime Minister Pierre Trudeau had exerted considerable pressure on Regan to negotiate a deal on the offshore as he hoped that an agreement between Ottawa and the Maritime provinces would force Newfoundland to similarly agree to federal control of the offshore.2 Although the agreement was never ratified, it embodied a federalprovincial collaboration that continues to define offshore oil and gas development in Canada. Yet, the proposed 1977 agreement left New­ foundland isolated and it had to fight Ottawa alone for provincial control of the offshore mineral resources. Federal energy minister Alastair Gillespie had written his Newfoundland counterpart, Brian Peckford, immediately after he concluded the deal with the Maritime provinces, encouraging him to agree to a similar arrangement. Peckford dismissed the Maritime arrangement. His federal colleague Conservative MP John Crosbie similarly scorned the Maritime acceptance of Ottawa’s offer as a “sick joke.”3 Peckford and Crosbie claimed that the provinces would actually get only a small proportion of total government revenues from a Maritime-type arrangement, as Ottawa refused to share any of the federal corporate income tax it collected, nor would it share any of PetroCanada’s 25 per cent take of the development as mandated by federal legislation. What Ottawa offered was 75 per cent of royalties, which was a  small share of the total federal share of the economic rent.4 The Opposition Conservatives in Nova Scotia shared those concerns and before the agreement could be formally ratified, the Liberal government in Nova Scotia was defeated.5 One of John Buchanan’s first acts as the new premier in 1978 was to withdraw Nova Scotia’s support for the agreement because, like Peckford, he believed the agreement not to be in the province’s best interest. With Nova Scotia having just one vote of the six-member board, it would leave the province vulnerable to the priorities established by the other two Maritime provinces as well as to Ottawa’s objectives. Moreover, allowing the federal energy minister to cast the decisive vote in the event of an impasse with the provinces only added to

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his worry, Buchanan said; Nova Scotia was powerless if it disagreed with Ottawa’s priorities. The proposed agreement gave the federal government control over all the important decisions. Buchanan believed that Nova Scotia should have a greater voice in matters of control and a greater share of the revenues. A few months after the signing of the draft Maritime accord, Newfoundland released a White Paper and draft regulations for the administration and disposition of petroleum that later became the Petroleum and Natural Gas Act of 1977; the accompanying regulations were enacted into law in 1978. The policies had been developed within the Department of Mines and Energy and had been driven largely by Peckford. The policies embodied several assumptions: first, federal recognition that the offshore fell within provincial boundaries; second, Newfoundland’s demand for control of the offshore would not be met in the proposed Maritimes-type agreement with Ottawa; third, the province wanted 75 per cent of all government revenues from offshore oil production; and fourth, Newfoundland was ready to pursue the matter through the courts if Ottawa refused to accept its demands. Peckford insisted that the draft agreement between Ottawa and the Maritime provinces failed to address any of his province’s concerns. Under the proposed provincial regulations, Peckford insisted that Newfoundland stood to earn an estimated $35 billion in revenue compared to $10 billion under the arrangement Ottawa had negotiated with the Maritime provinces (based on proven reserves at the time).6 The White Paper was the clearest signal to date that Newfoundland would not surrender control over the exploration and development of the continental shelf, and it came with no consultation with federal officials or ministers before the regulations were announced. Newfoundland Premier Frank Moores warned Gillespie that Newfoundland would have the matter in the Supreme Court by February 1979 if Ottawa continued to refuse to recognize the province’s claim.7 That proved an idle threat but the Moores government insisted, nonetheless, that offshore activity had to reflect provincial objectives; it had adopted an approach to oil and gas development based on the model adopted in Norway. Unlike Norway, however, Newfoundland was part of a federal state and its goals for the offshore conflicted with the interests of the national government in Ottawa, which continued to insist that oil and gas were too important to leave to the provinces. Newfoundland’s comprehensive set of oil and gas regulations demonstrated that it no longer believed a political settlement with Ottawa to be possible, and that it would settle for nothing less than control over the

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6.1  Brian Peckford became premier of Newfoundland and Labrador in 1979 and was quickly deemed the “bad boy” of Confederation for his determined fight with Ottawa, particularly over control of the offshore oil and gas resources. (The Rooms Provincial Archives of Newfoundland and Labrador, A86–70)

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offshore. Peckford acknowledged that the oil companies would provide the capital and the expertise required to develop the resource, and because only the provincial state had the capacity to understand how people of the province would “bear the brunt of any negative social and economic impacts,” it had to have a fair measure of control over the pace and nature of development. Only it could enforce the rigorous demands needed to protect the province and its people on the companies exploring for oil and gas off Newfoundland. The White Paper insisted that exploration would continue only on Newfoundland’s terms. It demanded a preference for Newfoundland goods, labour, and service in the drilling program, insisted on funds for research and development and education and training, required local refining and processing for offshore crude, and laid out plans for provincial control of the pace of development. The new policy also required all companies to hold a provincial permit to explore the offshore, even though the federal government also required the same companies to follow federal regulations.8 The oil industry was appalled, and Eastcan, one of its major players, reportedly promised Peckford that it would spend $50 million in exploration if the government made major and favourable changes to the regulations. When he refused to budge, the company moved its oil drilling rigs from the Grand Banks fields. Other companies similarly withdrew from New­ foundland, but Peckford insisted that the province would “not trade minor short term benefits at the expense of its long term objectives. The decision by Eastcan,” he insisted, “must be placed squarely in the context of the overall struggle to ensure the resources are developed for the benefit of the province.”9 Peckford understood that with potential reserves in excess of 26 million barrels (similar to the North Sea discoveries), the oil companies could not ignore the province’s offshore for long. Each household in the province was sent a copy of Heritage of the Sea, which outlined the province’s case for ownership of the offshore mineral resources.10 The oil companies returned the following year.11 Peckford Becomes Premier On 26 March 1979, Peckford became Newfoundland’s youngest premier, at thirty-six years of age, following the resignation of Frank Moores. A former high school teacher in Springdale in rural Newfoundland, Peckford was a modern-day Oliver Mowat who believed in provincial rights and the equality of the provinces. He was also a Newfoundland nationalist.

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Shortly after becoming premier, with the opposition Liberal party in disarray, he called a provincial election. Despite installing Don Jamieson, a prominent federal cabinet minister and one of Newfoundland’s favour­ ite sons, as their leader, the Liberals could not possibly win the election. Peckford had cleverly and successfully defined a ballot question that left voters with a clear choice: were they a part of the new nationalist movement that wanted to take control of Newfoundland, or were they a part of the old hands-out-to-Ottawa party? Some described the choice as between the “take-back” Conservative party or the “giveaway” Liberal party.12 Promising that Newfoundland would be a have-province if it embraced his vision, Peckford won a convincing victory, taking thirty-three of fifty-two seats and more than 50 per cent of the popular vote. A month earlier, on 22 May 1979, the Progressive Conservatives had won a minority government in Ottawa, and the new prime minister, Joe Clark, promised to treat offshore resources the same as those on land. A new relationship with Ottawa was emerging, and it looked as if Peckford would deliver on his promise. On 12 September 1979, Clark wrote Peckford that the government of Canada would recognize Newfoundland’s right to ownership of the oil and gas resources on the continental shelf. Although Clark insisted that Canada had sovereign rights over those resources in accordance with international law and had a legal obligation to enforce federal environmental regulations and be responsible for shipping and navigation and other federal powers, he would treat the resources as if they were located within the boundaries of the province and abandon Trudeau’s ­insistence on an East Coast revenue pool to be shared among the provinces.13 However, Clark’s government fell on a motion of confidence in late 1979 and a federal election on 18 February 1980 saw the return of Pierre Trudeau and the Liberal Party. Trudeau immediately repudiated Clark’s promise. He had told angry students at Memorial University during the campaign that giving the offshore to Newfoundland “is something I cannot do.”14 As Memorial University President Les Harris wrote in the Canadian Annual Review of Politics and Public Affairs after Trudeau’s return, Premier Peckford “put on the full armour of righteousness with buckler of birthright and breastplate of provincial rights replacing the erstwhile shackles of economic imperialism and opportunities denied.”15 In the throne speech delivered five days after Trudeau’s return, Peckford claimed that Newfoundland had been denied a reasonable share of the necessary levers of fishery, hydro transmission, and offshore resources, which were absolutely essential for the enrichment of Newfoundland

Struggle for Offshore Oil and Gas  179

society. He warned Ottawa that he and his party would be “unstinting in  our efforts to advance the proposition of equal treatment” within Canada.16 The government dispatched another circular to all households showing how Ottawa was determined to gain control over New­ foundland’s resources. At the same time the introduction of a new provincial flag to replace the Union Jack, which was in many ways a lingering remnant of imperial and external control, symbolized a newfound confidence in the province. Designed by the well-known artist Christopher Pratt, the new flag retained elements of the Union Jack but depicted several new ones, including a golden arrow heading to the future. Peckford was charting a new course for the province. Peckford as Nationalist Premier Peckford’s nemesis in his fight for control of the offshore was Prime Minister Trudeau, and the two could not have been more different. Trudeau was cultured, urbane, and worldly, the quintessential politician who managed every aspect of his persona while, at the same time, maintaining the veneer of an intellectual whose currency was merely the power of ideas. Although well-read and known to recite the great British and American poets at will, Peckford was the complete antithesis of Trudeau in both substance and style. Often described in Newfoundland as  “saucy as a crackie,”17 he mixed brashness with cockiness, populism with confidence. A high-school English teacher from a working-class family and as far from the elite and patrician world that Trudeau inhabited as one can imagine, Peckford’s fiery temperament was an affront to subtlety. His demeanor earned him the monikers of “battling Brian” and “the bad boy of Confederation.” His rapid-fire, staccato speech and steely eyes displayed an anger and edginess that had one wondering when he would attack the jugular – characteristics that set him apart from his more cerebral and eloquent contemporaries, such as Saskatchewan’s Allan Blakeney and Alberta’s Peter Lougheed, who also had their quarrels with Trudeau. Although Trudeau was enigmatic and had assiduously cultivated the image of a non-politician, he had long been regarded as a powerful intellectual of exceptional abilities for his clear, logical, and reasoned views on Canadian federalism. As part of the Montreal and Toronto self-styled aristocratic intelligentsia, and through his coterie of scholarly friends, Trudeau had outlined in a series of essays, articles, and books a clear and poignant vision of Canada. A strong federalist, he often asked “Who speaks for Canada?” and then insisted that he did. After

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waging a bitter and destructive crusade during the 1970s against Peter Lougheed over oil policy and pricing and battling what David Milne termed insular and chauvinistic nationalists in Quebec, he was determined that never again would the nation be held hostage by a greedy province or an upstart regional nationalist. Oil security had become one of Trudeau’s priorities and he was committed to having federal control over Hibernia, which was showing promise of being one of the largest oil fields in the world. While he was Opposition leader, he reminded the House of Commons that he never opposed provinces reaping financial benefits from the offshore, only against “a diminution of the federal power to act on the resource.”18 In 1980, when Trudeau returned to Ottawa, he was sixty-one and had been prime minister for eleven years. Peckford, then just thirty-eight, was in his first term as premier but never contemplated deferring to the more stately and imposing Trudeau. He arrived at each conference of first ministers as an equal, ready to promote the rights of the provinces and assert their voice at the table, but he could scarcely forget Trudeau’s words at their first meeting at 24 Sussex Drive: “Now Brian, if we give you the offshore, you’ll expect us to give you the fishing rights.” That was hardly an auspicious beginning for Peckford, who was determined to undo the 400 years of wrong he believed had been inflicted on his province by outsiders. Trudeau’s use of “give” was insulting and Peckford later told the Toronto Star, “I could have jumped up and left right then.”19 Trudeau and Peckford were equal in their determination to win. Both were zealous politicians, driven by burning commitment, passion, and a sense of history.20 One might argue that as a younger Trudeau had confronted the Grande Noirceur in Quebec during the reign of Premier Maurice Duplessis, Peckford was fighting similar demons in Newfound­ land. He, too, confronted the powerful political and cultural legacies that had long plagued his province, and he attempted to bring a more progressive way of thinking about the issues facing Newfoundland. Trudeau’s vision has been thoroughly articulated in his own writing (and that of others), but Peckford’s much less so. While Trudeau repudiated the cooperative federalism mantra of his predecessor, Peckford found equally reprehensible Smallwood’s cozy relationship with Ottawa that welcomed the transfer of federal funds into Newfoundland without addressing the structural issues that sustained the province’s have-not status. He was equally determined to slay the dragons – both real and imagined – that had denied Newfoundland its rightful prosperity and to

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assert control over the province’s resources to bring economic and social transformation to Newfoundland and Labrador and make it an economic and social equal within Canada. A strong province with control over the development of all natural resources, including offshore gas and oil, was necessary to achieve his objectives. Both Trudeau and Peckford believed they had taken the only respectable and valuable intellectual position that represented their respective interests and duties. For Newfoundland, the control of offshore oil development was a subtext for the pursuit of economic security, justice, and equality within Canada; for Ottawa it was about capacity to govern for the national community. Trudeau had an irrepressible confidence in his intellect that often blinded him to the relevance and value of positions that did not accord with his. He fought Peckford to ensure that what he believed to be right would prevail; that included fidelity to the original division of powers and his duty to govern in the national interest. Peckford, on the other hand, believed he fought from the perspective of justice and pressed for recognition of current contingencies; he had to put right a historic injustice to the people of Newfoundland – an injustice not remedied by the 1949 union with Canada.21 In fact, he believed that union had exacerbated it. Offshore oil was Newfoundland’s best chance to overcome the ravages of imperialism, federalism, and geography to become a self-sufficient place of real opportunity and self-determination that would lift the province out of the throes of poverty. At stake in Newfoundland’s claim was not greed or vindication for past harm or dominion over everything that the province resented about its past (the loss of control over the fisheries, for instance) but a search for dignity and a capacity to build for a better future through full federal recognition of provincial self-government over all natural resources. Peckford and Trudeau were unable to forge a functioning relationship and the resort to federal principles and constitutionalism also failed to find accommodation and restore political stability between province and nation. A measure of equality, justice, and prosperity was achieved for Newfoundland only when Trudeau was replaced and a new prime minister promised a new relationship between the federal and provincial governments. Prime Minister Brian Mulroney ignored many of the principles of federalism and constitutionalism embraced by Trudeau over the offshore question and found the capacity in his vision for a decentralized Canada to address for Newfoundland its poverty, powerlessness, and sense of historic grievances.

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Peckford and Newfoundland Underdevelopment The Past in the Present: A Personal Perspective on Newfoundland’s Future offers a concise view of Peckford’s ideology and his political philosophy. Pub­ lished in 1983 by a St. John’s publisher six years after he became premier, Peckford’s treatise is much more pedestrian than, say, Trudeau’s Federalism and the French Canadians, which was published to considerable acclaim in 1968, but it is no less clear in helping us understand Peckford’s view of Newfoundland’s place in Canadian federalism than is Trudeau’s famed work on Quebec’s. However, they find quite different explanations for the economic and social realities of their provinces. Trudeau attributes the underdevelopment of Quebec to the milieu created within the province by a backward culture, antiquated institutions, and myopic nationalism. Peckford, conversely, rejects the assumptions that the problems in Newfoundland were internal. Using the language that Janine Brodie employed to explain Canadian regionalism, Peckford adopted the “relational approach” and believed that outsiders were responsible for the underdevelopment and the economic and social backwardness of the province. He rejected the modernization theory and insisted that only provincial autonomy and local control of development could reverse economic dependency, while continuing to protect the cultural traditions and way of life that defined the province.22 As long as Ottawa exercised control over the offshore and denied Newfoundland its right, for instance, to transmit power from Labrador across Quebec to markets in Canada and the United States, Peckford believed that the province’s right to full self-government and provincial autonomy and self-determination were being denied. The Past in the Present mixes autobiography with political manifesto and history. “One of the great ironies of our time,” Peckford laments, is how resource-rich Newfoundland “still provides us with the lowest standard of living in all of Canada.” The very things that could have made Newfoundland great had been squandered and given away while the province struggled to build an enlightened social infrastructure without the means to pay for it. Newfoundland had had its chances at prosperity and if properly managed and developed it could have provided a standard of living and a level of public services equal to that of any of the Canadian provinces. That had failed to happen, not because of any inadequacy of the people, but because they believed that “someone else must help us.” Consequently, Newfoundland became a resource base to be exploited for the benefit of others. Confederation was part of that process

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and it flowed “from our whole history of colonialism, subjugation and exploitation.”23 Newfoundland was at a crucial juncture – as Quebec had been in the late 1950s – and the province had to find the courage, confidence, and pride to break with its past. As Peckford so frequently put it to the people of the province, it was time to stop the giveaways and take back control of the province. The Past in the Present also demonstrates Peckford’s thorough reading of Newfoundland history and, as Jerry Bannister has noted, it was a “recapitulation” of D.W. Prowse’s History of Newfoundland. Prowse, the much-loved nineteenth century historian who found in Newfoundland’s past repressive government officials, greedy merchants, and unscrupulous promoters who held the island captive to their own interests, was Peckford’s inspiration. Drawing heavily on Prowse and S.J.R. Noel’s Politics in Newfoundland, Peckford argues that from the earliest colonial times Newfoundland existed to serve England as a provider of food and a training ground for British seamen. Political development in the colony served the interests of its colonial masters: Britain refused to appoint the first naval governor until 1728, more than two hundred years after claiming Newfoundland as its first colony, and another sixty-three years passed before a legally appointed court was established. Representative government came some seventy-four years after it was granted in Nova Scotia, and Newfoundland was the last British North American colony to achieve responsible government. The political reformers who sought change saw the subsequent development of the colony wrecked on the shoals of economic cleavages that existed between the dominant merchant class and fishers. The divisions were accentuated by the religious conflict and a spatial distribution that scattered people around the island’s coastline in search of the best fishing grounds. Political self-determination was further hampered by the vagaries of European diplomacy that allowed France to control the coasts and fishery in the northern and western regions of Newfoundland until 1904. Control of much of the island was in the hands of outsiders. One of the first acts of the colonial legislature after acquiring responsible government in 1855 was to pass a resolution asking Britain to refrain from making changes affecting territorial or maritime rights without the consent of the Newfoundland legislature. A succession of political leaders saw great economic potential in New­ foundland’s geographical position and the natural resources in its interior. They also believed in the efficacy of large-scale development to take advantage of these opportunities. Absorbed in the euphoria of progress that the railway and interior development had delivered to the rest of

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North America, Newfoundland’s economic and political leaders attempted to emulate that model of development and, in doing so, failed to develop an effective fisheries policy. Industrialization invariably led away from the ocean, as the country embraced newsprint production in the early twentieth century, then mineral exploration, and finally hydroelectricity – all promoted by outside capital with the state providing lucrative land concessions, generous financial aid, and exemption from a variety of taxes. While these ventures created a few well-paying opportunities, they also resulted in the sacrificing of control over and management of the country’s valuable resources. When the Great Depression struck in 1930, investment in Newfoundland crumbled quickly and the population was left destitute. Peckford placed great faith in George Santayana’s dictum that those who will not remember the past are condemned to repeat it. In resource development, the collective Newfoundland memory was “appallingly poor,” he lamented. He describes the construction of the American bases during the Second World War as “one of the greatest giveaways” in the history of Newfoundland. The British, for instance, decided that New­ foundland would not tax US personnel working for the military bases nor require their spouses to license their vehicles to drive on Newfound­ land roads for ninety-nine years. Even Confederation, with its generous social and fiscal transfers, failed to change the mistakes of the past. Confederation could have been a “fresh start.” A new Newfoundland was possible but neither the federal nor the provincial government followed the proper course. Smallwood used the same strategies that had failed in the past: subsidies, resource concessions, and tax breaks to engender large-scale industrialization. Fishing was ditched in favour of minerals, timber, water power, and industrialization. Smallwood had learned little from his predecessors. He similarly conspired with outsiders to give them long-term control over the province’s resources. The two most notorious examples were the development of the massive iron ore reserves in Labrador City, where the Labrador Mining and Exploration Limited, not the Newfoundland government, gave the mineral rights to the Iron Ore Company of Canada, and the development of the Churchill Falls hydroelectric development: “the greatest mistake in our long, turbulent history.” It was against such “historical mismanagement of our resources” that Newfoundland had to address its current problems, Peckford maintained. Errors of the past had to be avoided and a new development philosophy had to be embraced. Peckford harboured a paranoia of

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making a bad deal with Ottawa on the offshore, and he maintained a basic mistrust of federal politicians.24 In The Past in the Present Peckford clearly had his sight trained on the federal government in Ottawa. Since 1949 the federal government had made life better for many through transfers to individuals, fiscal transfers to the provinces, and general federal spending, but Newfoundland had little control over what really mattered. In the fishery, for instance, Ottawa alone exercised control. The provincial government was effectively outside the federal decision-making councils and, as a result, it simply had to watch as national interests trumped provincial ones. Ottawa negotiated “over-the-side fish sales” that permitted fishers to sell their catches directly to foreign buyers who came in ships to purchase fish, rather than taking the catch to processing plants in rural communities. Canadian fishery policy was supposed to recognize provincial social objectives and job creation priorities, but that never happened when the federal minister of fisheries and oceans was driven by national concerns. Peckford argued that fishery policy should serve, first, the interests of those people in the adjacent provinces with three centuries of connection to the sea, and the government should develop policies and programs to sustain their social, economic, and cultural well-being. Once those provincial needs had been met, Ottawa might allocate fisheries resources to foreign states in the Soviet Bloc, for instance, in exchange for their purchases of Canadian grain.25 Moreover, Peckford believed that Canadian federalism should make possible “a delicate weaving of regional cultures and strengths into a vibrant national fabric. The strength of Canada is the strength of its parts.”26 Peckford maintained that a national government that ignored the needs of the smaller provinces and subjected them to the will of the tyrannical majority – Newfoundland and Labrador had only seven seats in the 281-seat Parliament – pointed to a dysfunctional federation. Peckford wanted a more decentralized federalism in Canada. In his first throne speech as premier in 1979, he remarked: “The greatest question posed today is whether we are in the provinces ready to move away from a paternalistic centralized federalism. Are we ready to trust more in our own abilities as a society than in federal transfer payments?” Rather than sundering the national community, he saw decentralization as strengthening national unity and giving the provinces the ability to pursue social justice while improving the level of social services in the havenot provinces. “There is a growing realization that the present structure

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6.2  Premier Peckford was an important member of the eight dissenting premiers who disagreed with Prime Minister Trudeau’s constitutional package. They met for breakfast in Ottawa on 3 November 1981 in the midst of a marathon session that lasted for several days and resulted in a new constitution for Canada. Clockwise from left: Brian Peckford, Newfoundland; Allan Blakeney, Saskatchewan; Angus MacLean, PEI; John Buchanan, Nova Scotia; René Lévesque, Quebec; Peter Lougheed, Alberta; William Bennett, British Columbia; and Sterling Lyon, Manitoba (back to camera). (Peter Bregg; CP 795260)

of Confederation does not allow the province to realize the full economic benefits of its own resources or to adequately promote the enhancement of our unique culture.”27 Newfoundland was increasingly frustrated – especially after the election of 1980 – with Pierre Trudeau’s constitutional objectives, which Peckford saw as another attempt to concentrate powers in the centre at the expense of the provinces. Trudeau’s intention to proceed unilaterally with constitutional reform when he faced strong provincial opposition was just one example of this. Newfoundland wanted to share jurisdiction in the fisheries with Ottawa, to have offshore resources treated as if they were on land, and to have the right to

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transmit electricity across provincial boundaries in the same manner as oil and gas.28 Trudeau dismissed all of these concerns but Peckford had made it clear when he announced his decision to run for the leadership of the provincial Progressive Conservative party that he would be aggressive in defending Newfoundland’s natural resources: As a people or society we have in this century “sold out” to those who would develop our resources for themselves and others without providing a fair return to the owners of the resources – the people of Newfoundland and Labrador. We are on the threshold of having perhaps our last chance with the discovery of oil and gas to “make it” or “break it.” I think I can help us make it.29

The philosophy and ideas outlined in The Past in the Present infused the policies he pursued as premier. A Clash of Visions, or Whose Canada? In October 1980, the Newfoundland government issued a detailed fiveyear plan – Managing All Our Resources – as the basis for a new financial relationship with Ottawa on the offshore. Prior to releasing the document – and after Trudeau’s return to office – Peckford had embarked on a cross-Canada speaking tour to explain Newfoundland’s position on the offshore and build support for the arrangement he had negotiated with former prime minister Clark.30 The document pointed out the financial and economic disparity between Newfoundland and Labrador and all of the other provinces. Little had changed in the thirty-five years since Confederation, as the province had failed to narrow the gap with the rest of the country. In 1980, GDP per capita was $5,951 compared to the Canadian average of $11,317; the average family income of $18,326 fared much worse than the Canadian average of $24,816; earned income per capita in Newfoundland was $4,228 compared to the Canadian average of $7,798; and Newfoundland’s rate of unemployment at 15.4 per cent was double the Canadian average of 7.5 per cent. The document decried the reliance on transfer payments and insisted that the only way for the province to overcome its dependence on Ottawa was to “generate real wealth within the province.”31 That could only be achieved if Newfound­ land had the same degree of control over its resources as other provinces had over theirs. Newfoundland asked only that it be treated the same as  other provinces and demanded that Ottawa consider the resources

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under the ocean as it did those on land. For Peckford, oil and gas revenue was to play a pivotal role in the new Newfoundland and he wanted part of that revenue to sustain the rural areas of the province. He had no desire to abandon the smaller isolated communities as had occurred during the Smallwood era: In seeking a better standard of living, Newfoundland is equally determined to preserve a way of life. This province has the potential to lead Canada’s economic growth in the future, as the West does today … Newfoundland is determined not to lose this opportunity, but we are equally determined not to repeat past mistakes. It is not so much the oil and gas itself that is important as what it can do to provide the wherewithal to revitalize the fishery and forestry industries on which the very survival of rural New­ foundland depends.32

Peckford did not want Newfoundland to become what he called an “offshore mineral society.” The wealth generated by oil and gas development had to be used to “develop long term renewable resources and hence enhance social and cultural life.”33 Like Smallwood, Peckford insisted that Canadians simply did not understand Newfoundland’s predicament and its efforts to move beyond it. The offshore was Newfoundland’s last chance at becoming a viable society. Trudeau’s position on the offshore had not changed during his brief time out of office. Even though Canadians had voted him from office in 1979, he believed that his nation-building plan had been unfairly and prematurely cut short. He returned with a greater zeal to strengthen the national community and the Canadian economic union. He had no intention of honouring Clark’s promise to Newfoundland and likened the former prime minister to a cringing headwaiter at the beck and call of the premiers. To Trudeau, the offshore was a mere subterfuge contrived by ambitious provincial premiers to usurp the powers of the central government: “how far can you go in dismantling the economic role of the national government before you cease to have an economic union, let alone a country in the political and cultural sense of the term,” he admonished those who did not share his view of Canada.34 It was all selfserving, of course, as his personal priorities and philosophy set Canadian policy.35 He became increasingly concerned that the federal government was not earning sufficient credit for the programs it was helping to fund in the provinces, which threatened his aspiration for a strong central state visible to all Canadians. In the early 1980s, he reduced transfers to

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the provinces in such areas as Established Program Funding (for health and social welfare initiatives in the provinces) and eliminated a variety of programs such as those in the Department of Regional Economic Expan­ sion. He equated visibility with nation-building, and Peckford claimed that Ottawa – and Trudeau’s form of federalism – had developed a “fortress mentality” as it moved to centralize power in the nation’s capital. This happened as Peckford and some of the other premiers demanded the “ability to reap a share from the development of their natural resources.” Each province needed an equal opportunity to develop its resources, and Peckford believed that Canada’s federal system had to recognize that only through greater control of natural resources could provinces such as Newfoundland and Labrador hope to prosper and participate fully in the national community.36 The two years following Trudeau’s return to office marked an exhilarating but anxious period in the history of Canadian federalism. He and the premiers were driven to resolve the constitutional dilemma that had confounded Canadians for decades, a task given added urgency after the Quebec referendum on sovereignty-association was defeated in 1980. Trudeau had promised then to renew Canadian federalism if Quebec voted to reject sovereignty-association. It was expected not only in Quebec but also among most of the premiers that Ottawa would consider some form of decentralization and the recognition of the special character of Quebec. In the 1980 throne speech, delivered just four weeks before the referendum vote, there was no indication that Trudeau would entertain any notions of further decentralizing the Canadian federation. Speaking to the disintegrative forces that he saw in the ascendency, he asked, first, “Will Canada still exist as a country at the end of this decade, or will it have been broken up by the tensions of our past and recent history?”; and second, “will we continue to build our future together as Canadians, or will we give in to the siren song of regional isolationism?”37 Trudeau refused to preside over a constitutional process that would lead to substantially wider powers for the provinces. Renewed federalism might look a lot like the existing one. Following the referendum vote, Trudeau convened several constitutional meetings with the premiers, who still remained optimistic for some significant changes to Canada’s constitution. In his search for fairness and equity for Newfoundland, Peckford sought to remake federalism and Canada. He hoped his goals could be achieved during the process of constitutional renewal that Trudeau promised during the 1980 Quebec referendum. Peckford would play an important role in the whole

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process, as first ministers met in Ottawa on 9 June, after Trudeau had dispatched Justice Minister Jean Chrétien and Michael Kirby, secretary to the cabinet for federal-provincial relations and a former Nova Scotia bureaucrat, to solicit views in all of the provincial capitals. Trudeau wanted merely to set an agenda to guide their talks on the constitution, but even that proved difficult. The Canadian Press reported before the conference convened that the powerful Cabinet Committee on Priori­ ties and Planning had already decided that Ottawa would pursue some form of constitutional change even if the provinces refused to fall in line. Peckford continued his “bad boy” image by inviting the premiers to a “gathering” before they met Trudeau, bringing charges from the federal side that he was creating a “cabal” against Ottawa. Only five other premiers attended – Allan Blakeney (Saskatchewan), René Lévesque (Quebec), Angus MacLean (Prince Edward Island), Sterling Lyon (Manitoba), and Peter Lougheed (Alberta) – but they agreed that the provincial rights consensus reached at the 1978 premiers’ conference, which included, for instance, the federal government conceding some jurisdiction over fisheries to the provinces, was a good starting point for any constitutional reform. Peckford admitted that he was committed to making gains on fisheries, regional disparities, and ownership of the offshore minerals, but he was optimistic for a constitutional agreement: “We’ve got a chance for real change now and I’m going to be doing my best to make it work.” Canada was a community of communities and if he had his way the provinces would decide what powers should be given to the federal government in a much more decentralized federation than was the case currently.38 His provincial chauvinism was obvious in a presentation to an Ottawa audience in May 1980: “The central government has only that life and that authority delegated to it by the 10 provinces,” he remarked, obviously ignoring a significant body of constitutional texts and judicial rulings in Canada: “It has no right,” he insisted, “to grow independently, either by legalistic evolution or by the use of its spending powers.”39 All of the premiers promised flexibility, as did the prime minister, and they agreed on an agenda of twelve items that would be the focus of the Continuing Committee of Ministers on the Constitution (CCMC), a group of ministers and officials who would work during the summer of 1980 to bring a set of proposals to first minsters in September. Peckford could count as a major victory that his priorities were added to the list. Trudeau cleverly divided the items into a “people’s package” (patriation, an amending formula, and a charter of rights) and a government’s list

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that dealt primarily with power sharing in the federation. He insisted that the “people’s package” could not be traded for governmental powers which included the premier’s demands for greater powers for the provinces. He also made it clear that he considered the latter, especially those demands for a more decentralized Canada, as coming from the “school of blackmail of which Quebec was the founder and the top-­ ranking graduate.”40 The federal government dismissed all three of Peckford’s priorities – provincial ownership of offshore oil and gas resources, concurrent jurisdiction in the fisheries, and the right to transmit hydroelectricity across interprovincial boundaries – but at the 26–29 August 1980 meeting of the CCMC it presented a proposal on revenue-sharing and administrative arrangements on the offshore that might be confirmed in the constitution. It was also an offer to Newfoundland on settling the offshore question.41 Offering to set aside the question of jurisdiction, Ottawa agreed that provinces should reap the major benefits from offshore development. These provinces, such as Newfoundland, would receive the same revenue benefits from offshore oil and gas as those derived by provinces from their onshore resources until they became “have” provinces and reached an agreed per capita income, ostensibly to address regional economic disparity. At that time, the provincial share of the revenue would decrease progressively. It promised coastal provinces 100 per cent of offshore royalties, fees, and rental and payments for exploration and development as was the case in Western Canada, but it refused to move on federal taxes, such as the corporation income tax and federal sales taxes, or on Petro-Canada’s mandated share of offshore development. The federal government offered as well a system of joint administration, to include federal and provincial appointees, to govern the exploration and development of the offshore. It insisted, however, that the national interest had to prevail in a conflict between the provinces and Ottawa. Not a single province was willing to accept the federal proposal regarding administration, as it raised the prospect of further federal encroachment on provincial powers. First, the proposal left too much power with the federal government, as it would have three members on a proposed six-person board and it would name the chair. Second, the federal revenue-sharing proposal did not meet the principle of equality of treatment for all resources. Third, the “100% of offshore resource revenues” that Ottawa identified was misleading; it did not include federal taxes or the share of development awarded to Petro-Canada. Fourth, Ottawa insisted that it would exercise an overriding right to manage the offshore in the

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national interest as it pursued a policy of national energy security. The coastal provinces demanded the same benefits and controls traditionally enjoyed by the provinces with onshore oil reserves and rejected the federal proposal.42 The provinces insisted on provincial ownership. The CCMC failed to reach agreement on any of the twelve agenda items. Like Peckford, each premier had begun the process with minimum demands and varied interests. As a result, the provinces had failed to produce a list of common priorities before the first ministers reconvened in the second week of September 1980. The politicians lived up to expectations as they failed to find any common ground, and the first ministers’ meeting ended in failure. Trudeau claimed that if he accepted the premiers’ proposals it would transform Canada from a “very decentralized, yet balanced, federation into some kind of loose confederation.” A few days later, on 2 October, he told Canadians in a national televised address that he had had enough. He would unilaterally pursue constitutional reform with the “people’s package” and negotiate all other items later. He was unwilling, he said, in an obvious shot at Peckford and some of the more recalcitrant premiers, “to bargain freedom against fish, fun­ damental rights against oil, [and] the independence of our country against long-distance telephone rates.”43 Peckford and seven other premiers were outraged at Ottawa’s unilateralism. Newfoundland, Manitoba, and Quebec challenged Trudeau’s action in their courts and, although the Supreme Court of Newfound­ land found Trudeau’s proposal unconstitutional, the other two ruled partially in the prime minister’s favour. In a province-wide broadcast, Peckford said “The great Canadian principles of sharing, equal treatment, [and] co-operation seem no longer the principle that [the] federal government wishes to pursue.” If Trudeau were allowed to proceed unilaterally, Canada could change Newfoundland’s denominational education system, its boundaries, and pretty much put the province at the mercy of the Canadian majority.44 Ottawa dismissed his comments as nonsense and accused Peckford of fear mongering.45 On 28 September 1981 the Supreme Court of Canada found that while the federal government had the legal right to unilaterally amend the constitution, convention dictated that Ottawa first obtain “a substantial degree of provincial consent.” With eight premiers, including Peckford, (who became known as the Gang of Eight) opposed, Trudeau had to return to the bargaining process.46 Peckford was at the centre of it all with the other premiers in those heady days of November 1981, when Canada finally patriated its constitution.

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Peckford and the 1980s Constitutional Negotiations In a book published in 2011 to mark the thirtieth anniversary of the historical negotiations in November 1981, Ron Graham incredulously claims that Trudeau dismissed three of the Atlantic premiers as “marginal players,” describing them as “parochial, hostile and unhelpful.”47 Only New Brunswick’s Richard Hatfield, who, incidentally, supported Trudeau throughout the whole constitutional process, made a difference. The evidence shows otherwise, however. Peckford, bombastic and determined to defend Newfoundland’s interests, was surely a thorn in Trudeau’s side, but he also put aside his bitter quarrel with the prime minister in those few days in November 1981 and worked with the other premiers (with the exception of Lévesque on the last day of the constitutional conference) to reach an eleventh hour breakthrough. Several months after the conference came to a successful conclusion, Peckford wrote Trudeau that “I had … developed by that time [2–5 November 1981] a feeling that individually, the vast majority of the First Ministers were expressing such willingness to compromise that there had to be a concensus [sic] in there somewhere.”48 By then, there were, indeed, only a few items outstanding in the constitutional file and the first ministers had simply to arrange them in a language that allowed each to claim that he had achieved what he wanted put in a new Canadian constitution. The first ministers did precisely that, but there has been little agreement over how that consensus was achieved. In his opening statement on 2 November, Peckford dropped the hardline image he had cultivated in earlier constitutional meetings, softened his rhetoric, and avoided all references to his long-simmering battle with Trudeau over the offshore and fisheries. He approached the negotiations with “an openness of mind,” he said, because the future of Canada was at stake. He was able, as were most of the other premiers, to put aside his antipathy towards what he considered Trudeau’s intransigence and make a constitutional deal. He spoke passionately, nonetheless, against what he saw as the tendency towards a unitary state that he feared Trudeau was promoting by threatening to proceed unilaterally on constitutional change. A balanced federalism with a strong federal government, strong provinces, and a Canada that endorsed the principle of equality of the provinces was critical for the survival of the federation.49 The negotiations in Ottawa were difficult but on Thursday morning, 5 November 1981, Trudeau and nine premiers broke the constitutional impasse.50 Quebec’s René Lévesque alone could not agree to the

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constitutional accord and, despite further modifications later, he still refused to join the process before the constitution was signed into law by Queen Elizabeth II in 1982. There has been little discussion in the mainstream literature about Peckford’s role in forging the agreement. Much of the credit has been taken by three other politicians: federal Justice Minister Jean Chrétien, Saskatchewan Attorney General Roy Romanow, and Ontario Attorney General Roy McMurtry, who for nearly three decades have done little to dispel the notion that they, almost singlehandedly, solved the consti­ tutional stalemate in the now famous “Kitchen Accord,” so-named because they apparently hammered out the basis of a deal in a kitchen at the Ottawa Conference Centre. The three politicians performed a re-­ enactment of their meeting for the CBC’s Mike Duffy immediately following the conclusion of the conference, after a Saskatchewan official came to the network with the story of the kitchen deal. Claire Hoy, a journalist at the conference, cites the “shameless hubris” of the three “egomaniacals [sic]” for the story, and describes McMurtry as “the most egregious character in perpetuating the fraud,” dubbing him “Roy McHeadline” for his propensity to seek out the camera. Several government and media people have suggested that McMurtry was pulled into the room only after Chrétien and Romanow had had their discussion and in time for the re-enactment.51 The three politicians – all of whom then had keen leadership aspirations – have par­ticipated in a number of events since 1981 celebrating the “Kitchen Accord” and cherishing their role in saving Canada. They were photographed, for instance, by the Toronto Star holding a copy of the “Kitchen Accord” at a conference to mark the twenty-­fifth anniversary of the Charter of Rights and Free­ doms in Ottawa in 2007; the caption claimed that the “Kitchen Accord” resulted in Canada adopting the Charter. Five years later they similarly celebrated the thirtieth anniversary, participating in several events that once again confirmed the importance of the “Kitchen Accord” in saving Canada from disintegration as constitutional differences imperilled the nation in 1981. In an episode of TVO’s The Agenda with Steven Paikin, called “The Three Amigos of the Constitution,” Romanow, Chrétien, and McMurtry revelled in his praise of their efforts in 1981.52 Romanow and Chrétien even presented the two-page “Kitchen Accord,” originally drafted in Romanow’s handwriting, complete with a “certificate of authentication” (signed by the three in the manner of a piece of sports memorabilia to increase its value) to Library and Archives Canada to commemorate McMurtry’s retirement from the Ontario

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Court of Appeal on 11 April 2007. It was given, they insisted, “in recognition of [McMurtry’s] contributions to nation-building,” even though there are questions about his role in the whole constitutional process. Library and Archives Canada describes the accord as “one of the most important foundations of the agreement to ‘patriate’ Canada’s Consti­ tution.”53 The “Kitchen Accord” has taken on a mythical role: what could be more Canadian than a Liberal, a Conservative, and a New Democrat from Quebec, Ontario, and the West, no less, coming together to save the nation? Ontario Premier Bill Davis acknowledged at the time that while “the kitchen cabinet meeting was not a fraud, it was not part of the final settlement.”54 Others maintain it was just one of a series of meetings going on in Ottawa to find a solution to the constitutional impasse. This is the conclusion that Romanow makes in one of his recent presentations about the whole process.55 Peckford also seems to have played an important role in helping to reach a final agreement on the constitution. Although usually dismissive of Peckford, Graham acknowledges in his account of the events of 4–5  November that Peckford had drafted a one-page proposal over lunch on Wednesday, 4 November, that he wanted to present to other first ministers. When the conference reached an impasse later that day, Peckford and his advisers continued to work on his draft and produced a slightly longer version outlining a series of items that might move the process forward. When a group of officials got together later that evening, it had two similar drafts: one that Saskatchewan officials had drawn up based on Romanow’s meeting with Chrétien and McMurtry, and a second that the Newfoundland officials had prepared based on Peckford’s proposal. Graham notes that it was the Newfoundland document that was discussed, redrafted, and typed up for all of the provinces and for Trudeau to consider. Journalist Robert Sheppard also reported that officials present during the final hours told him that when the premiers and officials from Alberta, Saskatchewan, and Newfoundland met late on 4 November, they were working from a two-page document that Peckford and his officials had presented.56 Howard Leeson, the Saskatchewan deputy minister of intergovernmental affairs, agrees: “It was … suggested by me that the Newfoundland draft could serve as a basis for a draft to be presented to Prime Minister Trudeau the next day.” Working from Peckford’s proposal, they finalized a two-page agreement that included patriation, an amending formula that required at least seven provinces and 50 per cent of the population but no financial compensation for opting out of amendments that touched provincial affairs,

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a charter with a notwithstanding clause, entrenchment of the principle of equalization to deal with regional disparities, and the recognition of provincial jurisdiction over natural resources. This won acceptance from Trudeau and all the premiers with the exception of Lévesque. Because two of the Western provinces, British Columbia and Alberta, were worried about the exact meaning of entrenching a broad category of Aboriginal rights in the Charter (along with mobility, equality, and other rights), that article which had been included in the premiers’ list earlier in the process was dropped from the final list, although the first ministers agreed to consider the issue later in a series of first ministers’ conferences.57 The Globe and Mail reported that “he [Peckford] is generally credited, in the final hours of the federal-provincial negotiations on  the amended constitution, with drafting what formed the basis of the agreement.”58 Yet, Graham portrays Peckford as infantile and immature as he took on the task on the morning of 5 November of presenting the proposal which several of the premiers and their officials had negotiated during the previous evening. He was delighted, Graham writes, “to have been instrumental in putting together a deal.” However, when Blakeney left the room earlier in the evening to brief Ed Broadbent, the federal NDP leader, Graham contends that Peckford and Buchanan attempted to change the wording around fundamental freedoms and minority-­ language education until Blakeney returned and “put a stop to their mischief.” Moreover, he writes that Peckford “had got himself into such a pitch of excitement that he seemed to be bouncing around the room, talking quickly and loudly, rarely pausing to hear what anyone else had to say, to the point that some officials worried he might actually think the proposal was his, and his alone, and keep tampering with it.” Peckford “had been chosen by the negotiators in the Chateau Laurier the night before.” His interventions had been “helpful” and the officials and other premiers had thought the proposal had a better chance of success “if presented by a hardline member of the Gang of Eight.” And, Graham maintains, Peckford “was tickled to do it.” Graham leaves no doubt that in his view Peckford’s contribution was minimal despite the evidence he himself presents to show him as an important participant: “Brian Peckford, Angus MacLean, and John Buchanan, despite having done little but stand in the way of patriation and the Charter for more than a year, now strutted and preened as the new Fathers of Confederation.”59 The Conservative premiers from Atlantic provinces had no place of importance in Graham’s history of the constitution.

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Others see Peckford’s role differently. Stephen Azzi, a professor at Carleton University and author of “Patriation of the Constitution” in the Canadian Encyclopedia, examined a variety of new documents and concluded that Peckford deserved credit for the important role he played in the patriation process. To do so does not diminish the contribution of  others, of course, but it recognizes that the constitutional process was complex, multifaceted, and messy. It was also one in which several individuals played pivotal roles. However, many people want a simple story, and they accepted that of the “Kitchen Accord” readily. Patriating Canada’s constitution was anything but simple.60 Peckford himself dismisses the “Kitchen Accord” as a “sideshow” to what was going on: “We knew of nothing being cooked up in the kitchen,” and Azzi confirms that some premiers and their officials at the centre of negotiations had no idea of the meeting in the kitchen.61 The day following the agreement, the Globe and Mail reported that it was Peckford’s compromise plan that had allowed the first ministers to reach a consensus.62 In her report to the Globe and Mail, Rosemary Speirs provides even more evidence of Peckford’s pivotal role. He is the only premier given special coverage in the Globe and Mail the following day with a headline that read: “Surprise – ‘bad boy’ Peckford helped pull rabbit from the hat.” A year earlier Peckford had shocked many when he told Trudeau that he preferred Lévesque’s decentralized vision of Canada to that of the prime minister, but when he met reporters at the end of the conference he embraced his Canadian patriotism, proclaiming “I feel more fully a Canadian today than at any time since I’ve [been] old enough to understand.”63 Peckford clearly relished the role that he played, but he insisted that there were many others involved. About his two-page proposal, he said, “there began a flurry of talks and countermoves lasting most of the night, and eventually involving everyone from the Prime Minister on down.” What finally emerged was not Peckford’s formula, but a greatly reworked draft. “I put a proposal and from that jelled consensus,” Peckford told reporters. Speirs also reported that some were envious of the attention Peckford was getting: “officials of the Saskatchewan and Ontario govern­ ment[s] circulated among reporters saying they’d really drafted the final compromise.” Peckford, they insisted, was just the front man for a consensus drafted, notably, by Saskatchewan, Ontario, and British Columbia.64 Howard Leeson similarly gives little credit to Peckford. While he acknowledges that Peckford was interested in constitutional change, he insists that “his personal and academic background was not directly related to the subject matter.” He further submits that Newfoundland, as a smaller

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province, was “without the economic or population resources required to play a major role.”65 Similarly, Ted Morton and Barry Cooper asked in a 1999 National Post article on the patriation process: “Since when does Newfoundland broker national unity deals?”66 All three ignored the pivotal role that representatives from Newfoundland and Manitoba played in later constitutional negotiations. Newfoundland Premier Clyde Wells and Elijah Harper, the lone Cree politician from Red Sucker Lake First Nation in the Manitoba legislature, defeated the Meech Lake Accord in 1990 despite its support from the prime minister and nine premiers. Academics have minimized Peckford’s role in 1981 because of his place of residence. However, in Newfoundland there was considerable gratification that although Peckford had confounded Trudeau during the constitutional negotiations, Trudeau later credited their premier with an important role in helping to negotiate a compromise that broke the constitutional impasse. Newfoundlanders hoped, too, that with the patriation process settled, a better relationship between Ottawa and St. John’s might develop.67 Newfoundland and Labrador Oil and Trudeau’s National Community Even though Peckford failed to find a resolution to the offshore dispute in the constitutional negotiations, he never considered giving up the battle, even as Ottawa became more aggressive in pressing its case for control. Ottawa’s controversial National Energy Program (NEP), introduced on 20 October 1980, suggested yet again that it believed energy was too important to leave to the provinces. The goals of Canadianization outlined in the NEP rested on three assumptions: one, security of supply and Canadian independence from the world oil markets; two, the opportunity for all Canadians to participate in the energy sector and benefit equally from its expansion; and three, fairness, both in pricing and revenue-sharing, that recognized the rights and needs of all Canadians. The NEP also established a new policy paradigm for oil and gas resource development in Canada’s offshore areas and on all Canada Lands by increasing the federal role, principally through the imposition of higher taxes and an increased role for Petro-Canada. Ottawa also threatened to have the Supreme Court of Canada settle the offshore ownership question with Newfoundland even as it continued to aggressively support exploration in the region.68 Shortly after the launch of the NEP, Allan J. MacEachen, deputy prime minister and minister of finance, warned delegates to the Offshore Canada Conference in Halifax of the dangers

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Peckford’s demand for control of the offshore posed to Canada’s prosperity. “How far can you go in dismantling the economic role of the national government before you cease to have an economic union, let alone a country in the political and cultural sense? Provincial control,” he asserted, “would increase regional disparities and weak[en] Atlantic Canada.”69 During a visit to St. John’s in early May 1981, Trudeau offered both the carrot and the stick to Peckford. He proposed a new partnership leading to joint management and revenue sharing of offshore resources, but warned that if no deal could be brokered by the end of February 1982, he would refer the matter to the courts. A few months later, on 27 July 1981, he provided a settlement offer to Peckford (and a similar deal to the premiers of Nova Scotia and British Columbia): Our position on revenue sharing is that, if such sharing can be agreed upon through negotiation, Newfoundland should be entitled to all provincialtype revenues. In effect, we would for revenue purposes treat offshore revenues as though they were located on land. This system would continue for as long as Newfoundland remained a “have-not” province. After this, a sharing of benefits with other Canadians would start to take place.70

Peckford was optimistic and dispatched his officials to meet their federal counterparts. Talks began on 2 October 1981. On 2 November 1981, after several weeks of negotiating between federal and provincial officials, Newfoundland outlined its position in a thirty-one-page document entitled, A Framework for an Agreement that it hoped would win Trudeau’s approval by the deadline he had set. It proposed joint ownership, a single set of regulations, significant economic benefits for the province, revenues to be shared as if the resources were on land, offices related to the offshore be situated in Newfoundland, and an agreement between the two orders of government entrenched in the constitution to avoid future disputes over ownership.71 Even though the oil-producing provinces had forced Trudeau to accept an arrangement earlier in 1981 that effectively limited federal taxing power in the non-renewable (oil and gas) sector by entrenching provincial taxation powers in the renewed Canadian constitution, Trudeau had refused to set aside the question of ownership as he had earlier promised. On 25 January 1982, Peckford revised his proposal. A Proposal for Settlement covered five general areas: an economic benefits package that would see major infrastructure improvements in the province to maximize local participation in the offshore; joint management that would set aside the

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issues of jurisdiction and ownership; a revenue sharing agreement that would garner the province 75 per cent of all government revenues until it had achieved the national standard in fiscal and economic indicators; a role for the province’s oil and gas Crown corporation (the Newfound­ land and Labrador Petroleum Corporation), and a demand that it be treated in the same manner as Petro-Canada; and constitutional guarantees for any agreement negotiated between the two levels of government. This would protect the agreement if one of the signatories later attempted to change it.72 Ottawa was interested and a series of protracted federal-provincial meetings ensued, including several between Marc Lalonde, the federal minister of energy, and William Marshall, his Newfoundland counterpart. Ottawa did not present any formal written proposal as the Newfound­ land government had, nor did it officially respond to Newfoundland’s. The negotiations proved to be a façade. Ottawa repeatedly advised New­foundland to join with Nova Scotia, to set ownership aside and negotiate a revenue-sharing agreement. At the same time, Ottawa resorted to a tactic that amounted to sheer trickery and was designed to provoke the Newfoundland government. The Seafarers’ International Union (SIU) had applied to the Newfoundland Labour Relations Board (NLRB) to organize workers with Crosbie Offshore Services Limited, one of the major suppliers providing services to the offshore rigs. When the union realized that its certification efforts would not meet the criteria set out by the NLRB, it applied for certification through the Canada Labour Relations Board (CLRB), which also considered the union’s certification efforts as suspect. When the CLRB claimed it did not have jurisdiction over labour certification in the offshore, the SIU appealed to the Federal Court, claiming that the CLRB had erred in its judgment. What began as an innocuous labour arbitration case quickly became a constitutional battle over ownership of the offshore when the federal government intervened and asked the Federal Court to expand its judgment to include a ruling on the whole question of jurisdiction over the offshore.73 Peckford was furious, claiming that he could not negotiate an agreement with Ottawa while it was in court claiming ownership of the offshore. Ottawa’s intervention was devious at best and deceitful at worse. The Federal Court had no jurisdiction over matters assigned to the provinces. It could arbitrate legal disputes arising in the federal domain, including claims against the government of Canada and challenges to the decisions of federal tribunals, but it was considered irrelevant to the provinces. The use of the Federal Court was a calculated move to poke

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the federal finger in the provincial eye, as Trudeau certainly understood that the Federal Court was not the proper venue to decide such a controversial and important legal dispute. Yet, it was a clever manoeuvre to keep the offshore question out of the Supreme Court of Newfoundland. A judgment from the Federal Court would be appealed to the Supreme Court of Canada. Trudeau’s duplicitous ruse had its desired effect; he succeeded in provoking Peckford, who called an emergency cabinet meeting and convened an urgent session of caucus. For two days, they deliberated and then issued Trudeau an ultimatum: withdraw federal intervention from the court case or Newfoundland would cease all negotiations over the offshore. He gave Trudeau twenty-four hours to confirm in writing that the government of Canada would put the question of exclusive ownership of the mineral resources off Newfoundland aside and work with the province to negotiate a settlement. Trudeau’s response was a dismissive five-page telex. He repeated his earlier warning that if negotiations could not soon be successfully concluded, he would refer the matter to the Supreme Court. Peckford announced there would be no further negotiations with Ottawa.74 Rather than leave such an important decision to the Federal Court, Peckford asked the Newfoundland Court of Appeal on 18 February 1982 to adjudicate the issue of ownership of the offshore.75 The reference to the Newfoundland court was designed to force Ottawa’s hand as Peckford maintained that he was still willing to put the issue of ownership aside and resume negotiations with the federal government. It proved to be a misplaced gamble as the verbal battle with Trudeau only intensified. Trudeau dismissed Peckford’s actions as incredulous, intemperate and premature, and blasted Newfoundland for refusing to negotiate, obviously ignoring his own resort to the courts. He described Peckford as reckless and unreasonable. His appeal to the Supreme Court of New­ foundland confirmed for him, Trudeau said, that no deal was possible with the intemperate Peckford. On 2 March 1982, less than two weeks after Peckford vowed he simply could not negotiate with Ottawa if he had to concede control of the offshore to the federal government, the wily Trudeau pulled another rabbit from his hat, announcing that he had negotiated a political settlement with Nova Scotia. Because Trudeau had agreed that Nova Scotia would receive the same benefits as Newfoundland if it were to negotiate a superior agreement with the federal government, Nova Scotia had little to lose and by signing an agreement with Ottawa before New­ found­land it might get a jump start on its Atlantic rivals in the offshore

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sweepstakes. The “Canada-Nova Scotia Agreement on Offshore Oil and Gas Resource Management and Revenue Sharing” provided the province with a generous revenue-sharing package that allowed it to collect most of the offshore revenue. Nova Scotia was permitted to levy a variety of taxes, including sales and corporate income taxes, on activities on the offshore as if they were on land. Ottawa provided a special $200 million offshore development fund to encourage Nova Scotia’s participation in offshore development. It also promised that offshore revenues would not immediately reduce Nova Scotia’s equalization payments. However – and for Newfoundland this was the critical point preventing a negotiated settlement – the federal government retained ultimate control despite a joint management board. That fact alone made the arrangement unacceptable to the government of Newfound­ land and Labrador, but there were other troubling aspects that Newfoundland Energy Minister William Marshall identified, including: the inadequate provincial revenue promised to Nova Scotia (which was far less than Alberta received from its oil and gas industry); the definition of provincial fiscal capacity, which ignored employment rates and level of public services compared to those in the rest of Canada; an insistence that the refining and petrochemical sectors in Eastern Canada be at full capacity before new plants were constructed in Nova Scotia; a provision limiting the province to a 6.25 per cent equity share in oil finds (and 12.25 per cent share in gas finds); and Ottawa’s refusal to make the agreement constitutionally enforceable.76 If  Newfoundland found Nova Scotia’s arrangement with Ottawa unacceptable, Trudeau invited Peckford to withdraw his reference to the New­foundland court and appeal jointly to the Supreme Court of Canada.77 This would remove all doubt of ownership, but Peckford had no intention of bypassing the province’s judicial system. He refused Trudeau’s request, as some in the Newfoundland government believed that the Supreme Court was too close to Trudeau to get a fair hearing there. Saskatchewan Premier Allan Blakeney put the issue a little more succinctly when he challenged Trudeau to consider the wisdom of having the federal government appoint members of the Supreme Court when it was the final arbitrator of constitutional disputes between Ottawa and the provinces.78 Angry with an intransigent Ottawa and anxious to show he held the support of the province, Peckford dissolved the government and called a snap election for 6 April 1982. “What I need now,” he told voters, “is a clear mandate which will show Ottawa that you do support my administration and the stand we are taking.”79 His victory was overwhelming: 44 of

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the 52 seats in the provincial legislature, and 61 per cent of the popular vote. In the federal election held two years earlier in 1980, Newfound­ landers had given five of their seven federal seats to Trudeau and his Liberals. As he often did with Quebec, which also voted for one party provincially and another federally, Trudeau could claim that he, too, had the support of Newfoundlanders for his handling of the issue. Clearly, New­ foundlanders saw the federal and provincial parties as completely separate entities but, as political scientists have suggested, divergence between the federal and provincial elections is the Canadian norm.80 Trudeau later told a Liberal Party convention in Newfoundland that those Liberal MPs were legitimate provincial spokesmen. They believed in a partnership between the two governments and rejected the notion that the provincial government should pursue alone the goal of social and economic development.81 Don Jamieson, the former provincial Liberal leader and longserving member of the Trudeau cabinet, saw Peckford’s win as “narrowly nationalistic,” demonstrating that Newfound­land was not yet entirely integrated into the Canadian family.82 Ottawa’s response was to taunt Peckford. Marc Lalonde even warned that New­foundland would lose in the oil sweepstakes: “The people of Nova Scotia [would] be the ones to benefit from offshore development” because they had negotiated a deal with Ottawa. Trudeau could not resist a jab at Newfoundland either: he told an audience in Charlottetown that two of the drilling rigs scheduled to drill off Newfoundland in 1982 had been reassigned to Nova Scotia; the Globe and Mail described the prime minister’s missive as “incredibly mean.” Trudeau was playing politics with the issue in a disgraceful manner that fuelled further antagonism not only between St. John’s and Ottawa but also between New­foundland and Nova Scotia.83 It got worse from there, as Trudeau had one more indignity to hurl at the premier. On 19 May 1982, Justice Minister Jean Chrétien travelled to St. John’s to announce that Hibernia oil was too important to Canada to risk further delay: his government had asked the Supreme Court of Canada to decide the question of ownership. The government believed that it could not wait for the Newfoundland court to render its judgment as was usual in most jurisdictional cases. Such haste could not disguise Trudeau’s bitterness towards Peckford: Canadian federalism had rarely witnessed such effrontery and barefaced audacity from a prime minister to a premier. Trudeau’s dismissal of the normal judicial process also demonstrated his disrespect for Canadian federalism. Opposition leader Joe Clark called the federal action “an insult bordering on contempt.”84 Peckford expressed shock and dismay:

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6.3  Pierre Trudeau believed that he, too, represented the interests of Newfoundland as well as the provincial government. He was always popular in Newfoundland and drew large crowds whenever he visited, as pictured here in Grand Bank, Newfoundland, in 1971. In the 1980 federal election, he won five of seven seats even though Newfoundland voted overwhelmingly Conservative in provincial elections. (CP Photo/Peter Bregg; CP 879530) Never before has a federal government ignored the legitimate rights of a Supreme Court of a province to adjudicate on a matter of such importance to the province. Never before has a federal government so arrogantly dismissed the expression of a people of a province on an issue which so greatly affects them.85

Reminiscent of Smallwood’s reaction to Diefenbaker’s decision on Term 29 in 1959, Peckford cancelled a ceremony planned to celebrate the new constitution which had been signed into law in Ottawa a few weeks earlier by the Queen and declared a provincial day of mourning. He also asked people to wear black armbands. With the backing of six  other provinces – itself an indication of the rancour that had engulfed intergovernmental relations in Canada – Peckford petitioned

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the Su­preme Court of Canada (SCC) not to hear the federal offshore reference until after the Newfoundland court had ruled. It refused, and on 3 June 1982, formally dismissed Newfoundland’s request and accepted the federal reference. Although it might be argued that the federal legislation had left the SCC no choice, Peckford saw it as another indication of Ottawa’s misuse of its power and its completed disregard for his province.86 Federal-Provincial Relations Hit New Low Peckford had bludgeoned Ottawa on almost every issue important to New­foundland and Labrador after he became premier in 1979, and Ottawa demonstrated that it, too, could play in the trenches. The two governments had fought not only on offshore oil and gas, but also on Newfoundland’s right to transmit electricity through Quebec, on the constitution, and on every imaginable aspect of fisheries jurisdiction. Some began to wonder if Peckford was simply an anti-federalist populist and Trudeau an unrepentant centralist. Michael Harris, the Globe and Mail reporter in St. John’s, described Peckford as a legend in the making – “a patriotic big mouth and political enfant terrible par excellence” – and that his confrontations with Ottawa had come at a terrible price. Peckford’s defence of Newfoundland had incited the fury of Liberal Ottawa. Trudeau and his cabinet seethed with anger as Peck­ ford steeled his province against Ottawa’s refusal to entertain any notion of sharing its control over the offshore oil and gas and the fisheries. Peckford’s position met with retribution. The extent of Ottawa’s punishment of New­foundland and Labrador exposed Trudeau and his colleagues as little more than unscrupulous, ruthless politicians, more at home in the patronage-ridden culture of an earlier era than in latetwentieth-century Canada. Diefenbaker had continued to funnel federal largesse into Newfoundland even as Smallwood openly plotted his overthrow. Not so Trudeau. Although relations between St. John’s and Ottawa in the period from 1980 to 1984 must be studied in much greater detail, one does not have to look far to find evidence of a series of punitive federal actions against Newfoundland and Labrador. Relations between Newfoundland and Ottawa subsequently reached their lowest points since 1949. Federal ministers, the Globe and Mail reported, regarded Peckford with the “kind of disdain usually reserved for yipping mongrels.” Disdain had “crystalized into hostility” the more Peckford assumed the mantle of regional

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nationalist. After the Quebec referendum in 1980, Peckford’s remark that the federal government was an agent for the provinces was too much for Trudeau and the Ottawa bureaucrats, as was Peckford’s savaging of Trudeau’s constitutional agenda. Trudeau could never forgive Peckford for saying that he was more sympathetic to Lévesque’s ideal of Canada than of Trudeau’s. Even though Ottawa was increasingly concerned about energy security, it refused to provide any support for Newfound­ land’s development of the Lower Churchill in Labrador. Federal and provincial officials had negotiated eight agreements for funding from DREE alone, but Pierre De Bane, the federal minister, delayed signing all agreements with his Newfoundland counterparts for more than a year. Ottawa provided generous financial assistance to modernize struggling dockyards in Halifax and Montreal in 1980–1, but it refused to provide any financial support for the $10 million upgrade to the New­ foundland dockyard as it prepared for offshore development. When the deep-sea fishery went into a tailspin in the early 1980s, Ottawa merely watched events unfold, except in regions of the province represented federally by the Liberal Party.87 Two years passed before Ottawa bailed out the struggling industry and when it finally did in 1983, it initially acted unilaterally without any provincial involvement. The two governments eventually nationalized the fishing industry in Newfoundland.88 Perhaps the extent of this federal-provincial irrationality and pettiness is highlighted by the events of 5 February 1982. On that day Ottawa and Newfoundland signed a new $75 million cost-shared transportation agreement, but they could not agree on a location for the actual signing ceremony. While Peckford and his transportation minister waited at Confederation Building, the seat of the provincial legislature, William Rompkey, minister of national revenue and the province’s representative in the federal cabinet, and Transport Minister Jean-Luc Pépin summoned the media to the Hotel Newfoundland. After they affixed their signatures to the agreement in front of the press, the document was couriered to the premier’s office. The St. John’s Daily News opined “Incredible … unbelievable … petty.”89 During a major speech in August 1982, Peckford provided a long list of projects and initiatives in Newfoundland awaiting decisions from Ottawa. He alleged that “the federal government is deliberately punishing the people of this province [Newfoundland and Labrador].” The treatment of Newfoundland, he said, confirmed that Trudeau’s 1981 claim “that co-operative federalism is dead” was valid.90 Several months later Ottawa realized that the impasse had gone on too long and on 2 September 1982 presented Newfoundland with a comprehensive proposal on management and revenue sharing of the offshore.

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It was not discussed in cabinet or with Rompkey, by then minister of state for small business and tourism.91 Trudeau proposed a single management board and a new fiscal regime. It mixed Trudeau’s commitment to a national economic community with an appreciation of Newfoundland nationalism and Peckford’s demand to set the pace and nature of development. Ottawa insisted that it had “a national responsibility to ensure security of energy supplies … and a fair distribution of resource revenues.” Some had argued that in its rush to secure the supply of oil, the federal government had sacrificed revenue considerations in the interest of early development. In fact, several months earlier, when Lalonde called for proposals for the exploration of more than 2 million hectares of Canada Lands off the East Coast, an internal federal memo noted “we have not been this aggressive before … in our exploration activity … to attain reduced dependence on insecure foreign crude oil.”92 The latest federal proposal attempted to mitigate those criticisms. It also recognized Newfoundland’s limited fiscal capacity and agreed “that New­ foundland should enjoy the major share of the revenue that offshore resources are expected to generate.” Revenues from the offshore would “contribute to reducing the financial dependence of the Newfoundland government on transfer payments.” Ottawa insisted “that Newfound­ landers, and subsequently all Canadians, receive a fair share of the economic return from offshore oil and gas production.” It allowed the province to claim all provincial and federal revenue, except for the federal corporate income tax, until the province reached a level of fiscal and economic capacity well above the national average. This was referred to as the “sharing trigger.” Two mechanisms were proposed for gauging the economic well-being of the province: first, the fiscal capacity, which had to reach 110 per cent of the national average, as measured by the level of tax revenues per capita the provincial government could receive based on representative Canadian tax rates; and second, the unemployment rate in the province. For every percentage point the provincial unemployment rate exceeded the national average, the “sharing trigger” would increase by two points. If the Newfoundland unemployment rate was 5 per cent higher than the national average, the “trigger” would increase from 110 per cent to 120 per cent. Newfoundland would collect not just all government royalties but it would benefit from the development through job creation and new business opportunities. Ottawa agreed that “the Government of Newfoundland and Labrador’s fundamental goal of attaining economic development and self-sufficiency by creating a strong and diversified provincial economy [would] contribute fully to prosperity throughout Canada.” The proposal also acknowledged

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that the province deserved a full voice in development decisions to ensure that the pace of activity [did] not outstrip Newfoundland’s ability to cope with such activity.”93 The federal proposal held promise enough to get the two sides together. Peckford was at heart a Canadian nationalist. He understood Trudeau’s position and agreed that in a federation like Canada, no province should be permitted to stand in the way of energy self-sufficiency and security of supply. He and Trudeau met in Ottawa on 1 October 1982. The prime minister went to great lengths to show that his proposal made Newfoundland and Labrador the primary beneficiaries of the ­development of the offshore resources. “I understand the concerns of Newfoundland,” he said. Peckford, however, insisted that Ottawa had to agree to joint management as well as being generous with revenue sharing. Trudeau agreed but insisted that Ottawa had to have the final say when a deadlock occurred. There was no way around the impasse, as Peckford refused to accept a deal which left to Ottawa control over the nature of development. On 6 October 1982, Peckford requested time on prime-time television to tell Newfoundlanders that he had suspended all talks with Ottawa. Ottawa was willing to share revenue but not management of the offshore. Throughout the rest of the year Jean Chrétien, who had become the new energy minister, took every opportunity to remind Newfoundland of the advantages Halifax had derived from its negotiated settlement. Chrétien also brought a profound dislike of Peckford to the negotiations, and it was a feeling he could not seem to put aside. Chrétien’s closest advisor and friend, Eddie Goldenberg, recalls how the minister was “almost literally sickened at” and “never forgot” some of Peckford’s comments at the first ministers’ meetings on the constitution, acknowledging that “it affected his later approach to the conduct of federal-­ provincial relations.”94 In the eight months after Nova Scotia surrendered control of its offshore to Ottawa, more than $1.6 billion had been signed in exploration agreements. On 22 November 1982, Chrétien travelled once again to the East Coast to announce that the Canadian Oil and Gas Lands Administration, the federally controlled agency that jointly administered offshore development with Nova Scotia, had negotiated new exploration agreements worth $350 million, creating 450 new jobs and injecting an additional $88 million in goods and services spending in the province. With Newfoundland facing a deficit of $61 million, budgetary cuts of $34 million, and an unemployment rate approaching 20 per cent, Chrétien’s missive was anything but subtle. An editorial in the Globe and

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Mail warned Canadians about the risks of fighting back. “Ottawa pats the fawning dog (Nova Scotia) and kicks the barking dog (Newfoundland).” Pointing out the folly of it all, the editorial noted that Canada really didn’t need Nova Scotia’s gas, but Newfoundland’s oil was essential in Canada’s quest for energy self-sufficiency. More importantly, the paper concluded, the situation demonstrated the economic and financial risks of standing up to Ottawa. The costs for provincial autonomy were very high.95 The federal Liberals seemed happy to be beating up on one of Canada’s weakest provinces. An opinion poll at the time found that 20 per cent of Newfoundlanders would opt for separation if Ottawa won control of the offshore.96 Chrétien and Marshall: Principles and Politics Jean Chrétien attempted to entice Newfoundland back to the negotiations in early 1983, intimating that Ottawa might be prepared to offer the province a deal different from that reached with Nova Scotia. He asked James McGrath, a St. John’s Conservative MP, to help arrange an informal, off-the-record meeting with William Marshall. He reassured McGrath that Ottawa had “room for flexibility,” adding “You know me, you know the kind of guy I am. I want to make a deal.”97 Chrétien and Marshall met a number of times, but Chrétien insisted that there be no formal exchange of written positions during their discussions. The two ministers subsequently agreed upon seventeen principles that Marshall believed could form the basis of a federal-provincial agreement, how­ ever. Chrétien had moved sufficiently on the management issue to make an agreement possible, and Newfoundland proposed a solution that it believed would allay Ottawa’s concern that it might hold the rest of the country hostage by threatening to reduce supply if it had a firm control over development. Marshall proposed to Chrétien that the province be allowed to decide how development would occur on the offshore to maximize jobs and business opportunities for Newfoundland, but if Ottawa thought that Newfoundland’s policies were threatening Canada’s ability to reach oil self-sufficiency and security of supply, it could apply to an independent board which would arbitrate the dispute. If the board ruled in Ottawa’s favour, it could override the Newfoundland policy and ensure that the province was not interfering with the federal goal of oil self-sufficiency and security of supply.98 Chrétien seemed to have agreed with Marshall’s assessment of the discussions and told the press an agreement was imminent. However, when

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federal and provincial officials attempted to put the Marshall-Chrétien principles into a document, the Newfoundland bureaucrats discovered that the federal position had not changed from when Marc Lalonde was minister, despite what Chrétien had agreed to with Marshall. Chrétien had proposed that Ottawa was prepared to accept a joint and equal management board, but his officials insisted that any agreement had to give Ottawa the final say in any dispute over the pace of development at least until national and regional oil self-sufficiency and security of supply were achieved. Peckford was willing to accept such an arrangement as he believed it was a short-term one, provided Ottawa’s development plans for the Newfoundland offshore were acceptable. Chrétien refused to reveal Ottawa’s development plans to Marshall.99 The Newfoundland team was also exasperated with Chrétien’s officials as they struggled to put into written language the principles Marshall thought he had secured from Chrétien. Infuriated, Marshall decided to confront Chrétien. Nego­ tiations could not continue if Chrétien agreed to a set of principles in private discussions with Marshall only to have them later dismissed by his officials. Marshall called Chrétien to a meeting in Montreal. Before Chrétien arrived Marshall penned a framework of their agreement as he understood it and wanted Chrétien to sign it so that their officials would know what the two ministers had agreed upon. Marshall describes the peculiar meeting and his attempt to have Chrétien accept the letter. What happened borders on the bizarre: When I took the envelope out of my pocket with the seventeen principles intended to serve as joint drafting instructions to respective teams of officials, Mr. Chrétien’s eyes became fixed on it. I remember him rising from his chair whilst exclaiming, “But Bill we agreed there would be no writing.” I recall responding that the federal negotiators were not accepting what we had agreed, so we had to reduce it to writing. I, too, got up out of my chair, holding out the envelope to him. Facing me, he started walking back towards the door with his hands up in front of his body as if to ward off some deadly blow, whilst incanting “no letter” to which I replied “just a little one, Jean.” Then I heard him mutter “no writing,” while continuing to backpedal with his eyes transfixed on the envelope I was holding out to him. I recall responding with something like “just these few words, Jean” as he reached the door, whereupon he exited, slammed the door right in front of my extended hand holding the proffered letter, and beat a hasty retreat lickety-split down the hotel corridor. He was gone, never to return.100

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Peckford, Marshall, and the Newfoundland officials had come to the conclusion that Chrétien had had no authority from Trudeau and the cabinet to meet Newfoundland’s demands – he was merely making it up as he went along. Peckford had visited Montreal during the negotiations and Ottawa insisted that he had forced Marshall to back away from the talks. However, Globe and Mail columnist Jeffrey Simpson supports Marshall’s account. Chrétien had thrown out ideas that the Newfoundland minister and his officials believed to be federal policy, but when Chrétien took them to the cabinet both Trudeau and Finance Minister Marc Lalonde refused to go along with them. Remembering their disputes with Lougheed following his 1979 decision to cut oil production to defy Ottawa, Trudeau and Lalonde were determined that never again would a premier be permitted to hold the federal government hostage by cutting back or ceasing oil production, and here was Chrétien discussing with Marshall a deal that might do precisely that. Trudeau put a stop to it. Marshall then realized that he was being misled by Chrétien, evidenced by his insistence that nothing should be put in writing, and decided that there was nothing to be gained from further discussions. After the Chrétien-Marshall meeting in Marshall’s suite at the Meridien Hotel in Montreal, Marshall and the Newfoundland negotiators attended a few more perfunctory sessions with federal officials, but when they realized nothing concrete was being offered, they checked out of their hotel and flew back to St. John’s without a word to Chrétien and the federal team. They had not even gotten to the issue of revenue sharing. Chrétien blamed the Newfoundlanders: Marshall had negotiated in bad faith, and Peckford had meddled in the negotiations. When he spoke to the Newfoundland and Labrador Construction Association shortly after, Chrétien received a standing ovation from the 400 members in attendance.101 His failure to deliver what he had promised Marshall, however, only succeeded in convincing Peckford that a federal-provincial agreement on the offshore was unlikely as long as Trudeau was prime minister. A short time later, Peckford sent a circular to all households explaining how his government had compromised on the offshore, moving from claiming provincial ownership to joint ownership to putting ownership aside completely, and still Ottawa continued to reject Newfoundland’s compromise proposal.102 Peckford found little support for his position on the offshore in the Newfoundland Court of Appeal. It ruled against Newfoundland’s ownership of the offshore. Ottawa acted quickly thereafter to show it now

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controlled the offshore. Within a week of the court’s decision in 1983, the United States Ice Patrol warned that conditions on the Grand Banks in the vicinity of the offshore drilling were treacherous. Peckford ordered Mobil Oil of Canada to cease drilling and bring its rigs into port. The Ocean Ranger Families Foundation joined with many others in the province to support Peckford’s cease drilling order, but Mobil appealed to Ottawa.103 Even though the court had declared Ottawa the victor after a passionate and bitter fight with Newfoundland, Chrétien could no more move beyond the political than could Newfoundland, even though a year earlier the Ocean Ranger and its eighty-four-member crew had been lost in a terrible storm.104 Chrétien overruled the provincial order and allowed drilling to continue. The Globe and Mail editorial, “Doesn’t He Care?” prompted an angry letter from Chrétien. He dismissed the Globe’s suggestion that Peckford had staked out the “high moral ground” and wrote that it was the Newfoundland premier who was playing politics with an emotional issue.105 Later, in August 1983, Chrétien also refused to allow Petro-Canada to participate in a joint venture with the Newfoundland and Labrador Petroleum Corporation (NLPC), a Newfoundland Crown corporation patterned after Petro-Canada. All companies drilling offshore had federal and provincial permits but the province had issued a permit for the South Hibernia only to NLPC. When Petro-Canada executives approached the province for a permit for the zone, the Minister proposed a joint venture between the two state-owned companies even if the Newfoundland entity existed only on paper at that point. If Ottawa won the case before the Supreme Court of Canada, Newfoundland proposed that it would pull out of the deal and allow Petro-Canada full control of the wells in the zone. If Newfoundland won, it would share the cost and revenues evenly with Petro-Canada. It was the type of coop­ eration that the industry desired as it showed that the two levels of government could work together. Petro-Canada also wanted the deal, but Chrétien intervened to disallow any cooperation. He refused to allow the federal state-run oil company to enter an agreement with a provincially controlled company. Chrétien was opposed because he feared that such an agreement would recognize Newfoundland’s claim to the offshore while the matter was before the courts.106 After refusing to allow PetroCanada to cooperate with the Newfoundland agency, Chrétien travelled to St. John’s and announced that he had directed Petro-Canada to drill South Hibernia on a licence issued unilaterally by Ottawa. The $1.23 billion program promised to create 1,200 new jobs in Newfoundland. Marshall called it a complete appropriation of the offshore by Ottawa.107

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Appeal to the Supreme Court Fails In 1984, despite Peckford’s insistence on the morality and rightness of his cause, the government of Newfoundland and Labrador lost in the Supreme Court of Canada as it had in the Newfoundland Court of Appeal a year earlier.108 In a split decision, the Newfoundland court had sided with the province on the five-kilometre territorial seabed where there was no oil and gas, and on the continental shelf for Ottawa, arguing that the United Kingdom had not passed a law or order-in-council exercising Newfoundland’s right to claim ownership of the offshore before it joined Canada in 1949.109 The Supreme Court of Canada similarly found on 8 March 1984 that the sub-sea resources off Newfoundland belonged to Canada, dismissing the argument that Newfoundland’s historical and constitutional position distinguished its claim from that of British Columbia. The court found that upon its entry into Confederation, Newfoundland could not have held rights to explore and exploit the continental shelf by virtue of international law, because in 1949 international law conferred no such rights. Continental shelf rights were an extraterritorial manifestation of external sovereignty and within the constitutional purview of the nation state, and in Canada the federal government had legislative jurisdiction by virtue of the peace, order, and good government power in its residual capacity.110 The Supreme Court’s decision was a terrible defeat for Peckford. He had gambled everything on the courts and had lost. He remained belligerent, though, and continued to insist that he would not return to the bargaining table until Ottawa agreed to give the province a share of the  management of the offshore. He embarked on a national speak­ ing tour – “Sharing from Sea to Sea” – to promote a better understanding of  Newfoundland and Labrador similar to Smallwood’s tour after Diefenbaker announced his decision on Term 29. As he attempted to promote Newfoundland’s case in the court of public opinion, Peckford frequently attacked the Supreme Court as a “blunt instrument with which to define the kind of Canada we want.” His anger towards the Court only grew after it ruled in May 1984 that his legislation to reclaim for the province all the water-power rights on the Churchill River as a way to force Quebec to re-negotiate the 1969 hydro contract was unconstitutional. He called upon Ottawa to intervene to restore some “natural justice and fairness” in a contract that reportedly provided Quebec with $790 million in revenue annually and $8 million to Newfoundland. It refused – for political reasons, Peckford insisted.111

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Trudeau had made it clear to Peckford much earlier that a court ruling upholding federal jurisdiction would radically alter his view about a negotiated settlement. Even though Ottawa now held all of the cards and the jurisdictional questions were resolved, the major oil companies remained reluctant to invest in the offshore as long as the two orders of governments remained at loggerheads. Even though Trudeau insisted that it was now incumbent upon Peckford “to show [that] his expectations [were] more clearly in line with the reality of federal legal ownership and control over the continental shelf,” he asked the Department of Justice if a constitutional amendment was possible to transfer some or all of Canada’s proprietary interests and legislative jurisdiction in the offshore area to Newfoundland. He had no intention of doing so, of course, and when the Department of Justice concluded that to do so would require resolutions of the Canadian Parliament and the legislative assemblies of seven provinces with a total of more than 50 per cent of the population, he knew that transferring the offshore to Newfoundland was nearly impossible. He scribbled on the memorandum from Justice, “Just what I wanted. Thanks.” He could now tell Peckford that it was not within his constitutional prerogative to transfer the offshore.112 A political solution to the offshore was never in the cards, even though Chrétien continued to insist that if Newfoundland signed an agreement similar to that negotiated with Nova Scotia, it would reap higher revenue levels than it would if it owned the resource. He continued to promote the arrangement Trudeau had last offered. Newfoundland would not be asked to share offshore revenues until it was the second richest province in Canada – second only to Alberta and then about 40 per cent richer than Ontario. Under such an arrangement Newfoundland “would be twice as rich as you and your neighbors in Atlantic Canada are today.” Nor should Newfoundland be concerned about oil revenues reducing its equalization payments. “We have a provision under the current equalization formula,” Chrétien said, “that guarantees equalization payments will not decline more than 15 per cent a year.” If Newfoundland signed a deal with Ottawa, he promised that “provincial revenues from Hibernia might be large enough to make Newfoundland a ‘have’ province within five years of production,” adding that this “should be a cause for celebration even if it entailed a loss of equalization payments.” Yet, in the national interest, he insisted, it was critical that “because of his large responsibilities for national energy concerns, the federal Minister could normally resolve a controversy [between the two orders of government].” Peckford had made it clear, however, that there would be no

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agreement as long as Ottawa insisted on having the final say over the offshore, regardless of how generous the federal government was in revenue-sharing.113 After negotiating since 1968, the Newfoundland government was no longer interested in working with the Liberal government in Ottawa. Peckford’s government decided that it would wait for a change of government before beginning negotiations again. Even after Trudeau’s resignation in March 1984, there was little hope of a deal with Ottawa. Chrétien, one of the leading contenders to replace the prime minister, told the Liberal policy convention he was committed to a strong central government. He defended his determined position against Peckford, claiming that provincial premiers cannot be allowed to set the national agenda.114 With relations so bitter, acrimonious, and suspicious between them, the Liberal government in Ottawa and Newfoundland’s Conser­ vative government could not realistically expect to negotiate a settlement. Peckford’s only hope lay in a change of government in Ottawa, just as Smallwood had earlier waited for the Liberals to return during his struggle with Diefenbaker. It was the last card the province had to play and with the Liberals more than twenty points behind the Conservatives in most national opinion polls during the spring of 1984, it looked like a winner. The Atlantic Accord Brian Peckford saw tremendous advantage in the election of Brian Mulroney to the leadership of the federal Conservative Party in June 1983. Both Peckford and John Crosbie (also a leadership contender) had supported Mulroney on the final ballot at the Progressive Conserva­ tive leadership convention. He vowed to end the interventionist policies of Trudeau and repeal the National Energy Program to deregulate the oil and gas industry in Canada. This would include abolishing federal restrictions on export sales, removing the special federal taxes on oil and gas activity, and terminating the preferential treatment for exploration and development on territory where Ottawa had jurisdiction. He eventually promised to recognize Newfoundland’s ownership of the offshore petroleum resource, but when Peckford first met him in Ottawa on 23  November 1983 to discuss the issue, Mulroney was reluctant to do so, even though the National Progressive Conservative Party had embraced the idea in 1980.115 On 14 June 1984, in a move partly designed to embarrass the Liberals, who were in the midst of a leadership campaign,

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Peckford and Mulroney signed a Memorandum of Understanding (MOU) on the offshore that would be the basis of an agreement if the Conserva­ tives prevailed in the upcoming federal election. Such a political undertaking was extraordinary – even improper and irresponsible, perhaps – for a federal opposition leader and a sitting premier. Marshall had negotiated the details with Pat Carney, the Conservative energy critic. Not to be outdone by the opposition Conservatives, the federal cabinet approved a few weeks later a brochure outlining Ottawa’s proposals on sharing the offshore with Newfoundland.116 Although the MOU between the two Conservative governments recognized that the Supreme Court had settled the issue of ownership of the offshore mineral resources and made impossible an earlier promise to recognize provincial ownership of the resource, Mulroney insisted that a Progressive Conservative government would recognize the right of Newfoundland and Labrador to be the principal beneficiary of the wealth generated from oil and gas off its shores as if the resources were on land. The principle of revenue sharing between the federal and provincial government should be the same regardless of whether the resource was on land or on the adjacent seabed. Peckford remarked that Mulroney’s strategy reflected a new approach to economic development, as it recognized “the right of the Atlantic provinces to be the principal beneficiary of the wealth of the oil and gas off their shores consistent with a strong and united Canada.” Mulroney’s promise also reflected a new approach to Canadian federalism and a possible end to the federal state-building efforts of Trudeau which Peckford so vehemently opposed. He found Mulroney’s promise consistent with his goal of a strong and united Canada.117 Peckford then did his part in helping Mulroney win the largest majority in Canadian history on 4 September 1984. He targeted the five Liberal MPs, whom he described as the “fickle five” for their refusal to support his claim to the offshore, and was able to defeat two of them. He delivered four of seven seats to Mulroney. The Conservative victory in Ottawa swept away the corrosive bitterness and acrimony that had characterized relations between Ottawa and St. John’s in the latter years of the Trudeau era. Federal Energy Minister Pat Carney negotiated the details of an agreement with Newfoundland’s William Marshall. On 11 February 1985, Mulroney and Peckford signed the Atlantic Accord giving both governments equal partnership in the management of offshore oil and gas resources. It was also an agreement that vowed to provide the development of the offshore oil and gas resources for the benefit of Canada as a whole and for Newfoundland and

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Labrador in particular. Canada’s goal was self-sufficiency and security of supply, and Newfoundland’s was joint management over fundamental decisions related to the pace and mode of development to control the impact of development on the province.118 The Atlantic Accord established joint federal-provincial management of the offshore resources and gave the province benefits as if the oil were located on land. It established a Canada-Newfoundland Offshore Petro­ leum Board (later changed to the Newfoundland and Labrador Off­ shore Petroleum Board) – with three members chosen by each level of government and a mutually agreed upon chair – which Trudeau had steadfastly refused to consider. The Board was tasked with managing the offshore resources on behalf of the two governments, and it had to approve all plans for development. This was a considerable victory given that Trudeau had insisted on federal control and had secured as much in an earlier deal with Nova Scotia. Newfoundland had insisted that an equal voice in the development strategy was more important than sharing revenue from the resource. The Atlantic Accord rested on three fundamental concepts: first, the principal beneficiary of the resource should be Newfoundland and Labrador because it was in the national interest to bring prosperity to the province; second, the resource should contribute to energy security for all Canadians because that, too, was in the national interest; and, third, producing provinces should be treated equally in developing their energy resources whether they are on land or offshore, because equality serves the national interest. Both sides agreed on the principle of achieving national energy sufficiency which, ironically, Trudeau and Peckford had also discussed. The federal minister would have paramountcy until Canada established security of supply and ultimate independence from the world oil market. After that, paramountcy would pass to the provincial minister. Because the companies had to submit a development plan, the province could ensure that the best mode of development was followed, but the provincial government could not stand in the way of Canada achieving self-sufficiency in oil. If the federal minister believed that the province’s insistence on a particular mode of development had unreasonably delayed Canada from achieving security of supply, the federal government could appeal to a three-person arbitration panel that would make a final ruling on the matter. The Conservatives treated Newfoundland oil as though it were on land, giving it the same rights as Alberta to set and collect its own royalties from any oil and gas discovered. It was a key demand for Newfoundland and one to which the

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Liberals were not prepared to accede.119 Ottawa also provided a $300 million offshore development fund over five years to provide for infrastructure development in Newfoundland. At the time of the negotiations, Carney had noted that the agreement was “a monument of Canadian co-operation and the way in which Canada should develop in the future.”120 For Peckford it was the realization of his quest for control, observing that: It might be worthwhile reflecting how different the contemporary history of this Province might have been if those charged with the responsibility of the affairs of this province [since Confederation] had insisted upon similar rights in relation to our fishery and the hydro resources.121

The Atlantic Accord also represented a new approach to federalism and regional development. As Prime Minister Mulroney said at the signing ceremony, “We have believed firmly in the principle of equality – equality in terms of joint management and equality in terms of revenue sharing.” There was no dollar-for-dollar loss of equalization payments as offshore revenues grew, but a gradual reduction as Newfoundland caught up economically and socially to the rest of Canada.122 Mulroney described the accord as the most important agreement reached between Ottawa and St. John’s since Confederation, adding that he was “not afraid to inflict prosperity on Newfoundland and Labrador.” For him, it was also a “cornerstone of national reconciliation” that he had promised when he assumed the leadership of the Conservative party.123 Peckford predicted it would allow “this province to catch up socially and economically to the rest of Canada.”124 That Nova Scotia immediately exercised its “most-favoured province” rights clause in its own deal and signed a new accord with Ottawa demonstrates that Newfoundland had negotiated the better agreement. The Mulroney government subsequently negotiated in March 1985 a comprehensive oil and natural gas agreement (The Western Accord) with the governments of Saskatchewan, Alberta, and British Columbia. The agreements reflected the return of co-operative federalism. The federal arrangement that marked the founding of Canada in 1867 and the constitutional document that provided the rules for that arrangement had not been established as simple instruments of coercion to impose a final victory between the two orders of government. They were designed to manage and mediate, not eliminate conflict, but in the offshore dispute no compromise was possible between successive New­ foundland premiers and the federal government until 1985. Throug­hout

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the process, there was, as constitutional scholar John Whyte has argued more generally about federations, tension between the view that federal arrangements invite fidelity to the original text and the original intentions of the Fathers of Confederation on the one hand, and the reasonable expectation that Canada’s federalism and constitutionalism should adapt and change to meet new conditions, new contingencies, and new contexts on the other.125 In the dispute over the offshore Trudeau argued for fidelity to the original division of powers and his duty to govern in the national interest while Newfoundland pressed for recognition of current contingencies. Several Newfoundland premiers, including Brian Peckford, believed that Canada’s federal arrangement did not meet the specific objectives of the provincial political community nor did it recognize the province’s historic realities and contingencies; he argued that there are times when constitutional rules have to be set aside to achieve the needs of those within the larger political community. Even when the Supreme Court of Canada ruled against Newfoundland, he argued that national circumstances and national purposes change and healthy nations must adopt a process that allows for constitutional dynamism that ensures the conditions for long-term political stability. The Atlantic Accord represented that approach to federalism and regional development. Peckford had achieved his goal of establishing the equality of the provinces in the energy sector. In the Throne Speech following the signing of the Atlantic Accord, he wrote that “My government is confident that the recent period of acrimony in our national life is now behind us and that all Canadians in the provinces are once again committed to internal cooperation and prosperity so that Canada can take its right place on the world stage.”126 Peckford’s federalist dreams had come in a bilateral political agreement, not a constitutional one (though the government of Canada agreed in the accord that it would introduce the appropriate legislation in Parliament to entrench the accord in the Constitution if Newfoundland received the requisite support of the other provinces to do so), but the Atlantic Accord changed the nature of Canadian federalism. Yet, the change came only in the offshore and not in fisheries management or with the transmission of hydroelectricity, which continued to infuriate successive administrations in Newfoundland. Peckford had failed to convince the federal government of the depth of the challenges facing Newfoundland as Trudeau and Chrétien were driven by near-paranoia of how Alberta in the 1970s had set its own course in energy. They were determined not to broker any deal with the provinces that might weaken the control of the central government at any time in

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the future. Mulroney had a different conception of Canadian federalism. After he negotiated an agreement on joint management of the offshore, negotiations began with the oil companies for the development of the Hibernia oil field. The federal government contributed $2.6 billion of the $8.5 billion needed for the consortium of oil companies to begin development. The first oil did not flow until 17 November 1997, twelve years after the Atlantic Accord was signed. Still, Newfoundland had been able to negotiate with Ottawa effective joint management over the offshore and retain the lion’s share of fiscal benefits, even though constitutionally and legally Ottawa retained ownership of the offshore. The province had no such success in other sectors of the economy, such as in the fisheries, where Ottawa held jurisdictional prerogative. When the fishing stocks that had sustained Newfoundland’s primary industry for centuries collapsed in 1986 and a cod moratorium was imposed, it was the federal government that provided both leadership and money. Although Peckford attempted to influence Ottawa’s decisions, the province had only a consultative role in helping fishers and communities that depended on the fishery to deal with the ecological and economic crisis. That power resided in Ottawa still as it had since 1949, despite Peckford’s bitter battles with the federal government to change things during his tenure as premier. Peckford had succeeded in his struggle, however, to create a more decentralized federation in the areas of offshore development. When he resigned on 22 March 1989 he left a different province than the one he had found when he became premier a decade earlier. His successor, Thomas Rideout, who had left the Liberal Party in 1980 to join Peckford in his battles with Ottawa for control over the offshore, soon discovered that the tide had gone out for the Conser­ vative Party. Just a month after becoming premier, and despite winning a higher percentage of the popular vote, Rideout lost the general election to the rejuvenated Liberals led by prominent lawyer and former Small­ wood cabinet minister Clyde Wells. On 5 May 1989, Wells became premier and minister responsible for intergovernmental affairs. Even though he had campaigned on a promise of economic recovery based on the promotion and encouragement of small- and medium-sized businesses, improved educational opportunities, and investment in infrastructure and facilitates, it was Wells’ opposition to a new constitutional amendment that led to another Ottawa-Newfoundland confrontation. A new government had come to power in Newfoundland, warning about the dangers of taking decentralization too far and that position would lead to another conflict between province and national government.

7 Reason, Passion, and Intransigence: Federalism, Clyde Wells, and Brian Mulroney

Introduction Clyde Wells was an outlier in Canadian federalism. He stood alone among the premiers in refusing to criticize the federal government during the early and mid-1990s when it drastically reduced fiscal transfers to the provinces to manage its own deficit and the burgeoning national debt. Reductions in transfers to the provinces for health, post-secondary education, and other social programs, as well as limits on increases to equalization hit Newfoundland and Labrador particularly hard. Such transfers in the late 1980s regularly accounted for nearly 50 per cent of its revenue but by the early 1990s they had dropped to less than 45 per cent; the province received $150 million less from Ottawa in 1993 than it had in 1989. To avoid a financial collapse the Wells government dramatically reduced operating expenses and program expenditures. Publicsector employees and other voters vowed to make the premier pay for what they considered his neoconservative retrenchment and downsizing as he attempted to restructure the economic landscape of the province. Faced with similar circumstances, Canada’s other premiers turned their fury on the unpopular prime minister, Brian Mulroney, but Wells chose not to follow the traditional script. “My Ministers have not criticized and do not criticize the federal government for this situation,” he said in a Speech from the Throne. “The financial health of the nation as a whole must be protected by reducing the unacceptably high level of federal debt that has been allowed to accumulate over time. The reality is, however, that part of the federal financial burden has effectively been transferred to my Ministers to manage.”1 Accepting those decisions was all part of being Canadian and sharing the national burden.

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Wells had his confrontations with Ottawa, but they were different from those of any other Newfoundland premiers since Confederation. They lacked the virulent partisanship that defined much of the history of intergovernmental relations between Ottawa and Newfoundland after 1957.2 Wells’ refusal to lay blame for the province’s financial predicament at Ottawa’s doorstep did not have the paternalism of Joseph R. Smallwood, who trumpeted Newfoundland’s exceptionalism and its late entry into Confederation as reasons to be exempted from the treatment other provinces might have received. Nor did it have the anger and bitterness of Brian Peckford. Wells’ attitude also differed in both substance and approach from that of Smallwood and Peckford, even though they all agreed that Confederation had not provided Newfoundland with the standard of living it had hoped for in 1949.3 Peckford exuded vitriol and anger towards the centripetal tendencies of a “paternalistic centralized federalism,” which contributed to Newfoundland’s economic paralysis and which Prime Minister Pierre Trudeau continued to defend. Peckford had convinced many Newfoundlanders that the Canadian state under Trudeau was just another in a long list of outsiders exploiting the province’s natural resources while ignoring its economic and social well-­ being. The provinces had to exert control, particularly in the area of resource development, as it was the only way to improve their social and economic well-being. Peckford applauded the province-centred, decentralized approach to Canadian federalism pursued by Mulroney after 1984, and he joined with his fellow first ministers to construct a federation that they claimed would respect the constitutional and jurisdictional prerogatives of the provinces. Wells sought to construct a different federation and a different relationship with Ottawa. He never accepted Peckford’s narrative of New­ foundland and Labrador as an exploited colonial state. He was skeptical not only of Peckford’s and Mulroney’s vision of Canadian federalism, but also of the efficacy of offshore oil and gas and other large-scale development projects which Peckford pursued to break the dependency of Newfoundland and Labrador on federal largesse. Wells insisted that Newfoundland’s underdevelopment stemmed from a series of internal factors such as an inadequate educational system and the lack of modern infrastructure. What really set him apart from Peckford was his belief that smaller and economically struggling provinces such as Newfound­ land and Labrador needed a strong and activist central government if they were to improve their fiscal capacity and provide citizens with a standard of living at or near the Canadian average.4 For the urbane and

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cerebral Wells, Newfoundland could only achieve the level of public services and the economic development opportunities that its citizens needed if the federal system were reformed to give the smaller provinces an equal voice in Ottawa with the more populous ones. The provinces did not need more responsibility or increased jurisdiction. What they required was a reformed constitution that would ensure that parliamentary institutions such as the Senate could more effectively protect and promote their interests. A decentralized and weakened federal government would relegate Newfoundland and Labrador to the perpetual role of poor cousin in the Canadian federation. When Wells sought to reverse Peckford’s acceptance of a decentralized Canada which he believed weakened the federal government, he found himself at the centre of a federal-provincial maelstrom. Wells insisted on a style of federalism and an intergovernmental paradigm that was clearly at odds with that of the prime minister and most of the other first ministers at the time. Many believed that his vision of Canada threatened national unity and, indeed, the very existence of the country, but Newfoundlanders rejoiced once again that their premier confronted the Ottawa juggernaut just as they had when Peckford earned the moniker of the “bad boy” of Canadian federalism and Smallwood vowed to destroy John Diefenbaker’s government. Newfoundlanders, it seems, revelled in the notoriety of their political leaders standing up to Ottawa and the rest of Canada. A New Approach to Intergovernmental Relations Wells adopted for Newfoundland and Labrador a new approach to intergovernmental relations. His battle with Ottawa was no less strident than Peckford’s, but he rejected the ranting and raving in favour of a more reasoned, balanced approach. This was demonstrated by his acceptance without rancour of the necessity of a policy of restraint in federal spending and transfers as noted above. Wells was neither an advocate for greater provincial autonomy nor a supporter of a more decentralized federation in the manner of Peckford and Mulroney, and he believed that provinces had to rise above their own particular interests and do what was also best for the country. While he believed, for instance, that Newfoundland had a role to play in such areas as fisheries management, he never challenged Ottawa’s control and demanded that Ottawa itself rise above narrow interests and govern in the broader national interest. He demanded constitutional and institutional reform that would give Newfoundland and the other have-not provinces a more effective voice

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in a strong national government. This would allow the federation to offset the dominant political influence of the most populous provinces of Ontario and Quebec. His mantra was akin to that of the nascent Reform Party of Canada and others in the Prairies who were demanding the “West wants in.” In his first provincial campaign, he asserted that Peckford had been fighting the constitution rather than using it to improve the economic position of Newfoundland.5 Canadian federalism and constitutionalism, Wells insisted, were about more than questions of jurisdiction. He believed that the issue pivoted on the meaningful representation of Newfoundland and Labrador at the centre of power in Ottawa, and not just on relations between orders of government. For him, Newfound­ land wanted in. Wells became a student of federalism at Memorial University of New­ foundland and in the intervening decades before he became premier he became a constitutionalist. He and Mulroney, incidentally, both enrolled at Dalhousie Law School in 1959, but they moved in separate circles in Halifax. Mulroney left for Laval after a less than stellar year in Nova Scotia. Wells became well-versed in the writings of leading federalist thinkers and was a great admirer of the precepts of the American constitution. A member of the 1978 Canadian Bar Association Committee on the Constitution, he argued then that an elected and equal Senate would represent and protect the interests of Newfoundland and Labrador from the Quebec-Ontario majority in the House of Commons. He never deviated from his view that Section 36 of the Constitution Act, 1982, held that “Parliament and the Legislature, together with the Government of Canada and the provincial governments, are committed to (a) pro­moting equal opportunity to the well-being of Canadians.” His primary objective for Newfoundland and Labrador, he frequently said, was “Furthering economic development to reduce disparity in opportunity,” followed closely by his second objective: “Providing essential public services of reasonable quality.” His third objective was to provide the people of Newfoundland and Labrador with “an opportunity for general well-being … reasonably comparable to that of [their] fellow Canadians.” These three objectives, he believed, covered every aspect of government. Moreover, the constitution was clear that the government and the legislature were committed to achieving these things; they were the basic precepts of the Canadian constitution that would help end regional disparity.6 For this to occur, however, the smaller provinces such as New­foundland and Labrador depended on a strong central government that had the capacity to “initiate and implement national social and economic programs designed to

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promote equal opportunities for all Canadians and to address regional disparities.” Any weakening of the federal government, he feared, threatened the national community of Canada.7 Wells’ view of Canadian federalism was not a new one for Newfound­ land and Labrador. It reflected the historical position of his province going back to the Confederation of Tomorrow Conference of 1967 and the first ministers’ conference on the constitution in 1968. Then, Premier Joseph Smallwood had argued that any special status for one province would reduce the “importance, authority or strength of the federal government [and] reduce Canada to a nation of a few wealthy provinces and ‘a number of slum provinces.’” The aberration in the province’s historic constitutional position came, Wells suggested, when the Peckford administration supported the Meech Lake Accord.8 Wells believed that nothing in the constitution could be negotiated away as it was the framework under which citizens agreed that they would live for the coming decades and that it would similarly govern federal-provincial relations in Canada for decades, even centuries. Premier and citizens had “to do what is right with the Constitution.” Yet, he admitted, the government of Canada had not lived up to the constitutional commitment because of the unequal distribution of power in the Canadian Parliament. With just seven seats and 2 per cent of the votes in the House of Commons (compared to 60 per cent for Ontario and Quebec), Newfoundland lacked the power to force Parliament to do what it was constitutionally mandated to do. Representatives from Quebec and Ontario acted in the best interests of their constituents – as one might expect – even if the rest of Canada suffered. The solution was an effective, elected, and equal senate that would ensure that the constitution was upheld. In a reformed senate with an equal number of representatives from each province, Newfound­ land and Labrador would have one tenth of the vote and have an impact equal to that of either Ontario or Quebec. Such a distribution of power was critical in a federal state. For Wells, the debate about the constitution was not some theoretical argument about federalism but a process for delineating the role of the federal state and its ability to ensure a brighter future for his province. The Constitution Act, 1982 promised New­ foundland that as a province of Canada it would not be relegated forever to the status of a have-not province, and that the Canadian state would ensure that it enjoyed a standard of living and public services comparable to that of all Canadians. The senate was the key to making the constitution work, although Wells realized that the upper house required considerable reform.9

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Yet, Wells was no ordinary politician. He rejected the strategy of most premiers of mixing passion and pragmatism and then settling on a compromise. For him intergovernmental relations were never simply the art of the possible, as he was not prepared to bargain away his principles and idealism for some middle ground. A fundamentalist, some charged, he largely dismissed the search for political expediency that is so common in politics and federal-provincial relations. Rather, his approach to intergovernmentalism was so impinged with reason and principled action that he became intransigent. This can be discerned most clearly in the constitutional negotiations in the late 1980s and early 1990s over the Meech Lake constitutional accord. At that time – and several years before Wells became premier – all of the provinces, including Newfoundland and Labrador, supported Mulroney’s promise to initiate a series of policies designed to promote national reconciliation and end the poisonous relationship between the provinces and Ottawa that had embittered federal-provincial relations since the early 1970s. They agreed that constitutional change would strengthen national unity, particularly in Quebec, and “breathe a new spirit into federalism.”10 Canadians seemed to share that optimism, too. On 4 September 1984 they had given Mulroney the largest electoral victory in Canadian history. Many interpreted the resounding Conservative victory as a repudiation of Trudeau’s combative approach to federalism and his dogmatic insistence on a strong central government in Ottawa. At the heart of Mulroney’s national recon­ciliation was his commitment to having Quebec give its assent to the Constitution Act, 1982 that had been negotiated against its protestations. After removing some of the major irritants in federal-provincial relations by negotiating separate energy accords with Newfoundland, the Maritime provinces, and Western Canada, Mulroney and the premiers forged a new constitutional deal that promised to end the impasse that had existed between Quebec and Canada since 1982. They never expected a premier of Newfoundland to emerge to thwart their plans. The Meech Lake Accord: Negotiating a Consensus The events leading to the Meech Lake Accord are relatively well-known, and it is necessary for our purposes only to provide the broad outlines.11 On 2 December 1985 Liberal Robert Bourassa was elected premier of Quebec, replacing the sovereignist Parti Québécois that had held power for almost a decade. Bourassa sought to have Quebec participate in the national reconciliation that Mulroney had promised and to remake the Canadian federation. Since 1982, every major political party in Quebec

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had condemned the 1982 constitution and demanded modifications. In May 1986, Quebec’s intergovernmental affairs minister and former constitutional advisor to Prime Minister Mulroney, Gil Rémillard, announced in Mont Gabriel five conditions necessary for Quebec’s reintegration into the Canadian federation: recognition of Quebec as a distinct society; limitations on the federal spending power on future cost-shared programs in areas of provincial jurisdiction; an enhanced role in immigration for Quebec; restoration of Quebec’s veto over constitutional amendments; and constitutional entrenchment of Quebec’s membership on the Supreme Court. Mulroney welcomed the announcement as a renewed commitment to Canada that came without any major transfer of power from the federal government that had been the essential objective of former Premier René Lévesque. Mulroney wrote Peckford and the other premiers, asking them to be sympathetic to Bourassa’s demands and inviting them to participate in a new round of constitutional talks to address Quebec’s concerns. He also asked that they leave more substantive constitutional matters for later discussions.12 This set off a flurry of federal-provincial and interprovincial discussions that lasted for nearly ten months. At their annual conference in 1986, the premiers accepted Quebec’s demands in the Edmonton Decla­ ration and agreed with Mulroney that constitutional negotiations should begin anew. They also agreed that such issues as senate reform, property rights, and fisheries management (one of Peckford’s demands) would follow in subsequent rounds of constitutional talks. Peckford and the premiers of the smaller provinces were concerned about Quebec’s attempt to limit the federal spending power, as they depended on federal transfers to sustain an acceptable level of public and social services.13 Federal negotiators, particularly Senator Lowell Murray, secretary of state for federal-provincial relations, who had earlier been a deputy minister in Richard Hatfield’s New Brunswick government, and Norman Spector, secretary to the cabinet for federal-provincial relations, met with provincial officials over the following months to prepare for a meeting of first ministers in Ottawa to consider Quebec’s constitu­tional demands. By spring 1987, confident that a deal could be reached, Mulroney invited the first ministers to Ottawa. “The task at hand is a Canadian priority,” he wrote. “Quebec’s abstention [from the Constitu­tion] is a matter fraught with consequences not only for Quebecers, but for all Canadians.”14 On 30 April 1987, in a strident moment of executive federalism where first ministers dominated intergovernmental relations, compromise, and elite accommodation, the eleven first ministers unanimously agreed at a

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7.1  Prime Minister Brian Mulroney and Premier Brian Peckford chat during the government retreat at Meech Lake on 30 April 1987, where Mulroney and the provincial premiers reached an agreement in principle on constitutional grievances. (Rt. Hon. Brian Mulroney/Library and Archives Canada. Photo provided by Arthur Milnes. The Mulroney Fonds are in process of being catalogued.)

Federalism, Clyde Well, and Brian Mulroney  229

government retreat at Meech Lake to the principles outlined earlier by Rémillard. Saskatchewan Premier Grant Devine scribbled on his working papers, “We have a signed accord, Quebec a part of Const[itution] of Canada [but] major give and take.” During the meeting Devine also wrote, “Should be fear in the regions” about changes in federal spending power but he and the other premiers never considered it reason enough not to proceed with the accord.15 They reconvened several weeks later at the Langevin Block on Parliament Hill, and after a marathon nineteenhour bargaining session put the principles agreed to at Meech Lake into a constitutional text on 3 June 1987.16 Mulroney and the premiers reassured Canadians that the Langevin text represented a new era of cooperation in federal-provincial relations. Peckford exclaimed that the new constitutional deal heralded a new equality for all the provinces and a new kind of Canadian federalism.17 The Meech Lake Accord was announced to near universal acclaim. Each provincial legislature potentially held the power to hold the accord ransom until its particular demands were satisfied, but that seemed an unlikely prospect. Finding unanimity did not seem an obstacle at the time, as all of the premiers, the federal government, and the major opposition parties in Parliament endorsed the accord. The Quebec National Assembly became the first to ratify it, and most of the other provinces, including Newfoundland and Labrador, subsequently followed. The 1982 rules for constitutional change had dictated that once a resolution supporting a constitutional amendment had been adopted by one legislature, it activated a threeyear countdown in which all provinces had to ratify the agreement. As constitutional scholar Richard Simeon subsequently noted, Meech Lake “seemed to have met the tests of both federalism and parliamentary government, and its swift ratification seemed assured.”18 Although the Meech Lake Accord found favour with most Canadians, it became a constitutional conundrum for others. Few disputed the desirability – if not the necessity – of having Quebec sign on to the 1982 constitutional agreement, but following patriation in 1982 the political culture of the country had undergone considerable change, especially in English-speaking Canada. It had embraced the Charter of Rights and Freedoms as a central tenet of the country and placed considerable credence in the notion of the equality of all provinces and all citizens. Many Canadians were troubled, for instance, by the irreconcilability between the distinct-society provisions of Meech and the entrenchment of individual rights and equality provisions in the Charter. Women’s groups, including the National Action Committee of the Status of Women, worried that

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the distinct-society clause might diminish equality provisions in Quebec even though women’s groups there dismissed such concerns.19 Former Prime Minister Pierre Trudeau declared the accord a betrayal of Canada, stating that Mulroney had sold out to the provinces and to Quebec nationalists: “Those Canadians who fought for a single Canada, bilingual and multicultural, can say goodbye to their dream.”20 Meech had been designed to mediate between the centralizing features of the Constitu­ tional Act, 1982 and the Charter by providing for regional participation in key federal institutions, but to some Canadians this was asking them to accept a brand of federalism that they found disconcerting. Wells Emerges as Critic It was ironic, perhaps, that the Liberal Party of Newfoundland and Labrador selected Clyde Wells as its leader in the same week that the Meech Lake wording was finalized. The Newfoundland legislature had ratified the accord on 7 July 1988, but when Wells became premier and minister responsible for Intergovernmental Affairs on 20 April 1989, he became the accord’s most determined critic. The Meech Lake Accord had not featured prominently in the Newfoundland general election campaign, but Wells had made no secret of his opposition to the accord. Several years earlier, while on a pre-election tour of the Northern Peninsula, his St. John’s staff had sent a copy of the new deal to his motel and as he was reading the document he scribbled his criticisms on a notepad.21 They were detailed and comprehensive and warned of trouble ahead if he were to become premier, even though most first ministers were heralding the new deal for ending Quebec’s constitutional isolation. Wells’ election as premier soon made him the most articulate and formidable threat to the Meech Lake constitutional deal, even as its detractors gathered momentum across Canada. He was not the lone opponent, however, who then possessed the authority to scuttle the deal negotiated in 1987. New Brunswick Premier Richard Hatfield, a veteran of the constitutional battles and a keen supporter of Meech Lake, had been routed in October 1987 by Liberal Frank McKenna (whose party won every seat in that year’s provincial election), who also had serious misgivings about it. The New Brunswick Acadian community was opposed, fearing that if Quebec became increasingly French the rest of Canada might become more English-speaking. McKenna himself was worried about the imposition of limits on the federal spending power and the impact of distinct society on the Charter of Rights and Freedoms, though he never

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threatened to withhold his province’s support if his concerns were not addressed. Similarly, the NDP government of Howard Pawley was defeated in Manitoba. In a narrow vote Progressive Conservative Gary Filmon emerged as premier of a minority government and Liberal Leader Sharon Carstairs, vowing never to support the accord, won twenty seats in the Manitoba legislature. Following the decision of the Quebec government to invoke the notwithstanding clause in December 1988 to override the Supreme Court’s declaration of the unconstitutionality of Quebec’s language laws, Filmon withdrew the resolution on Meech Lake from the legislative agenda and sought further public consultations, telling Manitobans that Bourassa had acted contrary to the spirit of Meech Lake.22 Many believed, however, that his resolve – like that of McKenna – would crumble as pressure mounted to ratify the deal. Wells’ Opposition to Meech Draws Fire Those opposed to Meech saw their best hopes with Premier Wells and the government of Newfoundland and Labrador. In his victory speech after winning the election Wells was vague on his intentions about Meech. He warned, perhaps ominously, that he wanted the other premiers to consider his concerns, but he vowed to allow McKenna to carry the opposition on the constitution. A day later, however, he was unequivocal in his opposition and swore to oppose Meech Lake. It conferred special legislative powers on Quebec, made reform of the senate impossible, and weakened the power of the federal government.23 Newfound­ land had elected a premier who would be selective in his fights with Ottawa, but he would prove to be a formidable opponent on those issues that he cared passionately about. Although some commentators had unfairly dismissed Peckford as ill-suited to participate in the constitutional debates facing Canada during his term in office, there was no denying Wells’ credentials. He was a constitutional lawyer and even as premier he could never step away from that vocation. Not all of the votes had been counted in the Newfoundland provincial election when the attacks on Wells’ position on Meech Lake began. The first off the mark was the federal government. John Crosbie, trade minister and Newfoundland’s representative in the federal cabinet, led the pack. On the evening of Wells’ election victory, he set the tone for what the new premier might expect if he insisted on revising the accord. Newfoundland might suffer economically, Crosbie warned, if it refused to “play ball” with Ottawa on the constitution. Crosbie later noted in his

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autobiography that “As a foe, Clyde [Wells] was one of the most miserable people I’ve ever encountered … one of the most stubborn being[s] alive.” Wells and Crosbie had been friends for years but after their split with Smallwood they travelled different political roads. Crosbie telephoned Wells and offered his congratulations, adding: “Now Clyde, I hope to Christ you’re not going to go shagging around and cause trouble on the Meech Lake agreement. We’ve got a lot at stake here.” He later told Canadian Press that “Clyde told me, ‘Well, there’s nothing more important than the Constitution’ ... So I knew from the beginning that he was going to be very difficult to deal with … that the Meech Lake accord was doomed.”24 While Intergovernmental Affairs Minister Senator Lowell Murray dismissed Crosbie’s threat, he wondered if a country could work if constitutional agreements could be revoked once passed by a provincial legislature. Even a conciliatory public gesture from Mulroney could not hide the growing fear and loathing of Wells within the Tory cabinet. Benoit Bouchard, one of the many Quebec sovereignists recruited by Mulroney to run in the 1984 election, instructed Wells not to fiddle with the future of Canada by insisting on changes to the accord since doing so might destroy the country.25 Quebec Premier Bourassa similarly cautioned Wells of the consequences for Newfoundland if he persisted in his opposition to Meech: “Newfoundland needs much economic development, and one way to achieve that development is to enjoy a very cordial relationship with its neighbour, the province of Quebec, and with the federal government.”26 The pro-Meech Globe and Mail was relentless in its condemnation of Wells.27 Its editorial writers described him as the greatest threat to the accord and opined that he had no mandate to demand changes to it. Although ratification was also required in Manitoba and New Brunswick, the newspaper recognized that Wells was “somehow a more implacable foe of the agreement than either Filmon or McKenna. While those premiers remain plagued with doubts about the agreement, Mr. Wells appears impervious to uncertainty; he is sure of his position and of the accord’s failings.”28 William Thorsell, the editor-in-chief, asked “Who is Mr. Wells to define what will satisfy Quebec?”29 Other media outlets, notably the CBC, attacked Wells and the other hold-out premiers, and they accepted Mulroney’s mantra that the failure of Meech would lead to an unravelling of the country.30 In the meantime, Francis McGuire, New Brunswick’s deputy minister of intergovernmental affairs, and others in Frank McKenna’s office advised senior officials in Ottawa to meet with Wells and consider his

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concerns. They understood that he was “fundamentally opposed to the spirit and concept of Meech” and were worried that his opposition, unless acknowledged and engaged, might lead to the accord’s undoing.31 Their advice was ignored even though Ottawa, too, was extremely worried about Wells. Neither Mulroney nor any of his officials attempted a  dialogue with him to understand or address his concerns. Some six months would pass from the time Wells became premier until federal government officials finally met with him. Mulroney had even cancelled a first ministers’ conference to discuss the growing opposition to the accord scheduled for Prince Edward Island in September 1989 rather than deal with Wells’ opposition. The Mulroney government understood that Wells’ concerns could not be met by simply tinkering with a phrase or two in the accord, and having no idea how to accommodate him while keeping Quebec onside, they decided that their best strategy was to ignore him and continue their campaign of warning of the dire consequences that would result from the collapse of the Meech Lake Accord.32 Wells attempted to rise above the petty politics of fear and intimidation. Meech had been a “quick-fix political deal more akin to a unionmanagement collective agreement than a true piece of constitutional evolution,” he insisted. He dismissed the dire warnings about the impending collapse of Canada if Meech were changed and characterized it as a deceptive strategy designed to avoid discussing how the accord would fundamentally alter Canadian federalism.33 When it was rumoured that the federal government was ready to resort to the practice of pragmatic federalism by offering special deals to the holdout provinces to secure their consent for the accord, Wells insisted that he would have no part in it. Reports had surfaced that Ottawa had offered McKenna additional federal funds for economic development in exchange for a promise to ratify the accord. Wells’ opposition was not to be assuaged through the use of federal largesse. On 8 June 1989, when he met for the first time his counterparts from Atlantic Canada, he told them he was prepared to listen to arguments for endorsing the accord, but made it clear that he was “not going to horse-trade principles for kilowatt hours of electricity or lower levels of unemployment.”34 Later, he told a Toronto audience – clearly as a means of differentiating himself from Brian Peckford who, it was rumoured, agreed to Meech because Ottawa was willing to discuss later a greater provincial role in fisheries management – “I am not here to bargain constitutional rights for tons of fish.”35 Still, Ottawa thought it might be able to entice Wells to support Meech by resorting to pork-barrel politics, and dispatched an assistant to Claude

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Castonguay, a well-known Quebec federalist and confidante of Prime Minister Mulroney, to St. John’s. Ottawa was prepared to change the mandate of the Department of Industry, Science, and Technology – of which Wells had been particularly critical – to broaden its primary focus on economic development in Ontario and Quebec to that of all provinces. Wells had used the department to show how policies that directed greater federal assistance to Central Canada served only to exacerbate the problem of regional disparity. Wells refused to play politics with Meech and resented all such attempts to barter over the constitution.36 The mandate of the Department of Industry, Science, and Technology pointed to the lack of regional power in Ottawa, and it was that lack of regional influence that had to be changed. As opposition to the Meech Lake Accord gained momentum throughout the summer and fall of 1989, so did the federal criticism of Wells. His position on Meech dominated discussion when Quebec MPs gathered at Montebello in mid-August 1989 and again at the Conservative Party convention a week later. The accord was essential for the unity of country and for the recognition of Quebec’s specific interests, Environment Min­ ister Lucien Bouchard asserted.37 The Cabinet Planning and Priorities Committee subsequently dispatched primarily English-speaking ministers to the three hold-out provinces to explain and promote the accord, hoping that more information about Meech would convince Canadians of its importance. Crosbie continued to target Wells as the federal government believed that it would be more effective in the province than having a minister from mainland Canada attacking the Newfoundland premier. “Clyde Wells is wrong about the Meech Lake accord,” Crosbie said repeatedly in speeches across Canada, asserting that Wells was a captive of the policies of former prime minister Trudeau and a threat to national unity. “He is putting his own biases from the Trudeau years ahead of what he should recognize as the interests of his country and his province.” Crosbie’s office frequently distributed excerpts from his speeches attacking Wells to media outlets in Newfoundland. Other federalist supporters such as NDP leader Ed Broadbent also lashed out at Wells and other opponents of the accord. He, too, warned that the break up of Canada was imminent if the constitutional stalemate with Quebec could not be solved. Mulroney and Bourassa both continued to warn that failing to ratify Meech would fuel Quebec separatism.38 Senior federal officials in intergovernmental affairs were also used to ostracize Wells and gain favour among opponents of Meech. Several bureaucrats met with journalists in Ottawa in late September – an unusual

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7.2  Clyde Wells, elected as premier of Newfoundland on 20 April 1989, became the most articulate critic of Meech Lake. Here he participates in a seminar in Ottawa on Sunday, 29 April 1990, where he makes one of many speeches explaining his stand on the Meech Lake Accord. (CP PHOTO/Chuck Mitchell; CP 788945)

event given the non-political tendencies of Canada’s civil service – and reminded the media about the uncertainty facing all intergovernmental agreements in Canada if a newly elected government such as Newfoundland’s could backtrack on federal-provincial agreements already ratified. They warned that important financial agreements between the provinces and the federal government were susceptible to unilateral demands for revision, even revocation, if provinces acted as Wells threatened to do: “It would raise questions as to the validity of a series of intergovernmental agreements.” Wells had the legal right to rescind his legislature’s ratification, but federal officials were instructed to emphasize how unorthodox and unusual such action was. One federal official warned that “Mr. Wells could just as easily start to question the Hibernia deal between the federal government and Newfoundland.”

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Mulroney told the CBC radio show Morningside that a province like Newfoundland had to live with the vote it rendered on the constitutional amendment, regardless of the composition of the legislature at the time the vote was taken.39 Any attempt by the Newfoundland legislature to rescind the vote that had ratified Meech was not only a despicable act but a dishonourable one too. The intervention of federal bureaucrats as part of Ottawa’s tactics of dealing with Wells demonstrates how nervous Mulroney was with Wells’ opposition. Wells maintained that Mulroney and his advisers had failed to explain the merits of the accord to Canadians. They had “not even expressed any concern about whether Newfoundland has any basis for its position,” he reminded law students at Osgoode Hall. “He hasn’t even deigned to consider it.” Wells remained perplexed and angered that no one in Ottawa, not even Mulroney or Murray, had made any attempt to contact him about his concerns over Meech. What that indicated, he told a Toronto audience, was that the federal government didn’t “give a damn” about Newfoundland’s concerns. It had clearly shown that it placed Quebec’s constitutional interests ahead of those of all other provinces, but “it’s about time that the Prime Minister of Canada started to express some concern about the legitimate aspirations of other provinces besides Quebec.”40 Several weeks before a scheduled first ministers’ conference, Wells made it clear that he would not be pushed around and asked that Ottawa set aside its scaremongering tactics to press the opponents of Meech to fall into line. Stop “trying to scare us into thinking that we’re going to destroy the country if we don’t rush out and sign this accord,” he advised Mulroney.41 Wells believed Mulroney’s primary strategy was to brand those who opposed the accord as unpatriotic: All the Prime Minister or the civil servants are talking about is dire threats to anybody who dares to speak against Meech Lake. And the suggestion that if you oppose Meech Lake you are somehow against Canada, you want Canada to fall apart and you’re unpatriotic … well, I’m as patriotic as the Prime Minister, I care as passionately about Canada as he does … I don’t appreciate him telling me I am insensitive to the future and the security of Canada.42

While “worried greatly” about the reaction in Quebec to the failure of Meech Lake, Wells acknowledged that “this country can no longer carry on doing things because it will be acceptable to Quebec.” He did not see rejecting Meech as tantamount to rejecting Quebec.43

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The Basis of Wells’ Opposition On 18 October 1989, Wells outlined his objections to Meech in a strongly worded letter to Prime Minister Mulroney and the other provincial premiers. It was perhaps naive, but he believed that by articulating his concerns in writing, other first ministers would then engage him in a reasoned discussion of the accord and attempt to address his concerns at the conference scheduled for 9–10 November. Meeting Quebec’s demands was possible, he began, without weakening the Charter of Rights and Freedoms or altering the distribution of legislative powers between the two orders of government. “Our government,” he wrote, “has every desire to accommodating the special concerns of Quebec,” but “we cannot agree to achieve it at a price that will prevent Newfoundland and Labrador from ever becoming a full participating province of Canada and [that] will keep our people in a permanent state of economic disparity.” He found little in the accord acceptable and with an extensive list of concerns, his intent was unequivocal: “In the absence of a commitment from the federal and provincial governments to address Newfoundland’s concerns, the government of this province will have no alternative but to seek the recision [sic] of Newfoundland’s earlier approval of the accord.” He dismissed any notion that Newfoundland’s unease might be addressed in subsequent constitutional talks following the ratification of Meech. He also heaped scorn on the process that had led to the accord: “The worst flaw in the Meech Lake accord is the process that resulted in 11 first ministers telling the 26 million people of Canada how they will be governed instead of the 26 million of Canada telling the 11 first ministers how they will govern.”44 Canadians deserved better. The letter then turned to the substance of his five objections. First, the distinct-society provisions of Meech threatened to undermine the Charter of Rights and Freedoms by creating a special legislative status for Quebec to preserve its distinctiveness. That amounted to special status for a single province being enshrined in the constitution but achieved under the guise of distinct society. Special status for any single province threatened to destroy Canada. In a federal state, Wells argued that it was not possible to have one province with a special status or special powers that no other province had. Such an arrangement would lead to all kinds of stress, dissension, and resentment that would eventually imperil the nation.45 Moreover, Wells rejected the notion that the “distinct society” clause was merely an interpretive one. He feared that under that clause, the Quebec legislature might threaten the rights of the anglophone

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minority in the province. Governments in Quebec, he asserted, would eventually attempt to make the clause an important one and give the courts specific instructions to pay particular attention to it.46 At Osgoode Hall Law School he had earlier elaborated on his fears: [W]hen you go out and say the Constitution must be interpreted in such a way as to acknowledge the character of Canada and then the government and legislature of Quebec has a role and responsibility to protect and promote that character, then you are conveying legislative power … and it’s the primary function of a legislature to pass laws. It is a situation that will wreck this country in the long term.

The equality of the provinces meant that there could be no special status for any one province.47 Moreover, special status for a single province would create resentment and anger in the rest of the country and lead to the eventual break up of Canada. Wells pointed to the growing support in New Brunswick for the Confederation of Regions Party (COR), a new English-rights party which would later win eight seats and form the official opposition there.48 He shared a vision of Canada that included a strong central government, equal provinces, and a nation where English- and French-speaking Canadians were equally at home anywhere in the country. For Wells, the promotion of bilingualism was as important as the spending powers of the federal government and the supremacy of the Charter. Second, the accord widened the sections of the constitution requiring unanimity for change: “The current amending formula is already quite rigid,” he wrote, but “the Meech Lake accord provisions would place Canada in a permanent constitutional strait-jacket.” He believed in a federal system where the provinces were “juridically equal – where the power of elected representatives is balanced in the Senate by equal provincial representation, and where federal programs thereby reflect more than the dominance of Ontario and Quebec.”49 The absence of an effective voice for the smaller provinces in Ottawa had contributed to the dysfunctionality and failure of Canada’s federal system to distribute the nation’s wealth more equitably. Because the senate failed to protect regional and provincial interests at the national level, the premiers “have had to move into the vacuum created by [an] inefficient and ineffective Senate, to protect regional interests.” Premiers had become very powerful and with ten of them exercising power at the national level in the interests of the provinces, an unhealthy federalism that threatened to weaken the

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national community had arisen. The premiers should be allowed to return to their proper role as defenders of their province’s interests. “Premier[s] should not be involved in the exercise of national legislative power in a federal state. Provincial premiers should be exercising provincial powers. They shouldn’t be transferring over and exercising the national powers because their focus, their way of thinking and their obligations are to the confined provincial interests.” Canada’s federalism had been corrupted by the tyranny of the majority, and the senate as it had evolved was powerless to act as a counterweight to majoritarian interests. National legislative priorities and the spending powers were established by the people of Ontario and Quebec through their control of the House of Commons. The constitution failed to provide for adequate representation at the centre for the less populated provinces like Newfoundland, but Wells believed that the exercise of national power also had to be acceptable to the majority of the provinces if Canada were to achieve social cohesion and equality for all citizens. An elected senate with equal representation from the ten provinces and the constitutional authority to act as a counterweight to the House of Commons would result in a more effective federalism. It would protect all regions and provinces in the federation, which had been the original goal of the Canadian confederation. An effective Senate would “diminish the level of dissension and differences in the country.”50 Senate reform, Wells maintained, was to be the single most important achievement for the long-term security of Newfoundland and other smaller provinces.51 Wells believed that the unanimous consent required for future constitutional amendments in a number of areas after the ratification of Meech would destroy any hope for changes to the Senate and hence, the federal principle in Canada: The real magic, the real magic of a federal system of government is that it is designed in such a way, if it’s operated properly, to accommodate the interest both of the majority of the people and the majority of the parts so that every time you exercise national spending and legislative power, you must subject it to two tests: what do the majority of the people think [and] what do the majority of the parts of the country think of it?

Federal power should not be exercised unless it protected and promoted the interest of the majority of the people as well as the majority of the provinces. To do otherwise, Wells argued, was to create a country where one part flourished and the other parts were excluded from that

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prosperity. The basis of all federal systems is balance and accommodation.52 Achieving senate reform was fundamental to the future of not only Newfoundland and Labrador but to that of all smaller provinces. Under the Constitution Act, 1982, Parliament and at least seven provinces with more than half the people of Canada had the power to redesign the senate, but Meech Lake required the agreement of all provinces as well as that of the federal government. A reformed senate was the best protection the smaller provinces had against political and economic domination by Central Canada.53 An economically disadvantaged and struggling province such as Newfoundland required considerable federal assistance, but “Meech Lake will consign Newfoundland to being a third or fourth-rate province for the rest of its life.”54 He later told a Montreal audience that “All of the smaller provinces have little or no hope of ever achieving their rightful place in the Canadian federation until Canada has a Triple-E [elected, effective, and equal] Senate.”55 Canada needed a strong central government that would use its resources to help the smaller provinces; Atlantic Canada and Newfoundland did not want more provincial jurisdiction or power because of their limited fiscal capacity – they wanted more say in the exercise of federal power but that might never come if Meech were ratified.56 Third, the limits that Meech imposed on the federal government’s spending power, even in areas of provincial jurisdiction, left little hope or incentive for new national programs. Unlike Peckford, Wells did not argue for more power for the provinces nor to reduce Ottawa’s ability to spend in the regions; he wanted to protect Ottawa’s spending power: We have already got complete jurisdiction in education and we cannot provide adequate schools for our children … What the small provinces need is more say in the execution of federal jurisdiction, not more jurisdiction themselves.57

Any limitation of federal spending prerogative would lead inevitably to a patchwork of programs across the country with different standards and a steadily weakening commitment to reduce regional disparities. Meech would also restrict federal spending power to the extent that it would “gravely undermine” Ottawa’s ability to establish national programs with minimum national standards. Limiting federal spending, Wells maintained, was in effect entrenching economic disparity as larger provinces would likely opt-out of national shared-cost programs, reducing the incentive for the federal government to introduce them. He was

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particularly worried about the fate of social and economic programs designed to promote equal opportunity for all Canadians and to address regional disparities:58 Every time the federal government tried to do anything to develop a national program to bring up the have-not areas of the country, it would have to pay the richer provinces, that would choose to opt out, a pro rata compensation. And that’s unfair.59

Wells outlined several other concerns. Ottawa had conceded too much power to the provinces by allowing them to determine the candidates for appointment to the Supreme Court. Such a policy effectively eliminated appointments from the territories. Moreover, the Meech provision on immigration that allowed a special role for Quebec – and potentially other provinces – in selecting newcomers eliminated the federal government’s obligation to provide new Canadians with a sense of  attachment to the country. Wells’ list was extensive and given that Mulroney and Bourassa had declared that any amendments to Meech would effectively kill it, Wells had set himself further apart from other first ministers. To protect Newfoundland’s interest and save Canada, he was prepared to disrupt the federal-provincial and interprovincial goodwill that had been established during the negotiations leading to Meech: “The government of this province must put the long-term future of its people, and we believe the long-term future of Canada, ahead of any concern about adverse criticism of its actions in respect of the Meech Lake accord.”60 Rather than forcing the federal government and the other provinces to take him seriously, however, his truculent attitude and his obstinacy only served to further set him apart from most of his colleagues. A few days after receiving the letter, Mulroney telephoned Wells and followed later with a fourteen-page response, refuting each of his assertions. Meech was a logical outcome of the constitutional discussion in Canada over the previous two decades. If Wells had been present at the negotiations he would have understood that Meech was the result of a “delicate balancing of interests” to deal with Quebec’s exclusion (a point that Wells and many others rejected) from the 1982 constitutional agreement. Other outstanding issues would be resolved once Quebec was back in the constitutional community. Mulroney attempted to clarify for Wells the linguistic duality/distinct society clause contained in the accord, insisting that the distinct-society clause had meaning but it also had

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to be interpreted in conjunction with the Charter. On the amending formula he accused Wells of inconsistency: [Y]ou insist on the equality of the provinces but reject Meech’s proposal for the current unanimity provision in the case of Senate reform. That would ensure the strict equality of the provinces in that area and prevent any seven provinces with at least 50 percent of the population imposing their will and new Senate on the three Prairie Provinces or three of the Atlantic Provinces for instance.

He also dismissed Wells’ concern over federal spending power: “Let me be clear that the Meech Lake Accord in no way restricts the spending power of Parliament.” Meech applied only to new national shared-cost programs in areas of exclusive provincial jurisdiction; it did not apply to the federal government’s spending prerogative for individuals and institutions.61 There was no indication that Mulroney had any intention of reopening the discussion as Wells had insisted must happen. Growing Concerns over Meech During the same week as Wells’ missive to Mulroney, the premiers of both New Brunswick and Manitoba released legislative reports on Meech Lake. New Brunswick’s was conciliatory and timed to encourage some compromise at the upcoming first ministers’ conference. Manitoba’s was less so. It called for sweeping changes, including making the distinct-society clause subservient to the Charter of Rights and Freedoms and demanding the removal of the provisions guaranteeing compensation to the provinces for opting out of national shared-cost programs.62 Gil Rémillard, Quebec’s intergovernmental affairs minister, dismissed Manitoba’s objections as “a throwback to the ’50s, to the postwar years.” Vowing the proposals would never be acceptable to Quebec, he announced that he would work only with Frank McKenna to find a way to save Meech Lake.63 Wells supported Manitoba’s position. The Globe and Mail, however, was scathing in its condemnation of both Wells and Filmon: [They] are not quibbling over details. They believe the nature of Quebec as a pre-dominantly French-speaking province deserves no effective constitutional recognition … The unyielding stands of Manitoba and Mr. Wells are bad news, for the accord and for the country.64

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On 8 November, just one day before the first ministers’ conference was to begin, Wells tabled Newfoundland’s alternative accord in the House of Assembly. It included recognition of Quebec as a distinct society in a preamble to the constitution; a veto for Quebec over constitutional change affecting language, culture, and the appointment of civil law judges; limits on federal spending that were consistent with the obligations identified in the constitution; and senate approval of the appointment of Supreme Court judges, taking into consideration the French and English divisions with the upper chamber so that Quebec senators would have input on civil law appointments.65 Things did not bode well for the meetings in Ottawa. The first ministers’ conference had been called to discuss the economy but there was no avoiding the constitution. It was Wells’ first conference since being elected premier and the affair became an interprovincial battle pitting the leaders of Canada’s largest provinces against the smaller ones. The federal-provincial imbroglio started at the formal dinner before the conference even began, when Wells first experienced the pressure that would be exerted on him over the next few days. There was a coordinated effort to persuade him to not only postpone taking any action to rescind Newfoundland’s approval but to accept the accord and trust the other first ministers to then discuss the issues he considered important. He engaged in lively and heated exchanges with Prime Min­ ister Mulroney and several of the premiers, principally David Peterson of Ontario in the opening session.66 As most of his colleagues voiced their support for the Meech Lake Accord, Wells articulated his vision of Canadian federalism and the role he wanted Ottawa to play in protecting the interests of the smaller provinces. That could not be achieved with Meech, and he offered the conference a compromise solution in “An Alternative to the Meech Lake Accord” that he believed was responsive to Quebec’s legitimate concerns and one he hoped would find reasonable acceptance among the majority of Canadians. Wells insisted that all provinces be treated equally and that no province have a veto over the wishes of the others. “I say no province in this nation has the right to hold up the rest of [the] nation. No province can hold up the constitutional development of this country forever.” 67 While Quebec was distinct in many aspects, its status and rights as a province were the same as any other province; recognition of Quebec as a distinct society should be included in the preamble to the constitution and not impact the Charter or affect the distribution of legislative powers between federal and

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provincial legislatures. He proposed new language on Quebec’s five proposals, including the federal spending power which Wells suggested would not permit opting-out with compensation to any national program that Parliament declared to be a response to the commitments set out in section 36(1), the appointment of Supreme Court judges, immigration, and a draft constitutional amendment to reform the senate that included, among other recommendations, six senators for each province, who would face re-election for future terms every six years.68 Wells was uncompromising. Perhaps, not unexpectedly, his proposal was met with scorn and derision by most of the other first ministers, especially after McKenna and Filmon suggested they were willing to compromise as a means of finding a way through the impasse. The premiers spent much of their time attacking Wells’ position, warning him constantly of the dire consequences of the failure to ratify Meech Lake. Globe and Mail columnist Robert Sheppard detected a visceral hatred towards Premier Wells at the conference and reported that Peterson’s lip curled “into a snarl” as Wells outlined his opposition to Meech. “You are threatening the political stability of the country,” Bourassa warned as the proceedings began, and Mulroney reminded Wells that it had required a great deal of generosity of spirit to enable Newfoundland and Labrador to join Canada in 1949. Although Mulroney had hoped that Wells might similarly display a greater sense of the same spirit, Wells interpreted the remarks as a direct personal attack and insisted that a rejection of Meech was not a rejection of Quebec. At that point, Bourassa got up from his seat and walked out as Wells continued to insist that Meech “serves only to foster and promote separatism in Quebec, not to diminish it.”69 Wells asked for a national referendum if first ministers were so confident that they were speaking for the Canadian people, adding that he was prepared to accept the results of a nationwide vote. Mulroney refused, claiming that referendums were not the Canadian way.70 Wells accomplished little in Ottawa, but he succeeded in defining the fundamental questions around the accord and the constitution more generally. On television sets across Canada, it seemed that only Wells had the courage to stand up for the equality of the provinces and resist making “unreasonable demands” to any single one of them. The premiers agreed to another first ministers’ conference to be held somewhere in Western Canada on senate reform no later than 1 November 1990, but only if Meech were successfully ratified. There had been no indication from either Ontario or Quebec, however, that they saw Senate reform as  important, and Wells demanded more than assurances of further

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discussion. The premiers did, however, agree that they would continue to work to save the accord. Wells promised not to rescind Newfoundland’s earlier ratification while talks continued.71 In the days that followed Wells watched the Grey Cup in Toronto with Peterson – who styled himself as a potential helpful fixer – and several other premiers. Yet Peterson also personified the resistance that Wells faced in having a serious discussion about his concerns as he insisted that the opponents of Meech – such as Wells – were riding a wave of intolerance of Quebec that was growing across Canada. He also insisted that Senate reform could come only after Meech was ratified.72 His attitude did nothing to compel Wells to change his mind. Discussions with federal officials were no more encouraging. Senator Lowell Murray, whom Mulroney had directed to pursue discussions with all ten premiers, met with Wells on 8 December. They could not find enough common ground to hold a joint news conference. Mulroney and Murray then turned to McKenna to try and convince Wells to change his mind and ratify the accord. They were in constant communication with the New Brunswick premier, who was planning a parallel accord to address the concerns of the three hold-out provinces while leaving the original agreement intact. However, McKenna refused Murray’s entreaties to act as an emissary to convince his fellow dissident premiers: “My view,” he told reporters after meeting Murray, “is that the government of Canada has the major role to play at this stage in trying to pull together some kind of an accommodation.”73 He was prepared to participate, but he would not lead the effort to convince Wells and others to support the accord. Still, Deborah Coyne, constitutional advisor to Premier Wells from 1989 to 1991, maintains that New Brunswick’s intergovernmental affairs officials acted as “Ottawa’s proxies in an attempt to open up the lines of communication to St. John’s.” Moreover, she contends that those officials reported regularly to Ottawa on the conversations held with Newfoundland over Meech.74 In Coyne, Wells had recruited a constitutional ideologue who was as inflexible as he was. Attacks on Wells Intensify As the outlook for Meech became more uncertain, Mulroney and his supporters stepped up their attack on Wells. William Thorsell, editor-inchief of the Globe and Mail and Mulroney confidante, entered the fray once more and called for the isolation of Wells.75 On 27 December 1989, his newspaper reported that 58 per cent of Quebeckers would embrace

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some form of sovereignty-association, while the other 42 per cent wanted complete independence if the Meech Lake Accord failed. Groups of prominent businesspeople, former politicians, bureaucrats, and academics joined forces in a loose coalition of Canadians for a Unifying Constitution to urge the ratification of the accord. The Friends of Meech Lake, one of the many groups which was organized to support the accord, claimed 100 members, including Liberal politician and former Newfoundland MP Jack Pickersgill and Robert Stanfield, former federal Conservative party leader and premier of Nova Scotia. Like others, they saw Wells as the main obstacle. Fearing the failure of Meech would cause irreparable damage to the country, they published an open letter to him, warning that he was putting Atlantic Canada at a severe risk as his opposition to the accord was fuelling the forces of separatism in Quebec: “To us, it is extraordinary that the Premier of Newfoundland would ex­pose the people of Atlantic Canada to grave additional perils for no reason of substance.” Wells was furious and dismissed the letter as “fear-mongering,” wondering again why his critics refused to discuss the merits of the accord if it was so great. This elicited even more anger from the Meech camp.76 Claude Castonguay, by then head of the Quebec-based Associa­ tion in Favour of Meech Lake, predicted that Quebec was headed for a “divorce” if Meech failed. His attack on Wells was indignant and spiteful, reminding Canadians that Wells was a unilingual Anglophone who treated the francophone minority in Newfoundland and Labrador poorly and had no creditability when he said he accepted Quebec as a distinct society. He would have to bear the blame for the disruption that would result if English-speaking Canada rejected Quebec, Castonguay insisted.77 Mulroney’s sixty-one Quebec MPs issued a similar warning, suggesting that Wells was encouraging an “attitude of intolerance” that was sweeping Canada. Their prediction was similarly dire: “We will be a distinct society in this country or we will be a distinct country in North America,” Quebec MP Jean-Pierre Blackburn projected.78 Wells’ response to his critics was an open letter to Canadians, a cross-Canada speaking tour to explain his opposition to Meech Lake, and a call for new constitutional talks.79 As first ministers continued to insist that not a single word in the accord could be altered, Wells became increasingly frustrated with the stalemate. Because Mulroney, Bourassa, and the other premiers had refused to discuss – let alone consider – any changes to the accord that would be acceptable to Newfoundland, Wells said he was left with no alternative but to withdraw his province’s earlier ratification. Because

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there was no indication of any movement to meet any of his objections, he announced plans to place rescinding Newfoundland’s approval of the accord on his legislative calendar in the Speech from the Throne on 8 March 1990. The fateful step would surely result in the death of the accord, but he optimistically hoped that such a threat would finally force Ottawa to take him seriously. However, it resulted merely in further enflaming the situation.80 Wells had telephoned Mulroney a few days before the Speech was read in the Newfoundland Assembly announcing his timetable for rescinding the accord, but Mulroney refused to consider a first ministers’ conference to discuss the accord to address Wells’ concerns. Senator Murray had not been able to find enough compromise among the premiers to warrant calling such a meeting.81 Yet, Mulroney and his advisers had a two-part strategy they believed would salvage the accord. First, they had decided to continue discussions at a variety of levels within the federal and provincial governments and bring the first ministers together only at the eleventh-hour in the hopes of finding some accommodation. Senator Murray reminded reporters that “When they [the premiers] are ready to be brought together, I have no doubt the Prime Minister will call them together.”82 The second was to further isolate Wells and continue to exert public pressure to force him to fall in line. Mulroney, the federal government and some provincial premiers had already done their best to ignore Wells and cast him as un-Canadian. After winning the Newfoundland election his most difficult intergovernmental task, he often said, had been to get Ottawa to take him seriously. Between the first ministers’ conference in November 1989 and mid-March 1990, Wells met only once with Murray and Norman Spector, the senior official responsible for the Meech Lake file. His primary means of communication with Ottawa was through the television set. However, the contact between Ottawa and the other two dissenting provinces, especially New Brunswick, had been “too many [times] to count.”83 Officials in the New Brunswick Office of Intergovernmental Affairs acknowledged that they were in regular contact with other officials across Canada working to find a solution to the impasse. The federal team believed that their best hope for salvaging Meech lay with a parallel accord, and they began secret negotiations, first, to win the support of New Brunswick, and then Manitoba. Once Wells realized he was standing alone, Ottawa hoped that he would abandon his opposition.84 Wells understood the federal strategy and after reassuring Filmon and McKenna that he was not negotiating in secret with Mulroney, he condemned the federal government for playing politics with the country’s

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constitution and its future. His dismissal of Mulroney’s strategy brought an angry response from the prime minister. Speaking in French, Mulroney said “If Mr. Wells wants to speak for himself and his province, I will speak for the country … It is none of his business when I decide to talk to another premier.”85 McKenna was the first to blink – perhaps because of his federal ambitions. His officials had been working closely with their federal, Ontario, and Quebec counterparts since the first ministers’ conference in Novem­ ber 1989 to prepare a series of new proposals. In a secret meeting that Mulroney arranged with Bourassa and Peterson at Harrington Lake towards the end of March 1990, they agreed that McKenna was key to silencing the opposition and securing passage of the accord. It should be noted, too, that New Brunswick might have been an easy sell as many of its bureaucrats – such as Don Dennison, the deputy minister of intergovernmental affairs – had advised former premier Richard Hatfield in negotiating the accord originally, and they were working inside the New Brunswick government for the ratification of Meech. Earlier that month, Lowell Murray and Spector had travelled to Fredericton to convince McKenna to introduce a resolution on Meech Lake in the provincial legislature along with a companion accord to address some of its opponents’ criticisms. They promised McKenna that Ottawa would introduce Bill 88 as a constitutional amendment, entrenching the equality of French and English in New Brunswick and giving the Acadian population the safeguards it sought in a post-Meech Canada. McKenna agreed to abandon his opposition to Meech and then became part of the Fredericton-Quebec City-Toronto-Ottawa intrigues. McKenna wrote in his diary that: [We] would introduce Meech and parallel accord. Would pass Meech if parallel accord passes. Ottawa would act surprised. After a day, they would endorse, introduce in the Parliament of Canada and call public hearings in several provinces. Momentum would build and Ont[ario] would support, PEI and NS would support. Man[itoba] and Quebec would be asked by Mulroney not to shout down too quick. Give it a chance. Quebec would be the final province on board. We work on [Liberal leadership hopeful and former Trudeau minister] Chretien, editorial boards, opposition parties and interest groups. We do Bill 88 at the same time. I agree. Must be done within two weeks. Only way to save the accord and prevent the breakup of Canada.86

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Mulroney and Peterson had convinced McKenna that he could play an important national role by persuading opponents of the accord to seek redress through add-ons or a companion resolution. In his personal diary Mulroney wrote: The deal was, he [McKenna] would agree to present a companion resolution for which “indications of reasonable support from elsewhere.” Namely the feds and a few other provinces, would persuade McKenna to approve Meech as is … with action on his resolutions to follow later.87

On 21 March 1990 McKenna followed the script and introduced a resolution in the New Brunswick legislature, promising to ratify the Meech Lake Accord as planned with Ottawa and proposing a companion resolution to address some of the criticism of the accord. Among the proposals was a resolution giving the Parliament of Canada the authority and responsibility to promote linguistic duality as a fundamental characteristic of Canada while recognizing Quebec’s distinct identity, protecting the rights of women, and guaranteeing a role for Aboriginal peoples in future constitutional talks. It also proposed restoring Ottawa’s authority to create new provinces from the territories and the inclusion of a preamble stating the equality of the provinces and a greater use of the Senate in reducing regional disparities in Canada.88 McKenna had had long discussions with Peterson, who immediately announced his support for the New Brunswick initiative. So, too, did most of the other premiers and Mulroney’s constitutional advisers. Ottawa was pleased as New Brunswick proposed ratifying Meech Lake without demanding any changes. McKenna later acknowledged that “The parallel accord and the last bargaining sessions and the timing of our interventions and everything was [sic] all very carefully scripted with Ottawa’s.” As his biographer concludes, McKenna “had been vanquished by the apocalyptic warning of Mulroney and his advisors,” and as McKenna himself conceded, “the process put such price on failure that we reached the conclusion that it was better to lose face.”89 Coyne noted in a letter to Eugene Forsey that there has been “tremendous coordination and collaboration going on” between Ottawa, Toronto, Fredericton, and Quebec City, and “Peterson et al. really sold McKenna on the delusion that he could be the great bridge-builder on the constitutional front. They just didn’t count on Clyde Wells, thank goodness.”90 In Mulroney’s words, with McKenna on side the nation finally put Wells and Filmon “on trial.”91

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Wells Dismisses Federal-Provincial Manoeuvring Wells dismissed McKenna’s companion accord. Too limited in scope, it failed to address his major concerns, particularly those on senate reform.92 A day after McKenna’s legislative intervention, Wells introduced legislation to rescind Newfoundland’s support for the accord, prompting angry outbursts from his fellow premiers and the prime minister. Even his suggestion that if New Brunswick and Manitoba ratified the accord, he would allow the accord to pass if it were approved by a referendum, either in Newfoundland or all of Canada, did little to quell the anger. McKenna called, asking him to delay the rescission, but Wells was frustrated that his call to hold a public debate on the accord had been ignored. Moreover, Mulroney had continued to refuse to respond to Wells’ invitation to meet the Atlantic premiers at their annual gathering in Newfoundland in late March. There had been no discussion between Ottawa and Newfoundland since Senator Murray visited St. John’s on 8 December 1989. Ottawa welcomed McKenna’s initiatives on the accord, but left Wells alone and gave absolutely no indication that it would address any of Newfoundland’s substantial concerns before the impending deadline. Wells remained determined to resist any side deals that threatened his view of Canadian federalism, even as the federal gov­ ernment continued its strategy to leave him standing alone against the Meech Lake Accord.93 Bourassa also telephoned Wells on 22 March to warn him that he was taking “an unlimited risk” with the future of Canada by going ahead to rescind Newfoundland’s earlier support of the accord. Strangely, neither Bourassa and Wells nor their officials had met at any time to discuss the accord, and it seems Mulroney did nothing to encourage a meeting between them. Rather, the supporters of Meech continued to make a series of statements that simply incensed Wells. Bourassa told the CBC’s current affairs program The Journal that he reminded Wells how dependent Newfoundland was on federal largesse and how it might all be gone if Meech failed. More than half of the province’s revenue came from the federal government and 68 per cent of Ottawa’s tax revenue came from Ontario and Quebec. Bourassa’s intent was clear: if Canada’s future was threatened, the economic consequences for Newfoundland were dire. His intergovernmental affairs minister, Gil Rémillard, unwisely commented that “Canada can very well survive without Newfoundland.”94 Federal politicians voiced similar thoughts, giving further evidence of

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their strategy of intimidation and fear-mongering. Lucien Bouchard said that Wells’ rejection of Meech Lake meant that English-speaking Canada could be forced to choose between Newfoundland and Quebec. There was also an attempt to trivialize Wells’ opposition and show Newfound­ landers as mean-spirited and vengeful. Newfoundland was motivated, Bouchard asserted, by revenge and bitterness over the Churchill Falls power contract. Interestingly, the verbal attacks were directly primarily at Newfoundland and Labrador, not Manitoba and New Brunswick.95 Wells was exasperated: “Nobody will deal with these issues; they just say it is terrible that Newfoundland is taking this position.” He could not let comments about Newfoundland’s dependency on Ottawa pass without a response, however: “I view that as a far more eloquent speech to the people of Newfoundland to reject the Meech Lake accord than anything I’ve said in the two years I’ve been talking [about the accord].”96 On 22 March 1990, one day after McKenna introduced his companion constitutional resolution in the New Brunswick legislature, Mulroney announced in an address to the nation that he would present the companion resolutions to the House of Commons and refer them to a special committee of the House. It was extraordinary for the prime minister to take a provincial proposal to Parliament but it all unfolded as had been planned earlier. Doing so confirms that Ottawa had not only been kept abreast of McKenna’s proposals but also had a hand in drafting them. A fifteen-member special committee was subsequently appointed to conduct hearings across Canada, a task that allowed many Canadians to vent at the Mulroney Conservatives – who by this point had fallen to 17 per cent popularity in the opinion polls. The public hearings were a feeble attempt by Ottawa to address the growing criticism among many Canadians that Meech had been negotiated in private and without public participation. The committee was unlikely to quell such criticism, however. Quebec MP Jean Charest was named committee chair, and the committee was asked to report by 18 May. Some Quebec MPs in the Con­ servative caucus had already indicated to the prime minister that their support for federalism was conditional on the recognition of Quebec as a distinct society as provided for in the Meech Lake Accord; there could be no watering down of the accord.97 The parliamentary committee might allow Mulroney more time to finesse a way out of the impasse, but his room to manoeuvre was becoming increasing constrained. While Quebec had made it clear it would not accept any changes to the accord, and with Wells and much of English-speaking Canada demanding that the Charest

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committee address their concerns, one side had to back down – but in the spring of 1990 that seemed very unlikely.98 As the vitriol and acrimony intensified in the weeks leading to the deadline for the unanimous passage of Meech Lake, the Globe and Mail invited Wells and Bourassa to present in separate 1,500-word essays their governments’ position on the accord. Bourassa refused, claiming that he did not wish to appear on the same page as the “extremist” Wells. However, Wells cogently outlined his opposition to the accord as he had done several times already. He began by insisting that the position of the government of Newfoundland and Labrador was “not based on emotion, anti-Quebec views or political convenience.” Rather, it rested “solely on a conscientious assessment of the structure of Canada as a nation and what we believe should be the position of the province of Newfoundland and Labrador in that nation.” Wells lamented that the proponents of Meech had attempted to cast those like him who opposed the accord as rejecting Quebec and threatening the future of Canada. “They are not rejecting Quebec. They are rejecting the dismantling of Canadian federation. They are rejecting a Canada with a class ‘A’ province, a class ‘B’ province, and eight class ‘C’ provinces.” The proponents of the accord, he insisted, had a moral obligation to promote it on its merits and justifications, and to resist elevating dissension and irrational fears by warning of the impending collapse of Canada if Meech were defeated.99 Wells was telling much of English-speaking Canada what it wanted to hear and had unwittingly become a lightning rod for much of the anti-French attitudes across Canada.100 A Gallup poll in March 1990 found that 53 per cent of Canadians opposed declaring Quebec a distinct society. Wells then rearticulated his criticisms, many of which he had been expressing since before becoming leader of the Liberal party of New­ foundland and Labrador, but this time before the Globe and Mail’s national audience. Canadians were knowledgeable about their constitution and they wanted a voice in constitutional reform, he insisted. For many, the Charter of Rights and Freedoms had become fundamental to them as Canadians. That explained, he wrote, why polls were showing that more than 70 per cent of Canadians wanted a national referendum on the accord: “Constitutions and constitutional change are not just affairs of governments and first ministers. The Constitution belongs to the people of Canada.” Second, the demands of a single province could not be permitted to create “great resentment and dissatisfaction among the people of the other provinces in the Canadian confederation.” Quebec’s demands

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in 1986 were reasonable, he agreed, but constitutional change would only be accepted if it met the shared fundamental constitutional precepts of the national community. Being a Canadian was more than being a resident of a particular province or territory: “Canada has a national identity that is more than the sum of its parts; [it is] an identity which must be provided for and reinforced by the Constitution.” Critical to that identity was the notion of the equality of all citizens and the equality of all provinces. The principle of the equality of the provinces needed to be reflected in the senate to ensure that national decisions reflected the interest of the majority of the provinces as well as the majority of the people.101 For Wells, the critical tasks for Canada were the promotion of equal opportunities for the well-being of all Canadians, the encouragement of economic development to eliminate regional disparities, and the provision to all Canadians of public services of reasonable quality. These goals were enshrined in the 1982 constitution, and he insisted that national political institutions had to function in a manner that reflected those shared precepts. Meech Lake was inconsistent with those fundamental constitutional principles because it did not take into account the impact on other provinces when it addressed the legitimate concerns of Quebec. He believed that the accord could accommodate Quebec’s original demands and be rewritten to remain faithful to the shared principles of Canadian federalism and not limit, for example, Ottawa’s responsibility to establish minimum national standards for all provinces. This could be accomplished in several ways: first, recognize Quebec as a distinct society in the preamble of the Constitution which would eliminate the creation of special legislative status for a single province; second, limit Quebec’s constitutional veto to issues of language, culture, and matters relating to civil law judges on the Supreme Court; third, limit federal spending as Meech proposed but add a qualifying section that Ottawa could still spend in areas set out in the Constitution that dealt with regional disparity (section 36 (1)); fourth, create a role for the senate in the appointment of Supreme Court judges that allowed for provincial participation; and fifth, avoid entrenching federal-provincial agreements on immigration in the constitution. All these matters could be negotiated, Wells asserted, while insisting that any amendment to the Constitution “must remain faithful to the fundamental precepts of federalism, and must have substantial approval in all parts of the nation.” Above all, all constitutional amendments must “strengthen our sense of national community rather than lead to national disintegration and discord.”102

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7.3  In the weeks before the deadline for the ratification of Meech Lake, the premiers and Prime Minister Mulroney had a series of extended meetings to try and address Wells’ opposition to the accord. Here, Wells leaves the official residence of the prime minister in Ottawa after having dinner with Mr. Mulroney. (Rt. Hon. Brian Mulroney/Library Archives Canada. Photo provided by Arthur Milnes. The Mulroney Fonds are in process of being catalogued.)

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The Triumph of Executive Federalism, Almost! A day before the release of the report of the special parliamentary committee studying the Meech Lake Accord, Mulroney called all of the premiers to explore how likely a compromise was among them and to ascertain if they thought a solution could be reached if he convened a first ministers’ conference.103 He was optimistic that the recommendations of the Charest committee would break the impasse. Although the committee had been appointed to test the appeal of McKenna’s proposals, it clearly had Wells’ opposition in mind when it released its report. William Rompkey, a Liberal MP and one of the committee members, kept Wells informed as the committee drafted its final report. It attempted, first, to navigate around the distinct-society clause, suggesting that it was an interpretive clause that would work with the Charter and not confer any additional legislative powers on Quebec. This was a change that Wells welcomed but that Bourassa dismissed as “unacceptable.” The committee, second, had endorsed McKenna’s proposal that a companion resolution be introduced to give the federal government responsibility not only to preserve but also to promote Canada’s linguistic duality. It also recommended that the oversight in Meech – excluding the territories in the appointment of senators and Supreme Court justices – be corrected, and that Canada’s multicultural heritage and its Aboriginal peoples be recognized in the Constitution. Moreover, the federal and provincial governments had to agree that the Meech Lake Accord would not impair the federal government’s commitment to reduce regional economic disparities and introduce new national programs. It also agreed that, given the commitment of several provinces to Senate reform, the unanimity provision of Meech for future constitutional amendments have a sunset clause, and if after a limited period of time senate reform had not been achieved, a different amendment formula would be adopted.104 Federal and provincial officials had already begun discussions around senate reform. The western premiers had also suggested that a time limit of perhaps two years be imposed on the unanimity requirement for Senate reform. Wells found all of this encouraging.105 However, the optimism would not remain for long. In an extraordinary development, Lucien Bouchard, another of the sovereignists who Mulroney had brought into his government as a federal minister, sent a congratulatory note to the PQ celebrating the 1980 Quebec referendum. He announced his resignation from the Mulroney cabinet a few days later, on 22 May 1990, claiming that he had been betrayed when the

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Conservative government expressed its willingness to modify Meech Lake. Sovereignty-association was the only solution for Quebec, he acknowledged, prompting Globe and Mail columnist Jeffrey Simpson to blame the hold-out premiers for the latest threat to national unity: history would judge Wells, Filmon, and McKenna “with the utmost severity.” The Globe and Mail singled out Wells: “Wake up Mr. Wells and smell the smoke. It is your country that is burning.”106 The growing crisis seemed to motivate Wells to attempt to arrange a meeting with McKenna and Filmon to move the negotiations on constitutional reform forward. He continued to insist, however, that the heightened tensions over the accord were not reason enough to accept Meech without any changes. He continued to urge Mulroney to call the premiers together and use the proposals from the special parliamentary committee as the basis for further negotiations. The looming deadline accelerated the federal-provincial manoeuvrings and the shuttle diplomacy between Ottawa and the provincial capitals. Mulroney and the federal government drafted a series of “add-ons” to Meech in a document entitled “State of Play on a Companion Resolution to the Meech Lake Accord” that they thought would satisfy the dissenting premiers. Murray discussed these options with all premiers between 19 and 22 May, and then revised the federal proposals as Mulroney met with each individually over the Victoria Day weekend in Ottawa, first, to narrow the areas of contention, and second, to build momentum for a first ministers’ conference. Executive federalism and federal-provincial negotiations reached their zenith as Mulroney and the premiers negotiated changes to a proposed companion accord that would make it more agreeable to the dissenters.107 Coyne had advised Wells to resist all pressure to accept any add-ons to Meech. He was the second-last premier to be invited to Ottawa; Bourassa was the last. Mulroney stressed to Wells the growing unease over national unity and the two agreed that Wells’ criticisms over the distinct-society clause might be addressed in a companion accord. “I had been tough, even brutal with Wells,” Mulroney wrote in his diary after their four-hour meeting, adding “I had shaken him out of his arrogance that Meech could be set aside without consequence.”108 Wells saw things differently: “We clearly have an understanding on concepts,” he said, “and I don’t think we should have extreme difficulty finding wording that should accommodate both of us.”109 His was no capitulation to the Meech side. On 30 May 1990 Wells introduced into the Newfoundland House of Assembly a list of possible “add-ons” to the Meech Lake Accord. They

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were designed to end the unanimity provision on changes to the senate, and a guarantee that the distinct-society clause of the accord would not override or deny the provisions of the Charter of Rights and Freedoms. On the constitutional amending formula, Wells insisted that any changes to the senate would require the support of seven provinces representing 50 per cent of the population if unanimity on senate reform could not be achieved by 30 June 1993.110 What Wells did not know was that Bourassa had held his ground in his meeting with Mulroney and insisted that Meech had to be ratified as it had been originally negotiated. Any flaws in the accord had to be addressed in a second round of constitutional talks. The federal government was left with little choice but to abandon the Charest proposals and a companion accord and insist that Meech had to be ratified as it was. The concerns expressed by Wells and the other premiers would be addressed in later negotiations.111 The federal government continued its pressure-cooker tactics as the June deadline for ratification approached, suggesting that it had no real plan other than coercion to deal with the opposition posed by Wells and Filmon. This was confirmed later in a leaked memo from the Ontario Ministry of Intergovernmental Affairs outlining a strategy for Ontario to join with Ottawa to exert pressure on Wells and Filmon. Although Peterson denied any knowledge of the memo and immediately dismissed it, it provided ammunition for what many people believed was collusion between Peterson, some of the other premiers, and the prime minister to attempt to discredit the hold-out premiers and force them into submission. Peterson later described Wells as “the most arrogant son of a bitch I’ve ever met in my life,” adding that there was no changing his mind once it was made up.112 Mulroney claimed that he had decided in mid-May that marathon constitutional talks in the final days before the June deadline would be an important part of his strategy of brinkmanship to force support from all premiers. He decided to wait until the eleventh hour to bring the first ministers together and force a deal in an atmosphere of crisis as if he were dealing once again with a labour dispute. Many premiers had thought that federal officials were struggling to find common ground among the provinces but that was not the primary strategy in Ottawa’s approach to the growing crisis according to the prime minister. He had a day in mind when “we’re going to roll the  dice,” he later revealed to the Globe and Mail. He and his advisers gathered at his official residence and decided strategy: “Right here, I told them when it would be,” he told the newspaper. “I told them … it’s like an election campaign. You count backwards [and] that’s the day

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we’re going to roll the dice.”113 Canadians have rarely seen such a mix of ­cavalier overconfidence and brinkmanship from their first minister; Mulroney’s attempt to suggest that his intention was “benign” and “innocent” and that he simply meant that he had to try everything to get the constitutional deal ratified satisfied no one. His opponents and those who opposed Meech seized on his words and castigated him as a reckless gambler willing to risk the nation.114 Following the strategy he had devised (one that many came to resent and one that defined his leadership over the accord) he invited the premiers for dinner at the Canadian Museum of Civilization in Hull on 3 June, three years to the day after the accord was first negotiated. He suggested that the premiers might be asked to remain in Ottawa for a constitutional conference if it looked as if the impasse could be brokered. “What is really at stake,” he told the House of Commons, “is Canada,” and he warned the premiers of the consequences of failure. If Meech failed everything from Canada’s currency to interest rates to foreign investment and national unity would be imperilled. It was high politics and the premiers stayed for a week in Ottawa.115 Mulroney orchestrated the affair, playing for time and hoping that as the deadline neared Wells and Filmon would buckle under the threat of failure. A compromise depended on agreement on senate reform, some wording to ensure that the distinct-society clause did not diminish the influence of the Charter, and a commitment to deal with outstanding issues such as minority and Aboriginal rights. Mulroney managed the closed-door meetings as a seasoned negotiator. If the accord failed, he could point to the technical details of veto power and Senate reform rather than the more emotive issue of French-English relations which would severely test national unity.116 The conference ended on 9 June without a clear plan for the ratification of the Meech Lake Accord. Still, the first ministers had all agreed on several items: first, the hold-out provinces would submit the accord to their legislatures and make “every possible effort” to pass it unchanged by the deadline of 23 June; second, there would be a commitment to achieve an elected, equitable, and effective senate under Meech Lake’s unanimity clause by 1 July 1995, but if first ministers could not reach agreement in the time allotted there would be automatic changes to the senate, readjusting the number of seats each province then held; third, an agreement to clarify the meaning of the distinct-­ society clause in its relations to the Charter; fourth, the creation of a special House of Commons committee to begin work on a “Canada” clause to recognize the rights of women, Aboriginal peoples, and multicultural

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peoples; and fifth, a package of add-ons to the Constitution to further protect sexual equality rights, the rights of the territories to be included in appointment of Supreme Court justices, and the promise to hold an Aboriginal conference every three years.117 Wells left Ottawa angry that Newfoundland’s constitutional concerns had not been addressed and furious at the process to which he had been subjected: I found myself constantly being pressured to agree to do something under the fear and threat that failure to do it may do irreparable harm to the country. And I do not want any responsibility for doing irreparable harm to any part of this nation.118

He had initially refused to sign the document produced at the end of the conference, but reluctantly relented. He affixed an asterisk beside his signature, though, agreeing only to put the package either before the Newfoundland legislature or to a provincial referendum. He advised Newfoundlanders not to give up on their right to make a decision on Meech “on the basis of conscience,” adding “I am not approving of this particular accord.”119 He later announced that he would have a free vote in the Newfoundland House of Assembly rather than a provincial referendum but still he did not promise to support the ratification of the accord. Filmon and the opposition leaders in Manitoba had similarly agreed to allow a vote in their legislature, but they agreed to recommend to their caucuses the acceptance of the accord. Filmon understood, nonetheless, that all members of the legislative assembly had to agree to bend the rules of procedure to allow for public hearings and a quick debate to meet the 23 June deadline.120 The federal strategy seemed to be working as it appeared that Wells was quickly becoming the sole holdout, standing alone against the ratification of Meech against the other first ministers. His extreme unhappiness with the closed-door process and the pressure he felt from other first ministers mattered little in Ottawa if they secured the passage of the accord. Wells had gone to Ottawa believing that Bourassa was willing to make concessions and that a compromise on the distinct-society clause would be acceptable to Quebec. Once he arrived he understood that Mulroney knew that was never a possibility, and the federal-provincial negotiations were a mere charade. Even Wells’ request for the other provinces and Ottawa to agree to extend the deadline for ratification was rejected. There were to be no negotiations leading to changing Meech

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and, with McKenna onside, Wells and Filmon were subjected to tremendous pressure to accept the accord or bear the burden for the possible destruction of Canada.121 All of the premiers except Wells and Filmon supported Bourassa’s position and over the week even Filmon relented, leaving Wells alone. It was reported, to some controversy, that Prince Edward Island premier, Joe Ghiz, became so angry with Wells that he shouted: “You were a prick when [you] were at Dalhousie Law School; you’re a prick now, and you’ll always be a prick!”122 Wells had been unable to engage his colleagues in discussing Newfoundland’s position because of the constant pressure on him to consider Quebec’s position, he told a cheering crowd at St. John’s airport where he received a hero’s welcome: You couldn’t discuss the issues on the basis of their merits because as soon as you put forward a logical argument you were always faced with the proposition that Quebec couldn’t concede, Quebec couldn’t compromise. If you couldn’t accept what Quebec wanted you were accused of wanting to destroy Canada.123

“The big mistake that I made personally,” he stated later, “was allowing myself to be sort of sucked into going along with this kind of process.”124 The Ottawa Citizen captured the situation best, writing “For seven days … Wells was battered, bowed and bruised in a cut-throat war of psychological gamesmanship unprecedented in Canadian politics … He appeared to bend. But he never broke.”125 It was only after the conference that Mulroney revealed his “roll the dice” strategy, but he insists in his autobiography that he “meant simply that I had to try everything humanly possible in that limited time frame to achieve success, otherwise the initiative would have failed.”126 After Mulroney revealed his strategy, the Evening Telegram immediately advised Wells to withdraw the invitation he had extended to Mulroney and the other premiers at the first ministers conference to speak to the Newfoundland legislature before it voted on ratifying the Meech Lake Accord.127 Amidst the criticism heaped on Wells, Elijah Harper, a New Democrat MLA in Manitoba and former chief of the Red Sucker Lake Cree First Nation, emerged at the last moment as a major impediment to Filmon’s plans for passing the accord. Harper refused to provide unanimous consent to bend the legislative rules and introduce the Meech Lake Accord into the provincial legislature without the normal two-day notice. Time was running out on Meech and Harper stood fast even with Mulroney’s

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promise of a royal commission on Aboriginal affairs. Harper could not be bought. “We need to let Canadians know that we have been shoved aside. We’re saying that Aboriginal issues should be put on the priority list,” Harper said, reflecting the anger and opposition to the accord among many First Nations and Aboriginal groups. The Métis and Ab­ original nations had prevented the Quebecois nation from achieving its objectives and aspirations within Canada.128 Filmon blamed Mulroney, claiming he had warned for months that the accord needed time to get through the Manitoba legislature. More than 3,500 people had asked to speak at the planned public hearings in Manitoba provided they could begin before the June deadline. The Accord in the Newfoundland House of Assembly Although Wells had invited Mulroney and the premiers to speak in the Newfoundland House of Assembly before a vote was held on the Meech Lake Accord, he warned them against the dangers of their continued fear mongering. “Choosing to light a candle instead of cursing the darkness, that’s exactly what all of us should do,” Wells said. Peace with Quebec should not come at any price.129 When Peterson and McKenna addressed the Assembly on 20 June, they ignored Wells’ warning. Rejec­ tion of Meech, they told the legislature and a packed gallery, would ­result in heightened racial tensions between Quebec and the rest of Canada, higher unemployment and higher interest rates, and generally gloom and doom for the country in the wake of a failed Meech. “In Quebec now there is an extraordinary feeling of rejection [among] seven million souls who feel Canada doesn’t want them,” McKenna pronounced. Saskatchewan’s Grant Devine delivered a similar message: “Is it [the accord] so flawed that we run the risk of saying to a province that wants to be a part of the nation ‘no, I’m not sure, I want you to go back out the door again?’ I don’t think so.”130 Prime Minister Mulroney claims that he only reluctantly accepted Wells’ invitation to address the New­ foundland Assembly because Wells “had already seriously violated the ‘even-handed approach’ he had assured his fellow first ministers he would adopt, and was not actually campaigning to subvert the agreem­ ent he has just signed!” Apparently, Moses Morgan, former president of Me­morial University and a keen supporter of Wells, had approached Paul Desmarais, a former chancellor of Memorial, to impress upon Mulroney the importance of accepting Wells’ invitation. Mulroney went to St. John’s because he trusted that Wells would hold a vote before the

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7.4  Premier Wells invited Prime Minister Mulroney and all the premiers to address the Newfoundland Assembly before its scheduled vote on whether or not to ratify the Meech Lake Accord. Mulroney made an impassioned plea for ratification and support reportedly jumped by 11 per cent overnight, but Wells decided that Newfoundland would not hold a vote after the Manitoba legislature was adjourned. Mulroney never forgave Wells for cancelling the vote. (Rt. Hon. Brian Mulroney/Library Archives Canada. Photo provided by Arthur Milnes. The Mulroney Fonds are in process of being catalogued.)

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23  June deadline.131 Mulroney spoke for nearly an hour, but it was a tough audience: one senior minister had labelled the accord as dangerous and compared Mulroney to Neville Chamberlain. Mulroney understood the stakes, however, and in his speech he trolled familiar territory: the rejection of Meech would fuel separatism in Quebec, create political and economic instability, and push investors away from Canada. He defended the accord, too, noting that the recognition of Quebec as a distinct society would ensure national unity, and rejected the claim that the accord eroded federal spending power. Mulroney acknowledged that many in Newfoundland and elsewhere linked their opposition to the accord to their dislike of him; he pleaded with Members of the House of Assembly to do what was best for Canada. “The PM made a superb speech – I expect it will have a significant impact,” Wells reportedly said to Murray. Later that evening, Mulroney had dinner with Wells and his wife, Eleanor. On Wells’ doorstep, Mulroney reminded the premier of the significance of the vote to Canada. “On a scale of 1 to 10, can you indicate to me how the vote will go?” Mulroney asked. Wells replied, “That it will pass? A 5!” When Mulroney arrived back to Ottawa, Crosbie reported that the day’s polling has registered an 11 per cent jump in support for Meech. Mulroney wrote in his diary that he was “pleased by Wells’ assessment of five out of ten for passage, given his ferocious opposition to the accord itself … I looked forward to a close but positive vote.”132 A vote never occurred in the Newfoundland legislature, though there had been intense lobbying from both sides in the days leading to the scheduled vote. John Crosbie called every member of the assembly, urging them to vote in favour, and worked with members of the group Newfoundlanders and Labradorians for Confederation to push the accord.133 He was at the House of Assembly on the day of the planned vote. Although Wells had promised at the first ministers’ conference that he would hold a free vote, when the Manitoba legislature effectively killed the accord with Elijah Harper’s refusal to provide the unanimity necessary to extend the session to send the accord to public hearings as was required by the Manitoba legislature, Wells began to reconsider his position. Harper had telephoned him on Friday morning, 22 June, informing him that he was determined to prevent the approval of the accord in Manitoba. In Wells’ interpretation, Meech was then dead and holding the vote in Newfoundland was not only meaningless, but a rejection there would surely and unnecessarily further inflame animosity between English- and French-speaking Canadians. Yet, there was some hesitation before he rendered his final decision. He explained his position to

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Crosbie and Murray over the telephone in the morning, but when he attempted to call Murray again in the afternoon for one last conversation before he announced his decision to cancel the vote in the legislature, Murray did not take his call. Desperate to speak to Ottawa, Wells asked Crosbie to call Mulroney to have them agree to defer the New­ foundland vote. Mulroney agreed to Newfoundland adjourning the debate to allow the matter to be resolved in Manitoba, but only if Wells personally came out in support of Meech Lake. The premier refused, telling Crosbie that Mulroney’s demand was “unacceptable.” As Wells told Peter C. Newman, who interviewed him for his book on Mulroney: How do you live with that? I couldn’t live with it. I can’t operate that way. It would be fundamentally dishonest. I didn’t support what was in it, and I couldn’t sell my soul that way. The prime minister thought it was appropriate to pressure me to do that.134

Murray had told Wells in the earlier telephone exchange that if the Newfoundland legislature approved the accord, the federal government was ready to seek the approval of the Supreme Court to extend for Manitoba the deadline for the ratification to 23 September, the anniversary of Saskatchewan’s ratification. Wells had literally begged Ottawa for weeks to extend the deadline for ratification but Mulroney and Murray had refused. Yet, as Wells waited on the telephone for Murray, he watched him announce to the press that Ottawa was ready to ask the Supreme Court for an extension to the deadline provided Wells put the accord to a vote in his legislature. The three party leaders in Manitoba had agreed to ratify the accord, but its passage had become a victim of legislative rules. An extension would allow the Manitoba legislature to ratify Meech. Ottawa had no such assurance from Newfoundland that an extension would result in its ratification of Meech. An assurance from Wells would change that. In a telephone call with Wells, Murray later told the cabinet, he told him that “it was essential that a vote take place that day, Friday … [W]ith the support of nine legislatures, and the tenth only unable to give its support because it had run out of time,” there was a clear case to put before the Court. Because Wells had never supported Meech, Murray believed that he could not convince the Supreme Court that an extension to the ratification could be made on the argument that they had run out of time. Wells’ approval was essential for the federal strategy of an appeal to the Court. Mulroney also told the Cabinet on 22 June 1990 that “if Wells gave an undertaking to pass the Accord provided he had

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the opportunity to undertake more consultation, the Government would be prepared to seek an extension on the time limit to cover those consultations.”135 Wells, however, dismissed Murray’s reasoning and believed that he was being manipulated by the federal government. He was furious and announced that he would have none of the last-minute federal pressure tactics. If Ottawa had been willing to seek an extension for Manitoba, then why was it not willing to do the same for Newfoundland? Wells seethed as he watched live news coverage of Senator Murray in Ottawa: “Now, it is up to Newfoundland, we are going to put all of this pressure on Newfoundland.” Wells understood the federal strategy and returned to House of Assembly to announce there would be no vote: “We are not prepared to be manipulated any longer.”136 Wells announced his decision to adjourn the House without a vote. He had failed to understand that Mulroney was willing to seek an extension to the deadline because the three party leaders in Manitoba’s had agreed that they would adopt the accord if there was adequate time to do so. Wells had never given any indication that he would. While Wells contends he cancelled the vote for fear of further aggravating feelings in Quebec and across Canada and because he believed the accord would not pass the Newfoundland legislature, the federal government saw his refusal to hold the vote as treasonous and dishonourable. Mulroney and his government would never forgive Wells for his actions. Opinion polls released just days before the anticipated vote suggested there was considerable confusion among the Newfoundland electorate, but the accord would likely have been defeated: 53 per cent of the adult population opposed the accord while 24 per cent favoured it; yet, 47 per cent believed that members of the assembly should vote for the accord for the sake of national unity and in the national interest.137 In Ottawa, Murray reminded the media of the June 1990 agreement from the first ministers’ conference that Wells had signed and charged that he had not lived up to his commitments.138 John Crosbie summed up the view in Ottawa when he claimed that the accord “has been shot down and mortally wounded by Premier Clyde Wells and nobody else.” Joe Clark and Murray laid the blame solely on Wells’ shoulders, and in a national broadcast on June 23, Mulroney told Canadians: “The last remaining hope [for Meech] was dashed by Newfoundland.”139 Mulroney had met his cabinet twice the previous day, even stopping at one point during the meeting to watch the events unfold in the New­ foundland Assembly. He lashed out at the Liberal party of Wells, former Prime Minister Trudeau, and Jean Chrétien, who was poised to become

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the new Liberal leader the following day, and accused them of “a colossal deceit and betrayal of the country ... ” The Meech Lake Accord, he lamented, “had been obstructed and undermined by people who thought they had the right to govern forever” and Wells was their “agent.” The accord had been passed by provinces representing 94 per cent of the population and with Manitoba committed to ratification, Newfoundland’s premier, representing 2 per cent of Canadians, had delivered the fatal blow to Meech. Wells had “deliberately” scuttled the constitutional deal. He had been the “first Premier in history in a constitutional matter to have gone back on the assent given by a predecessor government in the province.” Moreover, given his undertaking on 9 June, Wells had “broken his word to Canada and his fellow First Ministers who made the journey to St. John’s to speak to the House of Assembly.” When Wells cancelled the vote he had not only “deprived the legislature of its most fundamental right and obligation” but he “had, in effect, done the work of Mr. Trudeau and Mr. Chrétien.” The people of Quebec, Mulroney asserted, would “see clearly that the work of Newfoundland was linked to the activities of Mr. Chrétien and that all of this in turn was linked back to the influence of Mr. Trudeau.” It was “disquieting” to watch Wells, he told his colleagues, and was sad that his government’s effort to address some of the outstanding constitutional issues had been “obstructed and undermined by the people who thought they had the right to govern forever.”140 Mulroney was less politic in private. “But nothing has ever compared to the lack of principle of this son of a bitch,” he told Peter C. Newman. “Lookit [sic], on the night before the vote I was standing in the rain on the doorstep of his house and I asked him what the odds were. He told me that after my speech, they were good – at least fifty-fifty. This was after [italics in original] he had already made up his mind to cancel the vote.”141 A few days later, Wells received a standing ovation at the National Liberal Convention where he was welcomed as a hero and embraced by Jean Chrétien and Pierre Trudeau. For the Conservatives, his embrace by Chrétien, the new Liberal leader, was all too much. Back in Ottawa Mulroney fumed, writing that Wells, “in a fit of petulance and rage, stomped his foot and decided the duly elected members of the House of Assembly would never have the opportunity of voting on a matter that might well affect the ongoing existence of Canada, because he decided to cancel the vote … [and] extinguished the most fundamental right a parliamentarian has, simply because he did not want to run the risk that it might pass.”142

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When the House of Commons resumed its business, Mulroney’s anger towards Wells remained unmistakable. Wells was the leader of the “culprits” who had sabotaged Meech Lake. Brandishing the document Wells and the other ten first ministers signed at the constitutional meetings on 9 June, Mulroney described Wells as dishonourable for failing to bring the accord to a vote as promised: “It says a great deal about the challenges Canada has encountered in the past.” For Mulroney, Wells alone had killed Meech, and he refused to let go of that belief. On the day he announced his retirement, Mulroney could not summon the generosity to forgive him: “The failure to put it [Meech Lake] to a vote in the Newfoundland legislature was a very sad moment for me and my government and my family and the country. I would have no quarrel at all had it been put to a vote and voted down, no trouble at all.”143 Tom Rideout, the Conservative leader in Newfoundland, warned that Wells’ refusal to hold the vote as promised would endanger the future of the Hibernia project. For Rideout the greatest insult came from Wells, who he claimed had ditched the government’s own constitutional advisers in favour of those from Toronto and Ottawa, who had been involved in the constitutional discussions for a generation. One of these advisers was Deborah Coyne, who shared the premier’s view on the constitution and not that of the Newfoundland bureaucracy.144 Just days after the Newfoundland legislature failed to ratify Meech Lake, the federal government had announced that it would delay approval of $2.7 billion in financial support to the Hibernia oil megaproject, which had been scheduled for a vote on 26 June. Without federal support, the project faced further delay and an uncertain future. Quebec Conservative MPs threatened to vote against the legislation. “Can you imagine what our constituencies in Quebec would think if we voted for it?” asked Jean-Pierre Blackburn, MP for Jonquières.145 It also spoke to the politics of federal-provincial relations and prompted New­found­ land Liberal MP Brian Tobin to warn provinces that Mulroney intended “to practice the politics of brutality for those who step out of line and rewards for those who curry the favour of the Prime Minis­ter.”146 Unlike the dispute between Peckford and Trudeau, when federal-­provincial agreements were delayed in Ottawa for months, Mulroney did not harbour such animosity towards Newfoundland. Crosbie, a key player in Mulroney’s inner circle, exerted considerable influence and did not allow Newfoundland to be punished even if Mulroney had demanded retribution – but there is no evidence he did. “Clyde Wells is not

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Newfoundland,” Mulroney told the PC caucus. “Newfoundland cannot be held responsible for his [Wells’] mean-spiritedness and short-sightedness. I need your help to put forward this huge package of assistance, which will trigger the development of Hibernia.”147 The Hibernia agreement was signed on 14 September but Mulroney did not attend the ceremony in St. John’s. In the final weeks of negotiations with the consortium developing Hibernia, the federal government had pressured it to direct a number of projects from the development to the troubled Quebec shipyards, but there was no retribution against Newfoundland for Wells’ stand on Meech Lake. A year later Crosbie convinced Mulroney to invest an additional $290 million dollars in Hibernia and take an 8.5 per cent share in the development when one of the major partners withdrew from the consortium. Ottawa invested nearly $4 billion dollars in Hibernia. Just before Mulroney resigned, Wells wrote thanking him for not punishing Newfoundland for its opposition to Meech. “I am not aware of any Prime Minister in the forty-three years since Newfoundland has been a province of Canada,” Wells wrote, “who has given a stronger commitment to the economic needs of Newfoundland, and for that I express to you my personal appreciation.”148 Reviving the Constitutional Process In Ottawa, federal bureaucrats advised Mulroney to steer clear of constitutional issues and embrace a kinder, softer agenda of child care, the environment, and job training, especially as several of the provinces, particularly British Columbia and Alberta as well as Quebec, vowed to negotiate directly with Ottawa in the future rather than as part of a federal-provincial effort. He refused to listen and appointed Joe Clark, the former prime minister and one of his most capable colleagues, as constitutional affairs minister and initiated a series of consultation with Canadians. In November 1990, the Citizens’ Forum on Canada’s Future (Spicer Commission), led by the former commissioner of official languages Keith Spicer, engaged with some 400,000 people in its public hearings and found widespread disenchantment across the country with the political environment, notably the prime minister, and a growing divide between Quebec and the rest of Canada.149 In late September 1991, the federal government laid out a series of constitutional proposals in Shaping Canada’s Future Together: Proposals, designed to stimulate a discussion with Canadians and which eventually led to a new round of constitutional talks.150 It would not be a “closed-door”

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process, as Ottawa initiated a constitutional process that attempted to avoid every criticism made of the Meech Lake Accord and the process that had created it. Even the new federal proposal had emerged from a series of consultations with Canadians, and it included something for everyone: recognition of distinct society for Quebec; a Canada clause acknowledging the multiculturalism and bilingualism of the country; an elected senate with greater regional representation; several guarantees for First Nations and Aboriginal Canadians, including Aboriginal selfgovernment; guaranteed protection for property rights in the constitution; a Council of the Federation composed of federal, provincial, and territorial leaders to determine shared-cost programs and national standards; and the creation of an economic union. Later, a commitment to create a social union was added. There were 28 proposals in all, and they would be considered in a series of open forums before a federal-imposed deadline of the end of February 1992. “No one need lose,” Mulroney commented, not realizing that by attempting to please all Canadians and all interest groups he might succeed in pleasing none of them.151 Some dismissed the proposals as a grab bag of promises while others considered them a coherent framework to deal with the fractures evident within the Canadian federation.152 Parliament created the Special Joint Committee on a Renewed Canada of Senators and Members of the House of Commons with representation from the three major federal political parties and chaired by Senator Gérald Beaudoin and MP Dorothy Dobbie. The Beaudoin-Dobbie Committee was to canvass the country, but it was hampered by internal divisions, logistical challenges, and general apathy from many Canadians. It received 3,000 submissions and heard from 700 witnesses at five separate three-day conferences held across Canada. Its report, A Renewed Canada, proposed changes to every aspect of the initial federal proposals. For example, to the clause recognizing Quebec as a distinct society, it recommended to Ottawa the importance of minority language communities throughout Canada. Still, the committee’s recommendation formed part of the discussion leading to the Charlottetown round of constitutional reform.153 Meanwhile, Aboriginal groups and the government of Quebec launched their own public consultations. Aboriginal leaders conducted four separate consultations with their constituents and held a national conference on the constitution. Following the rejection of the Meech Lake Accord Bourassa said Quebec was entitled to decide its own future. The Quebec Liberal Party established a constitutional committee, headed by Jean Allaire, a strong nationalist, who was tasked with proposing changes to

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reform the Canadian Constitution. When it reported in January 1991, the committee recommended a radically reformed Canada which left only five exclusive fields of jurisdiction – defence, tariffs, currency, management of the public debt, and equalization – to Ottawa. Jurisdiction over Aboriginal peoples, foreign policy, fisheries, communications, and the post office would be managed jointly by Ottawa and the provinces, and all other powers would be exclusively provincial. The senate would be abolished.154 But this was too much for Bourassa. Instead, he accepted the report of the Commission on the Political and Constitutional Future of Quebec, widely known as the Bélanger-Campeau Commission, which had been created unanimously by the National Assembly of Quebec in September 1990. When it reported in March 1991, it recommended two possible solutions to the constitutional impasse: a profoundly altered federal system or Quebec sovereignty. A decision had to be made quickly and the Bélanger-Campeau Commission called for a referendum by 26 October 1992 to decide Quebec’s constitutional future. For Clyde Wells and Newfoundland, their thinking about the fundamental precepts guiding Canada’s constitution had not changed since the defeat of Meech. He was committed to balancing fairly and effectively the exercise of legislative national powers. He added to his list of demands the right of Aboriginal peoples to participate in the constitutional process and self-government for their peoples in their own lands. He also demanded a shared national identity for all Canadians, the equality of citizens, the equality of provinces reflected in the senate, the bilingual and bicultural heritage in an increasingly multicultural nation, the promotion of equal opportunity for all Canadians, and the elimination of regional inequalities.155 In the constitutional talks, Wells was one of the major players. Ottawa officials and politicians considered him as the premier most likely to scuttle any constitutional deal. They had earlier learned the consequences of ignoring him and now fully understood that he would reject any constitutional deal that did not satisfy his and Newfoundland’s demands. Wells was disappointed that his demand for an elected constituent assembly had been rejected but he expressed cautious optimism about the federal proposals. Wells continued to favour a strong central government. “The last thing in the world that poor provinces need is more powers they can’t afford to exercise.”156 In March 1992, Constitutional Affairs Minister Joe Clark launched a new multilateral process known as the Multilateral Meeting on the Con­ stitution (MMC). It comprised federal, provincial, and territorial ministers as well as the representatives of four national Aboriginal associations.

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Bourassa did not send representatives so Quebec was not represented. The process began when four working groups were tasked with preparing recommendations on the major issues, including a Canada clause and the amending formula; federal institutions, specifically the senate; Aboriginal peoples and inherent and treaty rights; and the distribution of powers, including the spending power, the economic union, and a social charter. The process led to a new set of constitutional proposals in June 1992 that were presented to Quebec and accepted by all first ministers in Charlottetown on 24 August 1992.157 The premiers agreed on a new design for the Senate with sixty-two members, six from each province and one from each territory. It recognized provincial equality. When the House of Commons and senate disagreed on a bill they would get together in a joint vote to solve the dispute. As in an earlier plan, the House of Commons was expanded by forty-two members to give increased representation to Quebec, Ontario, Alberta, and British Columbia and to guarantee to Quebec 25 per cent of all seats. Wells later regretted his compromise on Quebec’s share of seats in the House of Commons, but agreed at the time for two reasons. First, Quebec was surrendering a large share of senate seats; and, second, overrepresentation has been common in the House of Commons for decades. Prince Edward Island, for instance, has four seats when its population warrants one and New Brunswick has ten when it should have eight based on population.158 The first ministers accepted the inherent right of Aboriginal peoples to self-government, maintained national programs such as Medicare, and recognized the provinces’ right to opt-out of any national program with full federal compensation as long as they adhered to national objectives. They also agreed to the elimination of barriers to interprovincial trade. Wells remarked: “Clearly there were none of the kind of pressure tactics there were at the time of Meech Lake and I am grateful for that,” even if compromises had been crucial in making the deal.159 Mulroney noted in his diary that “each participant contributed significantly to the exercise that has become so successful [sic]. Including, I must recall in fairness, Premier Clyde Wells of Newfoundland.”160 It was Canada’s formal adoption of asymmetrical federalism designed not only to recognize linguistic, regional, and ethnic particularisms but to accommodate them in the Constitution. It was also a significant achievement for Mulroney and the other first ministers and an indication of the enduring strength of executive federalism. That the first ministers had been able to find common ground to amend the constitution after the bitterness caused by the death of Meech Lake is

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extraordinary. However, Canadians would prove less enthusiastic about the Charlottetown Accord and the process that created it than their political leaders. Three provinces – Quebec, Alberta, and British Columbia – were obliged to hold provincial referendums on constitutional changes. When first ministers and Aboriginal and territorial leaders gathered in Char­ lottetown at the end of August 1992 to approve the legal language of the constitutional proposals in what became known as the Charlottetown Accord, they also agreed upon a national referendum asking Canadians to approve the deal. Wells preferred separate votes on each item in the package but relented in favour of voting on the whole package. Canadians voted on 26 October and opposition to Charlottetown was widespread, coming from such disparate groups as the left-leaning National Action Committee on the Status of Women and the right-leaning Reform Party of Canada. Wells reluctantly joined the national campaign for the Charlottetown Accord after Mulroney telephoned asking him personally to help. In Newfoundland, the accord enjoyed considerable public support because Wells was on side.161 Even so, the “No” side generated considerable support in the province, in no small part because its opponents presented the accord as catering to Quebec. Advertisements asked Newfoundlanders to “Remember Churchill Falls,” warning them not to support another “bad deal” with Quebec. Moreover, 19,000 fishery workers had been thrown out of work with the collapse of the northern cod just months before the national referendum, and many were frustrated with both Ottawa and Wells over the benefits offered them to deal with the collapse.162 In the end, Newfoundland and Labrador was one of only five provinces to support the accord, which was defeated nationally, 54.3 per cent to 45.7 per cent.163 Conclusion After years of constitutional wrangling, the country was no closer to achieving the goal enumerated in section 36(1) of Constitution Act, 1982 – to promote equal opportunity for the well-being of all Canadians, to further economic development to reduce regional disparity, and to provide public services of an equitable nature across Canada. All of the attempts by national governments of different political stripes had failed to solve the problem of regional economic disparity in Atlantic Canada. Numerous programs and agencies had for more than a generation assisted a variety of enterprises and individuals but economic disparity had

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not been reduced. Earned income per capita for Newfoundland had been 53 per cent of the Canadian average in 1949 and forty years later it had hardly moved, stuck at 58 per cent of the national average. Nor had the Newfoundland economy become more self-sufficient and productive, or the provincial government able to offer public services of a comparable quality at a comparable level of taxation.164 Despite a plethora of programs and even the entrenchment of equalization and the eliminating of economic disparity in the Constitution, Wells believed that the political structure of Canada made the redress of regional economic disparity an impossibility. When the national government introduced a program to deal with the poor economic performance of Newfoundland or some other have-not province, the programs were soon extended to be a national program available to all provinces or, otherwise, comparable programs were developed for areas of the country not covered under the initial plans to deal with disparity. In the 1980s, for instance, the federal government was paying more money on a per capita basis to assist business and industrial development in the rest of Canada than it was in Atlantic Canada, even though that region had been particularly hard hit by the recession and was far behind in all national indices of economic and social wealth. Moreover, the federal programs were aimed primarily at treating symptoms rather than the underlying problems. The solution, Wells argued, rested with a long-term strategic plan to provide help solely to the economically depressed regions of Canada. First, however, political institutions had to be reformed. For Wells this was the senate. A reformed senate would give Parliament the political ability to ensure “national legislative jurisdiction is exercised and economic policy is developed and implemented in a manner that will provide for the equitable development of the economy across all parts of the nation. Real and sustained economic balance,” Wells insisted, “will only be achieved if and when Canada achieves political balance.”165 Despite his best efforts and after a bitter row with Ottawa, he had not moved the country any closer to accepting his version of federalism and taking the necessary steps to create greater social and economic equality among Canada’s provinces. The defeat of the Meech Lake Accord shows the continued importance of executive federalism in Canada even if the accord failed. The argument has frequently been made that Meech collapsed because it failed to meet competing claims for national recognition from groups that included Aboriginal peoples, women, and various ethnic and multicultural communities, who all wanted to redesign their relationship with the federal government as much as did the Quebecois. There was, in

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other words, a demand for greater cultural representation in any renewed constitutional discussions and not merely political ones.166 One cannot ignore the role of cultural imperatives in shaping public attitudes but only first ministers and provincial legislators had the ultimate power to approve or derail the proposed constitutional changes embodied in the accord. Even though various groups claimed that Meech Lake jeopardized their constitutional rights, and prominent individuals (such as former Prime Minister Pierre Trudeau) asserted that Meech would “render the Canadian state totally impotent,” all of them were powerless to prevent its passage even if they had considerable moral authority and had won support from many Canadians for their opposition. The accord could only have been stopped through the legislative process. It was Elijah Harper, a Manitoba legislator, and Clyde Wells who in the end prevented Meech Lake from being ratified and becoming a part of Canada’s constitution. As Robert Vipond has argued, all political systems have “some final, supreme irresistible power that is accountable to no one,”167 and in the case of Meech Lake it was the legislatures of Manitoba and Newfoundland, even if the electorate could toss their representatives out of office at the next opportunity. Although Meech Lake was the outcome of federal-provincial negotiations, its failure confirmed that a lone provincial legislator and a premier of a small province such as Newfoundland and Labrador had the political legitimacy to either accept or reject a constitutional accord. In Wells’ view of Canada, the provinces had the moral and political authority to negotiate the balance of power between the federal and provincial governments. In the case of Meech Lake, Clyde Wells disapproved of the compact that had been negotiated between the provinces and the federal government in 1987. It would, he believed, have fundamentally changed the role of the federal government, and it was a change that he also believed would have forever defined Newfoundland’s relationship with Ottawa. Despite warnings from the prime minister and all but one other premier of a constitutional apocalypse if Meech were not ratified, Wells stood alone against the accord, showing that in Canada executive federalism remains important and that constitutional change must serve the needs of all of Canada’s provincial communities, even the small and largely insignificant ones like Newfoundland and Labrador when measured in terms of population and economic wealth. Otherwise, as Meech Lake and Charlottetown demonstrated, future plans for constitutional change will likely have little chance of success.

8 The Battle for a Fair Share: Danny Williams, Equalization, and Ottawa

Introduction Federal-provincial relations were relatively tranquil after the Liberals formed the government in Ottawa in 1993. Clyde Wells settled into a more sedate form of federalism than had been the case with the Mulroney government. When Wells retired in January 1996, his successor, longtime federal Liberal politician Brian Tobin, who was very close to Prime Minister Jean Chrétien, resorted to a variant of federal-provincial cordiality reminiscent of the cozy days of Smallwood and Lester B. Pearson. By the time that Tobin returned to Ottawa and Roger Grimes became premier in 2001, many in Newfoundland and Labrador were convinced that the Atlantic Accord had been a Pyrrhic victory. The offshore oil and gas sector had failed to deliver on its promise of prosperity, largely because of delays in production and a dramatic decline in the price of oil to less than $12 a barrel in 1998. In January 2001 Grimes joined forces with John Hamm, the premier of Nova Scotia – which had also negotiated its own accord with Ottawa in 1985 – and launched a national Campaign for Fairness. Ottawa had started to reduce equalization payments to Nova Scotia by 70 cents on the dollar once offshore energy royalties began to accrue; Hamm demanded that Ottawa stop doing so – as had been done for Alberta when it was a have-not province in the late 1950s and 1960s. Ottawa had at that time allowed Alberta to keep both royalties and equalization payments, and Hamm demanded the same to allow his province “to maximize their economic potential and become contributors to the Canadian confederation.” Hamm and Grimes claimed that the provinces should be the principal beneficiaries of the offshore oil industry so

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that they could maintain a stable economy and reduce their dependence on transfers from the federal government.1 Newfoundland and Labrador had an accumulated debt (including unfunded pension liabilities) of more than $10 billion, or roughly $19,000 per capita, in 2001, giving it the highest level of combined debt in the country. The debt had been accumulated largely because of the poor economic and fiscal conditions that existed in the province. In fiscal year 2002–3, the province had a budgetary deficit of $666 million. The fiscal prospect looked dismal. Provincial tax levels were 13.8 per cent higher than the average across Canada.2 The euphoria surrounding the offshore oil and gas development, which had sustained many throughout the 1980s and 1990s with the promise of turning Newfoundland and Labrador into an eastern Alberta, was rapidly diminishing. There had been little economic recovery in the province under Clyde Wells as the traditional fishery had failed to recover from the cod moratorium imposed by Ottawa in 1992. Jobs never returned to outport Newfoundland, and it seemed unlikely that oil and gas revenues would be sufficient to reduce the accumulated debt and provide the funds necessary to improve the level of public services and offer relief from exorbitantly high levels of taxation, especially given that the Atlantic Accord would reduce equalization payments from Ottawa as the province’s oil and gas revenue increased. While the reduced financial dependency on Ottawa might be a positive development, it did little to strengthen the fiscal position of the province and allow it to meet its financial challenges and improve the standard of living and the level of public services. The problem for Grimes – and later Premier Danny Williams – was the formula for the equalization program, one of a variety of intergovernmental transfers that often exist in federations such as Canada. Equaliza­ tion is the federal transfer program, financed entirely from Government of Canada general revenues, designed to address differences in the fiscal and revenue-generating capacity across the ten provinces. It was first negotiated between all the provinces and the federal government in 1957, and it allows all Canadians, regardless of place of residence, the tax base of their province, or their province’s resource endowments, to enjoy reasonably comparable levels of public services at reasonably comparable levels of taxation. Although it was never intended to be permanent, and equalization payments change from year-to-year, Canadians embraced the notion of fairness and equity that equalization embodied. Govern­ ments became so attached to the principles that equalization was entrenched in the Canadian constitution in 1982.3 Since the 1960s there

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have also been a series of block transfers from Ottawa to the provinces to pay for health, post-secondary education, and welfare and social assistance, but they were conditional grants tied to particular programs. Equalization, on the other hand, provided unconditional grants to the provinces to allow them to provide a similar level of public services without having to impose taxation rates vastly higher than in more affluent provinces. Equalization transfers are an important source of revenue for many provinces; in 2003–4, Ottawa allocated $10.5 billion in equalization payments, $850 million of which went to Newfoundland and Labrador – one-third of the province’s revenues.4 Since its inception, the amount of equalization transferred to the provinces has been calculated following a complicated revenue-based formula to determine the per capita entitlement of each province, though the formula has changed from time to time. Three basic steps are involved. First, the federal government establishes a standard or revenue benchmark that is determined by calculating the revenue that five (representative) provinces would have generated from more than thirty different tax bases if they had taxed those bases at national average tax rates. That amount is declared in dollars per person, or revenue-generating capacity on a per capita basis. Second, the federal government determines the ability of each province to raise or generate revenue (the province’s fiscal capacity) compared to the national standard, or benchmark. Third, it calculates the difference between the federal revenue benchmark and the fiscal capacity of the province to generate tax revenue. The difference is stated in dollars per person. If the benchmark set by Ottawa exceeds the fiscal capacity of the province, then the province is entitled to an equalization transfer on a per capita basis. If, howev­ er,  the federal standard is less than the province’s fiscal capacity in a given year, then the province is not entitled to equalization transfers.5 Calculating the national standard or benchmark for determining provincial entitlement to equalization has generated considerable debate and controversy in fiscal federalism over the years. In 1957, when equalization was first introduced, the federal standard was calculated on the revenue raised through personal income tax, corporate income tax, and succession duties by the two wealthiest provinces, but over time new sources of revenues were added and all ten provinces were included to calculate the national standard. Beginning in 1982, the federal government decided that a province’s revenues from natural resources would be offset on a dollar-for-dollar basis through reductions in equalization. Since 1982, the standard has been determined by estimating the per

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capita revenue raised by Quebec, Ontario, Manitoba, Saskatchewan, and British Columbia (the five-province standard), using the national average tax rates for thirty-three revenue sources. Each province’s entitlement under equalization is determined by estimating how much revenue it would collect if it imposed the national average tax rates on the revenue sources available to it. In 2003–4, the national standard was calculated to be $5,924 per capita; Newfoundland and Labrador had a fiscal capacity of $4,290 per capita, and hence, was entitled to the difference between the two numbers, or $1,634 per capita.6 When the Canada-Newfoundland Atlantic Accord was negotiated in 1985, both Ottawa and St. John’s recognized that equalization payments would be reduced as revenue increased from offshore oil and gas development. This presented a particular dilemma for the province as it meant that its fiscal capacity, at least in the short term, would not improve because as natural resource revenues increased, there would be a reduction in fiscal transfers from Ottawa. The province would have no greater fiscal capacity to manage its affairs and there was little likelihood of it narrowing the economic and social gap between it and the rest of the country. The Atlantic Accord provided for “offset” payments so that Newfoundland could benefit from the offshore and continue to receive equalization in the first years of oil production.7 This protection from loss of equalization was important because the province could not achieve the desired standard of living if it lost as much to equalization as it earned from oil production. For Newfoundland, if there were no offset arrangements, there would be no increase in provincial revenue as a result of offshore development even though the federal government would see its revenues increase as it taxed the oil and gas resources. In 1994, when the equalization formula was renewed, it was agreed that only 70 per cent of the resource revenues of have-not provinces would be used in calculating the transfers from the federal government to Ottawa rather than 100 per cent. The federal government also recognized the problem confronting provinces with non-renewable resources and introduced what it called the “generic solution” to avoid having any province incur a dollar-for-dollar loss in equalization as provincial resource revenue increased. This is applied predominantly to natural resources, such as potash in Saskatchewan and Newfoundland’s offshore oil and gas. These are considered unique revenue sources and in those cases, only 70 per cent of the province’s revenue from that source is included in the calculation of a province’s fiscal capacity. This would limit the decline to 70 cents per dollar of offshore revenue in Newfoundland’s case, but such a decision raised serious discussion about the treatment of natural resources in

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the calculation of equalization – even though Newfoundland had the choice of opting for either the offset provisions contained in the Atlantic Accord or the generic solution.8 The options under the Atlan­ tic Accord were to expire in 2011, which would leave the generic solution as the only option for the province, but because equalization was governed by federal legislation, Ottawa had the authority to unilaterally change the “generic solution.” In 2003, the provincial Department of Finance predicted that the province could anticipate net annual revenues from offshore oil and gas in the range of $200 to $300 million by 2012 because of the existing federal-provincial revenue sharing agreements, including the Atlantic Accord and equalization arrangements, even though provincial revenues and royalties were to increase substantially during that period. After 2012, when the offset principle negotiated in the Atlantic Accord was due to expire for Newfoundland, only 30 per cent of the revenues from oil and gas would accrue to the province if the generic solution provision of equalization remained in place. This meant that 70 per cent of the remaining offshore revenue would be subject to the clawback provisions embedded in the equalization formula and calculated in the province’s equalization payment. The province would keep 30 cents in equalization payments for every dollar it earned in oil revenue. If equalization payments decreased as offshore revenue increased, the financial position of Newfoundland would hardly change.9 That fiscal arrangement was unacceptable to new Premier Danny Williams.10 Williams Arrives as Premier Danny Williams was not your usual politician. A long-time Progressive Conservative and successful St. John’s lawyer and entrepreneur, for years he had resisted the repeated entreaties of his party to stand for the top job. In 2001, after establishing himself atop the Newfoundland legal community and as one of the wealthiest businessmen in the province, he finally accepted the call and was elected leader of his party. He became premier in the general election that followed two years later. As premier, he most resembled Brian Peckford and Clyde Wells, but ruled with the power and authority not seen since the days of Joey Smallwood. He inherited Peckford’s sense of historic grievance and was determined to redress the failed policies of an earlier era. He had Wells’ tenacity but unlike that former premier, who held steadfast to a set of principles that he felt should govern Canada, Williams simply believed that one should never back down if he believed in the rightness of his cause. His was an

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8.1  In 2003, Danny Williams became premier of Newfoundland and Labrador. He shared with Peckford a historic sense of grievance and was determined that Ottawa change the equalization arrangement to allow the province to retain more of its revenues from offshore oil without immediate cuts to federal transfers. Like Peckford and Smallwood before him, he enjoyed tremendous support throughout the province for his confrontation with Ottawa. In the background is a frame cover of the Report of Business magazine that cast him as “Danny Chavez.” (Photo courtesy of the Evening Telegram; staff photograph)

abrasive political style and he was relentless in the pursuit of what he considered right. People who knew and watched him for more than twenty-five years said that once he engaged in a fight he was determined to win at all costs. His negotiations with Rogers Communications over the sale of his cable television company, for example, were reportedly hard-nosed and ruthless; he sold his company only when all of his conditions were met. In his first campaign for the premiership in October 2003 he adopted the slogan “No More Giveaways,” and outlined in a single sentence in his first victory speech his ultimate objective: “My team has received a mandate to seize control of our own destiny.”11

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Like other premiers before him, he believed that Newfoundland and Labrador had not prospered as it should have within Confederation. The province had been wronged too many times, and as he warned Maclean’s magazine, “If I’m wronged then I’ll come out swinging.” His tenure was defined by that pugilist demeanour and through bitter fights with two prime ministers – one Liberal and one Conservative. In Liberal Prime Minister Paul Martin, Williams faced a politician who had craved the top job for years. Despite years of planning and machinating to replace Jean Chrétien, he secured the prime ministership amid one of the worst scandals in Canadian history and soon found his hold on power increasingly tenuous. Martin was defeated in the 2006 general election when Stephen Harper and the Conservatives formed a minority government. While Martin was flexible in his dealing with the provinces, Harper was stubborn – especially with provinces such as Newfoundland and Labrador that he did not see as critical to winning a majority government. Intergovernmental relations between Newfoundland and Ottawa from 2003 to 2010 were marked by such animosity and conflict that they rivalled the lowest ebbs in the troubled relationship between the federal and provincial governments since Confederation. Williams was no Smallwood when it came to dealing with Ottawa: party allegiance counted for nothing if the well-being of his province was at stake. “We never went out looking for a fight but I can tell you the minute someone wronged my province, we were taking them on,” he once said. As was the case with his predecessors, Williams found that in his political battles with Ottawa the electorate was behind him. It is tempting to explain Williams’ confrontations with Ottawa as simply the latest in an enduring series of nationalist and populist crusades by premiers of Newfoundland and Labrador to tap into a politically popular theme of confronting the federal government for political gain at home.12 Williams had no well-articulated sense of historic grievance that he outlined in a series of speeches or committed to the pages of a book as Peckford had, nor did he have a vision of Canada developed over a lifetime of thinking about and studying federalism as Wells had. He was a street-fighter with a clear sense of justice – and justice denied had to be rectified. He was among those charismatic leaders whose legitimacy did not rest with his office or his status as premier but was distinctly personal. He was “Danny” and he had the uncanny ability to maintain himself as the source of legitimacy. With charismatic leaders, followers believe that their leader possesses extraordinary qualities highly esteemed in their culture. In Williams’ case, this was abundantly evident and Newfoundlanders and Labradorians did not need to weigh the veracity of his claims. They

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accepted them as true because he said they were, and they then accepted his directives for action. Voters gave Williams their unqualified emotional commitment and such devotion continued even after he left the premier’s office.13 John Crosbie, another of the province’s renowned, celebrated, and successful politicians, observed at the height of Williams’ fight with Ottawa that “He was the most dominant leader we’ve [Newfoundland] had since Smallwood.”14 Williams did not invent the issue that led him to clash with Ottawa. On becoming premier, he expressed the widespread dissatisfaction in the province with the state of the fiscal federation, and much of that frustration centred on the Atlantic Accord. By the mid-1990s there was a growing realization in Newfoundland that the accord – signed with such fanfare and optimism in 1985 – would not immediately transform the province from rags to riches as many had hoped when the deal was signed. The reality slowly sank in that under the existing regime of fiscal federalism, as offshore revenues increased, equalization payments would decline. In this scenario, the province would find it difficult to catch up to the rest of Canada, as it had come to believe that offshore oil and gas was its last chance at prosperity. Williams pledged a new relationship with Ottawa that would allow the province to control “[its] own destiny,” as well as a determination to have the federal government exempt resource revenue from the equalization formula.15 Newfound­ land and Labrador should reap all the benefits of offshore revenues and continue to receive equalization transfers until the standard of living and the level of public services approached something akin to the Canadian standard. He believed that the province was in a position of strength to seize control of its circumstances and become master of its own house.16 It was not a simple matter of fiscal capacity, but also of selfreliance and pride to pay its own way in Confederation. Williams never doubted the relevance of his cause and frequently reminded all and sundry that his government was fighting for Newfoundland and Labrador, and “That strength of character; that pride of place; that spirit of togetherness in the quest to make this province a better place [emphasis in original document].” He wanted Newfoundland to be a contributing member of the Canadian federation.17 Background: The Atlantic Accord and Equalization The Atlantic Accord was a political and bilateral agreement negotiated by Ottawa and Newfoundland and Labrador to deal with offshore oil and gas, which had been a thorny issue in Ottawa-Newfoundland relations

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since the late 1960s. When negotiated in 1985, the accord embraced several important principles: first, the offshore oil and gas resources were to be developed for the benefit of Canada as a whole and Newfoundland and Labrador in particular; second, the resource was to contribute to the attainment of national self-sufficiency and security of supply for Canada; and, third, Newfoundland and Labrador had the right to be the principal beneficiary of the oil and gas off its shores within a strong and united Canada. Ottawa agreed that Newfoundland had the right to collect revenue from this resource as if it were on land, even though the Supreme Court had earlier established federal authority over, and ownership of, the resource. Both the Canadian and Newfoundland governments realized at the time that if equalization payments from Ottawa to New­ foundland were reduced on a dollar-for-dollar basis as a result of offshore revenues flowing to the province, Newfoundland would never bridge the economic and fiscal divide that separated it from the wealthier provinces. To overcome the conundrum, the government of Canada established the principle of equalization offset payments, which would allow equalization payments to be made under the existing formula as the province received offshore petroleum resource revenues in the early stages of development. The federal government agreed that the reduction in equalization transfers would be spread over twelve years from commencement of production as Newfoundland and Labrador moved towards prosperity. In the first five years of oil and gas production, the province would continue to receive 90 per cent of its equalization payments and following the first fiscal year where production reached 15 billion barrels of offshore oil (or energy equivalent of natural gas), payments would begin to decline by 10 per cent annually. Prime Minister Brian Mulroney remarked at the time that he was not afraid to inflict prosperity on Newfoundland and Labrador. Not to be outdone, then-Premier Brian Peckford added, “have not will be no more.” As revenues flowed from the offshore and the fiscal capacity of the province improved markedly, there would be a gradual decline in equalization payments.18 Royal Commission: Newfoundland’s Place in Canada Royal commissions often serve political objectives in Canada, and New­ foundland has used this political tactic on several occasions as a way to illustrate its perceived mistreatment at the hands of the federal government. One of the best known examples is Smallwood’s appointment of a royal commission in 1953 to show why the province needed a generous federal payment under Term 29, which was to be considered in 1957 as

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one of the terms of Confederation. Grimes also established a royal commission in 2002 to consider the place of Newfoundland and Labrador in the Canadian federation and make a case for a special equalization arrangement. For Grimes, the issue had become the Atlantic Accord that Mulroney and Peckford had negotiated in 1985. They had agreed that Newfoundland and Labrador would be the chief beneficiary of the development of the petroleum resources on Canada’s continental shelf, and Grimes feared that would not be the case under the fiscal regime then existing between Ottawa and Newfoundland. On the one hand, the commission’s mandate was broad, as it was tasked with investigating how the expectations of the people of the province had been met within Confederation; on the other, it was asked to consider specific points of contention such as the conundrum created by the Atlantic Accord and the long-standing equalization program. The commissioners were asked to report on “any arrangements with Canada which had or might hamper or detract from the ability of the people of Newfoundland and Labrador to attain prosperity and self-reliance,” such as the federal jurisdiction over the offshore oil and gas resources.19 The royal commission concluded that “it is abundantly clear that our relationship with the Government of Canada is under considerable and understandable stress. Newfoundlanders and Labradorians feel ignored, misunderstood and unappreciated by their federal government, and to a lesser extent, by other Canadians.”20 There was no talk of separation but Newfoundlanders wanted to know “that they [were], as they deserve[d] to be, respected partners in Confederation.”21 It noted the growing sense that despite the promise of the Atlantic Accord, “New­ foundland and Labrador will not be the principal beneficiary of oil revenue in the coming years” and this threatened to exacerbate the animosity with Ottawa. As a result, it continued, “the spirit and intent of the Atlantic Accord will not be realized … as the province will be the net beneficiary of only 20 to 25 percent of the total government revenues.” The equalization program had no means of accommodating the promise made in the Atlantic Accord that Newfoundland and Labrador had to be the “principal beneficiary” of offshore development. This, the commissioners warned, represented “an impending but avoidable failure in the relationship between the federal and provincial governments.” In the twenty years since the Atlantic Accord had been negotiated, the development circumstances had changed substantially from what had been anticipated at the time, and the commissioners recommended im­mediate amendments to the accord to ensure that Newfoundland and

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Labrador remained the principal beneficiary, as intended. The oil and gas industry held the greatest hope of moving Newfoundland and Labrador towards “prosperity and self-reliance,” and the commissioners ominously and presciently warned that if changes were not made to the Atlantic Accord to achieve that end, Newfoundland’s place in Canada would be seriously questioned.22 The royal commission projected that over the life of the projects then in operation and expected to come on stream shortly (Hibernia, Terra Nova, and White Rose), government revenues would peak in 2010 at $1.15 billion. Given the fiscal structures in place at the time, including equalization, it was anticipated that the federal government would garner $900 million of the total (including its saving on equalization), leaving the Newfoundland and Labrador government with only $250 million. Such a split in revenue-sharing hardly made Newfoundland the principal beneficiary of offshore development as promised in the Atlantic Accord. The “enormous question,” the commission warned, was “how such an inequitable sharing [was] possible given the clear statement of intent and purpose in the Atlantic Accord.”23 In a research paper for the royal commission, John Crosbie, who had been Newfoundland’s representative in the federal cabinet when the Atlantic Accord was negotiated, maintained that the long-held view ­between Ottawa and Newfoundland was that the offshore mineral resources had to be developed for the major benefit of the province. Even though Pearson and Trudeau and various Newfoundland premiers disagreed over how best to achieve that end, there was no disagreement between any of them of the principle of Newfoundland being the primary benefactor of the development. In 1982, when the battle between Ottawa and St. John’s reached its most acrimonious moment, Trudeau still insisted that “The Government of Newfoundland and Labrador would receive all government resource revenue except the normal federal share of corporate income tax until they reached a level of fiscal and economic health well above the Canadian average.” Jean Chrétien, then the federal minister of energy, mines and resources, added that “the Newfoundland government wouldn’t be asked to share any revenue until it was the second richest province in Canada – second only to Alberta; about 40 per cent richer than Ontario; and twice as rich as you and your neighbours in Atlantic Canada are today.”24 Mulroney made a similar promise while in opposition, adding that “it is important that there should be no dollar for dollar loss of equalization payments as a result of offshore revenue flowing to the Province.” At the official signing of the Atlantic Accord, Premier Peckford noted that “There will be a very

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gradual and generous, for Newfoundland, phase out of equalization payments which allows this province to catch up socially and economically to the rest of Canada.”25 By the time the implementation legislation to ratify the Atlantic Accord was introduced in the provincial and federal legislatures, it had become widely accepted in Ottawa and in St. John’s that Newfoundland and Labrador should be the primary beneficiaries of offshore development until it became a “have” province. There were to be no dollar-for-dollar loss of equalization payments until Newfoundland had surpassed the average fiscal capacity of all provinces.26 Although the accord was signed amid considerable optimism, it was clear by the time the royal commission reported some thirteen years later that the agreement would not achieve its original goal of making Newfoundland and Labrador the principal beneficiary of offshore development. Oil production at the Hibernia field was delayed, beginning only on 17 November 1997, some twelve years after the signing of the accord and delaying the period that significant revenues were expected to flow to Newfoundland. The equalization offset payments under the accord began only in 1999 and were to expire in 2011 – clearly the offset period was too short to allow Newfoundland to benefit from the arrangement. In fact, the Standing Senate Committee on National Finance recommended in its Report to Parliament in 2002 that the federal government “undertake an evaluation of the equalization provisions of the Atlantic Accords for [Newfoundland and Nova Scotia] to determine if they ha[d] met the intent for which they were designed.”27 However, in 2001, Ottawa was not particularly interested in revisiting the Atlantic Accord and Chrétien’s government insisted that it was respecting both the letter and the intent of the bilateral accord. With keen aspirations to replace Chrétien as Liberal leader and then prime minister, Brian Tobin had no intention of fighting the Liberal government in Ottawa. Although the equalization program was affected by Chrétien’s program of restraint and cutbacks to the provinces, Stéphane Dion, the minister of intergovernmental affairs, maintained that the generic solution to the equalization program brought significantly greater benefits to Newfoundland than did the Atlantic Accord.28 The royal commission, however, compared the accord to the Churchill Falls situation, suggesting that “both cases were made based on assumptions that did not materialize.” Unless it was fixed, the accord would never live up to its original spirit and intent and “depict[ed] a situation that [was] totally unacceptable in a federation where fairness and equity should prevail.”29 It recommended that Newfoundland take the lion’s share of the revenue as long as it

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remained a have-not province. This would go a considerable distance to creating a more positive attitude in the province towards Confederation. Amending the Atlantic Accord Shortly after the royal commission issued its report in June 2003, Williams became premier. He shared with Grimes a dissatisfaction with the state of the fiscal federation and expressed considerable opposition to the reality of declining equalization payments as offshore revenue increased. In that scenario, the province would find it difficult to catch up to the rest of Canada. He pledged a new relationship with Ottawa that would allow the province to control “[its] own destiny,” as well as a plan to have the federal government exempt resource revenue from the equalization formula.30 He believed that Newfoundland and Labrador should reap all the benefits of offshore revenues and continue to receive equalization transfers until its fiscal capacity was such that it was ineligible for the transfer: Long gone are the days when we take a deal for the sake of a deal. Long gone are the days when we bargain away what we should be leveraging. And long gone are the days of sitting back and watching others benefit while we take the crumbs. Together, we have everything we need to make our vision of prosperity a reality. Together, we will do whatever is required to ensure our future in Newfoundland and Labrador is strong, self-reliant and secure … Our star is rising. No glass ceiling imposed from beyond our shores will ever keep us down. (Emphasis in original.)31

Williams soon found himself facing Paul Martin, the former federal finance minister who finally succeeded in November 2003 in forcing Chrétien into retirement and becoming prime minister. Martin did not take Williams’ demands seriously. He paid little attention to Williams’ insistence that the offshore revenue sharing was not working for New­ foundland as both federal and provincial politicians and bureaucrats had hoped more than a generation earlier. With a collapse of the traditional ground fish sector beginning in the 1990s, unemployment was rampant and coastal communities devastated. Despite the promise of oil and gas and a vast nickel discovery in Labrador, the province remained broke. Of its gross expenditures of slightly more than $4 billion, a quarter was required to service the debt in 2004. Premier Williams believed that the equalization money should be distributed on a basis that reflected

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the existing fiscal disparities and economic realities of provinces and not on a per capita basis, which hurt provinces such as Newfoundland that had a shrinking population – the provincial population had declined by 10 per cent between 1991 and 2001. Williams reminded Martin that of the offshore revenues, only 15 per cent of it came to the province while the federal government captured 85 per cent of the revenues from resource rents. Newfoundland had “a very narrow window of opportunity” to make something of its offshore resources, Williams insisted, “and if we don’t get a piece of that action then it’s lost forever. This is our opportunity to finally become self-sufficient, to become masters of our own destiny.” In March 2004, Williams wrote John Efford, the minister of natural resources and Newfoundland’s representative in the Martin cabinet, asking that Ottawa change the existing offset provision, allowing the province to keep provincial revenue from the offshore without any clawback from equalization payments. Williams insisted that the equalization offset provisions of the Atlantic Accord could “provide a payment equal to 100 percent of the net direct provincial offshore revenue.”32 Williams had little faith in Efford’s capacity to deliver much from Ottawa. More­ over, Efford was plagued by persistent health problems and had been the scorn of many in the province for being an absentee member of Parliament. Although Williams was determined to retain control of the file himself, he had clearly become disenchanted with the normal channels through which Ottawa and the provinces communicated. He subsequently established the Office of Federal-Provincial Relations in Ottawa and appointed former politician and popular news talk host Bill Rowe as Newfoundland’s representative in the nation’s capital. The office was to give the province a stronger presence in Ottawa and focus attention on such contentious issues as equalization, other fiscal transfers, resource benefits, and many others. There is no denying that the office was a public relations move on Williams’ part but it was also an indictment of the failures of Canadian federalism.33 Many Canadians believed that Martin’s hold on power was secure and that he could count on the top job for a decade at least. When reports surfaced of the alleged misuse of federal funds to advertise Canada at local events throughout Quebec, Martin’s well-scripted plan for the prime minister’s office unravelled quickly. Although he claimed he had no knowledge of the sponsorship scandal (as the misallocation of funds was called) and called a public enquiry to investigate, Canadians were appalled as Judge John Gomery confirmed the auditor general’s earlier

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findings that more than $100 million in public funds had been misappropriated and much of the money went to Liberal-friendly advertising firms. Although Gomery cleared Martin of any wrongdoing, Canadians turned their fury on him and the Liberal party. When Martin called a general election for 21 June 2004, he discovered how tenuous his hold on power really was. During the first days of the campaign his lead over Stephen Harper and the Conservatives evaporated. The election quickly became one where every vote in every riding across Canada mattered. The best the Liberals could hope for, it seemed, was a minority government, and suddenly Williams’ demands to address equalization and the impact of offshore revenue on fiscal transfers found a sympathetic ear with Martin and his two main rivals. In the first week of the political campaign, both Harper and Jack Layton, the leader of the New Democrats, had gone to St. John’s and announced that they agreed with Williams that Newfoundland should continue to receive equalization payments until it had caught up with the rest of Canada. Harper had been emphatic that he would end the “clawback” of resource revenue from Newfoundland’s equalization transfers. Foolishly, John Efford told a business luncheon in St. John’s that offshore benefits were too important to be discussed during an election campaign. Williams was furious, branded Efford a traitor, and demanded to speak to the same group the following day. He told them no one in Newfoundland should vote Liberal in the coming election unless Martin agreed to provide the province with 100 per cent of offset benefits. With Williams’ approval rating pushing past 80 per cent, Martin realized that his five seats in Newfoundland and Labrador were in jeopardy if Williams followed through on his threat to launch an anti-Liberal campaign. Martin had to make a deal with Williams. Even St. John’s mayor, Andy Wells, a strong Martin supporter, had warned that he would vote Conservative unless Martin met Williams’ demands. Late on 4 June, in the midst of the federal campaign, CTV News reported that the Liberals and Conservatives were in a virtual tie, and if the trend were not reversed, Martin would be sitting in opposition once the votes were tallied.34 Martin was desperate and he suddenly found Williams’ demand that Ottawa address the most contentious issue in fiscal federalism to be a legitimate one. Shortly after 7 a.m. on 5 June 2004, the day following the latest CTV poll and just three weeks before the election, Martin telephoned Williams in the hope of holding on to his five seats in New­ foundland. He promised Williams that he would end the “clawback” of 70 per cent of the province’s offshore revenue that then existed under

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the equalization formula. He accepted William’s demand for 100 per cent of equalization payments even as oil revenue grew. Later that day, at a campaign event in Halifax, Martin said he accepted the principle long supported by both Conservatives and Liberals: “What we’ve really got to do as a government is make sure that Newfoundland and Labrador is the primary beneficiary of its resources.” He added that “I have made it very clear that the proposal that he’s [Williams] put forth is a proposal that we accept.”35 Newfoundland delivered five seats to the Liberals and helped Martin secure a minority government, but Martin soon learned the perils of making policy on the fly. He also discovered that telephone federalism can be problematic as his reluctance to confirm his agreement with Williams sparked another spat in the long and difficult relationship between Ottawa and Newfoundland. The Perils of Telephone Federation Williams had initially been delighted with Martin’s change of policy on fiscal federalism, but he soon discovered that the prime minister had been less than sincere when he announced his conversion to William’s position. He wrote Martin on 10 June, asking him to commit to their verbal agreement: “An important task for both of us now is to ensure that Newfoundlanders and Labradorians have a clear and precise understanding of your commitments and what has been agreed to.” Martin ignored the letter and Williams telephoned him a month later, seeking written confirmation of their agreement. Still, Ottawa did nothing. On 5 August, two months after their initial telephone conversation, Williams’ patience was wearing thin, and he once again stressed the urgency of having a formal agreement: “It is imperative that our implementation teams begin their work with a clear understanding of our agreement,” he wrote, and dispatched to Ottawa a draft outline instruction letter for Martin to consider as a guide for federal and provincial officials as they put into legal language the agreement between the two first ministers. Martin continued to stall and Williams fumed: “I am very concerned that we have not begun to implement our agreement,” he wrote on 24 August, adding that he wanted the matter settled within ten days.36 Martin was ignoring the pugnacious Williams at his peril. He failed to realize that once Williams set a course, there was no backing down; he was determined to win at all cost. Martin had clearly overplayed his hand during the campaign and with the election over and the task of running the country taking precedence once again, he realized that he had to

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consider the reaction in the other provinces to his promise to Williams as well as that within the Department of Finance in particular. If New­ foundland were given a side-deal for “offset” payments even as its income surpassed the national standard, other provinces would demand similar treatment. He had to find a way to limit the benefits he had promised Williams because such politicking threatened to undermine the integrity of the national equalization plan. Ralph Goodale, the minister of finance and political minister for Saskatchewan – a province which found itself in a situation analogous to Newfoundland – as well as federal officials, especially in the department of finance, warned about the longterm consequence to national programs such as equalization if the prime minister started making special deals with individual premiers. Clearly, Goodale’s Finance Department did not support asymmetrical federalism. Such actions could paralyze national strategies for the federal government, pit the provinces against each other as well as against Ottawa, and severely limit revenues accruing to the national government. Yet in early September, Martin demonstrated that he was willing to spend billions in federal-provincial relations in what can only be termed a policy of appeasement, despite his hesitancy in finalizing his agreement with Williams. After several years of federal budgetary surpluses that Martin had amassed as finance minister through severe budget cuts throughout the federal government and in transfers to the provinces and individuals, he used some of those savings to show that Ottawa still had a major role in social spending. But his was a move away from national policies to simply providing federal funding to the provinces to spend as they wished. Given the political vulnerability of his minority government, the last thing that he needed was a brouhaha with the provinces. But the premiers seized on his predicament when he invited them to a three-day health summit to discuss strategies and new initiatives for solving the growing health care crisis in Canada. The provinces merely wanted more money. Martin relented and contributed $41 billion for new health spending over a ten-year period. He even included an “escalator clause,” automatically boosting federal transfers to the provinces by 6 per cent a year to keep pace with rising costs, but he failed to win any significant federal oversight of how the new federal money was spent.37 The health care summit was not without controversy and acrimony, however, as Alberta Premier Ralph Klein walked out after the first day, protesting that Ottawa should stop interfering in matters of provincial jurisdiction. Some of the other premiers agreed to the federal plan only after Martin promised movement on equalization. Williams said at the

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news conference concluding the summit that “the Prime Minister very graciously gave us a commitment this evening that the Atlantic Accord would be resolved before the fiscal imbalance [equalization] meeting on October 26th.” It had been a condition for Williams’ agreeing to the health accord and he had warned that he would boycott the talks on equalization if there were no agreement before they began.38 When Martin called the first ministers together again on 25 October 2004 to fulfil his election promise to negotiate changes to the equal­ ization program – even though the equalization program had been renewed earlier in April 2004 – it was Williams’ turn to stage a protest. There had been no deal between Newfoundland and Labrador and the federal government despite ongoing talks in the weeks before the second fall gathering in Ottawa. Martin had come to understand – as had most prime ministers since 1949 – that offering anything special to Newfoundland was sure to upset the other provinces, something Martin certainly did not want given his minority position in Parliament.39 Williams refused to attend the first ministers’ conference but he had been in Ottawa for several days beforehand, attempting to finalize the deal that Martin had promised in June during the election campaign. Two days before all of the premiers arrived, on 24 October, Finance Minister Ralph Goodale faxed a proposal to Williams outlining the terms of a commitment “made by the Prime Minister to ensure that Newfound­ land and Labrador receives greater financial benefits from its offshore petroleum activities.” Moreover, Goodale wrote: The Government of Canada is prepared to propose legislation to Parliament to provide additional annual payments that will ensure the province effectively retains 100 percent of its offshore revenues for an eight-year period covering 2004–05 through 2011–12, subject to the provision that no such additional payments result in the fiscal capacity of the province exceeding that of the province of Ontario in any given year.40

Martin was willing to sign an agreement in principle containing these provisions before the first ministers’ conference. It would have allowed Newfoundland and Labrador to retain 100 per cent of oil and gas revenues without any decrease in its equalization payments. However, Goodale had insisted that the federal government impose a cap to keep Newfoundland and Labrador from surpassing the per capita tax revenue of Ontario and limit the deal to eight years. That was not what Williams maintained he and Martin had agreed to during the election campaign; he wanted a deal that protected 100 per cent of offshore revenue from

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8.2  Prime Minister Paul Martin (right) and Finance Minister Ralph Goodale arrive to speak to the media at the first ministers’ meeting on equalization in Ottawa on Tuesday, 26 October 2004. All the premiers attended the meeting except Newfoundland and Labrador Premier Danny Williams. (CP PHOTO/ Jonathan Hayward; CP 610866. Martin and Goodale)

equalization clawbacks, with no restrictions and no pre-established time frame.41 William was angry with Ottawa’s conditions, claiming that the arrangement meant the loss of more than $1 billion over the years left in the Atlantic Accord. Even worse, Williams believed that Martin and the federal officials were encouraging the resource-poor provinces to warn that Williams’ demands threatened the principles of equalization and if granted might destroy Confederation.42 Williams went to the Lester B. Pearson Building in Ottawa where the equalization conference was being held, but he did so to announce his boycott of the meeting. At a hastily arranged news conference, he accused Martin of not only reneging on his election promise but refusing to meet with him to discuss

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Goodale’s offer: “Our pride can’t be bought … We won’t say yes to less,” Williams told reporters. “We had a commitment and [the prime minister] has broken that commitment.”43 Some premiers – and many Canadi­ ans – saw Williams as double-dipping and wanting the best of both worlds. Williams saw things differently: he had told a business audience in Toronto that all Canadians should be concerned because Paul Martin could not be trusted.44 Despite Williams’ absence, Martin announced that he would increase equalization by $28.7 billion over ten years and proposed a new framework agreement to be reviewed and adjusted every five years. Ottawa moved away from the strictly formula-based funding that had been used previously to determine provincial allotments and allocated a fixed pool of money, including an additional $2 billion for 2005–6, bringing the pool for that year to $10.9 billion to be shared by eligible provinces. The available pool of funds was to increase annually by 3.5 per cent and Martin guaranteed that equalization payments would never fall below $10 billion. Entitlements were calculated on a three-year moving average to protect individual provincial revenues from a rapid decline if their fiscal situation improved unexpectedly. Ottawa also created an independent expert panel to review the program and make recommendations for the future. Following the release of the report, federal-provincial negotiators were to meet and agree upon a new allocation formula. Loyola Sullivan, Newfoundland’s minister of finance and president of the treasury board, subsequently told the Expert Panel on Equalization and Territorial Formula Financing that equalization payments were becoming increasingly inadequate: Our province has been working hard to offer comparable services at comparable taxation levels, but with the inadequate federal transfers it means we continue to add to our debt to do so. As a result, we have a debt of approximately $12 billion, and on a per capita basis, it far exceeds any other province. Furthermore, no other province faces the geographic program delivery challenges as we do. We are trying to control the rising costs of offering needed programs and services, but with a relatively small population dispersed over a wide geographical area, we are in a unique situation.45

The war of words between Newfoundland and Ottawa heated up. Martin insisted that his original offer included a cap which finance officials defined as a fiscal capacity not to surpass that of Ontario. While he was prepared to allow Newfoundland and Nova Scotia to keep much of

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their provincial revenue from the offshore, Martin wrote in his autobiography, he was “not prepared ... to perpetuate the arrangements indefinitely. They needed to have a termination date.” The problem negotiating with a premier such as Williams, Martin lamented, was that his “negotiating style was not exactly built around ‘getting to yes.’”46 Williams found support from Mulroney, who had signed the 1985 Atlantic Accord, and Nova Scotia Premier John Hamm, who said after one of his meetings with Williams that “this is Paul Martin’s chance to make the right decisions today that will unleash more have provinces upon the Canada of tomorrow.”47 Opposition leader Stephen Harper expressed “great admiration for Premier Hamm in sticking by Newfoundland and not allowing the federal government to play [the] game of divide and conquer.” Even the Newfoundland Liberal Party backed Williams, and Efford found himself standing alone in defending Ottawa in Newfoundland.48 Martin still believed he could reach an agreement on the accord, and he moved responsibility for the file from Efford, the regional minister for Newfoundland, to Goodale and Alex Himelfarb, clerk of the privy council.49 Himelfarb met with Williams and Hamm in Halifax on 9 December 2004, and they agreed to continue talks over the next few days. Williams told a Canadian Press reporter that a deal was difficult because “The federal government had been very conscious of how it will look in the rest of Canada if two of the country’s poorest equalization-receiving provinces are given a multibillion-dollar break on offshore revenues.”50 Still, they agreed that an agreement should be finalized before Christmas, and Goodale and his officials from finance joined the discussions. Talks stalled once again, but Himelfarb convinced Williams and Hamm that Ottawa was ready to finalize an agreement, and he arranged a meeting with Goodale and the two premiers in Winnipeg on 22 December to conclude the arrangement. So confident of a signed deal was Martin that the CBC reported that he ordered Efford and Geoff Regan, the regional ministers from Newfoundland and Labrador and Nova Scotia, respectively, to be present to take credit for amending the Atlantic Accord and to have the necessary publicity photos for the next federal election. Martin later lamented the political price that Efford paid for trying to balance the national and provincial interests during the imbroglio over the accords.51 Raising the Rhetoric, Lowering the Flag Williams fumed at the meeting in Manitoba. Ottawa’s offer was essentially a draft and he found it “absolutely disgusting.” Ottawa continued to

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insist on so many conditions that it essentially nullified the commitment that Martin had made. Goodale demanded the eight-year time limit and a cap that required Newfoundland to return to the equalization formula when it reached the fiscal capacity of Ontario. Although the federal officials maintained that the proposal would contribute $3 billion to Newfoundland over the life of the agreement, it also insisted that New­ foundland introduce only balanced budgets if it were to remain a recipient of equalization. Williams dismissed as paternalistic any possibility that Ottawa thought it could control the provincial budget. He pointed out that Newfoundland was so far behind the other provinces in terms of public services that to remove equalization before it had narrowed the gap with the rest of Canada would leave the province forever behind all of the others. “It [offshore development] is a watershed moment, a defining moment,” he later told the Globe and Mail. Oil was Newfoundland’s “last great chance at prosperity”52 and Ottawa refused to help the country’s poorest province find its way out of its quagmire. Further nego­ tiations with Ottawa would not resolve the matter and Williams then engaged in the first of the attention-grabbing tactics for which he became famous during his years as premier. Like his predecessors, he understood the values of political theatrics. He flew back to Newfoundland and ordered the removal of all Canadian flags from provincial buildings. “People think it’s theatrics or antics. It just comes from a really strong passion and an intense gut feeling,” he said later when engaged in another high-profile dispute to secure a 4.9 per cent equity share of the Hebron oil project for the province. “You have to know Newfoundland and Labrador,” he told the Globe and Mail. “We have been hard done by and as a result we’re very passionate. I just display that openly – I wear it on my sleeve.”53 Williams, like all of Newfoundland’s premiers after Smallwood, was determined to prevent another Churchill Falls – that “motivates me more than anything”54 – and for him the solution lay in Ottawa. He believed that the federal government simply did not understand the province and its needs: Paul Martin has turned his back on the people of Newfoundland & Labrador when they need him most … Our pride can’t be bought … They’re slapping us in the face. I’m not willing to fly that flag anymore in the province … We are a keep-not province.55

As it had pilloried Premier Clyde Wells during the Meech Lake constitutional process, the Globe and Mail severely criticized Williams’ decision

Danny Williams, Equalization, and Ottawa  297

8.3  After talks between Williams and federal Finance Minister Ralph Goodale at the Airport Radisson Hotel in Winnipeg on 22 December 2004 failed to produce a longer-term deal to keep more money in provincial coffers, Williams ordered the Canadian flag removed from provincial buildings. Here Chris Osborne lowers the flag over the Newfoundland House of Assembly. (Photo courtesy of the Evening Telegram; staff photograph)

298  Lions or Jellyfish

to remove Canadian flags from provincial buildings. In its lead editorial, “Danny Williams Won’t Take Yes for an Answer,” it described him as “petulant” and ungrateful for federal largesse, referring to the money that had “poured” into the province since Confederation and the millions that Ottawa had given to the Hibernia project. It also had the temerity to remind Williams that the Supreme Court of Canada had awarded ownership of the offshore to Ottawa, ignoring the fact that Newfoundland had brought the huge resource to Canada in 1949. The Globe and Mail supported Martin’s position and considered Williams’ rejection of the federal offer as the ungrateful action of a petty politician who failed to appreciate Martin’s attempts to strengthen the federation. “The trouble is,” it opined, “that in his rush to take offense and knock over the chessboard, Mr. Williams ignores the extraordinary financial gains Newfoundland would make even under last month’s federal terms. With the prospect of becoming a have province in sight, the Newfound­ land government treats Ottawa’s generosity as an insult and in turn insults all Canadians by packing away the nation’s flag.”56 In Newfound­land, the initial enthusiasm for the “flag flap” was waning. Williams indicated that he was willing to discuss the issue with Martin, though not Goodale, when controversial Globe and Mail senior columnist Margaret Wente harangued Williams with such scorn and contempt that she inadvertently did more for his cause than even she could ever have imagined. In her 6 January 2005 column, “Oh Danny Boy, Pipe Down,” she described Williams as a “deadbeat brother-in-law who’s hit you up for money a few times too often.” While Wente may have been right that Williams’ flag ploy had not been winning much support on mainland Canada, her dismissal of Newfoundland’s “sense of victimhood,” her remark about sending “cakes” in the form of transfer payments, and her condescending use of the word “Neuf” helped to solidify support for Williams not only in Newfoundland but throughout the country. She called Newfoundland the world’s most scenic welfare ghetto.57 Williams was furious. Wente’s comments demonstrated, he rejoined a day later in the Globe and Mail, “why Newfoundlanders and Labrador­ ians have to take firm action to get the attention of people of this country.” His retort also outlined his view of Canadian federalism and Canada as a  nation while, at the same time, reprimanding Wente and telling her she should be ashamed of her comments. Newfoundland was an equal partner in the Canadian federation, Williams pointed out, and Martin’s June 2004 promise was to provide the province with the “necessary tools to finally become self-sufficient: a strong, contributing partner to the confederation.” His rejection of the latest federal offer was about

Danny Williams, Equalization, and Ottawa  299

New­foundland and Labrador achieving its full potential in the Canadian federation. Ottawa would continue to earn more than 50 per cent of all government revenue from the offshore developments and Newfound­ land merely wanted to keep its provincial share. What he was demanding – aside from Martin keeping his promise – was for Ottawa to fulfil Section 36 of the Canadian Constitution which promoted equal opportunity for all regions: The Maple Leaf symbolizes fairness, justice, compassion and co-operation in the quest for equality of opportunity of all people. Our province removed the Maple Leaf, not to reject those values, but to draw attention to the fact that the Martin government’s broken commitment to Newfoundland and Labrador frustrates those values … We are equal partners of a great country that accepts and supports our province’s aspirations to achieve equality of opportunity and self-reliance.58

A few days later, Williams hoisted the Canadian flag once again, though he said that he would negotiate only with Martin, as discussions with finance had been counterproductive: We had to get the Canadian attention about the history, the deep history of Newfoundland and Labrador. How we’ve been wronged and slighted by the federal government, how they mismanaged our fishery basically to oblivion, and have allowed foreign trawlers to basically take … everything off our banks in the interests of external trade.59

He got his wish: more than 40,000 letters of protest were sent to Martin and Goodale.60 Martin also wrote a conciliatory letter to Williams on 15 January 2005, stating that he was prepared to meet him directly – premier to prime minister – but he would not consider an offset to equalization in perpetuity: any arrangement had to be “undertaken in the context of ensuring fairness for all Canadians.”61 Martin had hoped to lure Hamm into signing a separate agreement with Ottawa in order to drive a wedge between the two Atlantic premiers as Trudeau had hoped in his negotiations with Nova Scotia and Newfoundland in the early 1980s, but Hamm refused to leave Williams isolated. Martin was left with little choice but to negotiate with Williams. In a minority Parliament, it was not to the Liberals’ advantage to allow the matter to fester any longer, even if delivering on Martin’s promise angered some of the other premiers who were also starting to demand specific concessions from Ottawa.62 Before their scheduled meeting on 28 January, Martin offered

300  Lions or Jellyfish

another compromise when Ottawa dropped its demand that the province maintain a balanced budget as a condition of retaining 100 per cent of resource revenues.63 Martin wanted a deal desperately, and in late January 2005 he surrendered to Williams’ demands, diminishing his role as prime minister in the process. Martin agreed finally that Newfoundland and Labrador should be the principal beneficiary of its offshore resources. Williams had forced Martin to revise the royalty agreement in the 1985 Atlantic Accord that guaranteed Newfoundland 100 per cent of the revenue from offshore resources without it being clawed back from equalization payments. There were no changes made to the equalization program itself, only to how the program applied to Newfoundland and Labrador and Nova Scotia. They were compensated for 100 per cent of their offshore energy-related clawback through to 2011–12; Ottawa advanced Newfoundland and Labrador $2 billion against future royalties. The Canada-Newfoundland accord also promised that if the total clawback over that period exceeded $2 billion, then Ottawa would provide the difference in cash, and once the $2 billion “credit” had been used, payments would be made annually to the province. However, if the value of the clawback by 2011–12 was less than the $2 billion already advanced, Newfoundland was not required to return any of the advance payment to Ottawa. If Newfoundland and Labrador remained a have-not province in 2011 or 2012 and its debt-servicing charges were high, then a successor agreement would be negotiated through to 2019–20 that would also guarantee a further 100 per cent compensation for the clawback on offshore revenues. However, if the province came off equalization between 2012 and 13 and 2019 and 20, it would still receive offset payments, though at a reduced rate from the federal government for up to two years. In other words, it would receive offset payments for two year after it no longer qualified for equalization payments. Moreover, the agreement did not impose a cap on the payments to Newfoundland. Martin’s commitment to Williams was delivered in full. The negotiations had been long and acrimonious and Williams returned to St. John’s to a hero’s welcome, just as Wells had done in his public fight with Mulroney. As it was with Wells, for Williams it had been a matter of “integrity and dignity, honour, and … pride.” “I am very proud to be a Canadian,” Williams said. The deal made stronger provinces, and “strong provinces make stronger nations and that’s what we are doing here.”64 For Williams, it was also a step towards self-reliance and pride in the future:

Danny Williams, Equalization, and Ottawa  301

8.4  Newfoundland Premier Danny Williams (back left) gives a thumbs up and Prime Minister Paul Martin looks on solemnly as federal Minister of Natural Resources John Efford (front right) and Newfoundland Minister of Finance Loyola Sullivan sign a multi-billion-dollar deal that set out new revenue-sharing rules for the province’s offshore energy industry on Monday, 14 February 2005. (CP PHOTO/Jonathan Hayward; CP 613639) Equality of services and opportunities is a fundamental principle of the Canadian federation. In fact, the principle is so much a part of our national character that we have entrenched it in our Constitution. However, equality is about more than the transfer of money. It is about pride. It is about being treated equally within the federation – with respect and dignity, by empowering us with the tools to succeed. Only then can the less fortunate partners truly embrace opportunities and realize our potential.65

Williams had demonstrated once again that for him there was no backing down when he believed in the justice of his cause. With his victory in

302  Lions or Jellyfish

the federal-provincial battle won, he basked in the adulation of the Newfoundland voters; his approval rating was nearly 90 per cent, making him the most popular premier in Canada. One Prime Minister Submits, Another Emerges For Martin, however, there was no such happy outcome. His fear that side deals with Newfoundland and Nova Scotia would elicit similar requests from other provinces was realized just a few days after the new Atlantic Accord was signed. Saskatchewan was the first province to step forward and claim that it, too, deserved a deal similar to what New­foundland and Labrador had negotiated. After a meeting with Goodale, who also represented a Regina constituency, Saskatchewan Finance Minister Harry Van Mulligen pointed out that his province also faced considerable challenges, just as its Atlantic counterparts did, and insisted that it should not be treated any differently than those provinces. If Saskatchewan had a deal similar to that of Newfoundland, it would add $4 billion to provincial revenues. About 90 per cent of Saskatchewan’s oil and gas revenue went to the federal government, Van Mulligen claimed, and it was simply unfair. “We certainly understand asymmetrical federalism, that there has to be flexibility in terms of dealing with provinces … but this is going far beyond what anyone would conceive as fair and equitable.”66 Saskatchewan subsequently mounted a determined but futile campaign for a deal similar to Newfoundland’s. Ottawa maintained that the inadequate level of social services and the high level of indebtedness of Newfoundland and Nova Scotia – $12 and $11 billion respectively – made special considerations necessary. Saskatchewan was in a much better fiscal situation, Ottawa insisted, but later the Northwest territo­ries, Quebec, and even Ontario joined with the western province to demand the same preferential treatment given to Newfoundland and Nova Scotia.67 New Brunswick Premier Bernard Lord had long expressed some concern over demands from Newfoundland and Nova Scotia for a greater share of offshore revenue from Ottawa. The special deals with New­ foundland and Nova Scotia, some argued, represented a significant departure from the fundamental principles underlying Canada’s system of equalization. Rather than providing cash to the fiscally weaker provinces to ensure that all provinces could provide reasonably similar levels of public services at reasonably similar rates of taxation, the Martin side deals and the changes to the program announced in 2004–5 meant that the combination of guaranteed increases in the program, and the

Danny Williams, Equalization, and Ottawa  303

special concessions made to two Atlantic provinces, would ensure that annual changes in provincial fiscal capacities would have little or no bearing on the amount of cash provinces received. Equalization was a federal program, financed and controlled by Ottawa, however, and it was “the federal government’s prerogative to operate, administer and distribute equalization in any way it [chose].”68 The Globe and Mail took a different position: Martin, it wrote, “is clearly willing to give away the store to buy provincial peace.”69 In May 2005, Martin even struck a special deal with Premier Dalton McGuinty, transferring $5.75 billion to Ontario over five years to address that premier’s demand that Ontario was paying “more than its fair share” into the federation. Martin’s handling of the federal-provincial file demonstrated to many Canadians that he was not prime ministerial material. The Fight Within: Provincial and Federal Conservatives Clash By the time the expert panel that Martin had appointed in 2004 finally reported, Stephen Harper had been elected prime minister and his Con­ servatives had replaced the Martin Liberals as the government in Ottawa. In their determination to form the government, the Conservatives had allied themselves with Williams since 2004 on equalization and non-­ renewable natural resources. They also promised a ten-province standard for the determination of equalization. When Martin lost a confidence vote in Parliament in November 2005, setting the scene for a general election on 23 January 2006, Harper reassured Williams once again of his position: “We will remove non-renewable natural resources revenue from the equalization formula to encourage the development of economic growth in the non-renewable resources sectors across Canada.”70 The Conservatives gained one seat in Newfoundland and won a minority government, but once in office Harper refused to implement his promise to Williams before studying Achieving National Purpose: Putting Equal­ization Back on Track, the report of the expert panel on equalization chaired by Al O’Brien, the former deputy provincial treasurer of Alberta. The 2006 report aimed to balance the competing interests of all provinces and recommended the following to ensure greater transparency and simplicity in one of Ottawa’s most important fiscal transfers to the provinces: increase funding to the equalization program by $900 million annually; include 50 per cent of provincial resource revenues in the  formula to determine each province’s real fiscal capacity (despite Martin’s agreement with Williams); use all ten provinces to determine the national

304  Lions or Jellyfish

standard; nullify special arrangements with Nova Scotia and New­found­ land and Labrador; institute a cap on payments to prevent any province from having a fiscal capacity higher than that of the lowest non-receiving province. The cap had the potential effect of clawing back some of the natural resource revenue from Newfoundland, although Martin’s deal with Williams came without imposing a cap on potential payouts.71 Williams was furious with the panel’s recommendation and denounced the proposal as “a bad dream,” warning of “dire consequences” if Harper adopted the recommendations. Nova Scotia, which had ridden Williams’ coat-tails to the 2005 Atlantic Accord, joined the chorus of objections, as did British Columbia, Alberta, and Saskatchewan. Given their oil and gas industries they vowed “to fight tooth and nail,” demanding that Harper fulfil his promise to exclude all revenue resources. Alberta’s Ralph Klein even threatened to withdraw his province from the equalization program, stating: “This is political showdown … This is also a constitutional issue. Alberta has control and authorization and authority over its resources.” Ontario’s Dalton McGuinty questioned the logic behind equalization payments and the need to continuously enrich the program, especially since his province then contributed a significant portion of the money to compensate other regions. The provinces most in need of equalization – such as Manitoba, Quebec, Prince Edward Island, and New Brunswick – accused the other provinces of being “anti-Canadian” and “going back on previous commitments to support increases in equalization payments.” The divide between the provinces grew throughout 2006, and it soon became apparent that each premier was on his own to convince Harper of his province’s particular needs.72 Harper came to the office of the prime minister in 2006 triumphing what he called “open” or “classic federalism.” He promised that each order of government should respect its clear constitutional mandate and he would keep the federal government’s spending power within bounds, take advantage of the experience and expertise in the provinces and territories to allow them to contribute more meaningfully to the national dialogue, and fully cooperate with all other levels of government, while clarifying the roles and responsibilities of each. He also promised to end what was called the “fiscal imbalance,” or the shortfall of provincial revenues compared to federal surpluses given the spending requirements of each level of government under the Constitution.73 Since the late 1990s, Ottawa had accumulated vast surpluses but it had reduced transfers to the provinces as they struggled to pay for basic services, especially in health and social programs, despite Martin’s attempt to restore some of the funding in 2004. Harper increased transfers in his 2007 budget as

Danny Williams, Equalization, and Ottawa  305

a way of fostering federal-provincial harmony. However, his return to a formula-based approach to equalization using a ten-province standard, replacing the fixed-sum program that had been in place since 2004, together with other revisions, angered some of the premiers, including Danny Williams. Under Harper, the equalization program assessed, on a per capita basis, a province’s ability to generate own-source revenues, or fiscal capacity, and compare it to the average fiscal capacity for all ten provinces. There was nothing new or radical in that approach, but all provincial government revenue sources, except for user fees, were lumped into one of five categories: personal income taxes; business income taxes; sales taxes; property taxes; and 50 per cent of natural resource revenues. The federal budget also imposed a cap on equalization payments, limiting payments to the total per capita fiscal capacity of any non-receiving province. However, the new rules allowed provinces such as Newfoundland and Labrador to continue under the existing arrangement with its five-province standard. This would have resulted in lower payments than the new agreement (known as the O’Brien formula after the chair of the export panel), but it allowed Harper to insist that he continued to honour the previous accords signed between Newfoundland and Ottawa, as the choice was left to the province to participate in the richer equalization system, which did not shelter offshore oil revenues, or continued with the 2005 offshore agreements. Williams and Nova Scotia Premier Rodney MacDonald demanded access to the new system without losing any petroleum revenues and insisted that preventing them from doing so was violating Harper’s election promise to keep oil and gas revenues out of equalization calculations. Williams was angry: “Essen­ tially, we are being railroaded into an untenable situation whereby we are forced to choose the O’Brien formula because in this particular year, it will give us additional monies just as it will give all equalization-­receiving provinces extra cash.” The gain was for a single year, but Williams insisted that “the broken promise of the Federal Government will still see our province short changed by approximately $10 billion.”74 It was, as political scientist Jennifer Smith points outs, a “clever move” by Harper that “backfired, producing another epic battle between the federal government and two provincial governments [Nova Scotia and Newfound­land]. For a time, intergovernmental affairs were out of control.”75 Once again, Newfoundland and Ottawa were at loggerheads. Williams saw Harper’s proposal as a betrayal by the Canadian government. The unilateral federal action threatened to nullify the Atlantic Accord 2005 which had been negotiated by the previous federal government; it was also a complete reversal of Harper’s earlier promise:

306  Lions or Jellyfish We were promised full exclusion of non-renewable resources, no caps and more importantly, an opportunity to finally put our non-renewable resource revenues to work for the province. Every day these resources continue to be developed, our province inches closer and closer to seeing these revenues come to an end. This is not something that will happen in the short term, but in the long term the resources and the associated revenues will be gone. That is why the Prime Minister’s promise is so important to our province and others like ours, so that we can achieve meaningful and sustainable self-sufficiency in this great federation.76

Williams found himself at war once again with Ottawa. One of his strategies was to diminish the stature of the prime minster by calling him “Steve” at public events. He also warned that if Harper did not keep his promise, he deserved a “big goose egg” in the next federal election.77 Like his predecessors in their quarrels with the federal government, Williams believed that other Canadians simply did not understand New­ foundland and Labrador. He followed the path first etched by Smallwood and took his message across the country to educate Canadi­ans. “We had cash in the bank in 1949,” he told the Economic Club of Toronto. Since then Newfoundland had been a victim of bad luck and bad policies. At the time of union, it did not know of the vast reservoirs of oil and gas on its doorstep and signed them away to the federal government. In the 1960s, Prime Minister L.B. Pearson convinced Premier Smallwood that if Ottawa enforced the constitutional guarantees that allowed the transmission of power from Newfoundland through Quebec it would have created civil unrest in Canada. Newfoundland, Williams said, “made the sacrifice for the sake of national unity”; however, the cost was more than Newfoundland could afford. By 2007, Newfoundland was earning $75 million annually while Quebec reaped $1.3 billion each year from Churchill Falls. The fisheries were also decimated. “We are determined to cultivate greater moral autonomy – no longer letting others decide what is good for us but finding our moral compass within and defining our own values and priorities.” As Wells maintained during his constitution battles, Williams insisted that Newfoundland and Labrador wanted to be a full and contributing member of the Canadian federation. “It’s not separation we crave, but respect. Self-respect breeds self-confidence, self-determination and self-reliance, economically and socially.”78 There was little respect from Prime Minister Harper, however. Williams recalled that in 2001, Harper had said that Liberal ridings west of Winnipeg are “dominated by people who are either recent Asian

Danny Williams, Equalization, and Ottawa  307

immigrants or recent migrants from Eastern Canada: people who live in ghettos and who are not integrated in Western Canadian society.” A year later Harper uttered his infamous comment that Atlantic Canada was infected with a “culture of defeat.” Williams said that as prime minister, Harper punished Newfoundland and Labrador by breaking his promise to remove non-renewable resource revenues from the equalization formula but lavished federal largesse on Quebec. Harper was driven by his desire for a majority government, Williams charged: “We are facing a federal election and in the House of Commons there is no equality among provinces. Seats are distributed by population, and unfortunately for the people of Newfoundland and Labrador our numbers are often not deigned significant enough to matter.” It was an argument that had been used by politicians in the less populated provinces since Confederation and it continued to have resonance in Newfoundland and Labrador. Harper’s position on equalization “was the most shameful, dishonourable thing I have ever witnessed in politics,” Williams told his mainland audiences, adding: I can tell you now that if this Prime Minister can so easily and blatantly break a promise to us, just imagine what he will do to you if he wins a majority government. His word is meaningless. His promises are lip service to win votes. And he will do absolutely whatever he has to in order to win power … Let our experience be a lesson to all Canadians.

When trust and respect disappeared from intergovernmental relations, there was little hope for Canada, Williams warned. “That is why I am encouraging Newfoundlanders and Labradorians and Canadians in the next federal election to vote ABC – Anything But Conservative.”79 Williams threatened to campaign against Harper in the upcoming federal election if he failed to honour his earlier promise. With considerable support from much of the national media, which warned him of the dangers to the federation of negotiating side deals as Martin had, Harper held his ground. An additional reason for doing so was that Ontario was encountering its own economic and fiscal problems and facing the ignominy of being a have-not province after funding – in its view, at least – the equalization program for two generations. Premier Dalton McGuinty warned about the unfairness of receiving provinces having a greater fiscal capacity than Ontario. Moreover, in late 2007, Newfoundland and Labrador reported a surplus of $882 million, the first fiscal surplus since Confederation. Williams demanded $10 billion from Ottawa over fifteen

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years to end his feud with Harper. That was the rough amount, he claimed, that the province would lose in equalization under Harper’s new scheme after an analysis by Memorial University economist Wade Locke.80 On the eve of the 2007 provincial election he told the St. John’s Board of Trade: We have stood together as one to fight the Harper government, a promisebreaking regime that reneged shamelessly on their commitment to sign an equalization agreement equivalent in value to our entire provincial debt. They don’t deserve a single seat in this province and should be booted out of office altogether. We must send a loud and clear message to those in Ottawa that Newfoundland and Labrador is no longer prepared to be the poor cousin of Confederation. We don’t have our cap in hand anymore.81

Following his overwhelming victory, Williams declared that the electorate had voted for a government committed to “no more giveaways” and one determined to be the master of its own house and to control its own destiny within the federation of Canada.82 In the subsequent Throne Speech, Williams claimed that Newfoundland lacked any influence in the federal cabinet, which treated the province with “contempt and condescension.”83 There was little sympathy outside Newfoundland for Williams’ position, however. During the 2008 federal election Williams launched an assault on the federal Conservatives with his “Anything But Conservative” campaign. The Newfoundland PC Party registered with Elections Canada and even advertised on a billboard in downtown Toronto, advising voters not to support Harper. Williams relentlessly attacked the federal Conservatives, forcing his own party members to express their dissatisfaction with their federal counterparts; some even campaigned for Liberal and NDP ­candidates. They all accused Harper of reneging on the promises made by the Martin government to exclude the province’s offshore energy revenues from the equalization transfers formula. The principle of New­ foundland and Labrador being the main beneficiary of offshore development was central to Williams’ campaign, and he launched a bitter attack on the prime minister in the 2008 Throne Speech: In the federal forum that once mattered most, Newfoundland and Labrador is treated with little but contempt and condescension. Ours is not the only provincial government to be treated with disdain by the Harper Government, but no province has been treated more dishonourably. My Government has

Danny Williams, Equalization, and Ottawa  309 been deeply frustrated by the current Federal Government’s refusal to honour – among other promises – their explicit written commitment to remove non-renewable resource revenues from the calculation of equalization, a commitment worth an estimated $10 billion to Newfoundland and Labrador according to independent economists. Given the magnitude of this commitment, My Government cannot, in good conscience, either forget it or cease to remind others of this broken promise. A Prime Minister who makes such a promise saying “there is no greater fraud than a promise not kept” stands condemned by his own words for refusing to keep it. By keeping their word, the Harper Government would have advanced our efforts to address our excessive burden of debt and achieve parity in the federation. Their actions are not only disingenuous but also dishonest. They have proven they cannot be trusted; but their great betrayal will do nothing to prevent us from achieving our goals on our own steam. Despite their opinion that they will win a government without Newfoundland and Labrador, our province will achieve its full potential as a prosperous and self-reliant partner within the federation with or without this Federal Government. We just want the opportunity to utilize our natural resources to become self-­ sufficient. We will resist any attempt to prevent this from occurring.84

Williams continued his attack on Harper in the 2008 federal election, although there was no indication that Harper was about to change his mind on the issue. Williams told the St. John’s Board of Trade that when he met with the prime minister to offer a compromise over equalization, Harper told him “face-to-face that he d[id] not need the people of this province to win an election … is it ok for the man occupying the highest office in our country to treat a province in this federation with such disdain?” Williams repeated much of what Harper’s detractors had said, warning of “the very dire consequences that could face us should Stephen Harper and his right-wing Conservative-Reform Party form a majority government in the coming weeks.” Harper had a hidden agenda, Williams warned, and if he secured a majority government Canada – and particularly Newfoundland and Labrador – would be imperilled. “You ain’t seen nothing yet,” Williams said: “a majority government for Stephen Harper would be one of the most negative political events in Canadian history.” Vote anything but Conservative, Williams pleaded: “If you believe the country deserves better, you know what to do. It is as easy as ABC.”85 As a testament to Williams’ influence, Harper’s Conservatives loss their three seats in Newfoundland as the province elected only Liberals and New Democrats, and the Conservatives polled just 16 per cent of the popular

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vote. Even in the 1962 election, when Smallwood unleashed the full fury of his Liberal organization against Diefenbaker, the Conservatives had managed 30 per cent of the vote and one MP. Point Made, Time to Move On Shortly after the federal election, which gave Harper a stronger minority government but still six seats short of a majority, Williams announced that he had shut down his Anything But Conservative website that had encouraged Canadians to vote for any party but the Tories. It effectively signalled an end to his two-year feud with Harper over offshore oil revenues. “We’ve achieved our goal,” he said. “We’ve sent a very strong message to the Harper Conservatives … we, in fact, had a role to play in preventing a majority government here.”86 Still, he wrote to Harper to congratulate him on his electoral victory and request a meeting with him before the end of the year. Despite Williams’ criticism of the Conservative 2009 federal budget, he maintained a conciliatory attitude towards Harper after the 2008 election. He found that Harper was no pushover like Martin, and after the election Newfoundland was left without a representative in the federal cabinet. Moreover, Williams needed federal help with a variety of files including the development of the Lower Churchill, which was announced with federal financial support shortly after he resigned as premier on 3 December 2010. Williams left office with a considerable list of accomplishments. In late 2008, Newfoundland and Labrador had finally achieved “have” status and no longer qualified for equalization for the first time since Confederation. Even with the Atlantic Accord offset payments, federal transfers accounted for only 25 per cent of total revenues in 2010 – half of what they were a decade earlier – largely because of oil revenues; by fiscal 2013, federal transfers accounted for about 10 per cent of total revenues. In 2013, Newfoundland and Labrador was one of only four Canadian provinces that did not receive equalization payments (the other three provinces were British Columbia, Alberta, and Saskatchewan), as Table 8.1 demonstrates. This was a remarkable achievement given that it had held last place on the list of most economic indices for decades. GDP per capita was among the highest of the provinces, and per capita personal income was approaching the national average. The province’s net debt was reduced by 28 per cent, from a high of $11.9 billion in 2004–5 to $8.6 billion in  2012–13. The severe outmigration of the 1990s was reversed, but many rural areas of the province continued to struggle.87 Still, many in

Table 8.1 Federal Support to Newfoundland and Labrador 2005– 2006

 

2006– 2007

2007– 2008

2008– 2009

Major Transfers

2009– 2010

2010– 2011

2011– 2012

2012– 2013

2013– 2014

2014– 2015

2015– 2016

(millions of dollars) 1

Canada Health Transfer

343

337

347

403

450

436

449

470

492

490

501

Canada Social Transfer1

146

146

146

160

164

168

171

180

184

187

191

Equalization2

861

687

477

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Offshore Offset Payments   1985 Accord   2005 Arrangement

0

110

189

557

465

642

0

0

0

0

0

189

219

306

0

0

0

536

0

0

0

0 0

189

329

494

557

465

642

536

0

0

0

Total Transfer Protection4

 

 

 

 

 

8

 

 

 

 

 

Total – Federal Support

1,539

1,499

1,465

1,120

1,079

1,253

1,157

650

676

676

692

Per Capita Allocation (dollars)

2,992

2,936

2,882

2,191

2,093

2,404

2,204

1,235

1,280

1,284

1,310

Total – Offshore Offset Payments

3

1 CHT/CST include transition protection payments for 2007–08. CHT includes protection payments to Newfoundland and Labrador in 2014–15.  2 Includes a one-time adjustment of $54 million in 2006–07, and amounts reflect the fact that Newfoundland and Labrador elected in 2010–11 to enter into the 2007 Equalization formula. Newfoundland and Labrador no longer qualifies for Equalization as from 2008–09 due to the strength of its economy relative to the other provinces.  3 Offshore Offset Payments include cash amounts from the 1985 Accord. The 2005 Arrangement included an upfront payment of $2 billion in 2004–05; amounts presented here are notional allocations, not including the $1,153 million booked by Newfoundland and Labrador in 2008–09 that represents the unused portion of the upfront payment. The $536 million paid in 2011–12 under the 2005 Arrangement represents a transitional payment as Newfoundland and Labrador no longer qualifies for Equalization or Offshore Offset Payments beyond that year. Offshore Offset Payments are not included for the purpose of calculating Total Transfer Protection. 4 Total Transfer Protection (TTP) was provided in 2010–11 to ensure that Newfoundland and Labrador's total major transfers in one of these years are no lower than in the prior year. For the purpose of calculating TTP, total major transfers comprise Equalization, CHT, CST and prior year TTP. Source: Canada, Department of Finance, Federal Support to Provinces and Territories http://www.fin.gc.ca/fedprov/mtp-eng.asp

312  Lions or Jellyfish

Newfoundland and Labrador had come to believe that the hopes and aspirations that supporters of Confederation held in 1949 had finally been realized, but they had been reached not because of Ottawa’s generosity but because recent premiers such as Brian Peckford, Clyde Wells, and Danny Williams had stood up to protect their province and challenge the federal government. With Williams’ departure it was left to the new premier, Kathy Dunderdale, to chart a new course for the province in Canada. She immediately lowered the temperature of politics in Newfoundland and Labrador, signalled a new relationship with Ottawa, and easily won her first election campaign on 11 October 2011. On 17 December 2012 she joined representatives of the federal cabinet, the government of Nova Scotia, and the Innu Nation to announce plans for the development of the Muskrat Falls hydroelectric project, which would see electricity cross the Cabot Strait to Nova Scotia and link to the North American electricity grid. She acknowledged the leadership of Prime Minister Harper for the federal government’s loan guarantee to make the development possible and said that it demonstrated the kind of leadership the federal government could provide in nation-building energy projects. Unlike other premiers who came to office promising and hoping to reverse Newfoundland and Labrador’s economic and fiscal performance and make it a contributing member, economically and fiscally, to confed­ eration, Dunderdale became premier with the province’s “have” status in place. The brighter economic prospects might mean that the relationship between Newfoundland and Labrador and the federal government may be less confrontational in the immediate future than it has been in the past but there are no guarantees, of course, that will be the case. The province’s fiscal and economic reversal has been achieved because of reasonably high prices in the oil and gas sector and, as all resource-based economies know only too well, their well-being is dependent on the vicissitudes of the international markets. In 2014, Dunderdale was forced to resign and the Progressive Conservative party that Danny Williams had rebuilt and led with such high approval ratings since 2003 was in such disarray that it had tremendous difficulty in finding a new leader who would also be the new premier. After two leadership conventions, Paul Davis was chosen as leader and on 26 September 2014, he was sworn in as the new premier just as the price of oil began to plummet. He also found himself in a disagreement with Prime Minister Harper over how the province could call upon a $400 million fund created in 2013 by

Danny Williams, Equalization, and Ottawa  313

the federal government to help the Newfoundland fishing industry adjust to the changes brought by the proposed Canada-European Union Comprehensive Economic and Trade Agreement (CETA). The pending free trade agreement would no longer require European-based fishing vessels to process a portion of their catches in Canadian territorial waters in processing plants in Newfoundland and the other Atlantic provinces. Ottawa and St. John’s soon disagreed over the intent of the CETA fund: Davis claims that the funds were designed to help Newfoundland rebuild the fishery through research and development, investment infrastructure, and new marketing initiatives, while Harper insists that the funds were designed to help those specific fishers who were impacted by the changes to the minimum processing rules. It was not a blank cheque for the Newfoundland fishery, remarked Rob Moore, the minister responsible for Atlantic Canada Opportunity Agency and the regional minister for Newfoundland and Labrador (even though he represents a New Brunswick constituency). Reminiscent of what Canadian ministers told the first Newfoundland delegation in 1947 that came to Ottawa to discuss union between the two countries, Moore said in the House of Commons on 11 December 2014 that federal funds could not be used to “give the [fishing] industry of Newfoundland and Labrador an unfair advantage over other Atlantic provinces.” The premier’s response was predictable as well. Following a meeting in Ottawa with Harper on 12  December, Davis, in language reminiscent of Williams’ battles with the federal government, lamented “I leave here very disappointed. I can tell you that it’s very clear to me that we cannot trust Stephen Harper, cannot trust this government.”88 The future of intergovernmental relations between Newfoundland and Ottawa may be a lot like the past and perhaps the history told here may just be a mere introduction to one aspect of the study of Canadian federalism.

Conclusion

When Newfoundland joined Canada in 1949, it had no experience with the constitutional model of divided jurisdiction or federalism that the fathers of the Canadian Confederation had adopted in 1867. Those that led the crusade for union in Newfoundland clearly understood, however, that Canadian federalism had attempted to build a national political community that made space for and accepted the legitimacy of the various communities that comprised the nation in 1867 or were added later. Newfoundland Confederate leader F. Gordon Bradley, who joined the government of Canada as the secretary of state on 1 April 1949, realized that union would transform Newfoundland and Labrador, but that the federal system of government guaranteed the formerly independent Newfoundlanders “a continuance of their identity of which they have always been so proud.” While the new system of government would lead to “stresses and strains,” he was hopeful that the process of integration would be smooth, as Canada had already given “speedy recognition” to Newfoundland’s special problems. Prime Minister Louis St. Laurent also reassured Newfoundlanders on 1 April 1949 from Parliament Hill that becoming a province of Canada “will not cause you to lose your identity, of which you are all so justly proud.” He added that each Canadian province had its own distinctive political existence and political traditions and within its fields of jurisdiction the province was as sovereign as the Parliament of Canada. The province was responsible for education, property, and civil rights, and it was primarily responsible for public health and social welfare. Newfoundlanders entered Confederation, St. Laurent promised, as full and equal partners with the older provinces even if not all Canadians enjoyed the standard of living that they should have as citizens of Canada. He promised Newfoundlanders that they

Conclusion 315

would share with the people of Canada the wealth of the nation. Both Bradley and St. Laurent promised Canada’s newest citizens full partnership and prosperity in their new country. Bradley’s comment, “We are all Canadians now,” held considerable promise for a bright future.1 Union with Canada was beneficial financially and economically for Newfoundland, but – as demonstrated in these pages – this does not mean that the relationship between Ottawa and St. John’s has always been tranquil. Far from it, really, but the battles between Ottawa and Newfoundland were not led by the progeny of the anti-confederates who lost the two referenda in 1948 that resulted in union with Canada. They remained a handful of pseudo anti-confederates and nationalists who wistfully longed for a past that existed only in their imaginations. While they dreamed of a Newfoundland variant of Iceland or Ireland (during the rise of the Celtic tiger) until the great financial crisis of 2008, they had little influence on the workings of federalism in the province. Those who wielded real power, and have at times worked with Ottawa and at other times confronted it, have been driven by the legacy of the early confederates such as Bradley, St. Laurent, and Joseph R. Smallwood. They maintained that Confederation should provide Newfoundland and Labrador with a standard of living and a level of public services that had been promised at the time of union. When relations between the federal and provincial governments deteriorated, it was often because the two orders of government disagreed over how to best deliver on the promise of Confederation. Canadian prime ministers have had to consider – and defend – what they saw as the national interest, while the province’s premiers have routinely argued that Newfoundland and Labrador is in many ways different from the other provinces and requires special treatment if the dream of Confederation is ever to be realized. This book has explored several episodes in the relationship between Ottawa and Newfoundland. At the basis of each has been the pursuit of fairness and justice and a search for stability in a province that has known its share of economic struggle and disappointment. Confederation ushered in an improved standard of living that changed immediately the plight of most Newfoundland families, even if the improvements came largely in the form of individual social transfers from the federal state, and an improved level of public service as measured in roads, schools, social amenities, and hospitals that would have proven very difficult without Confederation. There was a prosperity that Newfoundlanders had not previously known for extended periods of time. The provincial government participated in a revenue-sharing arrangement with the national

316  Lions or Jellyfish

government that allowed the province to construct an infrastructure that would have been unimaginable without union, even if severe economic obstacles remained for Newfoundland and Labrador following 1949. In the generation after Confederation, even as Newfoundland and Labrador prospered, it was never able to bridge the economic gap that existed between it and most of the other provinces. Earned income from wages and salaries (not including individual transfers from any level of government) in Newfoundland was 48 per cent of the Canadian average in 1949; it rose to 72 per cent in 2002 but was still some distance back from the national average. Personal income, which includes all income regardless of source, increased from 48 per cent to 79 per cent of the national average over the same period. These were remarkable achievements – as were the provision of water and sewer facilities and electricity to people who had gone without them for years, especially in much of outport Newfoundland and Labrador -- but Newfoundland has remained the poorest economically of all the provinces for much of its tenure as a province of Canada. Newfoundland and Labrador had few constitutional guarantees for addressing the economic disparities it faced within Confederation. The federal system of government allowed for the splitting of political identity, and citizens in Newfoundland and Labrador could be both Canadians and Newfoundlanders, but it could not solve the problems of economic adversity. The province relied – as the Royal Commission on Renewing and Strengthening our Place in Canada noted in 2003 – “on the good faith, vision and courage of successive federal governments in addressing obstacles to its full participation in Confederation.” The Commission also found that Newfoundlanders and Labradorians “feel ignored, misunderstood and unappreciated by their federal government and, to a less extent, by other Canadians.”2 It was a feeling that the political leadership of the province clearly understood. That combined feeling of alienation and being misunderstood has become essential to the normative rhetoric as Newfoundland premiers struggled to earn for their province a larger slice of the Canadian dream. In their narrative, Newfoundland’s economic circumstances were rarely considered to be shaped by internal decisions or market forces but rather by outsiders. Since 1949, most premiers – and their supporters – believed that redressing the economic imbalances of Confederation that continually rendered Newfoundland and Labrador a laggard was a fundamental tenet of membership in the Canadian political community, and a problem for the Canadian federal system to fix. Pierre Trudeau had warned in 1968 that persistent regional

Conclusion 317

inequality in Canada was as great a threat to national unity as FrenchEnglish relations. In 1982, Newfoundland joined with nine other provinces and the government of Canada to commit the country through its Constitution to alleviating regional economic disparities and creating equal opportunities for all citizens and provinces. That has been the goal of political leaders in Newfoundland and Labrador since 1949 but it has often brought them into conflict with the federal government and the working of Canadian federalism. Richard Simeon once noted that “federalism is not an end in itself.” Rather, it must be evaluated on its functional effectiveness, that is, its ability to “enhance or frustrate the capacity of government institutions to generate effective policy and respond to citizen needs.”3 In the episodes considered here, one might consider the demands and actions of the various Newfoundland premiers as attempts to create differing models of federalism at different points in the Ottawa-Newfoundland relationship: were premiers committed to a centrifugal or a centripetal model of Canadian federalism? While the premiers were indeed interested in the shape and workings of Canadian federalism, their relationship with Ottawa had embedded within it an important sense of history and grievance as it attempted to find space within the federal arrangement that accepted the legitimacy of its demands as a new member of Confederation. For premiers, Ottawa’s listening to their grievances and concerns was an indication of its recognition of the province’s needs. It also gave legitimacy to the province as a member of the Canadian community because the new constitutional arrangement of 1949 promised that Newfound­ land and Labrador could expect notions of fairness, prosperity, and stability within Canada. This book’s primary purpose has not been to offer a new conceptual approach to intergovernmental relations and federalism but to build on existing methodologies to examine the role of a handful of influential Newfoundland and Labrador premiers and Canadian prime ministers in shaping and reshaping the intergovernmental relationship between Newfoundland and Ottawa while at the same time balancing provincial and national interests and concerns. I have argued here, nonetheless, for bringing individuals and an understanding of the political culture and environment in which they govern back into the study of federalism. For Premiers Smallwood, Moores, Peckford, Wells, and Williams, the battles with Ottawa were essentially over Newfoundland’s place in Confederation and the struggle for economic justice, equality, and fairness. For Prime Ministers St. Laurent, Diefenbaker, Pearson, Trudeau, Clark, Mulroney,

318  Lions or Jellyfish

Martin, and Harper, the issue has also been about economic justice, equality, and fairness, but they have had to balance the legitimate concerns of Newfoundland provincial politics with the national polity, regional politics, and balancing the demands of the various communities that constitute the nation. At times, provincial and national first ministers have shared national and provincial concerns and have agreed on how best to achieve functional effectiveness within the federal system. Ottawa and Newfoundland embraced a policy for the resettlement of outport rural Newfoundland communities in the mid-1960s, as both orders of government held similar views of industrial and economic development. Both decided that a spatial redistribution of people from smaller rural areas to larger, more urban centres would increase the likelihood of attracting manufacturing and processing centres to those areas, thereby accelerating economic activity and improving the lives of citizens in those economically challenging locations. However, Ottawa had refused to participate in a similar program a decade earlier because it did not believe then that doing so was in the national interest. Moreover, it feared that becoming too involved in helping Newfoundland improve the level of public services for its citizens would raise similar demands from other provincial communities and force the federal government to become involved in jurisdictional sectors for which the Constitution had not provided. Peckford and Mulroney shared a similar view of Canada in the 1980s. They both agreed that strong and economically vibrant provinces made for a strong, cohesive, and united Canada and negotiated the Atlantic Accord. The new federal-provincial agreement awarded Newfoundland an equal voice in the control of offshore oil and gas development even though the Supreme Court had awarded control of the offshore to Ottawa. However, Pierre Trudeau had considered provincial control of the offshore as part of the process that was accelerating Canada’s descent towards a decentralized federation that would lead eventually to the country’s annihilation. All decentralist tendencies in Canadian federalism, he believed, had to be reversed and the economic powers of the federal government strengthened. His view of federalism had resulted in a long and bitter struggle with the Newfoundland government. OttawaNewfoundland relations reached their nadir during the late 1970s to early 1980s, when Trudeau and Peckford fought like scorpions trapped in a bottle over whether a decentralized or centralized Canada would provide the highest level of efficiencies in the federation. Trudeau was  emphatic that centralization would. Peckford held that only the

Conclusion 319

provincial state could ensure an improvement in Newfoundland’s social and economic well-being and that responsibility for development had to rest with the provincial government. Strong central governments that had held power in Ottawa since Newfoundland joined Canada in 1949 had not narrowed the economic and social gap between Newfound­ land and the other provinces. A strong national community was only possible if Canadian federalism provided a fair measure of equality among the provinces. Only the provincial government could foster a sustainable economic and vibrant social community in Newfoundland and bridge the fiscal and financial gap with the rest of Canada. Their quarrel imperilled the workings of intergovernmental relations between Newfound­land and Ottawa and was a low, dishonest period in the annals of Canadian federalism. Throughout much of the history of Ottawa-Newfoundland relations, Peckford’s and Williams’ were the unorthodox view. For the first quartercentury as a Canadian province, Newfoundland believed that only the federal government could oversee the redistribution of national wealth from richer provinces to poorer ones and that was the best way for Newfoundlanders to avail of a reasonably equitable standard of living that all Canadians were expected to share. Newfoundland’s first postConfederation political leaders, such as Smallwood and Bradley, who led the fight to bring Newfoundland and Labrador into Canada, articulated a set of principles and beliefs similar to those then being pursued by many of the other premiers. They shared with Tommy Douglas of Saskatchewan, Stuart Garson of Manitoba, and Angus L. Macdonald of Nova Scotia, for instance, similar concerns over the delivery of quality education, health care, and other public services, such as roads, rural electrification, and water and sewer infrastructure. Both federal and provincial governments and all political parties embraced the philosophy that the state had to address the social and economic injustices that their citizens faced. The new ideas were driven in large part by demands from citizens themselves. There emerged a commitment to notions of social rights, and a belief that all citizens should enjoy a reasonably common set of social welfare programs, a decent standard of living, and reasonable access to modern public services that would alleviate the burdens that citizens faced. In 1959, Smallwood and Diefenbaker had a major brawl over Term 29, the article of Confederation that required Ottawa to consider Newfound­ land’s fiscal capacity ten years after union to see how the province was managing in the provision of public services compared to the other

320  Lions or Jellyfish

Atlantic provinces. Premier Smallwood insisted the federal government had no choice but to provide the province with generous financial aid ­to bridge the economic and social gap with the Maritimes, at least, and eventually the rest of Canada. Ottawa refused and insisted that New­ foundland’s fiscal situation could be managed within the existing federal-provincial financial framework of institutional transfers and special assistance designed especially for the Atlantic region. Smallwood disagreed, arguing that Newfoundland was a special case within Confed­ eration because of its late entry into the union, its unusual constitutional and economic development, and its having the lowest standard of living of any of the provinces. Not only was Newfoundland’s prosperity threatened, but justice and fairness were also being denied when Diefenbaker refused to provide a special financial package for New­ found­ land. Smallwood maintained the federal government had broken the pact – implicit in the constitutional understandings reached in 1949 – that it was concerned for the well-being of the most vulnerable member of the Canadian political community. The federal disregard for the province’s unique situation was an “unspeakable betrayal of Newfoundland.” Clyde Wells had a similar view of Canadian federalism. He came to the premier’s office skeptical not only of Peckford’s approach to federalism but also of his faith in offshore mineral resources to break the province’s dependency on the federal government. Smaller and economically struggling provinces such as Newfoundland and Labrador needed a strong central government if they were to improve their fiscal capacity and provide their citizens with a standard of living at or near that of other Canadians. The functional effectiveness of the national government was threatened by the Meech Lake Accord that Peckford had negotiated with all the other provincial first ministers and Prime Minister Brian Mulroney. Its limiting of federal spending power in some areas, Wells believed, could only work against the interests of the economically challenged provinces such as Newfoundland and Labrador. Moreover, the new rules proposed in Meech for amending the Constitution rendered further constitutional change difficult, particularly of the Senate, which Wells believed should effectively protect and promote in Ottawa the interests of politically weak provinces such as his. Wells feared the tyranny of the political majority in Ontario and Quebec would make further constitutional change impossible, and a weakened federal government would leave Newfoundland and Labrador forever the poor cousin in the Canadian federation. Driven by that fear, Wells embarked on a lone strategy to either revise Meech Lake or destroy it. Some claimed

Conclusion 321

that he threatened the very existence of the country but he insisted that Newfoundland needed a strong central government else the community concerns of the economically weak provinces would be forever ignored. Wells sought constitutional and institutional reform to give Newfound­ land and Canada’s other have-not provinces a more effective voice in a strong and effective national government. He confronted Ottawa when he thought that the social and economic well-being and security of New­ foundland and Labrador were in jeopardy. He angered Ottawa, but intergovernmental relations remained civil and productive. The federal government agreed to take an 8.5 per cent share of the Hibernia oil development to save the project shortly after Wells led the fight to kill Meech Lake. Other examples of federal-provincial acrimony, such as Danny Williams’ dispute with Ottawa over the Atlantic Accord and equalization payments, were considered here as evidence of the turbulent history between Newfoundland and Ottawa, as well as Williams’ mission to promote Newfoundland’s interests vigorously. Like his predecessors, Williams fought Ottawa for economic stability and justice for Newfound­land, and like them his fight was never simply about creating winning conditions for his party in Newfoundland, nor any predilection to find a convenient political foe. It is necessary to take a broad view of the bitter and troubled relationship between Ottawa and Newfoundland. Those battles were – and are – struggles over how best to protect the economic and social interests of Newfoundland and Labrador, and what type of nation we want Canada to be. Federalism was never intended as an instrument for securing final victory over one’s political enemies; rather it was a framework for managing conflict and differences in Canada, not to eradicate conflict. In a few instances it seemed that resolutions on some issues – such as the federalprovincial control over offshore – led to indeterminable conflict between prime ministers and premiers. Yet, even when the constitution ruled against Newfoundland in that particular case, a new prime minister believed that if the constitutional rules impeded political stability, prevented the acquisition of social and economic justice for marginalized regions and provinces, and failed to find the accommodations that are necessary to maintain consent for the federal system, then the political community must find a compromise that seeks to restore some normative balance to the nation. Otherwise political consent for the federation will be lost and the legitimacy of Canada itself imperilled. That search for stability and social and economic justice in the federal system has

322  Lions or Jellyfish

been the raison d’etre of the relationship between Newfoundland and Ottawa since 1957. Moreover, Newfoundland’s struggles with Ottawa since then have been an attempt to contribute to the making and remaking of Canada and Newfoundland and Labrador. Premiers and prime ministers were cut from different political cloths, had distinct personalities, and, at times, exhibited dramatically different political philosophies – but they all share in the hope that Newfoundland and Labrador could shed its legacy of colonialism and prosper with the federal framework. The battles between the premiers of Newfoundland and Labrador and the prime ministers of Canada have also stemmed from particular historical realities and contingencies and from differences over how to achieve shared notions of social and economic citizenship. For New­ foundland and Labrador those notions of citizenship since 1949 have been based on equality of condition and equality in a level of public service with the rest of Canada, but such notions of common Canadian citizenship have proven to be elusive and contingent. Unless the situation changes quickly and permanently, it is only a matter of time before the next battle between Ottawa and Newfoundland erupts.

Notes

Introduction 1 James K. Hiller and Michael F. Harrington (eds.), The Newfoundland National Convention, 1946–1948: Debates, Papers and Reports, vol. 2 (Montreal: McGillQueen’s University Press, 1995); David MacKenzie, “The Terms of Union in Historical Perspective,” Newfoundland Studies 14, no. 2 (1998): 220–37; Stephen May, “The Terms of Union: An Analysis of Their Current Relevance,” The Royal Commission on Renewing and Strengthening Our Place in Canada (St. John’s: The Queen’s Printer, 2003); David MacKenzie, Inside the Atlantic Triangle: Canada and the Entrance of Newfoundland into Confederation, 1939–1949 (Toronto: University of Toronto Press, 1986); Raymond B. Blake, Canadians at Last: Canada Integrates Newfoundland as a Province (Toronto: University of Toronto Press, 1994); and Peter Neary, Newfoundland in the North Atlantic World, 1929–1949 (Montreal: McGill-Queen’s University Press, 1996). 2 This has also been a familiar theme in the study of Canadian federalism. See the essays in Penny Bryden and Dimitry Anastakis (eds.), Framing Canadian Federalism (Toronto: University of Toronto Press, 2009); T. Stephen Henderson, Angus L. Macdonald: A Provincial Liberal (Toronto: University of Toronto Press, 2008). 3 See, for example, John D. Whyte, “Federalism Dreams,” Queen’s Law Journal 34 (2008–2009): 1–24. 4 For a discussion of culture in recent Newfoundland history, see Jerry Bannister, “The Politics of Cultural Memory: Themes in the History of Newfoundland and Labrador in Canada, 1973–2003,” in Royal Commission on Renewing and Strengthening our Place in Canada, vol. 1 (St. John’s: The Queen’s Printer, 2003); and James Overton, “Progressive Conservatism? A Critical Look at Politics, Culture, and Development in Newfoundland,”

324  Notes to pages 8–12 Ethnicity in Atlantic Canada, Social Science Monograph Series V (Fredericton: University of New Brunswick, 1985): 84–102. 5 Stephen G. Tomblin, Ottawa and the Outer Provinces: The Challenge of Regional Integration in Canada (Toronto: James Lorimer & Company, 1995). 6 Herman Bakvis, Regional Ministers: Power and Influence in the Canadian Cabinet (Toronto: University of Toronto Press, 1991). 7 Penny E. Bryden, “A Justifiable Obsession”: Conservative Ontario’s Relations with Ottawa, 1943–1985 (Toronto: University of Toronto Press, 2013). See, too, David E. Smith, Federalism and the Constitution of Canada (Toronto: University of Toronto Press, 2010). 8 Alan Cairns, From Interstate to Intrastate Federalism in Canada, Discussion Paper No. 5 (Kingston: Institute of Intergovernmental Relations, 1979); and Ian Peach (ed.), Constructing Tomorrow’s Federalism: New Perspectives on Canadian Governance (Winnipeg: University of Manitoba Press, 2007). 9 Herman Bakvis and Grace Skogstad, eds., Canadian Federalism: Performance, Effectiveness and Legitimacy (Toronto: Oxford University Press, 2012), 6–7. 10 Richard Simeon, Federal-Provincial Diplomacy: The Making of Recent Policy in Canada, 2nd ed. (Toronto: University of Toronto Press, 2006); Edwin R. Black and Alan Cairns, “A Different Perspective on Canadian Federalism,” Canadian Public Administration 9 (March 1966): 27–44; Alan C. Cairns, “The Governments and Societies of Canada,” Canadian Journal of Political Science 10, no. 4 (1977): 695–725; Robert A. Young, Philippe Faucher, and André Blais, “The Concept of Province-Building: A Critique,” Canadian Journal of Political Science 17, no. 4 (1984): 783–818; Kathy Brock, “Executive Federalism: Beggar Thy Neighbour?,” in François Rocher and Miriam Smiths (eds.), New Trends in Canadian Federalism, 2nd ed. (Peterbourgh: Broadview Press, 2003): 67–83; Greg J. Inwood, Carolyn M. Johns, and Patricia L. O’Reilly, Intergovernmental Policy Capacity in Canada: Inside the Worlds of Finance, Environment, Trade and Health Policy (Montreal and Kingston: McGill-Queen’s University Press, 2011); Herman Bakvis, Gerald Baier, and Douglas Brown, Contested Federalism: Certainty and Ambiguity in the Canadian Federation (Don Mills: Oxford University Press, 2009); and Albert Breton, Competitive Governments: An Economic Theory of Politics and Public Finance (New York: Cambridge University Press, 1966), 93. 11 Premier Alison Redford of Alberta was forced to resign after a caucus revolt amid her excessive spending on questionable items such as travel and plans to build a luxury apartment in downtown Edmonton; in Manitoba, Premier Greg Selinger was forced to call a leadership convention as a number of his senior ministers resigned with the governing NDP mired in low approval ratings.

Notes to pages 12–23 325 12 Donald Savoie, Governing from the Centre: The Concentration of Power in Canadian Politics (Toronto: University of Toronto Press, 1999). 13 Anthony Sayers and Andrew Banfield, “The Dispersal of Federal Power in Federal States: Canada and Australia,” in Papers Presented to the Canadian Political Science Annual Meetings (Montreal, 2010); Herman Bakvis, “Prime Minister and Cabinet in Canada: An Autocracy in Need of Reform?,” Journal of Canadian Studies 35, no. 4 (2001): 60–80; and Savoie, Governing from the Centre. 14 See Blake, Canadians At Last, especially 146–77. 15 Rosemary Ommer, ed., The Resilient Outport: Ecology, Economy, and Society in Rural Newfoundland (St. John’s: ISER, 2002). 1. Smallwood, Diefenbaker, and Term 29: Failed Intergovernmentalism 1 On these points, see Raymond B. Blake, Canadians at Last: Canada Integrates Newfoundland as a Province (Toronto: University of Toronto Press, 2004); and George A. Rose, Cod: The Ecological History of the North Atlantic Fisheries (St. John’s: Breakwater Books Ltd., 2007). 2 Royal Commission on Renewing and Strengthening our Place in Canada (St. John’s: Office of the Queen’s Printer, 2003), 17–18. 3 See Margaret Conrad, “The 1950s: The Decade of Development,” in Ernest R. Forbes and Delphin A. Muise (eds.), The Atlantic Provinces in Confederation (Toronto: University of Toronto Press, 1993), 413–14. See also Harold Horwood, Joey: The Life and Times of Joey Smallwood (Toronto: Stoddart, 1989), 223–4; and J.W. Pickersgill, The Road Back: By a Liberal in Opposition (Toronto: University of Toronto Press, 1986), 65. 4 James G. Channing, The Effects of Confederation on Public Administration (Toronto: Institute of Public Administration of Canada, 1982), 81–3. 5 Richard Gwyn, Smallwood: The Unlikely Revolutionary (Toronto: McClelland & Stewart, 1968), 180–98. 6 Sean Cadigan, “Regional Politics are Class Politics: A Newfoundland and Labrador Perspective on Regions,” Acadiensis 35, no. 2 (Spring 2006): ­163–8; and Sean Cadigan, Newfoundland and Labrador: A History (Toronto: University of Toronto Press, 2009). Despite Cadigan’s claim that there was genuine anger towards Smallwood’s anti-labour stance, there is considerable evidence to suggest that he enjoyed tremendous support throughout the province for having confronted the loggers’ unions in 1958–9. 7 There have been some attempts recently to explore nationalism and nationalism rhetoric in Newfoundland history directed against outsiders: the British government, Canadian railway promoters and banks, and

326  Notes to pages 23–5 Confederation itself have been blamed for a series of problems that have confronted the province throughout its history. See Jerry Bannister, “The Politics of Cultural Memory: Themes in the History of Newfoundland and Labrador in Canada, 1972–2003,” in Collected Research Papers of the Royal Commission on Renewing and Strengthening Our Place in Canada. Volume 1. (St. John’s: Office of Queen’s Printer, 2003); Cadigan, Newfoundland and Labrador; Margaret Conrad, “Mistaken Identities? Newfoundland and Labrador in the Atlantic Region,” Newfoundland and Labrador Studies 18, no. 2 (2003): 159–74; and James Overton, “Sparking a Cultural Revolution: Joey Smallwood, Farley Mowat, Harold Horwood and Newfoundland’s Cultural Renaissance,” Newfoundland and Labrador Studies 16, no. 2 (2000): 166–204. 8 Patrick Fafard and François Rocher, “The Evolution of Federalism Studies in Canada: From Dependent to Independent Variable,” Canadian Public Administration 52, no. 2 (June 2009): 291–311; and David R. Cameron and Jacqueline D. Kirkorian, “The Study of Federalism, 1960–99: A Content Review of Several Leading Canadian Academic Journals,” Canadian Public Administration 45, no. 3 (September 2002): 328–63. Two notable exceptions appeared in recent issues of the Canadian Historical Review, though both ­focused on Western Canada: Barry Ferguson and Robert Wardhaugh, “Impossible Condition of Inequality: John W. Dafoe, the Rowell-Sirois Royal Commission, and the Interpretation of Canadian Federalism,” The Canadian Historical Review 84, no. 4 (December 2003): 551–83, and Gregory Marchildon, “The Prairie Farm Rehabilitation Administration: Climate Crisis and Federal-Provincial Relations during the Great Depression,” The Canadian Historical Review 90, no. 2 (June 2009): 275–301. 9 Richard Simeon, Federal-Provincial Diplomacy: The Making of Recent Policy in Canada (Toronto: University of Toronto Press, 1972). 10 Herman Bakvis, Regional Ministers: Power and Influence in the Canadian Cabinet (Toronto: University of Toronto Press, 1991); and Chris Dunn, “Federal Representation of the People and Government of Newfoundland and Labrador,” Collected Research Papers of the Royal Commission on Renewing and Strengthening our Place in Canada. Volume 2 (St. John’s: Office of Queen’s Printer, 2003): 23–107. 11 Edwin Black and Alan Cairns, “A Different Perspective on Canadian Federalism,” Canadian Public Administration 9 (1966): 27–44; and R.A. Young, Philippe Faucher, and André Blais, “The Concept of Province-Building: A Critique,” Canadian Journal of Politic Science 17, no. 4 (1984): 783–818. 12 “Report by Subcommittee on Finance and Economic Policy, Interdepartmental Committee on Newfoundland, 1 October 1948,” in Paul Bridle (ed.), Documents on Relations Between Canada and Newfoundland,

Notes to pages 25–8 327 Volume 2, 1940–49: Confederation, Part II (Ottawa: Minister of Supply and Services, 1984), 1107. 13 Public Records Office (PRO), London, Dominion Office Records 114, vol. 103, no. 339: 200, Telegram From High Commission, 6 October 1948; and Personal Interview with Mitchell Sharp, Ottawa, 12 February 1990. 14 The financial arrangement of union is discussed in Blake, Canadians at Last, 24–39. 15 “Minutes of Meeting of Cabinet Committee on Newfoundland,” 31 July 1947 in Bridle, Documents, 600–2, and “Memorandum from Assistant Secretary to the Cabinet to Secretary of State for External Affairs,” 9 August 1947 in Bridle, Documents, 614–17. See Library and Archives Canada (LAC), Records of the Department of Finance, vol. 3912, file 3765–02 vol. 2, Memorandum to Mr Sharp, 19 January 1949, prepared by A. Hockin. 16 “Memorandum by Representatives of Canada on Sub-committee on Arrangements for Union of Newfoundland and Canada,” 8 August 1947 in Bridle, Documents, 616–17. 17 “Prime Minister to Governor of Newfoundland,” 29 October 1947, in Bridle, Documents, 682–97, and “Minutes of a Meeting of Cabinet Committee on Newfoundland,” 31 July 1947 in Bridle, Documents, 600–5. 18 “Minutes of Sixth Meeting Held on the 28th August, 1948” in Bridle, Documents, 1025. Later, when the Privy Council Office submitted a memorandum to the Cabinet Committee on Newfoundland that reminded the ministers of the background of the proposals to Newfoundland, it included an explanatory note on the proposed royal commission: “The basic premise underlying the Canadian offer to Newfoundland was that no special terms could be offered to Newfoundland which any of the existing provinces could claim should be extended to them.” See Bridle, Documents, 1107. 19 Joseph R. Smallwood, I Chose Canada: The Memoirs of the Honourable Joseph R. “Joey” Smallwood (Toronto: Macmillan, 1973), 418. 20 “Chesley A. Crosbie to Chairman, Newfoundland Delegation,” in Bridle, Documents, 1238, and Daily News, 6 and 10 December 1948. Crosbie reportedly said “Newfoundland will then be at the mercy of the Federally appointed Royal Commission whose recommendations the Canadian government is not obligated to put into effect.” 21 “Extracts from Memorandum by Director, Economic Policy Division, Department of Finance, to Deputy Minister of Finance,” 29 October 1948,” in Bridle, Documents, 1163, and “Terms of Union of Newfoundland with Canada” in Bridle, Documents, 1253. 22 David G. Norris, “The Fiscal Position of Newfoundland and Labrador,” in Collected Research Papers of the Royal Commission on Renewing and Strengthening

328  Notes to pages 28–31 our Place in Canada. Volume 4 (St. John’s: Office of Queen’s Printer, 2003): 275–429. 23 The Daily News, 29 July 1953. 24 In his Inventing Atlantic Canada: Regional & the Maritime Reaction to Newfoundland’s Entry into Confederation (Toronto: University of Toronto Press, 2011), Corey Slumkoski argues that Newfoundland’s entry into Confederation did little to bring about a comprehensive Atlantic Canadian regionalism. 25 John N. Lavis, Political Elites and their Influence on Health Care Reform in Canada. Discussion Paper No. 26. Commission on the Future of Health Care in Canada, 2002. The concept of “high politics” is often used in the study of international relations and foreign policy to distinguish, for example, between issues discussed between heads of state and those discussed at the level of officials. 26 LAC, Department of Finance, vol. 3912, file 5765–05–01 vol. 1, Burns to Taylor, 23 April 1956. 27 Memorial University, Centre for Newfoundland Studies Archives (CNS), Joseph R. Smallwood Fonds, file 3.10.013, “Canada. Prime Ministers Office, 1949–59,” Smallwood to St. Laurent, 4 September 1956. 28 House of Commons, Debates, 22 February 1957. 29 LAC, Office of the Privy Council, Series A-5-a, Cabinet Conclusions, vol. 2644, file Newfoundland Royal Commission to review financial position of province: appointment, 6 September 1956; and vol. 1892, file Newfoundland Royal Commission to review financial position of province: appointment, 21 February 1957; and House of Commons, Debates, 22 February 1957. 30 Department of Finance, vol. 3912, file 5765–05–01 vol. 3, Burns to Harris, 26 February 1957. See also, Ottawa Journal, 21 June 1955, and Toronto Star, 6 July 1955. 31 “Term 29 Commissioners Announced,” Charlottetown Guardian, 25 February 1959. 32 Department of Finance, vol. 3912, file 5765–05–01 vol. 1, Taylor to Harris, 16 May 1957, including memo “The Royal Commission on Newfoundland Finances,” prepared by J.E. Howes, 14 May 1957; see also, Evening Telegram, 13 February 1957. 33 Department of Finance, vol. 3912, file 5765–05–1 vol. 1, Taylor to Jackett, Deputy Minister of Justice, 31 May 1957, and “Royal Commission on Terms of Union with Newfoundland,” memo prepared by Taylor for Minister, 21 June 1957, and “The Government of Canada’s Case,” memo prepared by J.E. Howes, 31 May 1957. 34 Department of Finance, vol. 3912, file 5765–05–1 vol. 1, Taylor to Jackett, Deputy Minister of Justice, 31 May 1957, “Royal Commission on Terms of

Notes to pages 31–4 329 Union with Newfoundland” (memo prepared by Taylor for Minister, 21 June 1957), and “The Government of Canada’s Case” (memo prepared by J.E. Howes, 31 May 1957). 35 Privy Council, Series A-5-a, Cabinet Conclusions, vol. 1892, file Newfoundland Royal Commission to review financial position of province: appointment of federal counsel, 27 May 1957. 36 Department of Finance, vol. 3912, file 5765–05–1 vol. 1, Taylor to the Minister, 26 June 1957; and House of Commons, Debates, 22 February 1957. 37 Department of Finance, vol. 3912, file 5765–06–01, Deputy Attorney General of Canada to Ritchie, 18 July 1957. 38 LAC, Donald M. Fleming Papers, vol. 101, file R-11 Royal Commission on Newfoundland Finances 1957, Fleming to Diefenbaker, 11 September 1957. 39 LAC, Royal Commission on Newfoundland Finances, vol. 1, Hearings, 22 July 1957, Presentation by Premier Smallwood. 40 James C. Thompson, the financial advisor who presented Newfoundland’s financial information to the Royal Commission, claimed that in 1956 Newfoundland paid a per capita tax of $51.50 compared to $86 in the Maritimes. However, Thompson argued that if the same proportional rate of taxation applied to Newfoundland as then applied to the Maritime provinces, Newfoundland should have a per capita tax of $41.50. Hence, the tax burden was considerably greater in Newfoundland. See Department of Finance, vol. 3912, file 5765–05–1 vol. 2, “The Royal Commission on Newfoundland Finances Under the Terms of Union of Newfoundland with Canada,” Memo prepared by J.E. Howes, 14 August 1957. 41 This is based on a variety of sources, including Department of Finance, vol. 3912, file 5765–05–1 vol. 2, “The Royal Commission on Newfoundland Finances Under the Terms of Union of Newfoundland with Canada,” Memo prepared by J.E. Howes, 14 August 1957. The initial demand had been for $17 million but was later revised to $15 million. 42 Department of Finance, vol. 3912, file 5765–05–1 vol. 2, Memorandum to the Minister of Finance, prepared by R.M. Burns, 27 August 1957. 43 Globe and Mail, “Minding Your Business,” October 8, 1957, p. 6. 44 This point is considered in Stephen May, “The Terms of Union: An Analysis of Their Current Relevance,” Collected Research Papers of the Royal Commission on Renewing and Strengthening our Place in Canada, Volume 1 (St, John’s: Office of the Queen’s Printer, 2003), 177–80. 45 Department of Finance, vol. 3912, file 5765–05–01 vol. 2, Ritchie to Fleming, 12 September 1957; and Fleming Papers, vol 101, file R-11 Royal Commission on Newfoundland Finances 1956, Fleming to Diefenbaker, 11 September 1957.

330  Notes to pages 34–6 46 Fleming Papers, vol. 101, file R-11 Royal Commission on Newfoundland Finances 1956, Memorandum to the Minister of Finance, prepared by R.M. Burns, 27 August 1957. Mr Fleming sent a copy of the Memorandum to the prime minister on 11 September 1957. 47 Proceedings of the Royal Commission on Newfoundland Finances, pp. 1504, 1604–05, 1616. See Fleming Papers, vol 101, file R-11 Royal Commission on Newfoundland Finances 1956, Ritchie to Fleming, 22 October 1957. 48 Report: Royal Commission on Newfoundland Finances (Ottawa: Queen’s Printer, 1958), 1–9. 49 Ibid., 40. Browne claims in his autobiography that Deutsch later told him that “they [the Commission] would not have awarded as much as they did if Sir Albert Walsh had not pleaded to the other Commissioners so strongly that they yielded to his plea and increased their award to the figure that was eventually recommended.” W.J. Browne, Eighty-Seven Years a Newfoundlander, Volume II, 1949–1965: Memoirs of William J. Browne (St. John’s: Dicks and Company, 1981), 282. 50 Government of Newfoundland, Budget Speech, 1956 and 1957. In 1956, the Minister of Finance said it was “inevitable” that after the Royal Commission considered the state of public services in Newfoundland compared to that of the Maritime provinces and took account of Newfoundland’s capacity to pay, it would demand “considerably increased federal assistance for Newfoundland.” 51 CNS, Smallwood Papers, Coll-075, file 7.05.003, Statements by Smallwood, July 1958. Quoted in Gwyn, Smallwood, 188. It is noteworthy that Gordon Bradley, the major proponent of Confederation along with Smallwood in 1949 and Newfoundland’s first cabinet minister following union, thought that Diefenbaker’s decision had “at least a sound excuse in the conventions of the constitution.” Bradley described Smallwood’s reaction after he was refused millions from Ottawa for his “quagmire of incompetence” as a “tragic-comic burlesque.” He accused Smallwood of orchestrating the student demonstration at Memorial University following the commission’s report. In Bradley’s view, Smallwood had become a dictator and he controlled the province with hardly a word of opposition from anyone. Bradley described it as “joeyitis,” created by ten years of lying propaganda. See CNS, F. Gordon Bradley Papers, file George Sellars, correspondence 1953–9, Bradley to Sears, 19 April 1959. 52 Department of Finance, vol. 3912, file 5765–05–01 vol. 3, Memo: Report of the Royal Commission on Newfoundland Finances, Prepared by Burns for Donald Fleming, Minister of Finance, 29 July 1959, and Burns to Ritchie, 30 July 1959.

Notes to pages 37–9 331 53 House of Commons, Debates, 11 January 1958, 3227–9, Campbell to Diefenbaker, 18 December 1957. Letter table in Debates. 54 House of Commons, Debates, 27 January 1958, 3843–7. 55 House of Commons, Debates, 27 January 1958, 3849, and 25 January 1958, 3795–8. 56 Fleming Papers, vol 101, file R-11 Royal Commission on Newfoundland Finances, 1955, Memorandum to the Cabinet, Re: Report of the Royal Commission on Newfoundland Finances, 6 August 1958. 57 Privy Council Office, Series A-50, vol. 1899, file Royal Commission on Newfoundland Finances, Cabinet Conclusions, 8 and 12 August 1958. 58 Smallwood Papers, Coll-075, file 7.05.003, Statement by Premier Smallwood, 16 August 1958; Fleming Papers, vol. 101, file R-11 Royal Commission on Newfoundland Finances 1958, James McGrath to Fleming, 22 August 1958. McGrath recommended that Diefenbaker promise to fund a highway across the province at a cost of approximately $90 million. Many of the newspapers in the Maritimes also believed that Diefenbaker would be generous with Newfoundland. See Fredericton Daily Gleaner, 20 August 1958. 59 Smallwood Papers, file 3.10.013, Smallwood to Diefenbaker, 23 August 1958; Daily News, 18 August 1958; LAC, J.W. Pickersgill Papers, vol 101, file R-11 Royal Commission on Newfoundland Finances 1958, Telegram from Smallwood to Diefenbaker, 11 August 1958; Fleming Papers, vol. 101, file R-11 Royal Commission on Newfoundland Finances 1958, Telegram, Smallwood to Diefenbaker, 23 August 1958; and University of Saskatchewan, Diefenbaker Canada Centre, Diefenbaker Papers, PMO Series, MG/01/vi/4532 vol 326, file 361.21 Provincial Governments – Newfoundland – Cabinet – Premier 1957–63, Smallwood to Diefenbaker, 3 September 1958. 60 Diefenbaker Papers, PMO Series, VI/4461, vol. 322, file McNair. Federal Government Administration – Royal Commissions – McNair, 1955–60, ­especially Harnett to Diefenbaker, 4 September 1958, John Higgins to Diefenbaker, 26 September 1958, and Newfoundland Board of Trade to Diefenbaker, 18 September 1958. 61 Bradley Collection, File: George Sellars, corresp. 1953–9, Bradley to Sellars, 19 April 1959. 62 Diefenbaker Papers, PMO Series, VI/4461, vol. 322, file McNair. Federal Government Administration – Royal Commissions – McNair, 1955–60, Smallwood to Diefenbaker, 18 September 1958; and Fleming Papers, vol. 101, file R-11 Royal Commission on Newfoundland Finances 1958, Diefenbaker to Smallwood, 26 August 1958; Smallwood Papers, file 3.10.013, Smallwood to Diefenbaker, 11 August, 3 September, and 18 September 1958.

332  Notes to pages 40–3 63 Smallwood Papers, file 3.10.034, Premier’s notes on Speech, DominionProvincial Conference 1968. 64 Smallwood Papers, file 2.3.10.013, Diefenbaker to Smallwood, 10 October 1958; Department of Finance, vol. 3912, file 5765–02 vol. 3, Smallwood to Diefenbaker, 16 October 1958 and Diefenbaker to Smallwood, 24 October 1958. 65 Department of Finance, vol. 3912, file 5765–02 vol. 3, Burns to Taylor, 24 November 1958, and Memo: Report of the Royal Commission on Newfoundland Finances, 24 November 1958; and Fleming Papers, vol. 101, file R-11, Royal Commission on Newfoundland Finances 1959 (January– June), Notes for Proposed Meeting with Premier Smallwood, prepared by R.M. Burns, 22 January 1958. 66 Fleming Papers, vol. 101, file R-11 Royal Commission on Newfoundland Finances 1959 (January–June), Fleming to Diefenbaker, 30 December 1958, and Taylor to Fleming, 2 January 1959. 67 Diefenbaker Papers, Diefenbaker Correspondence, MG 01/XII/A/148.3 vol. 5, Diefenbaker Correspondence, 1959, Fleming to Diefenbaker, January 8, 1959. 68 Fleming Papers, vol. 101, file R-11 Royal Commission on Newfoundland Finances 1959 (January–June), Memorandum to the Minister, Re: Newfoundland Royal Commission Report prepared by R.M. Burns, January 28, 1959, and Notes of Meeting with Premier of Newfoundland, January 26, 1959; Smallwood Collection, Coll-075, file 7.05.003, Statement by Premier Smallwood, January 27, 1959. 69 Fleming Papers, vol. 101, file R-11 Royal Commission on Newfoundland Finances 1959 (January–June), Memorandum to the Minister, Re: Newfound­ land Royal Commission Report prepared by R.M. Burns, 28 January 1959, and Notes of Meeting with Premier of Newfoundland, 26 January 1959; and Donald Fleming, So Very Near: The Political Memoirs of the Honourable Donald Fleming, Volume 2, The Summit Years (Toronto: McClelland and Stewart, 1985), 31–2. 70 For a discussion of the IWA Strike, see Gwyn, Smallwood, 199–210; and Dufferin Sutherland, “We Are Only Loggers: Loggers and the Struggle for Development in Newfoundland, 1929–1959” (unpublished PhD dissertation, Simon Fraser University, 1995). 71 Privy Council Office, Series A-5-a, vol. 2744, Cabinet Conclusions, 5 March 1959. Sean Cadigan has suggested that Diefenbaker condemned Smallwood’s involvement in the IWA Strike because of “the antagonisms between the federal and provincial regimes rather than any serious disagreement about the rights of labour.” Rather, it was Diefenbaker’s stand

Notes to pages 43–8 333 on the rights of labour that led in large part to the acrimony between Diefenbaker and Smallwood. Cadigan, “Regional Politics are Class Politics,” 163–8. 72 Privy Council Office, Series A-5-a, vol. 2744, Cabinet Conclusions, 6 March 1959. Smallwood enjoyed widespread support for his condemnation of the IWA and his decision to establish a new union for loggers. Hundreds of loggers from around the province sent telegraphs applauding his actions. A telegraph from Ronald and Lester Wells in Seal Cove, Fortune Bay, is typical: “Heard your broadcasts many thanks[.] Please form a new union for the loggers of NFLD.” Ronald and Lester Wells to Smallwood, Smallwood Fonds, File 15.03.148, 13 February 1959. 73 Diefenbaker Papers, PMO Series, VI/4461, vol. 322, file McNair. Federal Government Administration – Royal Commission – McNair, 1955–60, Fleming to Diefenbaker, 2 February 1959, Guest (for Diefenbaker) to Fleming, 10 February 1959; and Fleming to Diefenbaker (through Guest), 11 February 1959. Fleming Papers, vol. 101, file R-11, Royal Commission on Newfoundland Finances 1958, Ritchie to Fleming, 21 August 1958, Fleming to Diefenbaker, 25 August 1958. 74 Donald Fleming, So Very Near, 32. 75 Privy Council Office, Series A-5-a vol. 2744, Cabinet Conclusions, 5 March 1959; Department of Finance, vol. 3912, file 5765–03 vol. 3, Memorandum to Cabinet from Fleming, 18 February 1959; and Diefenbaker Papers, Series PMO, VI/4461, vol. 332, file McNair: Federal Government Administration – Royal Commission – McNair, 1955–1960, Memorandum for the Prime Minister, 15 July 1959. 76 Privy Council Office, Series A-5-a, vol. 2744, Cabinet Conclusions, 13 January 1959. 77 Ibid., 2 April 1959, and Fleming, So Very Near, 32. 78 Canada, Report of the Royal Commission on Dominion-Provincial Relations, Books 1 and 2 (Ottawa: King’s Printer, 1940). 79 Fleming Papers, vol. 101, file R-11 Royal Commission on Newfoundland Finances 1959 (January–June), Statistics compiled by Department of Finance, Ottawa. 80 Privy Council Office, vol. 2744, file 7, Cabinet Conclusions, 20 March to 30 April 1959 and Cabinet Conclusions, 2 April 1959. 81 See Globe and Mail, various dates from 26 March to 14 April 1959, and Ottawa Citizen, 28 March 1959. 82 Diefenbaker Papers, MG 01/XII/A/55, vol. 20, file Newfoundland – Term 29 [306.1 Nfld] 1959, H.T. Renouf, Executive Manager, Newfoundland Board of Trade, to Smallwood, 13 April 1959.

334  Notes to pages 48–54 83 This issue was discussed at length almost daily in the Cabinet from 5–18 March. See Privy Council Office, Series A-5-a, vol. 2744, Cabinet Conclusions for this period. 84 See House of Commons, Debates, 16 March 1959 and LAC, Lionel Chevrier Papers, vol. 12, file, Newfoundland, Pearson to Chevrier, 17 March 1959. 85 Gwyn, Smallwood, 210, and Daily News, 18 March 1959. 86 House of Commons, Debates, 25 March 1959. It is worth pointing out that Ritchie wrote Diefenbaker on 2 April informing him that during the Commission hearings, Newfoundland had insisted on the finality of Term 29. Smallwood had said on the opening day of hearings in St. John’s: “My Lord, you will by your recommendation write the final fateful terms of the Terms of Union.” Diefenbaker Papers, Series PMO, VI/2261, vol. 332, file McNair. Federal Government Administration – Royal Commissions – McNair, 1955–1960, Ritchie to Diefenbaker, 2 April 1959. 87 The literature on Canadian federalism is enormous. See David E. Smith, Federalism and the Constitution of Canada (Toronto: University of Toronto Press, 2010); Garth Stevenson, Unfilled Union: Canadian Federalism and National Unity, 5th ed. (Montreal and Kingston: McGill-Queen’s University Press, 2009); and Jennifer Smith, Federalism (Vancouver, University of British Columbia Press, 2004). 88 Privy Council Office, vol. 2744, file 7, Cabinet Conclusions, 20 March to 30 April 1959, and Cabinet Conclusions, 2 April 1959. 89 Fleming, So Very Near, 35–6. 90 “Opportunity Lost; Opportunity Grasped,” Globe and Mail, 27 March 1959, 6. 91 Gwyn, Smallwood, 190–1. 92 Smallwood Fonds, Coll-75, file 7.05.003, Smallwood Statement, 25 March 1959. 93 “Unhappy Anniversary,” Daily News, 1 April 1959. 94 “Premier Asks for ‘Understanding,’” Daily News, 1 April 1959; and Diefenbaker Papers, MG 01/XII/A/55, vol. 20, file Newfoundland – Term 29 [306.1 Nfld] 1959, H.T. Renouf, Executive Manager, Newfoundland Board of Trade, to Smallwood, 13 April 1959. 95 For a discussion of the Terms of Union, see David Mackenzie, “The Terms of Union in Historical Perspective,” Newfoundland Studies 14, no. 2 (1998): 220–7. 96 See, for example, Globe and Mail, 14 April 1959; and “PM Promises Nfld Consideration,” Daily News, 21 April 1959. 97 Browne, Eighty-Seven Years a Newfoundlander, 277–93. 98 Gwyn, The Unlikely Revolutionary, 193–4. 99 This promise was repeated in an open letter to voters in Newfoundland just before the 1963 federal election. Evening Telegram, 31 March 1963; Pickersgill, The Road Back, 70.

Notes to pages 54–61 335 100 House of Commons, Debates, 13 July 1959, and Fleming Papers, vol. 101, file R-11 Royal Commission on Newfoundland Finances, July 1959–61. “Premier Smallwood’s Statement,” 13 July 1959. 101 See Smallwood Papers, Coll-75, File 4.02.007, Speeches delivered during the 1959 campaign. The speeches do not have a date. 102 Department of Finance, vol. 3912, file 5765–02 vol. 3, Memorandum, Newfoundland Additional Grants Act, 17 May 1961. 103 Smallwood Papers. File 1.10.005, Daily Planner, 23 February 1961. 104 In 1960, Premier Smallwood had J. Wentworth Day write a short book, Newfoundland: The Fortress Isle, for distribution throughout the province. Smallwood wrote the foreword to the book and his picture with the words “Our Case. Premier Smallwood’s Statement of Policy” appeared on the front cover. 105 Pickersgill Papers, vol., 105, file Newfoundland Term 29, Terms of Union with Canada, 1957–62, Extracts from remarks of Hon. Lester B. Pearson, St. John’s, 17 April 1962; and Department of Finance, vol. 3912, file 5765– 02 vol. 3, Proposed Statement Re Clause 3 of Bill C-111, Federal-Provincial Fiscal Revision Act 1964, 12 August 1964. 106 Government of Newfoundland and Labrador, Budget Speech, 1996. http://www.budget.gov.nl.ca/budget96/Speech96.htm#SEC3-1 2. Federalism for Bullies: Newfoundland, Quebec, Ottawa, and Hydroelectric Development in Newfoundland and Labrador, 1960–1970 1 Churchill Falls was originally known as Hamilton Falls but was renamed on the death of Sir Winston Churchill in 1965. Churchill Falls will be used throughout this chapter for purposes of clarity. 2 This point is made in James P. Feehan, “Smallwood, Churchill Falls, and the Power Corridor through Quebec,” Acadiensis 40, no. 2 (Summer/ Autumn 2011): 112–27. 3 On Pearson’s approach to Quebec, see Kenneth McRoberts, Misconceiving Canada: The Struggle for National Unity (Don Mills, ON: Oxford University Press, 1997), 38–9. McRoberts contends that while in opposition, Pearson became committed to a policy of accommodation and conciliation when dealing with Quebec’s new demands. There was no space in Pearson’s world for confronting Quebec. 4 Library and Archives Canada (LAC), J.W. Pickersgill Papers, vol. 110, file 6010.3, Pearson to Pickersgill and Smallwood, 9 April 1963. 5 In 1979, several years after he left public office, Smallwood continued to insist that while he did not personally negotiate the contract for the sale of power to Hydro-Québec, it was an exceptional deal for Newfoundland.

336  Notes to page 62 In his defence he cited the number of Newfoundlanders who worked on the construction of the site (21,000), the wages paid to the workers, the company town that grew at Churchill Falls, and the projected revenue of $600 million for the province over the forty-year contract. He did not mention the automatic renewal clause but claimed that the long-term contract was ­necessary to cover the time period of the bond issue and that once the bond was retired after forty years, it was only reasonable that Quebec could receive a lower price on the power to compensate it for its original investment that made the project possible. He also insisted that no one could have foreseen the dramatic spike in energy costs that came in the 1970s. See Joseph R. Smallwood, The Time Has Come to Tell (St. John’s: Newfoundland Book Publishers (1967) Ltd., 1979), 99–101. 6 On this point, see James Feehan and Melvin Baker, “The Origins of a Coming Crisis: Renewal of the Churchill Falls Contract,” Dalhousie Law Journal 30, no. 1 (Spring 2007): 207–57; James P. Feehan and Melvin Baker, “The Churchill Falls Contract and Why Newfoundlanders Can’t Get Over It,” Policy Options (September 2010): 65–70; and David A. Vardy, “Making Best Use of the Lower Churchill: The Muskrat Falls Development.” Paper prepared for Action Canada, 31 August 2011. Feehan and Baker suggest that the legal doctrines of conflict of interest or economic duress might ­offer a basis upon which the contract, or perhaps the renewal provision, could be impugned. Sarah Bradley agrees that the Churchill Falls contract is grossly unfair but concludes that the factual circumstances provide little hope that a legal challenge of the contract would succeed in the courts today. See Sarah P. Bradley, “Conflict of Interest, Duress and Unconscionability in Quebec Civil Law: Comment on ‘The Origins of a Coming Crisis: Renewal of the Churchill Falls Contract,’” Dalhousie Law Journal 30, no. 1 (Spring 2007): 259–80. 7 Some have argued that we must try and view this case in the context of the period, but historians rarely do so. See Jason L. Churchill, “Pragmatic Federalism: The Politics Behind the 1969 Churchill Falls Contract,” Newfoundland Studies 15, no. 2 (1999) and Report of the Royal Commission on Renewing and Strengthening Our Place in Canada (St. John’s: The Queen’s Printer, 2003). Historians no longer insist (thankfully) that we must consider residential schools or the shabby treatment of minority groups and ­women or the practice of slavery in the context of the period in which they existed, when abuse in its many forms was accepted by the majority. So, too, it was with the outcome of the negotiations over Churchill Falls. We can say – as Smallwood himself acknowledged by the 1970s – that the contract must

Notes to pages 63–6 337 be seen in the context of the political circumstances of Quebec in the 1960s, or the promise of nuclear power. To do so legitimates a process that went against both the spirit and the letter of the Canadian constitution, which is the foundation of Canadian federalism. For a different view, see Feehan, “Smallwood, Churchill Falls, and the Power Corridor through Quebec.” He describes the story of Pearson and Smallwood as a “story that is no more than a legend.” For the role of myth in Newfoundland political culture, see two excellent essays by Jerry Bannister: “Making History: Cultural Memory in Twentieth-Century Newfoundland,” Newfoundland Studies 18, no. 2 (Fall 2002), and “A River Runs Through It: Churchill Falls and the End of Newfoundland History,” Acadiensis 41, no. 1 (Winter/Spring 2012). 8 Peter Neary, “Party Politics in Newfoundland, 1949–1971: A Survey and Analy­sis,” in James Hiller and Peter Neary (eds.), Newfoundland in the Nineteenth and Twentieth Centuries (Toronto: University of Toronto Press, 1980). 9 James L. Kenney and Andrew Secord, “Public Power for Industry: A Reexamination of the New Brunswick Case, 1940–1960,” Acadiensis 30, no. 2 (Spring 2001): 84–108; and P. Crabb, “Cheap Power – An Expensive Failure: Hydro-electric Power and Industrial Development in Newfoundland,” Journal of the American Water Resources Association 10: 42–53. 10 Melvin Baker, The Power of Commitment: A History of Newfoundland and Labrador Hydro-Electric Corporation (St. John’s: Jesperson Press, 2000), 3–5. 11 Joseph R. Smallwood, I Chose Canada: The Memoirs of the Honourable Joseph R. “Joey” Smallwood (Toronto: Macmillan,1973), 445–6. Smallwood often justified his reliance on foreign and private capital by insisting that indigenous entrepreneurs, including those from Canada, had refused to invest in Newfoundland following Confederation. See Michael Harrington, “Greatness Newfoundland Deserves; Greatness She Shall Have,” The Atlantic Advocate (June 1963): 17–23. 12 Baker, The Power of Commitment, 8; and Philip Smith, Brinco: The Story of Churchill Falls (Toronto: McClelland & Stewart, 1975). 13 Memorial University, Centre for Newfoundland Studies Archives (CNS), Joseph R. Smallwood Fonds, file 3.08.046, Mackintosh to Smallwood, 26 February 1953, and Macintosh to Leslie Curtis, 26 February 1953. 14 LAC, Department of Finance, vol. 788, file 201–13–3, Despatch, High Commission for Canada in the UK [N.A. Robertson] to Secretary of State for External Affairs, 10 March 1954, and Memorandum on Present and Future Activities of the British Newfoundland Corporation Limited, 15 April 1954. 15 Smallwood Fonds, file 3.16.082. Press Release, 30 May 1962. Smallwood issued a statement five years after their meeting, when one of the candidates

338  Notes to pages 66–7 in the 1962 federal general election released copies of the correspondence between Smallwood and Duplessis. 16 LAC, Alvin Hamilton Papers, Box 198, memorandum, Hamilton to Diefenbaker, 27 April 1960; Box 269107, Alvin Hamilton, unpublished “Declaration of Principles by the Progressive Conservative National Conven­ tion,” February 1957. See Patrick Kyba, Alvin: A Biography of the Honourable Alvin Hamilton (Regina: Canadian Plains Research Center, 1989), 100–2. 17 House of Commons, Debates, 14 October 1958; and Smallwood Fonds, file 3.08.048, Notes on Conversations with Hon. J.R. Smallwood in the Office of the Premier, 29 November 1957. 18 The Diefenbaker government also introduced a cost-shared program for road construction under the auspices of the Road to Resources program. On 10 June 1958, Hamilton invited Premier Smallwood to submit a proposal to Ottawa for road construction. Smallwood Fonds, file 2.19.010, Hamilton to Smallwood, 10 June 1959. 19 Smallwood Fonds, file 3.08.048, Pushie to House [Brinco], 3 January 1958, file 3.08.048, Notes on Informal Meeting to Discuss Rural Electrification on Newfoundland, Held in Brinco Montreal Office, 22 January 1958; and LAC, Department of Northern Affairs and National Resources, vol. 883, file 51–23(1), Memorandum for Minister, 16 February 1959, and Memorandum for File, Prepared by John L. Jenness (Chief, Economic Division), 18 March 1959. 20 Department of Northern Affairs and National Resources, vol. 883, file 51–13(1), Hamilton to Diefenbaker, 17 April and 13 May 1959; and Smallwood Fonds, file 3.08.050, Pushie to Davis, 6 February 1961; and Baker, The Power of Commitment, 46–8. 21 Kyba, Alvin, 122–4; and University of Saskatchewan, Diefenbaker Canada Centre, John G. Diefenbaker Papers, speech files, 20 August 1958. 22 Smallwood Fonds, file: 3.23.043 Notes for Opening Remarks by Rt. Hon. John G. Diefenbaker at Federal-Provincial Conference on Long-Distance Power Transmission, 19 March 1962. 23 See R. Duhamel, Resources for Tomorrow Conference. Department of Northern Affairs and National Resources (Ottawa: Queen’s Printer, 1962); and Resources for Tomorrow (Ottawa: Queen’s Printer, 1961). The conference report covers two volumes and includes 1061 pages. 24 D. Owen Carrigan, Canadian Party Platforms, 1867–1968 (Toronto: Copp Clark Co., 1968), 227–8. 25 LAC, E.D. Fulton Paper, MG32 B11 vol. 46, memorandum, Alvin Hamilton to cabinet, 5 October 1961; see Kyba, Alvin, 134–5. 26 Diefenbaker Papers, MG 01/x11/C254,vol. 65, file Lesage, Correspondence – National Grid, 1962, Diefenbaker to Lesage, 17 January 1962.

Notes to pages 68–73 339 27 LAC, Privy Council Office, Series B2, vol. 6180, file 454–61, Cabinet Document No 454/61, “Memoranda to the Cabinet: Long Distance Transmission,” prepared by Walter Dinsdale, 6 December 1961. 28 Diefenbaker Papers, MG 01/x11/C254,vol. 65, file Lesage, Correspondence – National Grid, 1962, Lesage to Diefenbaker, 24 January 1962, Diefenbaker to Lesage, 3 February 1962, Lesage to Diefenbaker, 8 February 1962, 22 February 1962, and 2 March 1962. 29 Smallwood Fonds, file 3.23.043 O’Sullivan to Stephens, 4 December 1961. 30 Quoted in Smith, Brinco, 120. 31 Fulton Paper, vol. 46, memorandum, Alvin Hamilton to cabinet, 5 October 1961; Globe and Mail, 27 September 1962; and Kyba, Alvin, 134–5. 32 Smallwood Fonds, file 3.10.014, Smallwood to Diefenbaker, 8 March 1962. 33 Karl Froschauer, White Gold: Hydroelectric Power in Canada (Vancouver: UBC Press, 1999), 33. See also Smallwood Fonds, 3.08.052, “Record of Meeting to Discuss Export of Hamilton River Power,” 15 November 1962. 34 On this point see Froschauer, especially chapter 2, “Avoiding National Power,” and 34. 35 Smallwood Fonds, file 3.08.052, Southam to Lesage, 9 January 1963; and Douglas H. Fullerton, The Dangerous Delusion: Quebec’s Independence Obsession (Toronto: McClelland and Stewart, 1978), 51. 36 Smith, Brinco, 120–1 and 136. 37 Froschauer, White Gold, 33. See also Smallwood Fonds, 3.08.052, “Record of Meeting to Discuss Export of Hamilton River Power,” 15 November 1962. 38 Lesage makes this point repeatedly in debate in the Quebec legislature. See, for example, “Opposition Leader Seeks Disclosure of Hydro Contracts,” Montreal Star, 21 March 1964. 39 Smith, Brinco, 78–81; and Fullerton, The Dangerous Delusion, 62–4. 40 The Rooms Provincial Archives Division (The Rooms), PRC 14, GY 116, file: Pushie, 1963–6. Winters to Pushie, 30 October 1963; and Fullerton, The Dangerous Delusion, 51. Winters was appointed chairman and chief ­executive officer of Brinco in mid-1963. 41 LAC, Churchill Falls (Labrador) Corporation Ltd Fonds, File 7103.1 Premier of Quebec, Volume VI 1963, Aide Memoire on Hamilton River Power Project, prepared for The Honourable Jean Lesage, 11 January 1963; Southam to Lesage, 11 January 1963; David Morgan-Grenville Notes on Conversation with J.R. Smallwood, St. John’s, 15–17 January 1963. 42 Churchill Falls (Labrador) Corporation, File 7103.1 Premier of Quebec, Volume VI 1963, de Rothschild to Smith, 14 June 1963; and Notes on Discussion between Premier Lesage and H. Greville Smith, Quebec City, 28 January 1963.

340  Notes to pages 73–4 43 Churchill Falls (Labrador) Corporation, File 7103.1 Premier of Quebec, Volume VI 1963, Notes of Conversation on 13 August 1963 between Premier Jean Lesage, Jean Lessard, and Robert Winters; and Feehan and Baker, “The Renewal Clause in the Churchill Falls Contract: The Origins of the Coming Crisis,” Papers in Political Economy, The University of Western Ontario, (September 2005), 7–9. 44 Smallwood Fonds, file 3.08.052, Southam to Lesage, 9 January 1963; and Eric Kierans with Walter Stewart, Remembering (Toronto: Stoddart, 2001), 112–13; see also, John N. McDougall, The Politics and Economics of Eric Kierans: A Man for All Canadas (Montreal and Kingston, McGill-Queen’s University Press, 1993), 96. 45 René Lévesque, Memoirs. Translated by Philip Stratford. (Toronto: McClelland and Stewart, 1986), especially chapter 26 “Nothing Ventured …,” and Pierre Godin, René Lévesque héros malgré lui (Montreal, Boréal, 1994), 128–32. 46 “Levesque’s Labrador,” Toronto Star, 14 November 1964. 47 “Memorandum on Public versus Private Development of Hamilton Falls Power, Prepared by D.H. Fullerton for Quebec Cabinet on February 3, 1964,” in Fullerton, The Dangerous Delusion, 221–3. There was an immediate clash of personalities as the Quebecers dismissed the Brinco executive team as “so representative of the British upper classes!” 48 “Lévesque’s Labrador,” Toronto Star, 14 November 1964. 49 A mill is one-tenth of a cent. A kilowatt-hour represents the quantity of electricity consumed by, say, keeping ten 100-watt bulbs lit for an hour. 50 Memorandum on public versus private development of Hamilton Falls Power, prepared by D.H. Fullerton for Quebec cabinet on February 3, 1964,” in Fullerton, The Dangerous Delusion, 64–5, 221–3; “Quebec’s New Move in Power Play,” Winnipeg Free Press, 11 July 1964. Kierans claims that he asked Lévesque why they needed Brinco and Lévesque replied: “Because Joey says we do.” In his autobiography, Kierans writes: “Premier Smallwood had talked this [the Churchill Fall project] over with his hero, Sir Winston Churchill, and he knew that Churchill had bought shares in Brinco, as had the Royal Family. He felt indebted to Churchill, Brinco, Edmund de Rothschild, and Robert Winters, the CEO of Rio Algom, which was a member of the operating company. That was fine; but Quebec owed no such loyalty, and I failed to see why Quebec should pay to indulge Joey.” Eric Kierans, Remembering, 113 51 This was also the major argument of a 1982 special edition of Forces, a publication of Hydro-Québec (Forces, 57–8: 1–2) that presented Quebec’s view of the Churchill Falls contract. The issue includes a number of articles and

Notes to pages 74–7 341 interviews by Hydro-Québec executives and Quebec government officials involved in the negotiations. They claimed that Hydro-Québec had assumed all the financial risks associated with the project and without Quebec “the project would be still on the drawing board” (6–7). The magazine argued that the deal between Quebec and Brinco was a commercial arrangement, freely signed and consented to in a democratic state, and the best approach for Newfoundland was to put aside past grievances and work with Quebec for the betterment of the two provinces. It is interesting to note that the early issues of Forces had as its cover a map of Quebec that showed Quebec – rather than Newfoundland – owning Labrador.: the map did not show the boundary between Quebec and Labrador. 52 “Memorandum on public versus private development of Hamilton Falls Power, prepared by D.H. Fullerton for Quebec cabinet on February 3, 1964,” in Fullerton, The Dangerous Delusion, 221–3. 53 Michael Wardell, “Brinkmanship Hamilton Falls,” Atlantic Advocate (June 1964): 15. Lévesque was also critical of Brinco, which he described as “a rather medieval set-up” which had been established on “principles unacceptable practically everywhere in Canada, and certainly in Quebec.” 54 “Memorandum on public versus private development of Hamilton Falls Power, prepared by D.H. Fullerton for Quebec cabinet on February 3, 1964,” in Fullerton, The Dangerous Delusion, 221–3. 55 See, for instance, “Assembly Backs NU Power Bill,” Montreal Star, 16 April 1964; and Smallwood, I Chose Canada, 456–7. 56 “Hydro Plans Stepped Up,” Montreal Gazette, 5 July 1963. 57 “Memorandum on public versus private development of Hamilton Falls Power, prepared by D.H. Fullerton for Quebec cabinet on February 3, 1964,” in Fullerton, The Dangerous Delusion, 221–3; Smallwood Fonds, file 3.08.052, Southam to Lesage, 9 January 1963; and Kierans. Remembering, 112–13; see also, McDougall, The Politics and Economics of Eric Kierans, 96. 58 Peter Newman, “Daring Suggestion on Brinco Power,” Montreal Star, 14 November 1964. 59 Report of the Royal Commission to Enquire into the Leasing of Premises for the Use of the Newfoundland Liquor Commission (St. John’s: Government of Newfound­ land, 1972); A.B. Perlin, “The O’Dea Royal Commission Report,” The Newfoundland Quarterly (October 1972): 3–4; and John C. Crosbie, No Holds Barred: My Life in Politics (Toronto: McClelland & Stewart, 1997), 48–54. 60 The Rooms, Provincial Archives of Newfoundland and Labrador, Cabinet Secretariat, Premier’s Files, Joseph R. Smallwood, JRS 2001–002, file Brinco, Jan. 1964–July 1964, DS 2008–00, Lessard to Winters, 13 February 1964. Lesage sent a copy of the letter to Smallwood on 14 February 1964. Lesage

342  Notes to pages 77–9 also passed to Smallwood a memorandum prepared by his officials entitled “Hamilton Falls – Estimates of revenue to Newfoundland’s Treasury.” After discussing the issue with Lesage, Winters wrote Smallwood that Lesage would be willing to negotiate a deal over Churchill Falls if Smallwood agreed to develop Churchill Falls as a public corporation and if he agreed to renegotiate the border. See Winters to Lesage, 15 February 1964. 61 Quoted in Kierans, Remembering, 114–15. 62 In his speech to convocation at Memorial University in 2002, columnist and humourist Ray Guy said in the wit for which he is noted: “I still cannot forgive Joey Smallwood for the wickedly low estimation he held of the Newfoundland people, any more than I can yet forgive Newfoundlanders for living down to that estimation.” See Memorial University, President’s Report, 2002. After he retired from Newfoundland politics, Smallwood made national unity one of his major priorities and travelled extensively throughout Canada extolling the virtues of bilingualism and multiculturalism. See Ray Argyle, Joey Smallwood: Schemer and Dreamer (Toronto: Dundurn Press, 2012), 154-5. 63 Evening Telegram, 14 March 1964; and Fullerton, The Dangerous Delusion, 68. It is worth noting that Smallwood had insisted throughout 1963 that the plant to pelletize ore extracted from the Wabush Iron Company in Labrador be built in Labrador but in the face of opposition from the Quebec government, the company constructed the plant at Pointe Noire on the Gulf of St. Lawrence in Quebec. 64 Telegram from Lesage to Smallwood, 8 July 1964, The Rooms, Provincial Archives of Newfoundland and Labrador, DS 2008–008, Cabinet Secretariat, Premier’s Files, Joseph R. Smallwood, JRS2001–002, file Brinco Jan. 1964– July 1964. 65 “Hamilton Power: Private or Public?” Montreal Star, 11 July 1964. 66 Smallwood, I Chose Canada, 459–60; and “Lesage Shut Falls Door, It Stays Shut: Smallwood,” Globe and Mail, 27 November 1964. 67 “Levesque’s Labrador,” Toronto Star, 14 November 1964. 68 See Smith, Brinco, 183. 69 LAC, Department of Trade and Commerce (RG 20), Mitchell Sharp, Minister, Vol. 1525, file: Development of Hamilton Falls, Winters to Pearson, 29 July 1964. 70 Quoted in Froschauer, White Gold, 35. Sharp’s comment came when he learned that the Lesage’s government had introduced a measure in the Quebec Assembly to impose provincial controls on the export of electric power from the province. 71 LAC, Lester B. Pearson Papers, vol. 80, file 3.31.2.02 R.G. Robertson, “Memorandum for the Prime Minister: Hamilton Falls,” 26 May 1964; See

Notes to pages 79–83 343 also Feehan, “Smallwood, Churchill Falls, and the Power Corridor through Quebec,” 117; and Smith, Brinco, 191–2. 72 “Brinco Project Takeover Tempts Quebec Leaders,” Globe and Mail, 29 July 1964. 73 “The National Interest,” Globe and Mail, 1 August 1964. 74 “Quebec and Hamilton Falls,” Globe and Mail, 8 September 1964. 75 “London Scene of Power Play Between Kierans, Smallwood,” Globe and Mail, 22 October 1964. 76 “Smallwood Scents Victory,” Globe and Mail, 19 December 1964. 77 The Rooms, PRC 14, GY 113, File Premier 1964, Rothschild to Winters, 26 October 1964. 78 LAC, Henry Borden Papers, vol. 4, “Recollections,” 166. 79 “Brinco in the Middle of Power Dispute,” Globe and Mail, 30 November 1964. 80 Smallwood in debates in Newfoundland Assembly, quoted in Churchill, “Pragmatic Federalism,” 226. 81 Debates, Newfoundland Hansard, 15 May 1964. An amendment to the Constitution officially changing the name of Newfoundland to Newfoundland and Labrador only occurred on 6 December 2001. 82 William Tetley, The October Crisis: An Insider’s View (Montreal and Kingston: McGill-Queen’s University Press, 2007). 83 Smallwood in debates in Newfoundland Assembly, Newfoundland Hansard, 20 March 1964, 30–1. 84 Pearson Papers, file 552 NFLD, Winters to Pearson, 27 August 1964. 85 Department of Trade and Commerce, Mitchell Sharp, Minister, Vol. 1525, file: Development of Hamilton Falls, Gordon to Sharp, 14 July 1964. 86 Quoted in Smith, Brinco, 202–3. 87 “Falls’ Power A Makeweight,” Montreal Star, 25 July 1964. 88 Moncton Times, 25 July 1964. 89 Kierans, Remembering, 116. 90 “Hydro Line in Spring Joey Says,” Montreal Star, 28 November 1964; and “The Anglo-Saxon Route,” Globe and Mail, 5 February 1965. 91 The Rooms, PRC 14, GY 113, File Premier 19644, Notes of Meeting held on 26 November 1964 at the Queen Elizabeth Hotel between Premier Smallwood and Hon R.H. Winters. 92 Stanfield to Smallwood, 1 June 1964, DS 2008–008, Cabinet Secretariat, Premier’s Files, Joseph R. Smallwood Cabinet Secretariat, The Rooms, Provincial Archives of Newfoundland and Labrador, JRS2001–002. 93 Noted in Feehan and Baker, 13, “Memorandum of Meeting between Premier Lesage and Messrs Bourget and Monast at the Prime Minister’s Office, on Thursday, August 27, 1964.”

344  Notes to pages 83–6 94 LAC, Walter Gordon Papers (MG 32 B44) vol. 21, file 14: taxation, 1963– 65. Bryce to Gordon, 5 October 1964. 95 Smallwood Fonds, Smallwood Personal Diary, 25 February 1965; and Smith, Brinco, 211. 96 “Quebec’s Power Play,” Montreal Star, 12 May 1964 and “Joey Says His Power Can Bypass Quebec,” Toronto Star, 26 November 1964. 97 Smallwood Fonds, 3.08.053, Smallwood to House of Assembly, 10 March 1965; “Policy Flip,” Toronto Star, 11 March 1965 and “Nfld-Brinco Power Plans ‘Irrevocable’ No More: Joey,” Financial Times, 15 March 1965. 98 Pickersgill Papers, vol. 208, file 558–1, Memorandum for the Prime Minister, Action by federal government with regard to electric ­power, prepared by R. Gordon Robertson, 15 January 1965. 99 Department of Trade and Commerce, Vol. 1525, file: Development of Hamilton Falls, Robert Howland to Sharp, 25 May 1965. 100 Winters to Smallwood, 7 May 1964, The Rooms, Provincial Archives, DS 2008–008, Cabinet Secretariat, Premier’s Files, Joseph R. Smallwood, Box JRS 2001–002, file Brinco, Jan.–July 1964. 101 “Brinco Plan Talks Held in Ottawa,” Globe and Mail, 4 May 1965; and “Brinco Seizure by Smallwood Quebec Rumor,” Globe and Mail, 5 May 1965. 102 Cabinet Conclusions, 6 May 1965. 103 House of Commons, Debates, 5 May 1965, 959 104 “On Constitutional Thin Air,” Toronto Star, 6 May 1965. 105 “Bluff and Counter-Bluff,” Toronto Star, 7 May 1965. 106 See, for example, “Can Quebec Stop Joey’s Power,” Toronto Star, 12 May 1966. 107 “Where Provincial Rights End,” Financial Post, 15 May 1965. 108 “Power Quarrel,” The Calgary Herald, 17 May 1965. 109 Letter to editor, Montreal Star, 15 May 1965. 110 See Smallwood Fonds, Box 260, file 3.23.003 Churchill Falls Corres. Smallwood received hundreds of letters from across Canada praising him for his determined stand against Quebec. 111 “Labrador Land Trade Holds Key,” Montreal Star, 13 May 1965. 112 Smallwood raised this matter at the Federal-Provincial Conference, 26–9 November 1963. 113 Pearson Papers, vol. 205, file 552 NFLD, Smallwood to Pearson, 7 June 1965; Pearson to Gordon, 14 June 1965; and J.W. Pickersgill, Seeing Canada Whole: A Memoir (Toronto: Fitzhenry & Whiteside, 1994), 757. 114 Winters to Smallwood, 14 May 1965, DS 2008–008, Cabinet Secretariat, Premier’s Files, Joseph R. Smallwood, file Brinco Jan–May 1965; and Feehan and Baker, 14–15. 115 “Tax Help May End Brinco Impasse,” Financial Times, 26 July 1965.

Notes to pages 87–90 345 116 Smallwood Fonds, file 3.23.005, Borden to Smallwood, 11 February 1966, and Marshall to Minister of Finance, 25 February 1966. 117 Toronto Daily Star, 14 May 1965. 118 “Talks Start Soon,” Globe and Mail, 26 March 1965; “Winters: New Set of Figures Soon,” Montreal Star, 19 April 1965; and The Rooms, PRC 14, GY 113, File: Premier 1964–66, Smallwood to Winters, 15 May 1965. 119 Cabinet Conclusions, 6 May 1965. 120 The Rooms, PRC 14, GY 113, file: Premier 1964–66, Winter to Smallwood, 19 May 1965. 121 Smallwood Fonds, file 3.23.003, Winters to Lessard, 29 July 1965. 122 Pearson Papers, vol. 182, file 552, Pepin to Pearson, 16 March 1966. 123 See “Lesage Retreats Before Irate Joey,” Montreal Star, 2 September 1966 and “SSJB Wary of Contract with Brinco,” Montreal Star, 6 October 1966. 124 “NU Split on Brinco Project,” Montreal Star, 6 October 1966. 125 Le Devoir, 14 July 1966; and “Quebec on the Spot over Border Row,” Montreal Star, 13 July 1966. 126 “Progress Surprising,” Montreal Star, 15 May 1966. 127 “Ottawa May Move in on Brinco Deal: Lesage,” Globe and Mail, 1 September 1966. 128 “Will Decide on Brinco by Oct. 6,” Montreal Star, 10 September 1966. 129 Smith, Brinco, 245. 130 Smallwood Diary, 12 September 1966; Smallwood Fonds, Coll-282, Box 5; and Smallwood, I Chose Canada, 466–7. 131 Smallwood Diary, 13 September 1966, Smallwood Fonds, Coll-282, Box 5. 132 Smallwood Diary, 21 September 1966, Smallwood Fonds, Coll-282, Box 5. 133 Smallwood, I Chose Canada, 467; and diary entry for 28 September 1966. 134 Smallwood Fonds, File 3.10.106, Canada Prime Minister’s Office, 1966–7, Smallwood to Pearson, 29 September 1966. 135 Smallwood, I Chose Canada, 466, diary entry for 12 September 1966. 136 Borden Papers (MG30 A86), vol. 4, Recollections, 165–7; and Smallwood, I Chose Canada, 467. 137 Cabot Martin, “The Truth Behind the Churchill Falls Deal,” Globe and Mail, 23 November 1996. There are several other versions of the event. In his account, Frederick Rowe claims that he was with Smallwood when he first raised the issue of having Churchill Falls declared a strategic national ­resource with Premier Lesage who responded that there would be no way to protect such a transmission line from sabotage (Frederick Rowe, The Smallwood Era, 32). Eric Kierans contends that Smallwood proposed to have Prime Minister Pearson pass federal legislation to designate the transmission route through Quebec a federal property, but J.W. Pickersgill

346  Notes to page 91 persuaded him not to proceed with the request to Pearson. Kierans, Remembering, 114 138 Feehan, “Smallwood, Churchill Falls, and the Power Corridor through Quebec,” 117. 139 See Pearson Papers, vol. 6, Pearson Appointment Book. Smallwood wrote Pearson a short time later (14 November 1966) asking for financial support to construct a Trans-Labrador Highway from Goose Bay through Churchill Falls to Labrador City. Once again, he argued that Newfoundland’s case was a “special one” given the transportation difficulties the province faced. See Smallwood Fonds, file 3.10.016, Smallwood to Pearson, 14 November 1966. 140 On this point, also see Feehan, “Smallwood, Churchill Falls, and the Power Corridor through Quebec,” 126. Feehan concludes: “Not only was there practically no opportunity for a meeting, but there is also more compelling evidence: Smallwood’s daybook and Pearson’s appointment book. The contents of both do not jibe with there being a Smallwood-Pearson rendezvous.” Even if Smallwood and Pearson did not actually meet on the specific date in question to discuss Smallwood’s letter and even if they met and Smallwood did not specifically ask Pearson to enact the override provisions of the constitution, does that absolve Ottawa of its responsibility to step in and allow the interprovincial transmission of hydroelectricity because Smallwood did not make a formal request to Pearson? I have argued elsewhere in this chapter that Smallwood’s “appreciation” of Pearson’s position represents a major failing on his part (given his reaction earlier against Diefenbaker over Term 29, for instance); he put other interests ahead of Newfoundland’s. On the other hand, Pearson did not need to tell Smallwood not to ask him to intervene with Quebec as Smallwood readily grasped the predicament his fellow-Liberal was in when it came to Quebec. Smallwood clearly understood how Pearson felt about intervening against Quebec and no exchange of words was necessary between Smallwood and Pearson on the matter. Silence is a policy. 141 Johnson insisted that the agreement was made without prejudice to Quebec’s claim regarding the Quebec-Labrador frontier, and he also announced that the cabinet planned to appoint a commission to study all Quebec’s boundary problems. “Quebec Agrees to Brinco Deal,” Globe and Mail, 7 October 1966. Leslie Harris, writing in the Canadian Annual Review for 1966, noted “the general feeling was still that the Churchill development could not be other than the most significant economic development in Newfoundland’s history.” 142 “Power Deal Finally Gets Green Light,” Montreal Star, 7 October 1966.

Notes to pages 91–5 347 143 Churchill Falls (Labrador) Corporation Limited Fonds, vol. 36, file 200– 831, “Text of address by Mr. Jean-Claude Lessard, President of Hydro at a press conference held Thursday, Oct. 13, 1966 on the subject of Churchill Falls hydro-electric development.” 144 “Sold Down the River and Over the Falls?” Globe and Mail (Report on Business), 18 October 1966. “Trouble Brews on Labor Accord,” Montreal Star, 14 October 1966; “Hydro-Quebec sets rules for Churchill Falls deal,” Globe and Mail, 14 October 1966. 145 Smallwood Fonds, file 3.23.005, Hobbs to Smallwood, 10 October 1966. 146 “Offer of Jobs at Churchill Falls Brings Flood on Applications,” Globe and Mail, 28 December 1966. 147 “Joey Shines in Blast Off,” Montreal Star, 18 July 1967. 148 Smallwood Fonds, file 3.23.006, Smallwood to Gordon, 1 September 1967. 149 Smallwood Fonds, file 3.23.006, Gordon and McParland to Smallwood, 13 September 1967; and Borden Papers, vol. 4, Recollections, 158. 150 On this point, see Richard Simeon, Federal-Provincial Diplomacy: The Making of Recent Policy in Canada (Toronto: University of Toronto Press, 1972), 257. 151 “Making It Easier for Brinco,” Evening Telegram, 7 May 1968. The Evening Telegram also wondered if the exemption was a reward for Smallwood supporting Trudeau rather than Robert Winters (former Brinco CEO and president) at the 1968 Liberal leadership convention. 152 Smallwood, I Chose Canada, 457; see also, Feehan and Baker, “The Churchill Falls Contract,” 66. 153 Quoted in Feehan and Baker, “The Churchill Falls,” 69. The Montreal Star reported on 9 May 1964 when negotiations broke at that time that an official with Hydro-Quebec had said that power as low as 2.8 mills/kwh “would be remarkably cheap power.” See “The Hamilton Falls Saga,” Montreal Star, 9 May 1964. 154 Feehan and Baker, “The Churchill Falls,” 70. 155 “What’s In It for Us? Evening Telegram, 16 July 1968. 156 “Smallwood Outsmarted by Quebec,” Evening Telegram, 21 January 1969; and “Churchill Falls Power ‘Giveaway’ says Kitchen,” Evening Telegram, 29 April 1970. 157 “Mighty Churchill,” Evening Telegram, 17 February 1969; and “Churchill: Where Do We Stand,” Evening Telegram, 15 May 1969. 158 “Levesque Talks Through Hat – Joey,” Toronto Star, 15 May 1964. 159 The Rooms, GY 116, file: Pushie, 1963–65, Pushie to Winters, 20 October 1963; and Douglas H. Fullerton, The Dangerous Delusion. Quebec’s Independence Obsession (Toronto: McClelland and Stewart, 1978), 51, 64–5.

348  Notes to pages 95–100 160 Feehan and Baker, “The Renewal Clause in the Churchill Falls Contract,” 49–50. 161 Henry Borden Papers, vol. 4, Recollections, 159–60. 162 For a wider discussion of this point, see Feehan and Baker, “The Renewal Clause in the Churchill Falls Contract.” 3. Classic Federalism: The Resettlement of Fishing Communities in Newfoundland and Labrador to 1965 1 The federal and provincial governments participated in the resettlement of a number of Inuit communities such as Hebron, Nutak, and others in Labrador in the mid-1950s. That resettlement process is not considered in this chapter as it has been told elsewhere. See Sean Cadigan, Newfoundland and Labrador: A History (Toronto: University of Toronto Press, 2009), 246– 51; and John C. Kennedy, People of the Bays and Headlands: Anthropological History and the Fate of Communities in the Unknown Labrador (Toronto: University of Toronto Press, 1995). 2 See Evening Telegram, 8 June 1971. 3 See Marshall Berman, “All That Is Solid Melts into Air”: The Experience of Modernity (New York: Penguin Books, 1982). 4 Jerry Bannister, “The Politics of Cultural Memory: Themes in the History of Newfoundland and Labrador in Canada, 1972–2003,” in Collected Research Papers of the Royal Commission on Renewing and Strengthening Our Place in Canada (St. John’s: Government of Newfoundland and Labrador, 2003). James Overton offers a good discussion of the quarrel between academics and public commentators over Newfoundland culture in the 1960s and 1970s. See James Overton, “With Their Rubber Boots On: Sociologists as Modernizers, Strip Miners, Necographers, Romancers and Revivalists,” Sociology on the Rock 5 (Summer 2010). http://www.mun.ca/soc/newsletter/ issue5/index.html. The much-revered economic historian David Alexander has argued that by the late nineteenth century it was clear that the fishery could not sustain the country’s labour force. He blamed Ottawa for the collapse of the salt cod fishery after Confederation. See David Alexander, “Newfoundland’s Traditional Economy and Development to 1934,” Acadiensis 5, no. 2 (Spring 1976): 56–78. 5 Some of these ideas are considered in M.M. Cernea and C. McDowell (eds.), Risks and Reconstruction: Experiences of Resettlers and Refugees (Washington, DC: The World Bank, 2000). 6 On this point, see John Sandlos, “Not Wanted in the Boundary: The Expulsion of the Keeseekoowenin Ojibway Band from Riding Mountain

Notes to pages 101–3 349 National Park,” The Canadian Historical Review 89, no. 2 (June 2008); Frank J. Tester and Peter Kulychiski, Tammarniit (Mistakes): Inuit Relocation in the Eastern Article, 1939–1963 (Vancouver: UBC Press, 1994); A Report on the 1953–55 Relocation: The High Arctic Relocation, Royal Commission on Aboriginal Peoples (Ottawa: Minister of Supply and Services, 1994); Jennifer J. Nelson, Razing Africville: A Geography of Racism (Toronto: University of Toronto Press, 2008); C. Cole Harris, The Resettlement of British Columbia: Essays on Colonialism and Geographical Change (Vancouver: UBC Press, 1997); James Murton, Creating a Modern Countryside: Liberalism and Land Resettlement in British Columbia (Vancouver: UBC Press, 2007); Tina Loo, “People in the Way: Modernity, Environment and Society on the Arrow Lakes,” BC Studies 142–3 (Summer 2004): 161–97; Bonaventure Fagan, “Images of Resettle­ ment,” Newfoundland Studies 6, no. 1 (1990); James S. Scott, Seeing Like a State (New Haven: Yale University Press, 1998); George Withers, “Engineering Demographic Change: State-Assisted Resettlement of Newfoundland Inshore Fishing Communities in the Smallwood Era,” prepared for Provincial Historic Sites Commemoration, February 2012; Jim Lotz, “Resettlement and Social Change in Newfoundland,” Canadian Review of Sociology 8, no. 1 (1971): 48–59; and Tina Loo, “The Government Game: Resettlement then and now,” ActiveHistory.ca, 6 June 2013, http://activehistory.ca/2013/06/the-government-game-resettlement-then-and-now/ 7 Marian Wright, A Fishery for Modern Times: The State and the Industrialization of the Newfoundland Fishery, 1934–1968 (Toronto: Oxford University Press, 2001) offers this analysis. 8 H.V. Nelles, The Politics of Development: Forest, Mines, Hydro-Electric Power in Ontario, 1849–1941 (Toronto: University of Toronto Press, 2005). 9 For a discussion of the rationality policy model, see Graham T. Allison, ­Essence of Decision: Explaining the Cuban Missile Crisis (Boston: Brown Little and Company, 1971); Janice Gross Stein, “Decision Making: Rational, Psychological, and Neurological Models,” in Steve Smith, Amelia Hadfield, and Tim Dunne (eds.), Foreign Policy: Theories, Actors, Cases, 2nd edition (Oxford: Oxford University Press 2012), 102–16; Michael Breheny and Alan Hooper (eds.), Rationality in Planning: Critical Essays on the Role of Rationality in Urban and Regional Planning (London: Page Bros, 1985); and James G. March, A Primer of Decision-making (New York: The Free Press, New York, 1994). 10 See Cadigan, Newfoundland and Labrador. 11 Some of these ideas are discussed in John Breuilly, Nationalism and the State (Manchester: Manchester University Press, 1994). 12 The Atlantic Charter was embraced as part of the foundational principles of the United Nations, and Allied leaders promised to work to secure better

350  Notes to pages 104–8 social and economic conditions for all peoples in a world which subsequently adopted social welfare as one way to eliminate fear and want from the lives of citizens. 13 T.H. Marshall, Citizenship and Social Class and Other Essays (Cambridge: Cambridge University Press, 1950). 14 Keith Banting, “Social Citizenship and the Multicultural State,” in Alan C. Cairns et al. (eds.), Citizenship, Diversity and Pluralism (Montreal and Kingston: McGill-Queen’s University Press, 1999). 15 The Commission of Government was appointed by Great Britain to govern Newfoundland and Labrador following the suspension of responsible government in 1933. The most authoritative history of the Commission period is Peter Neary, Newfoundland in the North Atlantic Word (Montreal and Kingston: McGill-Queen’s University Press, 1988). 16 Quoted in Linda White, “The Rev. Lester Burry Collection,” Newfoundland Quarterly 105, no. 2 (2012): 11. 17 Cadigan, Newfoundland and Labrador 3, 292–3; and see also, James Overton, “Poverty, Independence, and Self-Reliance: Politics, Newfoundland History and the Amulree Report of 1933,” in Garfield Fizzard (ed.), Amulree’s Legacy: Truth, Lies and Consequences Symposium (St. John’s: Newfoundland Historical Society, 2000). 18 The most recent example of this argument comes from well-known Newfound­land performer Greg Malone. His Don’t Tell the Newfoundlanders: The True Story of Newfoundland’s Confederation with Canada (Toronto: Knopf Canada, 2012) argues once again that Confederation was a British and Canadian conspiracy. 19 Government of Newfoundland, Budget Speech of the Honourable H.W. Quinton, minister of finance, 30 November 1949. 20 Library and Archives Canada (LAC), Privy Council Office, Series A-5-a, vol. 5775, Cabinet Conclusions, 26 and 31 July 1956. 21 Richard Gwyn, Smallwood: The Unlikely Revolutionary (Toronto: McClelland and Stewart, 1972), 80–1, 124–5. 22 LAC, Records of the Department of Fisheries and Oceans, vol. 541, file 711–25–26 [2], “Statement to the House of Commons” by R.W. Mayhew, 6 December 1949. 23 Fisheries and Oceans, vol. 1748, file 784–17–1 [1], “Joint Announcement by Premier Smallwood and Mayhew, Re: Fisheries Development in Newfoundland,” January 27, 1951. 24 Newfoundland Fisheries Development Committee Report. Published by ­authority of the Honourable James Sinclair, Minister of Fisheries, and the

Notes to pages 109–11 351 Honourable W.J. Keough, Minister of Fisheries and Co-operatives. St. John’s, Newfoundland, 1953. 25 Memorial University, Centre for Newfoundland Studies Archives (CNS), Joseph R. Smallwood Fonds, file 7.002.006, “Radio Broadcast” by Smallwood, 16 July 1953. 26 LAC, Department of Trade and Commerce, vol. 1962, file 20–191–4, pt. 1, “Memorandum on Newfoundland and the Salted Fish Industry,” by J.N. Lewis, 26 June 1958; Smallwood to Mayhew, June 18, 1952, LAC, Department of Fisheries, vol. 1749, file 794–17–1 [4]; and “Report of the Working Party on Newfoundland Fisheries Development,” Department of Fisheries, vol. 1750, file 794–17–1 [11]. 27 CNS, Smallwood Fonds, file 7.02.005, “Speech File, 1952.” 28 CNS, Smallwood Fonds, file 3.06.016, Smallwood to Beland Honderich, ­editor-in-chief, Toronto Daily Star, 5 July 1955. Smallwood also reported that James Sinclair, the federal minister of fisheries, had said that it didn’t matter if the Newfoundland fishers all left the industry as they could find work in other parts of Canada. 29 Cabinet Conclusions, Privy Council Office, Series A-5-a, Volume 2653, Newfoundland Fisheries Development, 17 September 1953. See Blake, Canadians at Last, and Wright, A Fishery for Modern Times. 30 On this point, see Tom Kent, A Public Purpose (Montreal and Kingston: McGill-Queen’s University Press, 1988), 416. 31 CNS, Smallwood Fonds, file 3.06.042, “Speech File,” 1949. The Newfoundland fishery has frequently failed to provide a decent standard of living for those engaged in the industry. Newfoundland had experienced turmoil in the industry in the nineteenth century either from a collapse in prices or a collapse in catch. In 1932, when Smallwood campaigned in Bonavista South he saw first-hand the poverty, indebtedness, and misery of the people who then engaged in the trade. At that time he realized that the fishery failed miserably at providing a basic subsistence and realized it had to change. See George Withers, “Resettlement of Newfoundland Inshore Fishing Communities, 1954–1972: A High Modernist Project,” 9 (Unpublished Paper, Department of History, Memorial University, 2009). 32 Newfoundland, Budget Speech, presented by Gregory Power, 20 April 1953. 33 Melvin Baker, The Power of Commitment: The History of Newfoundland and Labrador Hydro (St. John’s: Silver Lights Club, 2000), 3–5. 34 Newfoundland, Budget Speech, presented by Gregory Power, 20 April 1953. Evidence of these demands for improved services can be seen in coverage of the debates in the House of Assembly by the Evening Telegram. See

352  Notes to pages 112–16 also Department of Fisheries and Oceans, vol. 1748, file 794–17–1 [1], Gushue to Mayhew, 14 May 1952; and Joseph R. Smallwood, I Chose Canada: The Memoirs of the Honourable R. “Joey” Smallwood (Toronto, 1973), 370–2. 35 David G. Norris, “The Fiscal Position of Newfoundland and Labrador,” in Collected Research Papers of the Royal Commission on Renewing and Strengthening Our Place in Canada. Volume 4 (St. John’s: Office of Queen’s Printer, 2003), 275–429. 36 Neary, Newfoundland in the North Atlantic World, 62–4; Cadigan, Newfoundland and Labrador, 162 and 228; and Patrick O’Flaherty, Leaving the Past Behind: Newfoundland History from 1934 (St. John’s: Long Beach Press, 2011), 52–5. 37 Frederick W. Rowe, The Smallwood Era (Toronto: McGraw-Hill Ryerson, 1985), 111–14. 38 This point is made repeatedly in official government documents and even after Smallwood retired from politics, he never missed an opportunity to make this point. See Decks Awash 6, no. 1 (February 1977), Letter to the ­editor from Smallwood. For the community debates over whether or not to resettle, see Surviving in Rural Newfoundland, Newfoundland and Labrador Adult Basic Education Social History Series, A Joint Project of The Writers’ Alliance of Newfoundland and Labrador and Cabot College Literacy Office (St. John’s: 1996). 39 The Daily News, 19 March 1956, 4. 40 Report of the South Coast Commission (St. John’s, 1957). 41 CNS, Smallwood Fonds (Coll-075), file 3.10.078. Smallwood to Robert Wells, Provincial Economist, 22 July 1958. 42 Canada, Royal Commission on Canada’s Economic Prospects (Ottawa: 1957), 181–9, and 405–6. In its submission to the royal commission, the government of Newfoundland noted that the wages and benefits from the salt ­fishery had not compared favourably with those from other industrial ­employment and that fact alone would lead fishers to leave the industry. In 1954, the government estimated that those engaged in the production ­of salt fish earned about $500 for their catch and told the commission that if fishers could not earn a better wage, they would seek employment elsewhere. Submission by the Government of Newfoundland to the Royal Commission on Canada’s Economic Prospects (October 1955). 43 CNS, A.G. Stacey Collection, Smallwood Statement, February 1957, h ­ ttp:// www.mun.ca/mha/resettlement/documents_full_view.php?img=001_​ 1957feb_smallwood_statement&galleryID=Doc1. During the hearings over Term 29, Clarence Powell, Newfoundland’s deputy minister of municipal ­affairs, noted the centralization of communities would reduce costs for the

Notes to pages 116–20 353 province. See Ritchie to Fleming, 10 October 1957, LAC, Donald M. Fleming Papers, vol. 101, file R-11. 44 “Newfoundland and the Salt Fish Industry,” a report prepared by J.N. Lewis for G.R. Clark, federal deputy minister of fisheries. Department of Fisheries, vol. 1739, file 794–7-2 [5]. 45 Stacey Collection, Smallwood Statement, 29 October 1957, http://www​ .mun.ca/mha/resettlement/documents_full_view. php?img=019_1957oct_smallwood_statement&galleryID=Doc1. 46 CNS, Smallwood Fonds, Coll-075, file 7.05.003, Smallwood Statement, 9 January 1958, and Smallwood Statement, 18 October 1958; file 3.10.078, Memorandum to Smallwood from Robert Wells, Provincial Economist, 22 July 1958; and Stacey Collection, Community Chart 1957, http://www​ .mun.ca/mha/resettlement/documents_full_view.php?img=013_ community_chart&galleryID=Doc1. 47 Report on Resettlement in Newfoundland, 1960, p. 48, The Rooms, GN 34/2, Department of Fisheries, box 29, file 12/62/1E. 48 CNS, Edward Roberts Fonds, Coll-078, file 4.04.067, “Address to the St. John’s Rotary Club,” William N. Rower, 5 December 1968. 49 D. Ralph Matthews, “Communities in Transition: An Examination of Government Initiated Community Migration in Rural Newfoundland” (PhD Dissertation, University of Minnesota, 1970), 75. See Withers, “Resettlement of Newfoundland Inshore Fishing Communities, 1954–1972: A High Modernist Project.” 50 Parzival Copes, The Resettlement of Fishing Communities in Newfoundland (Ottawa: Canadian Council on Rural Development, 1972), 6–10, 185–90. 51 Copes, The Resettlement of Fishing Communities in Newfoundland, 28–37. 52 T.F. Wise, Budgets, Credits, and Skills Survey of Rural Fishermen (St. John’s: Institute of Social and Economic Research, 1964). 53 Matthews, “Communities in Transition: An Examination of Government Initiated Community Migration in Rural Newfoundland,” 51–64. 54 For a discussion of the consumer society, see Suzanne Morton, Ideal Surroundings: Domestic Life in a Working-Class Suburb in the 1920s (Toronto: University of Toronto Press, 1995); Joy Parr, Domestic Goods: The Material, the Moral, and the Economic in the Postwar Years (Toronto: University of Toronto Press, 1999); and Joan Sangster, “Consuming Issues: Women on the Left, Political Protest, and the Organization of Homemakers, 1920–1960,” in Sharon Anne Cook, Lorna R. McLean, and Kate O’Rourke (eds.), Framing Our Past: Canadian Women’s History in the Twentieth Century (Montréal and Kingston: McGill-Queen’s University Press, 2001). 55 Copes, The Resettlement of Fishing Communities in Newfoundland, 54–6.

354  Notes to pages 120–3 56 Jane A. Abramson, Four Economically Lagging Areas in the Atlantic Provinces and Quebec (Ottawa and Saskatoon: Canadian Centre for Community Studies, 1968), 97. 57 Robert DeWitt, Public Policy and Community Protest: The Fogo Case (St. John’s: Institute of Social and Economic Research, 1969), 20–1. 58 On this point, see Wright, A Fishery for Modern Times, 119. Wright suggests that the reaction in fishing communities to the modernization plans has yet to be studied. However, she contends, using a Gramscian model of hegemony, that fishers had by the early 1960s accepted the view of the dominant ­social and economic class as a universal truth. 59 The Daily News, 8–20 November 1962. 60 The Daily News, 27 September 1962. 61 Government of Newfoundland, National Fisheries Development: A Presentation to the Government of Canada by the Government of Newfoundland (St. John’s, 1963). 62 CNS, Smallwood Fonds, Coll-075, Pearson to Smallwood, 13 February 1963, file 3.10.016. The Conference is discussed in Wright, A Fishery for Modern Times. 63 CNS, Smallwood Fonds, Coll-075, file 3.12.029, Smallwood to Robichaud, 8 January 1964. 64 CNS, Smallwood Fonds, Coll-075, file 3.12.030, Rapporteurs’ Report, Federal-Provincial Conference on Fisheries Development, Ottawa, 21 January 1964. Quote from the opening plenary is taken from Gwyn, Smallwood: The Unlikely Revolutionary, 226. The issue of foreign trawlers fishing in the waters off Canada’s east coast is not discussed here but it was a major issue for the Canadian fishing industry by the 1960s, especially after the Soviet Union and other Eastern European countries as well as the traditional fishing nations of Spain and Portugal launched extensive operations on the Grand Banks. By the mid-1960s about 70 per cent of the fish taken from the waters on the east coast were taken by the foreign fishing vessels. Fishers in Newfoundland and Nova Scotia had demanded since the late 1950s that the federal government take action to deal with European nations that came to Canada to fish. In 1970, Ottawa declared a 12-mile territorial sea and in 1977 it began to exercise jurisdiction over a 200-mile exclusive economic zone (EEZ) over its continental shelf, but Canada’s EEZ was only formally established in 1997. It was 2003 before Canada approved the United Nations Convention of the Law of the Sea, which recognizes maritime zones under international law. 65 CNS, Smallwood Fonds, Coll-075, file 3.12.030, Rapporteurs’ Report, Federal-Provincial Conference on Fisheries Development, Ottawa, 21 January 1964.

Notes to pages 123–8 355 66 LAC, Records of Department of Regional Economic Expansion (DREE), Fisheries Development Programme, Newfoundland. Discussion on Central­ ization of Industry and Population, 19 January 1965, vol. 27, file 168-N5, pt. 1. 67 CNS, Smallwood Fonds, Coll-075, file 3.12.028, Robichaud to Smallwood, 19 June 1963. 68 Noel Iverson and D. Ralph Matthews, Communities in Decline: An Examination of Household Resettlement in Newfoundland (St. John’s: Institute of Social and Economic Research, 1968), 2. 69 Matthews, “Communities in Transition: An Examination of Government Initiated Community Migration in Rural Newfoundland,” 64–8. 4. Cooperative Federalism: Newfoundland, Ottawa, and Resettlement after 1965 1 This point is raised in Ralph Matthews, “The Researcher, the Community and Social Policy,” 5, paper presented at York University, March 1973. 2 The literature on regional economic development is immense. See Anthony Careless, Initiative and Response: The Adaptation of Canadian Federalism to Regional Economic Development (Montreal and Kingston: McGillQueen’s University Press, 1977); Ralph Matthews, The Creation of Regional Dependency (Toronto: University of Toronto Press, 1983); Donald J. Savoie, Regional Economic Development: Canada’s Search for Solutions (Toronto: University of Toronto Press, 1986); and Donald J. Savoie, Visiting Grandchildren: Economic Development in the Maritimes (Toronto: University of Toronto Press, 2006). 3 On this point and for a general overview of the period, see P.E. Bryden, Planner and Politicians: Liberal Politics and Social Policy, 1957–1968 (Montreal and Kingston: McGill-Queen’s University Press, 1997). 4 On this point, also see Copes, The Resettlement of Fishing Communities in Newfoundland, 102–3. 5 Savoie, Regional Economic Development; Ducarmel Bocage, The General Economic Theory of François Perroux (Lanham, NY: University Press of America, 1985). 6 Savoie, Regional Economic Development, 6–7. 7 Newfoundland Resettlement Program, Report of the Joint Planning Committee from the Newfoundland Resettlement Committee (Ottawa: Department of Regional Economic Expansion, 1973), 4. 8 Library and Archives Canada (LAC), Department of Manpower and Immigration, vol. 79, Memorandum to the Cabinet, Re: Newfoundland – Centralization of Fishermen, 24 February 1965.

356  Notes to pages 128–34 9 LAC, Records of the Department of Regional Economic Expansion (DREE), Memorandum to Cabinet, Newfoundland – Centralization of Fishermen, 19 February 1965, vol. 27, file 168-N5, pt. 1. 10 DREE, Federal-Provincial Meeting on Centralization of Industry and Population, Fisheries Development Programme, St. John’s, 2–4 February 1965 and ­10–11 March 1966, vol. 27, file 168-N5, pt. 1. 11 DREE, Memorandum, From Rural Development Branch (ADRA) to Interdepartmental Committee on Centralization, no date, and Guy Lemieux to A.T. Davidson, 28 July 1966, vol. 27, file 168-N5, pt. 1. 12 PCO Series A-5-a vol. 6265, Cabinet Conclusion, 23 December 1964; and “Summary of Discussions on the Development of the Newfoundland Fisheries between Federal and Provincial Fisheries Representatives,” 18 December 1964, CNS, Smallwood Fonds, Coll-075, file 3.12.029. 13 Cabinet Conclusions, 25 February and 4 March 1965, Privy Council Office, RG2, Series A-5-a, vol. 6271. 14 CNS, Alex Stacey Collection, Federal-Provincial Announcement on Resettlement, 5 March 1965, http://www.mun.ca/mha/resettlement/ documents_full_view.php?img=055_announcement&galleryID=Doc1. 15 Quoted in David Vardy and Eric Dunne, “New Arrangements for Fisheries Management in Newfoundland and Labrador,” in Collected Research Papers of the Royal Commission on Renewing and Strengthening our Place in Canada, ­volume 3 (St. John’s: Queen’s Printer, 2003), 107. 16 Department of Regional Economic Expansion, Federal-Provincial Newfoundland Fisheries Household Resettlement Program: Program Review, 1965– 1970, Special Projects (Ottawa, 1970), 2. 17 Ibid., 7; and K.M. Harnum, “Outline of Resettlement Policy,” Decks Awash 1, no. 4 (February, 1970): 4–5. 18 Cabinet Conclusions, 4 March 1965, Privy Council Office, RG2, Series A-5-a, vol. 6271; and Department of Regional Economic Expansion, FederalProvincial Newfoundland Fisheries Household Resettlement Program, 6. 19 Cabinet Conclusions, 10 September 1966, RG2, PCO, Series A-5-a, volume 6321. 20 Memo on Resettlement and Housing, prepared by A. Vivian, 13 December 1966. CNS, Smallwood Fonds, Coll-075, file 2.07.001. 21 Government of Newfoundland and Labrador, Economics and Statistics Branch, Quarterly Interprovincial Migration Showing Census Total, Newfoundland & Labrador, 1961–2 to 2011–12; and Final Report: Report of the Royal Commission on Renewing and Strengthening Our Place in Canada (St. John’s: Queen’s Printer, 2003), 35–7.

Notes to pages 134–7 357 22 Speech on Resettlement and Industrialization, 1969. CNS, Smallwood Fonds, Coll-075, file 3.10.078. 23 This is based on a variety of correspondence and memorandums, including: Memorandum on Resettlement and Housing prepared by A. Vivian, Newfoundland Commissioner of Housing, 13 December 1966, Smallwood Fonds, Coll-075, file 2.07.001; R.A.J. Phillips, Director, Special Planning Secretariat, Privy Council Office, to Richard Cashin, 3 November 1966, Smallwood Fonds, Coll-075, file 3.10.078; Smallwood to Pearson, 12 and 17 January 1967, and 14 February 1967. 24 “Reception Community Categories,” The Rooms, GN 34/2, Department of Fisheries, Box 29, file 12/62/1A, vol. 1, Fisheries Household Resettlement Committee – Minutes of Meeting; and Department of Regional Economic Expansion, Federal-Provincial Newfoundland Fisheries Household Resettlement Program, 6. 25 E.A. Harvey, Secretary-Treasurer, The Frozen Fish Trades Association Limited, to A.A. Etchegary, chair, Fisheries Resettlement Advisory Committee, 18 January 1968, The Rooms, GN 34/2, Department of Fisheries, Box 29, file 12/62/1A, vol. 11. 26 “Agreement, Minister Fisheries Canada and Minister Fisheries Newfound­ land, 1965,” A.G. Stacey Collection, Centre for Newfoundland Studies Archives at Memorial University of Newfoundland, http://www.mun.ca/ mha/resettlement/documents_full_view.php?img=063_agreement&​ galleryID=Doc1; and Department of Regional Economic Expansion, Federal-Provincial Newfoundland Fisheries Household Resettlement Program, 3. 27 Smallwood Fonds, Coll-075, Harnum to Smallwood, 19 May 1969, file 3.10.078. A year later on 28 November 1970, Davis addressed the Rotary Club of Toronto with a speech entitled, “The Outlook for our Outports.” He argued that the outlook for Newfoundland outports was “reassuring.” 28 Mike Martin, “Woody Island – Condemned to Death?” Decks Awash 1, no. 4 (February 1970): 6. 29 LAC, DREE, Acc 1987–88/028, file 260–1-4, pt. 1, Kent to Jamieson, 18 June 1970. 30 Department of Regional Economic Expansion, Federal-Provincial Newfound­ land Fisheries Household Resettlement Program, 1. 31 PCO Series A-5-a, vol. 6323, Cabinet Conclusions, 31 January and 14 March 1967; R.A.J. Phillips, Director, Special Planning Secretariat, Privy Council Office, to Richard Cashin, 3 November 1966; Smallwood Fonds, Coll-075, file 3.10.078, “The Resettlement Programme,” Statement by F.W. Rowe,

358  Notes to pages 137–40 20 June 1967; Smallwood Fonds, Coll-075, file 3.12.029, “Remarks by Fisheries Minister, H.J. Robichaud,” 20 June 1967. 32 Department of Regional Economic Expansion, Federal-Provincial Newfoundland Fisheries Household Resettlement Program, 2 33 Copes, The Resettlement of Fishing Communities in Newfoundland, 103. 34 Iverson and Matthews, Communities in Decline, 136. 35 DREE, vol. 27, file 168-N5, pt. 5, Seminar – DREE Development Plan for Newfound­land, Ottawa, 1 November 1969. 36 Smallwood Fonds, Coll-075, file 3.24.032, “Preliminary Paper for Discussion by the Senior Advisory Committee on Regional Development.” This was part of a process for accommodating the Regional Economic Expansion Act to Newfoundland’s development needs, 30 September 1969. 37 For a discussion of DREE, see Savoie, Regional Economic Development: Canada’s Search for Solutions. 38 Ralph Matthews, “There’s No Better Place Than Here”: Social Change in Three Newfoundland Communities (Toronto: Peter Martin Associates Limited, 1976), 125–7. 39 LAC, Department of Regional Economic Expansion (DREE), RG124, vol. 27, file 168-N5, pt. 3, Summary of Meeting between Department of Fisheries and Representatives of Manpower and Immigration, 7–8 November 1968. 40 The Smallwood government provided considerable support in the mid1960s to American entrepreneur John Sheehan to build an oil refinery in Come By Chance, a small community several hours’ drive outside of St. John’s. Although Sheehan had built a small refinery in Holyrood in 1960 without state support, he demanded considerable government aid for the Come By Change project and when Smallwood conceded to his demands, including the provision of $5 million in an unsecured loan to begin construction, two of Smallwood’s ministers, Clyde Wells and John Crosbie, ­resigned and crossed the floor of the provincial assembly to sit as independent Liberals. 41 Smallwood Fonds, Coll-075, file 3.10.20, “Memorandum to the Honourable, The Premier: Regional Economic Expansion,” 3 March 1969; Smallwood Fonds, Coll-075, file 3.24.032, “Preliminary Paper for Discussion by the Senior Advisory Committee on Regional Development.” This was part of a process for accommodating the Regional Economic Expansion Act to Newfoundland’s development needs, 30 September 1969; and Smallwood Fonds, Coll-075, file 3.10.20, “Incentives for Regional Economic Expansion,” remarks by Jean Marchand, minister for regional economic expansion, 27 May 1969.

Notes to pages 140–4 359 42 LAC, Pierre Trudeau Fonds, MG 26 O11, Federal-Provincial Issues and Situation Reports, Prepared by Federal-Provincial Relations Secretariat, Privy Council Office, 26 May 1972, vol. 10, file 10–12. 43 Government of Newfoundland, Department of Community and Social Development, statistics reprinted in Copes, The Resettlement of Fishing Communities in Newfoundland, 112, 178. 44 DREE, Acc1987–88/028, Box 22 file 260–1-4, pt. 1. A.D. Crerar, Atlantic Development Board economist, to M. Hart, Atlantic Development Board, 28 February 1969. 45 Smallwood Fonds, Memorandum to Executive Council, 23 January 1968; Memorandum to Executive Council, 26 February 1968; Memorandum to Executive Council, 11 April 1969. 46 Smallwood Fonds, Coll-075, file 3.10.20, Gosse to Sametz, 8 September 1969. 47 Ibid. Many of the opponents of resettlement often pointed to the rise of the number of families on able-bodied relief as a failure on the program. On 15 June 1971, Fred Rowe, the minister of community and social development, told the House of Assembly that the rates declined for those who ­resettled. Of the approximately 3,200 families who were resettled from 1965 to 1970, 11.4 per cent were on relief when they moved but five years later this rate had dropped to 4.3 per cent. However, 82 families not on relief ­applied for assistance after they moved. In February and March 1970, of the 3,242 families that were resettled, 222 (or 6.9 per cent) were on relief, suggesting that the number on relief at the time of moving had been cut almost in half within five years after they moved. “Statement by William Rowe, Minister of Community and Social Development,” 15 June 1970, CNS, John Crosbie Fonds, Coll-073, file 3.07.004. 48 Edward Roberts Fonds, Coll-078, file 5.04.014, DREE 1969–70, “A Social and Economic Development Program for Newfoundland and Labrador in the 1970’s,” by The Honourable William Rowe, Minister of Community and Social Development, Government of Newfoundland and Labrador, May 1970. 49 John Crosbie Fonds, Coll-073, file 3.07.004, “Statement by William Rowe, Minister of Community and Social Develop­ment,” 15 June 1970; and Newfoundland Resettlement Program, Report of the Joint Planning Committee from the Newfoundland Resettlement Committee (Ottawa: Department of Regional Economic Expansion, 1973), 4. 50 Edwards M. Roberts Fonds, Coll-078, file 5.04.012, Memorandum to Executive Council, William N. Rowe, 27 May 1970.

360  Notes to pages 144–9 51 For definition of special areas, see Smallwood Fonds, Coll-075, file 3.10.021, “What Is a Special Area?” no date. 52 Smallwood Fonds, Coll-075, file 2.07.004, Memorandum to the Executive Council, Second Newfoundland Resettle­ment Agreement, 27 May 1970; and Canada, Regional Economic Expansion Canada, “Canada/ Newfoundland. Second Resettlement Agreement, 1970,” 17 July 1970. 53 Quoted in Paul Stevens and John Saywell, “Parliament and Politics,” in John Saywell (ed.), Canadian Annual Review for 1968 (Toronto: University of Toronto Press, 1969), 75–8. 54 Smallwood Fonds, Coll-075, file 3.10.020, “Regional Disparities,” Statement of Hon. W.N. Rowe, Newfoundland, 1969. 55 James Overton, “Towards a Critical Analysis of Neo-Nationalism in New­ found­land,” in Robert J. Bryan and R. James Sacouman (eds.), Underdevelop­ ment and Social Movements in Atlantic Canada (Toronto: New Hogtown Press, 1979), 219–49. 56 For an excellent discussion of the situation in Newfoundland and Labrador at the time, see Peter Neary, “Politics in Newfoundland: the end of the Smallwood Era,” Journal of Canadian Studies 7, no. 1 (February 1972): 3–21. 57 Crosbie Fonds, Coll-073, file 3.07.004, Statement in House of Assembly by William Rowe, Minister of Community and Social Development, 8 June 1970; and Daily News, 24 December 1970. 58 One of the most outspoken and influential critics of resettlement was Evening Telegram columnist, Ray Guy. He wrote of resettlement that it “was one of the greatest crimes ever committed against Newfoundland people.” Quoted in Bonaventure Fagan, “Images of Resettlement,” Newfoundland Studies 6, no. 1 (Spring 1990): 4. 59 Janice Wells, Frank Moores. The Time of His Life (Toronto: Key Porter Books, 2008), 192. 60 Withers, “Engineering Demographic Change,” 19. 61 Don Jamieson, Speech to Rotary Club, St. John’s, 1 March 1973. 62 “Federal Resettlement Program/Community Consolidation Program Statis­tics,” The Rooms, GN/59/7/A Rural Agriculture & Northern Develop­ ment – Resettlement, Box 2; and Newfoundland Resettlement Program, Report of the Joint Planning Committee from the Newfoundland Resettlement Committee (Ottawa: Department of Regional Economic Expansion, 1973), 7. 63 Newfoundland Resettlement Program, Report of the Joint Planning Committee from the Newfoundland Resettlement Committee (Ottawa: Department of Regional Economic Expansion, 1973), 10.

Notes to pages 149–54 361 64 Minutes of the Resettlement Committee Meeting, 2 May 1973, The Rooms, Rural Agriculture & Northern Development – Resettlement, GN 59/7/1. Box 4. 65 CNS, James McGrath Fonds, Coll-156, file 10.01.029, James Reid to Walter Carter, 19 August 1975. 66 James G. Reid, minister of rural development to Don Jamieson, minister of Department of Regional Economic Expansion, 10 January 1975 and Report of Meeting with Federal Minister, Federal-Provincial Resettlement Committee Meeting, 9 January 1975, The Rooms, GN 59/7/A Rural Agriculture & Northern Development – Resettlement, Box 4A, file 8; and Memorandum to Cabinet on Canada/Newfoundland Resettlement Agreement, 20 January 1976 (Marked Agreed), and Report of Advisory Committee on CanadaNewfoundland Resettlement Agreement, 29 December 1975. Report in letter from J.F. Rogers, deputy minister, rural ­development to John Lundrigan, minister, 29 December 1975, John Crosbie Fonds, Coll-073, file 7.06.022. 67 R.H. McGee, Director General, DREE (Newfoundland) to G.J. O’Reilly, Deputy Minister. Department of Rural Development, 13 April 1976, GN 59/7/A Rural Agriculture & Northern Development – Resettlement, Box 4A, file 8; and Federal/Provincial Resettlement Committee Meeting, 29 March 1977, GN 59/7/A, Box 4A, file 8. 5. Unravelling the Question: Federal or Provincial Jurisdiction of Offshore Oil and Gas 1 The government of Newfoundland and Labrador described the whole area as the continental margin. It encompassed approximately 1.8 million square kilometres and included the continental shelf, the continental slope, and the continental rise. It claimed the area by virtue of international law and Newfoundland’s pre-Confederation rights until the Supreme Court of Canada awarded ownership to the federal government. 2 See Peter Clancy, Offshore Petroleum Politics: Regulation and Risk in the Scotian Basin (Vancouver: UBC Press, 2011). 3 “Department of Attorney General, Interdepartmental Memo, from Deputy to Attorney General,” 22 April 1959, quoted in Arbitration Between Newfound­ land and Labrador and Nova Scotia Concerning Areas As Defined in the CanadaNova Scotia Implementation Act and the Canada-Newfoundland Atlantic Accord Implementation Act [hereafter, Arbitration], Award of the Tribunal in the First Phase, Ottawa, 17 May 2001, 32. 4 After the Moores government was elected in 1972, it recognized only those permits that had been issued in accordance with provincial legislation

362  Notes to pages 155–9 pursuant to Section 8 of the Petroleum and Natural Gas Act, 1965. Of the permits issued after 1972, none of them granted production rights (only the right to conduct exploration programs) and all required operators to give preference to Newfoundland and Labrador labour, goods, and services. 5 Arbitration, 38–43. 6 Library and Archives Canada (LAC), L.B. Pearson Papers, Laing to Pearson, 1 March 1964, vol. 115, file 15–1. 7 Reference Re: Offshore Mineral Rights, [1967] S.C.R. 792 (http://scc-csc​ .lexum.com/en/1967/1967scr0-792/1967scr0-792.html); and Roderick Logan, “Parting the Waters – Canadian Style” in Rocco Gentilcore (ed.), Geographical Approaches to Canadian Problems: A Selection of Readings (Toronto: Prentice-Hall of Canada, 1971), 199. 8 Joseph R. Smallwood Fonds, Centre for Newfoundland Studies (CNS), Lester Pearson to Joseph Smallwood, 30 November 1964, file 3.10.015; and Provincial Archives of Nova Scotia (PANS), Premier’s Correspondence, George Smith, RB 100, vol. 78, file 36–7, Minutes, Meetings of Joint Mineral Resource Committee, 13 June 1969. 9 “The Legal Case,” Decks Awash 6, no. 1 (February 1977): 27–30; and Smallwood Fonds, W.R. Shaw to Pearson, 30 December 1974, file 3.10.015. 10 Smallwood Fonds, Lester Pearson to Joseph Smallwood, 11 December 1964, file 3.10.015. 11 House of Assembly, Hansard, Newfoundland, 4 February 1966. 12 Reference Re: Offshore Mineral Rights, [1967] S.C.R. 792. See George Swan, “The Newfoundland Offshore Claims: Interface of Constitutional Federalism and Introduction International Law,” McGill Law Journal 22 4 (1976): 541–73. 13 Privy Council Office, Series A-5-a, Volume 6265, Cabinet Conclusions, 24 September 1964. 14 Trudeau Fonds, MG 26 O7, vol. 378, file 542.2, Trudeau’s comments on “Memorandum for Prime Minister, Offshore Minerals,” 25 July 1969. 15 Ibid., Pierre Trudeau to G.D. Walker. Secretary, Joint Mineral Resources Committee, 6 February 1969. 16 Cabinet Conclusions, 22 June 1972, PCO Series A-5-a, volume 6395. 17 Trudeau Fonds, MG 26 O7, vol. 378, file 542.2, “Statement by the Prime Minister on Offshore Mineral Rights in the House of Commons,” 2 December 1968. 18 Privy Council Office, Series A-5-a, vol. 6177 and vol. 6338, Cabinet Conclusions, 5 and 21 November 1968; and Pierre Trudeau to Louis J. Robichaud, Premier of New Brunswick, 29 November 1968 in Arbitration, 50. Similar letters were sent to the other premiers. Trudeau’s comments are reported in Halifax Chronicle Herald, 3 December 1968.

Notes to pages 159–63 363 19 The Rooms, Provincial Archives of Newfoundland and Labrador, DS 2008– 008, Cabinet Secretariat, Premier’s Files, Joseph R. Smallwood, Box Number JRS2001–001, File Offshore Mineral Resources, Smallwood to Trudeau, 25 July 1969. 20 PANS, Premier’s Correspondence, RG 100, vol. 78, file 36–7, D.M. Smith to Pierre Trudeau, 9 December 1968. 21 Donald M. Smith, Minister of Mines, Province of Nova Scotia, to C.M. Lane, Minister of Mines, Agriculture and Resources, Province of Newfoundland and Labrador, 7 June 1968, in Arbitration, 49–50. 22 Donald Savoie, Visiting Grandchildren: Economic Development in the Maritimes (Toronto: University of Toronto Press, 2006), 201. 23 The Rooms, Leslie Curtis Papers, MG 5, box 11, file Newfoundland Offshore Jurisdiction, Colomb to Canadian Javelin, 31 October 1969. 24 PANS, Premier’s Correspondence, RG 100, vol. 78, file 36–7, Minutes of Meeting of Joint Mineral Resources Committee, Quebec City, 13 June 1969. 25 John C. Crosbie Fonds, Coll-073, file 6.04.243, Minutes, Meeting of the Committee on the Offshore, 18 September 1972, and Cabot Martin, “Brief Description of the Federal-Provincial Dispute over Offshore Mineral Rights,” 18 August 1975. Published by Government of Newfoundland, Department of Mines and Energy. 26 Trudeau Fonds, MG 26 O7, vol. 378, file 542.2, Ivan Head to Pierre Trudeau, 18 October 1968. 27 Smallwood Fonds, Pierre Trudeau to Joseph Smallwood, 2 December 1969, file 3.10.017. Similar letters were sent to the other premiers. 28 PANS, Premier’s Correspondence, RG 100, vol. 86, file B28, Pierre Trudeau to G.I. Smith, December 2, 1969. 29 House of Assembly Hansard, Newfoundland, April 28, 1970. 30 PANS, Premier’s Correspondence, RG 100, vol. 86, B28-Newfoundland, William Callahan to Joe Greene, 29 April 1970. 31 Trudeau Fonds, MG 26 Series O7, Memorandum for the Prime Minister, 11 July 1972, vol. 117, file 117.3 (312.4 Federal-Provincial Relations – Pres. & Conf. Government); Trudeau Fonds, Series O7, Memorandum for the Prime Minister, 23 July 1971, file 117–2 (312.4 Federal-Provincial Relations – Pers. & Conf. Government); and Trudeau Fonds, Series O7, Memorandum for the Prime Minister, 11 July 1972, file 117–3 (312.4 Federal-Provincial – Pers. & Conf. Government). 32 PANS, Premier’s Correspondence, RG 100, vol. 79, file Oil and Gas, Regan to Trudeau, 14 October 1971. Innis MacLeod, N.S. deputy attorney general had told Premier Regan after reviewing the various legal options, “I must

364  Notes to pages 163–6 advise that our chance of success on a court action with respect to submarine mineral rights is remote.” RG 100, vol. 79, file Oil and Gas, MacLeod to Regan, 13 May 1971. 33 This is a familiar theme in Newfoundland politics. See Stephen Tomblin, “Newfoundland and Labrador at the Crossroads: Reform or Lack of Reform in a New Era?,” Journal of Canadian Studies 37, no. 1 (Spring 2002): 89–108. 34 CNS, James McGrath Fonds, vol. 156, file 10.01,021, Speech to Northwest Rotary Club, St. John’s, Leo Barry, 4 December 1973; and Rowland J. Harrison, “Why Offshore Jurisdiction must be Resolved: Dispute Stops Oil Play at Exploration Stage,” Atlantic Provinces Economic Council Newsletter 17, no. 4 (April 1973): 2–3. 35 Trudeau Fonds, MG 26 O11, vol. 5, file 1, “The State of Federal-Provincial Relations,” Memorandum for Prime Minister, 8 August 1974. 36 C.W. Doody to G.D. Walker, Secretary, Joint Mineral Resources Committee, 11 April 1972, quoted in Arbitration, 54. 37 Crosbie Fonds, Coll-073, file 6.07.050, Cabot Martin, “Brief Description of the Federal-Provincial Dispute over Offshore Mineral Rights,” 18 August 1975. 38 Trudeau Fonds, MG 26 O7, vol. 378, file 543.2 1972–73, Gerald Regan to Pierre Trudeau, 18 June 1972. 39 “Statement by Premier Moores,” Newfoundland 36th General Assembly, in Verbatim Report, 1st Session, Vol. 1 No. 33 (19 June 1972), 2492. 40 See George Swan, “The Newfoundland Offshore Claims,” McGill Law Journal Vol. 22, no. 4 (1976): 541–73; and Cabot Martin, “Newfoundland’s Case on Offshore Minerals: A Brief Outline ” (St. John’s: Newfoundland Department of Mines and Energy, 1974). 41 Arbitration. Phase I. Chapter V, Notes from Meeting between Moores and Smith, 9 May 1972, 59, S. Peters, Executive Assistance to Premier Moores, to D.G. Crosby, Director Resource Management and Conservation Branch, Department of Energy, Mines and Resources, 6 June 1972, 60, Communiqué of Meetings of Atlantic and Quebec Premiers, 17–18 June 1972, 60–1; and Evening Telegram, 2 August 1972. 42 Trudeau Fonds, MG 26 O7, vol. 223, file 313.312, Memo, “Meeting with the Prime Minister and Premier Regan,” 19 July 1972; and Cabinet Conclusions, 22 June 1972, RG 2, PCO, Series A-5-a, vol. 6395 and vol. 6381, 29 July 1971. 43 Trudeau Fonds, MG 26 O7, vol. 332 Background Notes for Prime Minister Respecting Offshore Mineral Rights, Minutes of Meeting of First Ministers of the Five Eastern Provinces on Offshore Minerals, 2 August 1972. 44 C.W. Doody to M.J. Kirby, Principal Secretary to the Premier of Nova Scotia, 6 October 1972, in Arbitration, 60–1.

Notes to pages 166–74 365 45 Trudeau Fonds, MG 26 O7, vol. 117, file 117.4 (312.4 Federal-Provincial Relations – Pers. & Conf. Government), Note Pour Le Premier Ministre, 14 mai 1973. 46 With the outbreak of the Yom Kippur War in October 1973, Arab nations imposed an oil embargo against Israel’s Western allies and changed forever Canada’s relationship with oil. The Middle Eastern embargo prompted a dramatic spike in the price of oil. Although Canada had huge reserves in Alberta, it experienced the same shock as other Western nations when oil prices quadrupled and it faced the first of two oil crises that would mark the 1970s. 47 “Proposal of the Government of Newfoundland to resolve the current offshore mineral dispute between the Province of Newfoundland and the Federal Government,” 27 September 1973. 48 Cabinet Conclusions, 20 December 1973, RG 2, PCO Series A-5-a, vol. 6422; Pierre Trudeau to Frank Moores, 25 January 1974; and Trudeau Fonds, MG 26 O7, vol. 378, file 542.2 1974–5, Memo for the Prime Minister, 10 December 1973. 49 Trudeau Fonds, MG 26 O7, vol. 90, file 3.06.2.02–1974. Report on National Energy Conference, 22–23 January 1974. 50 Trudeau Fonds, MG 26 O7, vol. 378, file 542.2, 1974–5, Frank Moores to Pierre Trudeau, 14 May 1974. 51 Martin, “Newfoundland’s Case on Offshore Minerals: A Brief Outline.” 52 Janice Wells, The Life and Times of Frank Moores (Toronto: Key Porter Books, 2008), 208. 53 “Who Owns What and What Does It Mean?,” Decks Awash 6, no. 1 (February 1977): 29. 54 “The Federal Sellout,” Decks Awash 6, no. 1 (February 1977): 30. 55 Gary Halverson, “Newfoundland – How to Exploit Its Riches,” The Christian Science Monitor (18 October 1976), 20. 56 Evening Telegram, 3 February 1977. 57 “Moores: If Necessary We Will Secede,” Time Canada (29 September 1975): 13. Ed Roberts, the leader of the Liberal party moved a motion asserting provincial ownership of the offshore during the Session; it was passed unanimously by the House.. 58 LAC, Alastair Gillespie Fonds, vol. 267, file 243–13 Newfoundland, John Crosbie to Alastair Gillespie, 26 April 1978. 6. The Nationalists: Trudeau, Peckford, and the Struggle for Offshore Oil and Gas 1 Trudeau Fonds MG 26 Series O7, vol. 641, file 1702 (January to July 1977), Memorandum for the Prime Minister, 28 January 1977; “Federal-Provincial

366  Notes to pages 174–8 Memorandum of Understanding in Respect of the Administration and Management of Mineral Resources Offshore to the Maritime Provinces,” (Ottawa, 1 February 1977); and Evening Telegram, 23 July 1976. 2 There is evidence of this in federal cabinet discussions throughout the 1970s. See, for example, Cabinet Conclusions, 11 July 1971, RC 2, PCO, Series A-5-a, vol. 6381. 3 Evening Telegram, 14 March 1977. 4 “A White Paper Respecting the Administration and Disposition of Petro­ leum Belonging to Her Majesty in Right of the Provinces of Newfoundland,” issued under the authority of A. Brian Peckford, Minister of Mines and Energy, May 1977, 33–4. 5 Two years later Gerald Regan, who had negotiated the failed deal, joined the government in Ottawa, where Trudeau appointed him minister of ­labour and minister of state for international trade. 6 “A White Paper Respecting the Administration and Disposition of Petro­ leum Belonging to Her Majesty in Right of the Provinces of Newfoundland,” 33–4. 7 LAC, Alastair Gillespie Fonds, vol. 294. File 500-Moores, Frank Moores to Alastair Gillespie, 3 August 1978. 8 “A White Paper Respecting the Administration and Disposition of Petroleum Belonging to Her Majesty in Right of the Provinces of Newfoundland.” 13-20. 9 Quoted in Oilweek (4 April 1977): 8. 10 Brian Peckford, Some Day the Sun Will Shine and Have Not Will Be No More (St. John’s: Flanker Press, 2012), 127. 11 Because it wanted to control the pace of development, Newfoundland had vowed to issue permits to limited parcels but Ottawa had already given out exploration and production rights for nearly the entire continental margin, which Newfoundland claimed was one “of the country’s most shocking examples of natural resources mismanagement.” See Stephen Kimber, “Tough Man on the Rock,” The Financial Post Magazine (February 1980): 36–41 and “A White Paper Respecting the Administration and Disposition of Petroleum Belonging to Her Majesty in Right of the Provinces of Newfoundland,” 36. 12 Peckford was not a nationalist in the vein of some who yearned for an independent Newfoundland and the loss of country in 1949, but he was driven by a sense that Newfoundland had to stand up and confront those who had allowed it to be pushed around. He welcomed outside investors but they had to expect a normal profit and pay a fair price for using the natural resources. 13 CNS, James McGrath Fonds, Coll-156, file 10.01.038, Brian Peckford to Joe Clark, 23 August 1979, and Joe Clark to Brian Peckford, 14 September 1979.

Notes to pages 178–87 367 14 “Liberal Leader Says Courts Must Decide Who Owns What,” Evening Telegram, 31 January 1980, 1–2. 15 Leslie Harris, “Newfoundland and Labrador,” in Canadian Annual Review of Polit­ ics and Public Affairs, 1980 (Toronto: University of Toronto Press, 1982), 336. 16 Government of Newfoundland and Labrador, Speech from the Throne, 25 February 1980. 17 According to the Dictionary of Newfoundland English, a crackie (or cracky) is a small, noisy mongrel dog. The word was also applied to a person who usually has a saucy tongue or a person who will answer back: http://www​ .heritage.nf.ca/dictionary/azindex/pages/1065.html. 18 House of Commons Debates, 10 October 1979, 36. 19 “Newfoundland’s Brian Peckford: Lean, Intense and Fiercely Proud,” Toronto Star, 4 September 1984. 20 Peckford has not been given much of the respect he deserves for his role in Canadian politics. See Howard Leeson, The Patriation Minutes (Edmonton: Centre for Constitutional Studies, 2012); and National Post, 15 April 1999. 21 For a discussion of nationalism and culture in Newfoundland history, see Jerry Bannister, “Making History: Cultural Memory in Twentieth-Century Newfoundland,” Newfoundland Studies 18, no. 2 (2002): 175–94; James Overton, “Progressive Conservatism? A Critical Look at Politics, Culture, and Development in Newfoundland,” Ethnicity in Atlantic Canada, (Fredericton: University of New Brunswick, 1985), 84–102; and Stephen Tomblin, Ottawa and the Outer Provinces (Toronto: James Lorimer & Company, 1995). 22 For a fuller discussion, see Janine Brodie, The Political Economy of Regionalism (Toronto: Harcourt Javanovich, 1990), especially Chapter 1; and Tomblin, “Newfoundland and Labrador at the Crossroads: Reform or Lack of Reform in a New Era?,” 100. 23 Brian Peckford, The Past in the Present: A Personal Perspective on Newfoundland’s Future (St. John’s: Harry Cuff Publications, 1983), vi. 24 Ibid., 57 and 61. 25 Peckford, The Past in the Present, 62. 26 Peckford made this point in a speech to the Canadian Club of Ottawa, 9 May 1984. 27 Speech from the Throne, 1979, quoted in Peckford, Some Day the Sun Will Shine and Have Not Will Be No More, 154. 28 Peckford, The Past in the Present, 73 and 76. 29 Peckford, Some Day the Sun Will Shine and Have Not Will Be No More, 131–2. 30 CNS, William Rompkey Fonds, Coll-269, file 3.01.027, Peckford to Rompkey, 1 April 1980. 31 Quoted in Peckford, Some Day the Sun Will Shine and Have Not Will Be No More, 154–6.

368  Notes to pages 188–93 32 Peckford, The Past in the Present, 79. 33 Ibid., 94–5. 34 Quoted in Globe and Mail, 15 March 1982, and Tom Axworthy, “After 1984 – A Liberal Revival,” Canadian Forum (November 1984). 35 Richard Gwyn makes a similar point about Macdonald on his return to the office of prime minister. See Richard Gwyn, Nation Maker: Sir John A. Macdonald: His Life, Our Times. Volume Two: 1867–1891 (Toronto: Random House Canada, 2011), 259–60. 36 Peckford, The Past in the Present, 69. 37 Quoted in R.B. Byers (ed.), Canadian Annual Review of Politics and Public Affairs 1980 (Toronto: University of Toronto Press, 1982), 21. 38 Globe and Mail, 9 June 1980, 1 and 10. 39 “No Match for the Master,” Globe and Mail, 22 May 1980. 40 Quoted in Ron Graham, The Last Act: Pierre Trudeau, the Gang of Eight and the Fight for Canada (Toronto: Allen Lane Canada, 2011), 27. 41 Rompkey Fonds, file 3.01.027, Trudeau to Neary, 6 July 1981. Trudeau later confirmed that it was an offer to Newfoundland in a letter to Newfoundland Liberal MHA. 42 Federal-Provincial Conference of First Ministers, Report of the Continuing Committee of Ministers on the Constitution to First Ministers on Offshore Resources, Ottawa, 8–12 September 1980, http://www.originaldocuments.ca/ documentBase/38162/pdf/1stMinistersOffshore1980Sep8.pdf. 43 Quoted in Graham, The Last Act, 87–8. 44 Government of Newfoundland and Labrador, “Province Wide Address by the Honourable A. Brian Peckford to the People of Newfoundland and Labrador,” 20 October 1980. 45 CNS, William Rompkey Fonds, Coll-269, file 5.04.081, Rompkey to Peckford, 23 October 1980. 46 Graham, The Last Act, 68–9. 47 Ibid., 43. 48 Trudeau Fonds, MG 32 G15, vol. 15, file 15, Peckford to Trudeau, 27 January 1982. 49 “Opening Statement by Honourable A. Brian Peckford, Premier of New­ foundland and Labrador, at the First Ministers’ Conference on the Canadian Constitution,” Ottawa, 2 November 1981: http://www.originaldocuments​ .ca/documentBase/37904/pdf/1stMinistersConfOpenStatePeckford1981N ov2.pdf. 50 The sequence of events at the conference and how each premier reacted to events remains a source of controversy and disagreement. In a television interview Roy Romanow, Jean Chrétien, and Roy McMurtry insist that Lévesque would not have agreed to any compromise on the Constitution

Notes to pages 194–7 369 because he was a separatist who wanted to break up Canada. They also suggest that when Lévesque agreed to a referendum on the Constitution, he broke with the Gang of Eight, but Lévesque maintains that he was going to present a compromise proposal on the morning of 4 November. See “The Three Amigos of the Constitution,” TVO, The Agenda with Steve Paikin, 18 April 2012, http://ww3.tvo.org/video/176436/three-amigos-constitution; and Robert Sheppard, “Secret, All Night Talks behind Historic Accord,” Globe and Mail, 6 November 1981, 10. 51 This account is based on confidential interview with several journalists and two government officials close to the negotiations, 18–22 October 2012. 52 “The Three Amigos of the Constitution.” 53 LAC, Kitchen Accord, http://collectionscanada.gc.ca/pam_archives/index​ .php?fuseaction=genitem.displayItem&lang=eng&rec_nbr=3912727&back_​ url=%28%29. 54 Claire Hoy, “The Truth Has Finally Come Out,” Orangeville Citizen, 20 Sep­ tember 2012; and Claire Hoy, Bill Davis: A Biography (Toronto: Methuen, 1985), 349. 55 Roy Romanow, “Reflections on the Kitchen Accord,” Constitutional Forum Constitutional vol 21. No 1 (2012): 1-5. 56 Sheppard, “Secret, All Night Talks behind Historic Accord,” 10. 57 Graham, The Last Act, 191, 208; and Leeson, The Patriation Minutes, 61. “Existing” Aboriginal rights were included before the constitution was finally adopted. Once details of the constitutional package were made available, women’s organizations were outraged that the notwithstanding clause (section 33) could override equality rights (section 28). When first ministers agreed to change the language to prevent such a development, they added “existing” Aboriginal rights to the Charter. 58 “Liberals in Limbo,” Globe and Mail, 31 March 1982. 59 Graham, The Last Act, 208, 217, and 226. 60 Stephen Azzi, “Giving Credit Where Credit’s Due: Rewriting the Patriation Story,” Canadian Encyclopedia, 17 September 2012, http://blog.thecanadianencyclopedia.com/blog/posts/ giving-credit-where-credits-due-rewriting-the-patriation-story/.. 61 See Brian Peckford, “A Fresh Stable at the Night of the Long Knives,” Globe and Mail, 6 September 2012. 62 “Highlights from the Ottawa Bureau,” Globe and Mail, 6 November 1981, 1. 63 “Accord Is Cheered Everywhere except Quebec,” Globe and Mail, 6 November 1982, 2. 64 Rosemary Speirs, “Surprise – ‘Bad Boy’ Peckford Helped Pull Rabbit from the Hat,” Globe and Mail, 6 November 1981, 10. Peckford is reported in the article as saying that he communicated with Lévesque on the consensus

370  Notes to pages 198–202 reached both on the night of 4–5 November 1981 and again on the morning of 5 November. He also said that he hoped for a “big pat on the back” from former Newfoundland premier Joseph R. Smallwood and the only ­living Father of Confederation. 65 Leeson, The Patriation Minutes, 65 and 97. 66 “Night of the Long Knives, Who Dunnit?”, National Post, 15 April 1999. 67 Leslie Harris, “Newfoundland and Labrador” in Canadian Annual Review of Politics and Public Affairs, 1981 (Toronto: University of Toronto Press, 1984), 455. 68 Canada, Budget Speech, 20 October 1980. 69 CNS, Edward Roberts Fonds, Coll-078, 16.01.060, Notes for an Address by The Honourable Allan J. MacEachen, 23 June 1981. 70 William Rompkey Fonds, file 3.01.027, Pierre Trudeau to Brian Peckford, 22 July 1981. 71 Peckford insisted that the issue of ownership be set aside and any negotiated agreement be incorporated into the Constitution. He was worried that Ottawa might follow the process adopted by the national government in Australia where the two levels of government had a negotiated settlement on the offshore mineral resources but walked away from a ten-year joint management agreement after the courts awarded jurisdiction to the ­national government. 72 “Newfoundland’s Proposal in Offshore Talks Tabled,” Globe and Mail, 17 March 1982, 10. 73 “Premier’s Conditions for Sharing Revenue: Peckford Tells Ottawa to Give up Resource Claim,” Globe and Mail, 11 February 1982; and Seafarers’ Int. Union of Can. V. Crosbie Offshore Services Ltd., [1982] 2 F.C. 855, 135 D.L.R (3d) 485, 82 C.L.L.C. 14, 180 (C.A.). Leave to appeal to S.C.C. ­refused (1981), 135 D.L.R. (3d) 485. 74 James McGrath Fonds, vol. 11.009.001, Pierre Trudeau to Brian Peckford, 12 February 1982; and Peckford, Some Day the Sun Will Shine and Have Not Will Be No More, 217–19. 75 Ref. re Mineral and Other Natural Resources of the Continental Shelf (1983), 145 D.L.R. (3d) 9, 41 Nfld & P.E.I.R. 271 (Nfld. C.A). 76 “Canada-Nova Scotia Agreement on Offshore Oil and Gas Resource Management and Revenue Sharing,” (Ottawa: Department of Mines, Energy and Resources Canada, 1982); Newfoundland Petroleum Directorate, Analysis of the Impact of a Nova Scotia-Type Agreement on Newfoundland (St. John’s: Department of Mines and Energy, 1982); “Memorandum to the Planning and Priorities Committee,” 3 March 1982, prepared by William Marshall (provided by Executive Council, Government

Notes to pages 202–5 371 of Newfoundland and Labrador); and André Plourde, “Canada” in George Andersons (ed.), Oil & Gas in Federal Systems (Don Mills, ON: Oxford University Press, 2012), 100–1. 77 During this intense period, the Ocean Ranger drilling rig sank in a storm on the Grand Banks with a loss of eighty-four men. In the aftermath of the tragedy both the federal and provincial government announced separate enquiries to investigate the disaster. In the end, though, the two governments agreed on a single investigation. See Globe and Mail, 19 and 26 February 1982. 78 A recent book has also questioned the Supreme Court’s relationship with the federal government during this period. See Frédéric Bastien, La bataille de Londres (Montreal: Editions du Boréal, 2013). Bastien contends that Supreme Court Chief Justice Bora Laskin revealed confidential information to Canadian and British officials during deliberations on the repatriation of the constitutional case in 1981. Shortly after the book’s publication, the Supreme Court announced that it would investigate the allegations. 79 Quoted in “Peckford Calls Vote in Battle over Oil,” Globe and Mail, 16 March 1982, 1. 80 Richard Johnston and Fred Cutler, “Popular Foundations of Divided Government in Canada.” Paper presented at 2003 Annual Meeting of the Canadian Political Science Association, Dalhousie University, Halifax. http://www.cpsa-acsp.ca/paper-2003/johnston.pdf. 81 CNS, Eugene Hiscock Fonds, Coll-182, file 6.01.013, Speech Given by the Prime Minister to the Liberal Party of Newfoundland and Labrador’s Fund Raising Dinner, St. John’s, 5 May 1981; William Rompkey, Newfoundland’s representative in Trudeau’s cabinet after the 1980 election made this point to Peckford. See William Rompkey Fonds, file 3.01.027, William Rompkey to Brian Peckford, 12 May 1981. Rompkey confirmed Trudeau’s position when he wrote Peckford: “It seems to me that if we are to hold together as a Country, and if we are to have self-sufficiency in energy by 1990, then we must proceed all across the Country on the basis of sharing and co-operation.” 82 “Peckford Gets More Muscle in Big Sweep,” Globe and Mail, 7 April 1982, 1. 83 “Pitfalls for Hibernia,” Globe and Mail, 6 May 1982, 6. 84 “Courts and Sparks,” and “Peckford declares day of mourning over Hibernia,” Globe and Mail, 20 May 1982, 6 and 8 85 Quoted in Peckford, Some Day the Sun Will Shine and Have Not Will Be No More, 221–2. 86 Government of Newfoundland, The Offshore: From the Table to the Bench (St. John’s: Government of Newfoundland, 1982). A copy of this four-page document was sent to every householder in the province.

372  Notes to pages 206–7 87 See “A New Leaf and New Marching Orders,” Globe and Mail, 10 December 1981, 8, and “A Boost for Liberals from Santa’s Bag,” Globe and Mail, 31 December 1981, 8. 88 “A Boost for Liberals from Santa’s Bag,” Globe and Mail, 31 December 1981, 8; “New Company Created: Ottawa Acts Unilaterally on Newfoundland Fishing,” Globe and Mail, 5 July 1983, 1; and “Nationalizing an Industry: After Two Years of Brutal Negotiations, Intrigue and Political Bickering, a New Fishery Is Born,” Globe and Mail, 5 November 1983, 10. The negotiations between Newfoundland and Ottawa over restructuring the processing sector in the 1980s have not been studied. It is another fascinating story in federal-provincial relations in Canada where local interests collide with state policies, and in the Fishery Restructuring Agreement that resulted in a restructured fish company, it was agreed that the provincial government be consulted on corporate decisions (such as plant closures, consolidation, mechanization) that might have a negative social on the province. 89 St. John’s Daily News, 31 January 1982. Although Peckford enjoyed popular support for his fight against Ottawa, his provocative and confrontational style also had its critics. Many in the business community blamed his obstinacy and intractability for delays in the development of the offshore, especially as Halifax seemed to be attracting more investment from the oil and gas sector. They feared that Halifax was winning the offshore sweepstakes. Harry Steele, owner of Eastern Provincial Airways, and Craig Dobbin, a prominent land developer and owner of Canadian Helicopter, both criticized Peckford’s inability to manage the province. Steele later moved his airline from Gander to Halifax to protest Peckford’s policy towards Ottawa. When it was announced in December 1981 that the Crosbie Group of Companies were in financial difficulty, Richard Spellacy, president and 49 per cent owner of Crosbie Offshore, blamed Peckford’s handling of the oil and gas industry for some of the economic problems facing New­ foundland and Newfoundland businesses. Globe and Mail, 29 December 1981 and 15 March 1982. 90 William Rompkey Fonds, file 5.04.154, “Statement by Honourable A. Brian Peckford,” 18 August 1982. Peckford also wrote to Rompkey asking him to arrange meetings between his ministers and their federal counterparts, claiming that it had been impossible for him to get meetings with federal ministers. See file 5.04.154, Peckford to Rompkey, 10 September 1982. 91 Trudeau Fonds, MG 26 O19, vol. 38, file 38, 5, “Memorandum, Offshore Negotiations – Keeping Mr. Rompkey’s Office up to Speed.” 92 William Rompkey Fonds, Michel Phelps, Executive Assistant to Lalonde, to R. Ward, Executive Assistant to Rompkey, 26 June 1981. The memo also noted that the federal action might upset Peckford.

Notes to pages 208–12 373 93 Crosbie, “The 1985 Canada-Newfoundland Atlantic Accord,” 261–3. 94 Eddie Goldenberg, The Way It Works: Inside Ottawa (Toronto: McClelland and Stewart, 2006), 171. 95 “Risk in Fighting Back,” Globe and Mail, November 23, 1984. 96 “Newfoundland Separatist Party Fizzling,” Globe and Mail, 27 May 1984, 9. 97 James McGrath Fonds, Coll-157, file 11.09.001, Memorandum to File, 18 November 1982. 98 William Marshall, “The Offshore ‘Flip-Flop’ by Ottawa,” The Daily News, 26 February 1983; William Marshall, Notes of the Atlantic Accord, quoted in Peckford, Some Day the Sun Will Shine and Have Not Will Be No More, 230, and “Ready to Draft Offshore Pact, 2 Ministers Say,” Globe and Mail, 13 January and “Chretien Softens Stand to Get Offshore Accord,” Globe and Mail, 14 January 1983. Jeffrey Simpson confirms the event in “Newfoundland vs Ottawa: How Offshore Deal Sank in a Sea of Suspicion,” a lengthy article in the Globe and Mail on 31 May 1984, 7. 99 “Offshore Oil Talks Collapse: Chretien Flip-Flop Charged,” Globe and Mail, 26 January 1983, 1. 100 William Marshall, Notes of the Atlantic Accord, quoted in Peckford, Some Day the Sun Will Shine and Have Not Will Be No More, 230; and “Ready to Draft Offshore Pact, 2 Ministers Say,” Globe and Mail, 13 January 1983, and “Chretien Softens Stand to Get Offshore Accord,” Globe and Mail, 14 January 1983 and “Newfoundland vs Ottawa: How Offshore Deal Sank in a Sea of Suspicion”, Globe and Mail, 31 May 1984. 101 Edward Roberts Fonds, file 16.01.058, “Notes for an Address by the Honour­ able Jean Chrétien to the Newfoundland and Labrador Construction associa­ tion,” 28 January 1983; “Settling Offshore Now up to Court: Chretien,” Globe and Mail, 29 January 1983, 3; and Evening Telegram, 29 January 1983, 1. 102 Government of Newfoundland and Labrador, The Offshore: We’ve Been Fair (St. John’s: Government of Newfoundland and Labrador, 1983). 103 James McGrath Fonds, Coll-156, file 10.01.039, Marshall to Chrétien, 1 March 1983; and “Liberal Chief Backs Peckford in Offshore Drilling Dispute,” Globe and Mail, 4 March 1983, 1–2. 104 The Ocean Ranger was a semi-submersible mobile offshore drilling rig working the Hibernia oil field when it sank during a severe winter storm on 15 February 1982. All eighty-four workers were lost, making it one of the worst marine disasters in Canadian history. 105 “Offshore Safety is ‘Utmost Priority,’” Globe and Mail, 12 March 1983, 7. See also James McGrath, Coll-156, vol. 11.09.001, Communique, “Chrétien Critical of Newfoundland Decision,” 25 February 1983 and attachments. 106 “Newfoundland, Petrocan Both Victims of Federal Offshore Initiative,” Globe and Mail, 1 August 1983, B6.

374  Notes to pages 212–17 107 In an editorial on 12 July 1983, the Evening Telegram called for an end to the bickering between Ottawa and St. John’s. It also added: “The only surprising thing about the whole offshore question is that it has taken Ottawa so long to act.” Marshall was horrified by the Telegram’s stance and asked “[are] we beyond anesthetised by transfer payments and commissions of government that we tolerate this.” He took out a full-page ad in the Globe and Mail on 14 July 1983 to explain Newfoundland’s position, reminding Ottawa that “Newfoundlanders are not idiots and it is high time patronizing federal politicians cease treating them as such.” 108 Similar decisions were handed down by the high courts in Australia and the United States in disputes in those countries between state and federal governments. 109 Reference Re Mineral and Other Natural Resources of the Continental Shelf (1983), 145 D.L.R (3d) 9. 110 Reference R Continental Shelf Offshore Newfoundland (1984) 1 S.C.R. 86; and Leonard LeBlanc, “Hibernia Plans Stalled in Dispute,” Offshore (January 1982): 54–8. In 1984, the Supreme Court of Canada ruled that the province owned the marine resources on the continental shelf between the mainland and Vancouver Island (what it called the “inner” shelf) but the federal government owned the “outer” shelf beyond the Strait of Georgia. 111 Trudeau Fonds, MG 26 O19, vol. 38, file 38, 5, Memorandum for the Prime Minister, prepared by David Crenna. 112 Trudeau Fonds, MG 26 O19, vol. 167, file 167, 51, Pierre Trudeau to Senator Austin, 13 April 1984; and Memorandum: Possible Constitutional Amendment Respecting Newfoundland Offshore, 14 May 1984. 113 Edward Roberts Fonds, 16.01.059, “Statement of the Honourable Jean Chrétien on Newfoundland and the Offshore,” 5 April 1984. 114 “Rivals Launch Offensive against Turner Policies,” Globe and Mail, 7 May 1984, 5. 115 James McGrath Fonds, Coll-156, file 10.01.039, Notes from Meeting between Mulroney and Peckford, 17 November 1983; and Plourde, “Canada,” 93–4. 116 Trudeau Fonds, MG 29 O19, vol. 38, file 38, 6, Brochure on Resources Offshore Newfoundland. 117 “Mulroney Set to Announce Energy Deal with Peckford,” Globe and Mail, 14 June 1984, 1. See Pat Carney, Trade Secrets: A Memoir (Toronto: Key Porter Books, 2000), 217–20. 118 See Jennifer Smith, “Intergovernmental Relations, Legitimacy, and the Atlantic Accords,” Constitutional Forum constitutionnel 17, no. 3 (2008): 81–98.

Notes to pages 218–22 375 119 The 1985 Canada-Newfoundland Atlantic Accord, or “Memorandum of Agreement Between the Government of Canada and the Government of Newfoundland and Labrador on Offshore Oil and Gas Resource Management and Revenue Sharing” was signed on 11 February 1985. The Legislature of Newfoundland subsequently approved the CanadaNewfoundland Atlantic Accord Implementation (Newfoundland) Act in 1986 and the Parliament of Canada approved the Canada-Newfoundland Atlantic Accord Implementation Act (S.C. 1987, c. 3) a year later. See also Crosbie, “The 1985 Canada-Newfoundland Atlantic Accord,” 267–8. 120 “NEP, Next on Hit List, Mulroney tells US group,” Globe and Mail, 11 December 1984, 1–2; and “Deal of a Decade,” “The Offshore Triumph,” and “St. John’s, Ottawa Sign Pact for Joint Deal on Offshore,” Globe and Mail, 12 February 1985, 1, 6, and 8. 121 Marshall to Becket (St. John’s Board of Trade), Executive Council, Government of Newfoundland and Labrador, 26 June 1985 (provided by Executive Council, Government of Newfoundland and Labrador). 122 “Mulroney Set to Announce Energy Deal with Peckford,” Globe and Mail, 14 June 1984, 1. 123 Brian Mulroney, Memoirs, 1939–1993 (Toronto: McClelland & Stewart, 2007), 354. 124 Quoted, Newfoundland and Labrador Heritage Website, http://www​ .heritage.nf.ca/law/atlantic_accord.html.. The Provincial Government wanted the Atlantic Accord entrenched in the Constitution. Clause 64 of the Atlantic Accord provided that: “The Government of Canada agrees that should the Government of Newfoundland and Labrador achieve the requisite support among the other provinces for the constitutional entrenchment of the Accord that it would introduce a mutually [acceptable] resolution into Parliament.” 125 John D. Whyte, “Constitutional Development in Canada,” in EuropeanAsian Journal of Low and Governance 2, no. 1 (2013): 1–14. 126 Speech from the Throne, Government of Newfoundland and Labrador, 25 April 1985. 7. Reason, Passion, and Intransigence: Federalism, Clyde Wells, and Brian Mulroney 1 Government of Newfoundland and Labrador, Speech from the Throne, 4 March 1993. 2 For a good discussion of the difference between the Peckford and Wells administrations, see Douglas M. Brown, “Sea-Change in Newfoundland:

376  Notes to pages 222–6 From Peckford to Wells” in Ronald Watts (ed.), Canada: The State of the Federation, 1990 (Kingston: Institute of Intergovernmental Affairs, 1990): 200–24. 3 Transcript of Premier Clyde Wells Address to the Newfoundland and Labrador Federation of Municipalities, 7 October 1989, in Selected Documents on Constitutional Reform, (St. John’s: Centre for Newfoundland Studies [hereafter CNS], Memorial University). 4 For an overview of the Wells administration, see Stephen Tomblin, “New­ foundland and Labrador at the Crossroads: Reform or a Lack of Reform in a New Era?,” Journal of Canadian Studies 37, no. 1 (Spring 2002): 89–108; and J. Douglas House, Against the Tide: Battling for Economic Renewal in Newfoundland and Labrador (Toronto: University of Toronto Press, 1999). 5 “Ottawa Braced for an End to Calm in Newfoundland,” Globe and Mail, 20 April 1988, 1–2. 6 Transcript of Premier Clyde Wells Address to the Newfoundland and Labrador Federation of Municipalities, 7 October 1989, in Selected Documents on Constitutional Reform, (St. John’s: CNS, Memorial University). 7 Government of Newfoundland and Labrador, “Opening Statement by Honourable Clyde Wells, Premier of Newfoundland and Labrador at the First Ministers’ Conference on the Economy,” 9–10 November 1989. 8 Government of Newfoundland and Labrador. Presentation to the Special Committee on the Proposed Companion Resolution to the Meech Lake Accord, by Clyde Wells, 1 May 1990. 9 Transcript of Premier Clyde Wells Address to the Newfoundland and Labrador Federation of Municipalities, 7 October 1989, in Selected Documents on Constitutional Reform, (St. John’s: CNS, Memorial University). 10 Brian Mulroney Speech at Sept-Iles, 6 August 1984. 11 There are a number of books that detail the events leading to the Meech Lake Accord. Some, such as Andrew Cohen’s A Deal Undone: The Making and Breaking of the Meech Lake Accord (Vancouver: Douglas and McIntyre, 1990), present the Meech process as an exercise in personality politics. Patrick Monahan offers the view of an insider in Meech Lake: The Inside Story (Toronto: University of Toronto Press, 1991). He puts Meech in the context of Canada’s constitutional history and considers the political atmosphere, constraints, and pressures in which the various first ministers operated. Ronald L. Watts and Douglas M. Brown (eds.), Canada: The State of the Federation 1993 (Kingston, ON: Institute of Intergovernmental Relations, 1993) provide a good overview of the accord that considers many dimensions involved in the workings of Canadian federalism. Alan C. Cairns points to the perils of executive federalism in Disruptions: Constitutional Struggles,

Notes to pages 227–32 377 from the Charter to Meech Lake (Toronto: McClelland and Stewart Inc., 1991). L. Ian MacDonald, From Bourassa to Bourassa: Wilderness to Restoration (Montreal and Kingston: McGill-Queen’s University Press, 2002) offers another insider’s account of the events surrounding Meech Lake. For an overview of accord’s various sections, see Brian Schwartz, Fathoming Meech Lake (Winnipeg: Legal Research Institute of the University of Manitoba, 1987). 12 Brian Mulroney, Memoirs 1939–1993 (Toronto: McClelland and Stewart, 2007), 516. 13 Press Release, 27th Annual Premiers’ Conference, Edmonton, Alberta, ­10–12 August 1986. This position was reaffirmed at the annual First Ministers’ Conference held in Vancouver several months later. 14 Saskatchewan Archives Board, Premier Grant Devine Fonds, BF 2–2, file 7.58.2, Mulroney to Devine [and all of the Premiers], 19 April 1987. 15 Devine Fonds, BF 2–2, file 7.58.4, Constitution Act, 1867, 11:50 PM, handwritten notes. 16 Mulroney, Memoirs, 540–5, offers the prime minister’s perspective on the negotiations. 17 “Peckford Proud of Deal,” Western Star, 4 June 1987. 18 Richard Simeon, “Why Did the Meech Lake Accord Fail?,” in Ronald L. Watt and Douglas Brown (eds.), Canada: The State of the Federation (Kingston: Institute of Intergovernmental Relations, 1990), 21. 19 Lysiane Gagnon, “Une solicitude suspecte,” La Presse, 18 August 1987. 20 Pierre Elliot Trudeau, “Say Goodbye to the Dream of One Canada,” in Roger Gibbins, (ed.), Meech Lake and Canada: Perspectives from the West (Edmonton: Academic Printing & Publishing, 1988), 66. Trudeau’s ­comments appeared in the Toronto Star, 27 May 1987. 21 The copy of his initial thoughts remains in the possession of the Honourable Clyde Wells. 22 This point is discussed at length in Monahan, Meech Lake: The Inside Story, 157–65. 23 “Newfoundland Liberals’ Win Raises Alarms in Ottawa,” and “Wells Pledges to Oppose Meech Lake Agreement,” Globe and Mail, 22 April 1989, 1–2. 24 John Crosbie, No Holds Barred: My Life in Politics (Toronto: McClelland and Stewart, 1997), 364; and “Brian Mulroney, Pierre Trudeau Drama Unveiled in Cabinet Minutes,” The Canadian Press, 23 March 2014 (http://www.cbc​ .ca/news/politics/brian-mulroney-pierre-trudeau-meech-lake-drama-unveiledin-cabinet-minutes-1.2583552). 25 “Newfoundland Liberals’ Win Raises Alarms in Ottawa,” and “Wells Pledges to Oppose Meech Lake Agreement,” Globe and Mail, 22 April 1989, 1–2. Crosbie had said in an interview with the newspaper: “We’ll play ball with them if they

378  Notes to pages 232–6 play ball with us. However, if they want … to reopen old issues like Meech Lake and so on, then we’ll have to reassess the situation. Such a move would certainly affect our relationship with the Newfoundland government.” 26 “Bourassa Clarifies Quebec’s Position on the Notwithstanding Clause,” Globe and Mail, 22 April 1989, 9. 27 “Mr. Wells Makes Three,” Globe and Mail, 22 April 1989, 6. 28 “Mr. Wells Lengthens Meech Lake Odds,” Globe and Mail, 9 October 1989, 6. 29 “Complacent Ontario Fiddles While Meech Lake Burns,” Globe and Mail, 28 October 1989, 14. 30 On the role of the media, see David Taras, “The Mass Media and Political Crisis: Reporting Canada’s Constitutional Struggles,” Canadian Journal of Communication 18, no. 2 (1993); and James Winter, “The Media, the Meech Lake Accord, and the Attempted Manufacture of Consent,” The Electronic Journal of Communication 1, no. 2 (1991). 31 Philip Lee, Frank: The Life and Politics of Frank McKenna (Fredericton: Goose Lane Editions, 2001), 151. 32 Monahan, Meech Lake: The Inside Story, 172–3 and 176–7. 33 “Wells a Star on Political Stage,” Globe and Mail, 22 April 1989, 9. 34 Lee, Frank: The Life and Politics of Frank McKenna, 153. 35 Wells Speech at Osgoode Hall Law School, 4 October 1989; “Pierre Trudeau Returns as Premier of Newfoundland,” Globe and Mail, 5 October 1989, 7; and “Will Stand by Principles, Meech Opponents Vow,” Globe and Mail, 9 June 1989, 12. 36 This episode is recounted in Deborah Coyne, Rolling of the Dice: Working with Clyde Wells during the Meech Negotiations (Toronto: James Lorimer & Company, 1992), 57–8. 37 “Cabinet to Push Meech Message,” Globe and Mail, 31 August 1990, 12. 38 “End Meech Deadlock, Broadbent Urges,” Globe and Mail, 27 October 1989, 1–2. 39 “Newfoundland Move on Meech Accord Worries Ottawa,” Globe and Mail, 23 September 1989, 3. 40 “McKenna, Wells Fire First Anti-Meech Volleys after Quebec Vote,” Globe and Mail, 27 September 1989, 5. 41 “Newfoundland Premier says PM Using Scare Tactics on Meech Pact,” Globe and Mail, 24 June 1989, 2. 42 “Ottawa Must Change Meech, Wells Says,” Globe and Mail, 5 October 1989, 17. 43 Government of Newfoundland and Labrador, “Opening Statement by Honourable Clyde Wells, Premier of Newfoundland and Labrador at the

Notes to pages 237–41 379 First Ministers’ Conference on the Economy,” 9–10 November 1989; and “Opposing Meech Lake,” Globe and Mail, 1 August 1989, 6. 44 Clyde Wells to Brian Mulroney, 18 October 1989, Selected Documents on Constitutional Reform (St. John’s: CNS, 1991); Government of Newfoundland and Labrador, Office of the Premier, Premier Wells Outlines Objections to Meech Lake Accord, 20 October 1989; and Coyne, Roll of the Dice, 11–15. 45 “Newfoundland Premier Says PM Using Scare Tactics on Meech Pact,” Globe and Mail, 24 June 1989, 2. 46 “Transcript of Premier Clyde Wells’ Address to the Northwest Rotary Club,” 24 October 1989, Selected Documents on Constitutional Reform (St. John’s: CNS, 1991). 47 Wells Speech at Osgoode Hall Law School, 4 October 1989; and “Pierre Trudeau Returns as Premier of Newfoundland,” Globe and Mail, 5 October 1989, 7. 48 CNS, M.O. Morgan Fonds, Coll-083, file 5.02.001, Clyde Wells to Moses Morgan, 12 December 1989; “Wells Says Accord Could Fuel Bitterness,” Globe and Mail, 11 October 1989, 5. See also Geoffrey Martin, “The COR Party of New Brunswick as an ‘Ethnic Party,’” Canadian Review of Studies in Nationalism 23, nos. 1–2 (1996): 1–8. 49 “Opposing Meech Lake,” Globe and Mail, 1 August 1989, 6. 50 “Leaders’ Power Assailed,” Globe and Mail, 23 August 1989, 3. 51 Coyne, Roll of the Dice, 10–11; and “Leaders’ Power Assailed,” Globe and Mail, 23 August 1989, 3. 52 “Transcript of Premier Clyde Wells’ Address to the Northwest Rotary Club,” 24 October 1989 (St. John’s: CNS, 1991). Wells frequently reminded people that Vermont with fewer people than Newfoundland had two senators, the same number as California which had more people than the whole of Canada. 53 “By-election Delays Vexes Newfoundland Liberals,” Globe and Mail, 30 Novem­ ber 1987, 3. 54 “Opposing Meech Lake, Globe and Mail, 1 August 1989, 6. 55 Clyde Wells, Speech to Canadian Club of Montreal, 20 January 1990. 56 “Newfoundland Premier says PM Using Scare Tactics on Meech Pact,” Globe and Mail, 24 June 1989, 2. 57 Wells Speech at Osgoode Hall Law School, 4 October 1989; and Robert Sheppard, “Pierre Trudeau Returns as Premier of Newfoundland,” Globe and Mail, 5 October 1989, 7. 58 Clyde Wells, Speech to Canadian Club of Montreal, 20 January 1990. Generously provided by the Honourable Clyde Wells.

380  Notes to pages 241–5 59 Transcript of Premier Clyde Wells’ Address to the Newfoundland and Labrador Federation of Municipalities, 7 October 1989, in Selected Documents on Constitutional Reform (St. John’s: CNS, 1991). 60 Wells to Mulroney, 18 October 1989, Selected Documents on Constitutional Reform (St. John’s: CNS, 1991); Government of Newfoundland and Labrador, Office of the Premier, “Premier Wells Outlines Objections to Meech Lake Accord, October 20, 1989”; and Coyne, Roll of the Dice, 11–15. 61 Brian Mulroney to Clyde Wells, 2 November 1989, and Clyde Wells to Brian Mulroney, 6 November 1989 (St. John’s: CNS, 1991). 62 Government of Manitoba, Report of the Manitoba Task Force on Meech Lake, Winnipeg, 23 October 1989; and Susan Delacourt, “Newfoundland Premier is Siding with Manitoba in Opposition to Accord,” Globe and Mail, 26 October 1989, 1. 63 See Gil Rémillard, “Quebec’s Quest for Survival and Equality Vis the Meech Lake Accord,” in Réal A. Forest (ed.), L’adhésion du Québec à l’Accord du Lac Meech – Points de vue juridiques publiques, (Montréal: Les Éditions Thénism 1988); and “Quebec Proposes Working with N.B. to Salvage Meech?” Globe and Mail, 26 October 1989, 1. 64 “Is There Any Hope for Meech Lake?” Globe and Mail, 25 October 1989, 6. 65 Newfoundland and Labrador, House of Assembly, Debates, 8 November 1989. 66 Coyne, Roll of the Dice, 37–8; and “Dissidents See Outcome as Victory,” Globe and Mail, 11 November 1989, 2. 67 “Constitutional Proposal: An Alternative to the Meech Lake Accord,” Submitted by the Government of Newfoundland and Labrador to the First Ministers’ Conference, 9 and 19 November 1989 (St. John’s: CNS, 1991). 68 Ibid. 69 “PM Says No to Meech Referendum,” Globe and Mail, 10 November 1989, 12. 70 Ibid., 1 and 12. 71 Coyne, Roll of the Dice, 42; and “PM and Premier Agree on Attempt to Save the Accord,” Globe and Mail, 22 November 1989, 1 and 12; and “Dissidents See Outcome as Victory,” Globe and Mail, 11 November 1989, 1–2. 72 “Foes of Meech Riding a Wave of Intolerance, Peterson Says,” Globe and Mail, 30 November 1989, 1. 73 Lee, Frank: The Life and Politics of Frank McKenna, 153; and “Not Optimistic about the Future of Meech, N.B. Premier Says,” Globe and Mail, 9 January 1990, 9. 74 Coyne, Roll of the Dice, 23. 75 “Meech Lake: Shadow-boxing on the Plains of Abraham,” Globe and Mail, 30 December 1989.

Notes to pages 246–51 381 76 Coyne, Roll of the Dice, 49–50; Susan Delacourt, “Wells Rejects Warning by Stanfield, Pickersgill,” Globe and Mail, 11 January 1990, 11. 77 “Quebec Headed for ‘Divorce’ if Meech Dies, Businessman Says,” Globe and Mail, 21 February 1990, 10. 78 “Quebec MPs Issue Warning about Future,” Globe and Mail, 14 March 1990, 5. 79 “Wells Carries Attack on Meech into Quebec,” Globe and Mail, 20 January 1990, 7. A vast number of Canadians supported Wells’ position. In the month following his heated exchange with Mulroney at the First Ministers’ Conference in November 1989, Wells received 3,354 letters of support and 15 against. Between November 1989 and June 1990, Wells received more than 30,000 letters from Canadians offering their views of Meech. 80 “Wells Vows to Revoke Meech Vote,” Globe and Mail, 9 March 1990, 1 and 2. 81 Coyne, Roll of the Dice, 69. 82 “Mulroney’s Strategy on Meech Involves Letting the Heat Build Up,” Globe and Mail, 10 March 1990, 12. 83 “We Will Wait – and Wait – for Call from PM,” Globe and Mail, 17 March 1990. 84 “No Secret Talks on Meech Logjam, Wells Is Assured,” Globe and Mail, 10 March 1990, 1–2; “Mulroney to Respond to N.B. Meech Proposal,” Globe and Mail, 22 March 1990, 1–2. 85 “Mind Own Business, PM tells Wells,” Globe and Mail, 15 March 1990, 1–2. 86 Quoted in Lee, Frank: The Life and Politics of Frank McKenna, 155. 87 Excerpt from Mulroney’s diary is printed in Mulroney, Memoirs, 732; this ­relationship between McKenna and others is discussed in Coyne, Roll of the Dice, 19–22. Coyne’s assertions are supported in Monahan, Meech Lake: The Inside Story, 188–9. 88 “Rescue Bid to Begin as Meech Hopes Dim,” Globe and Mail, 9 April 1990, 5. 89 Quoted in Lee, Frank: The Life and Politics of Frank McKenna, 157. 90 Library and Archives Canada, Eugene Forsey Fonds, MG 30 A25, vol. 64, file 64–2, Deborah Coyne to Eugene Forsey, 21 February 1990. 91 Quoted in Lee, Frank: The Life and Politics of Frank McKenna, 157. 92 Government of Newfoundland and Labrador. Presentation to the Special Committee on the Proposed Companion Resolution to the Meech Lake Accord, by Clyde Wells, 1 May 1990 93 Government of Newfoundland and Labrador, New Release and Proposal for a Revised Constitutional Accord, 22 March 1990. Provided by the Honourable Clyde Wells. 94 Ibid.; and Rhéal Seguin, “Risking Canada’s Future, Bourassa Warns Premier,” Globe and Mail, 22 March 1990, 1 and 12. 95 “Meech Rejection Called Provocation,” Globe and Mail, 7 April 1990, 1–2. Newfoundland Finance Minister Hubert Kitchen had linked the province’s

382  Notes to pages 251–6 rejection of Meech to the Churchill Falls power contract: “They got us by the short hairs on Upper Churchill. We’ve got them in the same place on Meech Lake.” Wells distanced himself from the comments, calling them “misfortunate, inappropriate, unacceptable and offensive.” 96 “Balloting on Accord Proposed by Wells,” Globe and Mail, 23 March 1990, 1–2. 97 “Rescue Efforts Failing to Bridge Meech Chasm,” Globe and Mail, 26 March 1990, 1–2. 98 There was considerable concern that the committee chose to hear from politicians and constitutional experts rather than “ordinary” Canadians. Robert Shepard reported that in Newfoundland, as was the case in Manitoba, ordinary Canadians were given ten minutes each to voice their concerns on the last morning of public hearings when the committee met in St. John’s. See “A Meech Lake Passion Play in Two Scenes from Newfoundland: The Provinces,” Globe and Mail, 1 May 1990, 7. 99 “The Meech Lake Accord. An Address to the Canadian Club of Montreal by The Honourable Clyde K. Wells, January 19, 1990,” Government of Newfoundland Labrador, A Collection of Position Papers and Speeches Relating to Newfoundland’s Constitution Position, October 1989 to September 1991; and Clyde Wells, “Canadians Are Rejecting the Dismantling of Federalism,” Globe and Mail, 14 April 1990, D01. 100 Hugh Windsor, “Wells Was Lightning Rod for Anti-French Feeling, Polls Show,” Globe and Mail, 10 July 1990. 101 Clyde Wells, “Canadians Are Rejecting the Dismantling of Federalism,” Globe and Mail, 14 April 1990, D01. 102 Ibid. 103 “PM Calling 10 Premiers to Evaluate Meech Report,” Globe and Mail, 17 May 1990, 1–2. 104 “Unacceptable Demands Being Made, Bourassa Says,” Globe and Mail, 18 April 1990, 1 and 11; and “Meech Opponents Ready to Bend,” Globe and Mail, 18 May 1990, 1–2; and Kevin Cox, “Elated N.B. Premier Makes Plea for Unity,” Globe and Mail, 18 May 1990, 11. 105 “Senate Reform Called a ‘Glimmer of Hope’ for Approval of Accord,” Globe and Mail, 11 May 1990, 10. 106 “Among the Guilty Parties,” Globe and Mail, 23 May 1990, 6; and “Responding to Quebec Nationalism,” Globe and Mail, 24 May 1990, 6. 107 Monahan, Meech Lake: The Inside Story, 198–9; and “Mulroney Summons Premiers for Talks,” Globe and Mail, 26 May 1990, 1–2. 108 Quoted in Mulroney, Memoirs, 769–70. 109 “Senate Reform Key to Deal on Meech,” Globe and Mail, 28 May 1990, 1–2.

Notes to pages 257–61 383 110 “Wells Tables Meech ‘Add-on’ List in Newfoundland’s Legislature,” Globe and Mail, 31 May 1990, 9. 111 Monahan, Meech Lake: The Inside Story, 199. 112 Quoted in Peter C. Newman, The Secret Mulroney Tapes: Unguarded Confessions of a Prime Minister (Toronto: Random House Canada, 2005), 144. 113 “Marathon Talks Were All Part of the Plan, PM Says,” Globe and Mail, 12 June 1990, 1–2. 114 Mulroney, Memoir, 786–7. 115 Apparently, Senator Lowell Murray kept the only notes from the meetings. They are reprinted in Mulroney, Memoirs, 1016–45. 116 Patrick Monahan was present in Ottawa for the week, and he provides a first-hand account of how he saw the events unfold. See Monahan, Meech Lake: The Inside Story, 198–237; “Trying to Build a Nation with Commas and Subjunctive Clauses,” Globe and Mail, 6 June 1990, 7. 117 Devine Fonds, BF 2–2, Accession No. R91–281, file 13.57.4, First Ministers’ Meeting on the Constitution, Final Communiqué, 9 June 1990. 118 First Ministers’ Conference on the Constitution. Verbatim Transcript, Ottawa, 9–10 June 1990. Provided by the Honourable Clyde Wells. 119 Toronto Sunday Star, 10 June 1990, 1–2. 120 Final Communiqué, First Ministers’ Meeting of the Constitution, 9 June 1990; Statement by Premier Clyde Wells, 3 July 1990; “Wells Seeks Extension of Meech Deadline,” Globe and Mail, 11 June 1990, 1–2; “Eloquence, Fear, Euphoria, Rage All Part of the 7-day Meech War,” Globe and Mail, 11 June 1990, 1 and 8. 121 Peterson confirms this in a conversation with Peter C. Newman. See Newman, The Secret Mulroney Tapes, 144. 122 “Eloquence, Tears, Euphoria, Rage All Part of the 7-day Meech War,” Globe and Mail, 11 June 1990, A1, A8. Ghiz and Wells never attended law school together and Ghiz denies the exchange took place, though Graham Fraser who wrote the Globe and Mail article continues to stand by the story. The episode is discussed in Allan Levine, Scrum Wars: The Prime Minister and the Media (Toronto: Dundurn Press Limited, 1993), 358. 123 Ibid. 124 “Meech Deal Emerges for Public Debate,” Globe and Mail, 9 June 1990, 1–2. 125 The Ottawa Citizen, 10 June 1990, 1–2. 126 Mulroney, Memoirs, 786–7. 127 Evening Telegram, 13 June 1990. 128 “We’ve Been Shoved Aside, Manitoba Cree Leader Says,” Globe and Mail, 13 June 1990, 1–2.

384  Notes to pages 261–6 129 André Picard, “Wells Challenges Supporters of Meech,” Globe and Mail, 14 June 1990, 4. 130 Devine Fonds, BF 2–2, Accession No. R91–281, file 13.57.4, Speaking Notes for Address to Newfoundland House of Assembly. 131 Morgan Fonds, Box 502 Meech Lake; Mulroney, Memoirs, 784–6; and Cabinet Minutes, 22 June 1990. These were obtained by Canadian Press through Access to Information Act, 23 March 2014 (http://www.scribd​ .com/doc/213778852/1990-cabinet-meeting-minutes-about-the-MeechLake-accord). 132 Mulroney, Memoirs, 788–9. 133 Crosbie recounts his efforts in Crosbie, No Holds Barred, 366–8. 134 Quoted in Newman, The Secret Mulroney Tapes, 141; and Statement by Premier Clyde Wells, 3 July 1990, provided by the Honourable Clyde Wells. 135 Cabinet Minutes, 22 June 1990. These were obtained by Canadian Press through Access to Information Act, 23 March 2014 (http://www.scribd​ .com/doc/213778852/1990-cabinet-meeting-minutes-about-the-MeechLake-accord). 136 Government of Newfoundland and Labrador, Hansard Verbatim Report, 22 June 1990; and Statement by Premier Clyde Wells, 24 June 1990, provided by the Honourable Clyde Wells. 137 CNS, Thomas Rideout Fonds, Coll-258, file 4.16.003, Omnifacts Research, Press Release, 22 June 1990. 138 Statement by Senator Lowell Murray, 22 June 1990. A copy of the remarks was sent from Norman Spector to Peter Kennedy, Deputy Minister of Intergovernmental Affair, Government of Newfoundland and Labrador. Copy provided by the Honourable Clyde Wells. 139 These events are described in several places, including Coyne, Roll of the Dice, 141–7; “Meech Dies as Wells Puts off Vote,” Globe and Mail, 23 June 1990, 1–2; and “Wells Hopes for Dialogue with Quebec,” Globe and Mail, 25 June 1990, 4. 140 Cabinet Minutes, 22 June 1990. These were obtained by Canadian Press through Access to Information Act, 23 March 2014 (http://www.scribd​ .com/doc/213778852/1990-cabinet-meeting-minutes-about-the-MeechLake-accord). 141 Newman, The Secret Mulroney Tapes, 129. 142 Quoted in Mulroney, Memoirs, 791–2. Mulroney loyalist L. Ian MacDonald has pointed out that after Chrétien became prime minister he included many of the opponents of the Meech Lake Accord in his long list of federal appointments. Wells became Chief Justice of Newfoundland; Carstairs was appointed to the Senate in 1994 and later to the cabinet as government

Notes to pages 267–9 385 leader in the senate; Coyne was appointed to the Immigration and Refugee Board; Harper joined the Liberal party and was appointed to the Indian Claims Commission in 1997. See MacDonald, From Bourassa to Bourassa, 320. 143 “Wells Quits as Premier,” Globe and Mail, 20 December 1996, 1–2. Wells remarked that Canadians might forgive him for his stand on Meech, but they would never forgive him for his part in keeping Mulroney around for another two years. Mulroney had said he would have resigned in 1990 if Wells had not helped to kill Meech. 144 Rideout Fonds, Coll-258, News Statement, Opposition Leader Tom Rideout, 29 June 1990. Rideout also asserted that Wells cancelled the vote because he knew the accord would pass the House of Assembly, “a result he would never have allowed to happen.” The government records for the period are closed to researchers but the relationship between experienced constitutional and intergovernmental bureaucrats and the Premier’s Office were tense after Coyne arrived. 145 “MPs’ Anger over Meech May Delay Hibernia Approval,” Globe and Mail, 26 June 1990, 1 and 4. The federal and provincial governments had signed a statement of principle with the four-company consortium in 1988 before Wells became premier and he was critical of the agreement. Newfoundland had made too many concessions, including exempting the total capital spending of $8.5 billion from provincial sales tax. Moreover, the province had agreed to impose only a 4 per cent tax on operating expenditures of $10 billion during the expected eighteen-year life of the project. Newfound­ land’s gain in royalties depended on the price of oil, but Wells pointed out that for every dollar it received in royalties, the federal government ­reduced equalization payments by 97 or 98 cents. “Wells Cautious about Hibernia,” Globe and Mail, 19 September 1990, B01–2. 146 “Tories Push New Agenda to Defuse Controversy,” Globe and Mail, 27 June 1990, 1–2. 147 Mulroney, Memoirs, 811–12 and 837; and John C. Crosbie, No Holds Barred, 440–9. 148 Quoted in Newman, The Secret Mulroney Tapes, 425. 149 Citizen’s Forum on Canada’s Future: Report to the People and Government of Canada (Ottawa: Supply and Services Canada, 1991). 150 For an assessment of the proposals, see Douglas Brown, Robert Young, and Dwight Herperger (eds.), Constitutional Commentaries: An Assessment of the 1991 Federal Proposals (Kingston, ON: Institute of Intergovernmental Relations, Queen’s University, 1992). 151 “Canada’s Future in the People’s Court,” Globe and Mail, 25 September 1991, 1–2. For an overview of the Charlottetown process, see Peter H.

386  Notes to pages 269–74 Russell, Canada’s Constitutional Odyssey: Can Canadians Become a Sovereign People?, 3rd ed. (Toronto: University of Toronto Press, 2004), 154–227. 152 Many elements of that debate are considered in Kenneth McRoberts and Patrick Monahan (eds.), The Charlottetown Accord, the Referendum, and the Future of Canada (Toronto: University of Toronto Press, 1993). 153 Government of Canada, Special Joint Committee on a Renewed Canada, Report of the Special Joint Committee on a Renewed Canada (Ottawa: Supply and Services, 1992). 154 Constitutional Committee of the Quebec Liberal Party (Allaire Report) (Montreal: Quebec Liberal Party, 1991). 155 Government of Newfoundland and Labrador, Commentary on the Federal Government’s Proposals, Shaping Canada’s Future Together, to the Newfoundland and Labrador Committee on the Constitution. Presented by The Honourable Clyde Wells, 22 October 1991. 156 “Looking at the Constitutional Gambits,” Globe and Mail, 18 January 1992, 6. 157 On the Charlottetown Accord, see Peter Leslie, Rebuilding the Relationship: Quebec and Its Confederation Partners (Kingston: Institute of Intergovernmental Relations, 1987); and Ian Peach, “Building or Severing the Bonds of Nationhood? The Uncertain Legacy of Constitution Making in the Mulroney Years,” in Raymond Blake (ed.), Transforming the Nation: Canada and Brian Mulroney (Montreal and Kingston: McGill-Queen’s University Press, 2007), 80–112. 158 Conversation with Premier Clyde Wells, 19 February 2013; and “Premiers Design New Senate,” Globe and Mail, 20 August 1992, 1–2. 159 “Compromises Were Crucial in Making a Deal,” Globe and Mail, 24 August 1992, 1 and 5. 160 Quoted in Mulroney, Memoirs, 951. 161 Government of Newfoundland and Labrador, Notes for Address by the Honourable Clyde Wells, to The Canadian Bar Association, Vancouver, 8 October 1992. 162 “Newfoundland Debate Becomes Slugfest,” Globe and Mail, 23 October 1991, 10. 163 “Unity Needs a New Definition,” Globe and Mail, 1 November 1995, 1–2. 164 Government of Newfoundland and Labrador, Notes for Remarks by The Honourable Clyde K. Wells, Premier of Newfoundland and Labrador, to The Special Colloquium of the School of Public Administration, Carleton University, 5 June 1991. 165 Ibid. 166 See Charles Taylor, Reconciling the Solitudes: Essays on Canadian Federalism and Nationalism (Montreal and Kingston: McGill-Queen’s University Press,

Notes to pages 274–8 387 1993); Jane Jenson, “Naming Nations: Making Nationalist Claims in Canadian Public Discourse,” Canadian Review of Sociology and Anthropology 30 (1993): 337–58; James Tully, “The Crisis of Identification: The Case of Canada,” Political Studies 47 (1994): 77–96; and Jeremy Webber, Reimaging Canada: Language, Culture, Community, and the Canadian Constitution (Montreal and Kingston: McGill-Queen’s University Press, 1994). 167 Robert Vipond, “What Became of the Compact Theory? Meech Lake and the Politics of Constitutional Amendment in Canada,” Queen’s Quarterly 96, no. 4 (Winter 1989): 793–812. 8. The Battle for a Fair Share: Danny Williams, Equalization, and Ottawa 1 Government of Nova Scotia, Premier’s Office, “Campaign for Fairness Goes to Ottawa,” 6 February 2001. http://novascotia.ca/news/release/​ ?id=20010206007. 2 Government of Newfoundland and Labrador, Our Place in Canada, Final Report, Royal Commission on Renewing and Strengthening our Place in Canada (St. John’s: Queen’s Printer, 2003), 60–3. 3 For a good discussion of equalization and the Atlantic Accord, see Jennifer Smith, “Intergovernmental Relations, Legitimacy, and the Atlantic Accords,” Constitutional Forum constitutionnel 17, no. 3 (2008): 81–98. 4 Our Place in Canada, 92–3. 5 For one of the simplest and most accurate descriptions of how equalization works in Canada, see Our Place in Canada, 93–4. 6 Ibid. 7 There is an extensive and growing list of publications on the impact of oil and gas on public policy in Newfoundland. See Angela Carter, Economic Development Benefits of the Oil and Gas Industry in Newfoundland and Labrador, Conference Report (St. John’s: The Leslie Harris Centre of Regional Policy and Development, 2007); Wade Locke, “Offshore Oil and Gas: Is Newfound­ land and Labrador Getting Its Fair Share?” Memorial Presents, 2007; Scott Reid and Jeff Collin, “Oil, Politics and Public Policy: A Case Study of Newfound­ land and Labrador,” Paper Presented to CPSA Annual Meeting, Edmonton, AB, 2012. http://www.cpsa-acsp.ca/papers-2012/Reid-Collins.pdf; Jack Mintz and Duanjie Chen, “Taxing Canada’s Cash Cow: Tax and Royalty Burdens on Oil and Gas Investments,” University of Calgary School of Public Policy Briefing Notes 3, no. 3 (February 2010); James Feehan, “Equalization and the Provinces’ Natural Resource Revenue: Partial Equalization Can Work Better,” in Harvey Lazar (ed.), Canadian Fiscal Arrangements (Kingston, ON: Institute of Intergovernmental Relations, 2005): 185–208.

388  Notes to pages 278–84 8 Ibid, 95–7. 9 Ibid, 64–6. 10 Christopher Dunn, “Why Williams Walked, Why Martin Balked: the Atlantic Accord in Perspective,” Policy Options February 2005: 9–14. 11 Quoted on CBC News Indepth, Danny Williams, 17 October 2006. http:// web.archive.org/web/20040831151742/http://www.cbc.ca/news/ background/williams_danny/ 12 For an interesting and provocative discussion of Williams, see Alex Marland, “Masters of Our Own Destiny: The Nationalist Evolution of Newfoundland Premier Danny Williams,” International Journal of Canadian Studies 42 (2010): 155–81. Marland considers Williams in light of the literature on nationalism, populism, and regionalism, and concludes that “Newfoundland is passing through a partisan cycle whereby co-operative federalism, benign nationalism, and influential regional ministers are exchanged for competitive federalism, malign nationalism, and noisy premiers.” Williams led a “nationalist evolution, not a political revolution.” See also Harry Hiller, “Dependence and Independence: Emergent Nationalism in Newfoundland,” Ethnic and Racial Studies 10, no. 3 (1987). 13 On the issue of charismatic leadership, see Ann Ruth Willner, The Spellbinders: Charismatic Political Leadership (New Haven: Yale University Press, 1985), 1–17; and Boas Shamir, Michael B. Arthur, and Robert J. House, “The Rhetoric of Charismatic Leadership: A Theoretical Extension, a Case Study, and Implications for Research,” The Leadership Quarterly 5, no. 1 (Spring 1994): 25–42. 14 Jonathan Gatehouse, “Premier Williams Gives Prominence to Newfound­ land’s Concerns,” Maclean’s, 20 December 2004. 15 Quoted in Marland, “Masters of Our Own Destiny,” 168. 16 This notion is expressed in many of the documents produced by the Williams administration. See, for example, the Budget Speech in 2007, House of Assembly Proceedings 45, no. 3 (26 April 2007). 17 Government of Newfoundland and Labrador, News Releases, Premier Danny Williams, Speaking Notes, St. John’s Board of Trade, 12 September 2007. 18 The Atlantic Accord, Memorandum of Agreement Between the Government of Canada and the Government of Newfoundland and Labrador On Offshore Oil and Gas Resource Management and Revenue Sharing, 11 February 1985. http://www.servicenl.gov.nl.ca/printer/ publications/aa_mou.pdf. 19 Ibid, 156. 20 Ibid, 2–3. 21 Ibid.

Notes to pages 285–90 389 22 Quoted in ibid., 117. 23 Ibid, 119–21. These recommendations were based on a world price for oil at $24US. 24 This quote comes from an offer that the Government of Canada made to Newfoundland on 2 September 1982 to settle the question of jurisdiction on the offshore. It is quoted in John C. Crosbie, “The 1985 CanadaNewfoundland Atlantic Accord,” in Collected Research Papers of the Royal Commission on Renewing and Strengthening Our Place in Canada, vol. 3, 237–8. 25 Quoted in ibid., 240. 26 John Crosbie, “The Atlantic Provinces Only Want What’s Supposed to Be Coming to Them, Says Former Cabinet Minister. Are You Listening, Mr. Chretien?” Globe and Mail, 10 September 2001. 27 Government of Canada, Standing Senate Committee on National Finance, The Effectiveness of and Possible Improvements to the Present Equalization Policy. Fourteenth Report, March 2002. http://www.parl.gc.ca/Content/SEN/ Committee/371/FINA/rep/rep14mar02-e.htm. 28 The Honourable Stéphane Dion, Minister of Intergovernmental Affairs, Open Letter in Response to the September 10 Op-ed Piece by John Crosbie, in “Mr. Crosbie Got It Wrong,” Globe and Mail, 3 March 2001, 15. 29 Our Place in Canada, 121–2. 30 Quoted in Marland, “Masters of Our Own Destiny,” 168. 31 Government of Newfoundland and Labrador, News Releases, Premier Danny Williams, Speaking Notes, St. John’s Board of Trade, 12 September 2007. 32 Government of Newfoundland and Labrador, News Releases, “Premier Williams Outlines Province’s Position on Equalization Heading into First Ministers’ Meeting,” 12 October 2004; and Interview with Danny Williams, Maclean’s, 16 February 2004. http://www.thecanadianencyclopedia.com/ articles/macleans/danny-williams-interview. 33 Government of Newfoundland and Labrador, News Releases, “Premier Announces Appointment of Bill Rowe to Newly Established Ottawa Office,” 27 July 2004. Historian John FitzGerald was appointed to the position on 3 May 2006 to succeed Rowe. 34 Paul Wells, “Offshore Pressure: What Newfoundland Wants – and Why Danny Williams May Get It Yet,” Maclean’s, 31 January 2005. http://www​ .thecanadianencyclopedia.com/articles/macleans/offshore-pressurewhat-newfoundland-wants-and-why-danny-williams-may-get-it-yet. 35 “Intergovernmental Relations, Legitimacy, and the Atlantic Accords,” 87; and Wells, “Offshore Pressure.” See Paul Martin, Come Hell or High Water: My Life In and Out of Politics (Toronto: McClelland and Stewart, 2008), 301.

390  Notes to pages 290–6 36 Wells, “Offshore Pressure.” 37 Gerard Boychuk, “How Ottawa Gambles: Rolling the Dice in Health Care Spending,” in G. Bruce Doern (ed.), How Ottawa Spends: Managing the Minority, 2005–2006 (Montreal and Kingston: McGill-Queen’s University Press, 2005), 41–58. 38 Quoted in Rowe, William, Danny Williams: The War with Ottawa (St. John’s: Flanker Press, 2010), 100. 39 The Evening Telegram, 13 and 14 October 2004. In his autobiography, Martin writes that when Premier Clyde Wells approached him when he was finance minister about finding some way of dealing with Newfoundland’s pressing fiscal problems, Premier Ralph Klein of Alberta was sympathetic but “unfortunately, other provinces were not.” See Martin, Come Hell or High Water, 301. 40 Quoted in Rowe, The War with Ottawa, 108. 41 Wells, “Offshore Pressure.” 42 Rowe, The War with Ottawa, 111–2. 43 CBC News Indepth, “Danny Williams,” 17 October 2006. 44 Jonathan Gatehouse, “Premier Williams Gives Prominence to Newfoundland’s Concerns,” Maclean’s, 20 December 2004. 45 Government of Newfoundland and Labrador, News Releases, “Finance Minister to Present to Expert Panel on Equalization and Territorial Formula Financing,” 27 October 2005. 46 Martin, Come Hell or High Water, 302. 47 Government of Newfoundland and Labrador, News Releases, “Premiers Stand United on Offshore Revenues and Look Forward to Meeting with Prime Minister Martin,” 8 November 2004. 48 Quoted in Smith, “Intergovernmental Relations, Legitimacy, and the Atlantic Accords,” 89. 49 See “Between the Rock and a Job,” Globe and Mail, 16 December 2004. 50 “N.S. and Newfoundland Resume Offshore Talks with Feds,” Canadian Press, 9 December 2004. Also quoted in Rowe, The War with Ottawa, 195. 51 Martin, Come Hell or High Water, 303. 52 Wells, “Offshore Pressure”; and Roy MacGregor, “Keep-not Province Ready to Go to Wall,” Globe and Mail, 17 January 2005, 2. 53 Colin Campbell, “Newfoundland Premier Williams Wins Fight with Big Oil,” Maclean’s, 10 September 2007. 54 Ibid. 55 “Nfld. Premier Says PM Broke Promise.” CBC News, 24 October 2004; and Paul Wells, “The Danny Millions Deal,” Macleans.ca, The Back Page, 10 February 2005.

Notes to pages 298–304 391 56 “Danny Williams Won’t Take Yes for an Answer,” Globe and Mail, 5 January 2005. 57 Margaret Wente, “Oh Danny Boy, Pipe Down,” Globe and Mail, 6 January 2005, A16. 58 Danny Williams, “We’re as Mad as Hell,” Globe and Mail, 7 January 2005, A15. 59 Quoted in “Maple Leaf Will Fly Again,” Globe and Mail, 10 January 2005, A10. 60 Roy McGregor, “My Country,” Globe and Mail, 11 January 2005, A2. 61 “PM Signals He Will Meet Williams,” Globe and Mail, 15 January 2005, A5. 62 See, Globe and Mail, 31 January 2005; and Paul Martin, Come Hell or High Water, 302. 63 “Ottawa Backs Newfoundland on Energy Proposal,” Globe and Mail, 26 January 2005, A08. 64 “Deal Reached on Offshore Oil Revenue,” Globe and Mail, 29 January 2005, A7; Government of Newfoundland and Labrador, News Releases, “Prime Minister and Premier Celebrate New Revenue Sharing Arrangement,” 14 February 2005; and Michael Holden, Equalization: Implications of Recent Changes (Ottawa: Library of Parliament, 2006). 65 Government of Newfoundland and Labrador, News Releases, “Speaking Notes, Premier Danny Williams News Conference, Atlantic Accord Agreement,” 31 January 2005, and “Premier Danny Williams Signing Offshore Revenue Agreement Monday,” 14 February 2005. 66 “Offshore Deal Prompts Saskatchewan to Seek Similar Pact,” Globe and Mail, 2 February 2005, A07. 67 For a discussion of Saskatchewan’s demands, see Province of Saskatchewan, Equalization Reform: A Fair Deal for Saskatchewan, presented to the Expert Panel on Equalization and Territorial Formula Financing, Regina, June 2005; and Tom Courchene, “Confiscatory Equalization: The Intriguing Case of Saskatchewan’s Vanishing Energy Revenues,” Choices 10, no. 2 (March 2004), Institute for Research on Public Policy, Montréal. 68 Holden, Equalization: Implications of Recent Changes. 69 “If the Provinces Shout, Mr. Martin’s All Ears,” Globe and Mail, 3 February 2001, A7. 70 Government of Newfoundland and Labrador, “Excerpt of a Letter to Premier Williams from Stephen Harper, 4 January 2006.” http://www .releases.gov.nl.ca/releases/2006/exec/01harper.pdf. 71 Canada NewsWire, “Achieving a National Purpose – Expert Panel on Equalization and Territorial Formula Financing Releases Recommendations and Government of Canada,” Department of Finance, EPETFF Expert Panel Report, 2006.

392  Notes to pages 304–13 72 This point is made in Smith, “Intergovernmental Relations, Legitimacy, and the Atlantic Accords,” 92. 73 Government of Canada, Office of the Prime Minister, “Prime Minister Promotes Open Federalism,” 21 April 2006. http://www.pm.gc.ca/eng/ news/2006/04/21/prime-minister-promotes-open-federalism. 74 Government of Newfoundland and Labrador, News Releases, “Newfoundland and Labrador Has Not ‘Signed Onto’ Any Equalization Deal,” 12 December 2007. 75 Smith, “Intergovernmental Relations, Legitimacy, and the Atlantic Accords,” 93; and Holden, Canada’s New Equalization Formula. 76 Government of Newfoundland and Labrador, “The Facts about a Prime Minister’s Promise,” Executive Council, 3 April 2007. 77 Marland, “Masters of Our Own Destiny,” 169–70. 78 Government of Newfoundland and Labrador, News Releases, “Premier Danny Williams Speaks to Economic Club of Canada,” Toronto, 3 May 2007. 79 Ibid. 80 “Williams to Harper: It’ll Cost $10b to End Feud,” The Chronicle-Herald, 1 December 2007, 4. 81 Government of Newfoundland and Labrador, News Releases, “Premier Danny Williams, Speaking Notes, St. John’s Board of Trade,” 12 September 2007. For an overview of the 2007 provincial election, see Alex Marland, “The 2007 Provincial Election in Newfoundland and Labrador,” Canadian Political Science Review 1, no. 2 (2007): 75–85. 82 Government of Newfoundland and Labrador, “News Releases, Premier Danny Williams, Speaking Notes, St. John’s Board of Trade,” 12 September 2007. 83 Marland, “Masters of Our Own Destiny,” 170. 84 Government of Newfoundland and Labrador, “Speech from the Throne, 2008,” 10 March 2008. 85 Government of Newfoundland and Labrador, News Release, “Premier Danny Williams to St. John’s Board of Trade,” 10 September 2008. 86 “War with Tories Over, N.L Premier Declares,” Evening Telegram, 15 October 2008. 87 James P. Feehan, “Danny Williams Goes Out on Top,” Policy Options (February 2011). 88 “Paul Davis ‘Cannot Trust’ Stephen Harper, Says Rules for Fisheries Fund Changed,” CBC News, Newfoundland and Labrador, 12 December 2015. http://www.cbc.ca/news/canada/newfoundland-labrador/paul-daviscannot-trust-stephen-harper-says-rules-for-fisheries-fund-changed-1.2870812.

Notes to pages 315–17 393 Conclusion 1 Paul Bridle (ed.), Documents on Relations Between Canada and Newfoundland, vol. 2, 1940–1949 – Confederation (Ottawa: Minister of Supply and Services, 1984), 1675–89. 2 Our Place in Canada. Royal Commission on Renewing and Strengthening Our Place in Canada. Main Report (St. John’s, Office of the Queen’s Printer, 2003), 8, 24–6. 3 Quoted in Jean Leclair, “The Supreme Court of Canada’s Understanding of Federalism: Efficiency at the Expense of Diversity,” Queen’s Law Journal 28 (2003): 411–14.

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Index

Aberhart, William, 24 Aboriginal self-government and indigenous rights, 10, 196, 215, 258, 259, 261, 269–73 Abramson, Jane, 120 Achieving National Purpose: Putting Equalization Back on Track (2006; O’Brien Report), 304–6 Agricultural and Rural Development Act, 121, 122, 125, 129–30, 135 Alberta: constitutional negotiations, 195–6, 271–2; legislative revolt (2014), 12; negotiations to join confederation, 24; oil and gas, 81, 202, 217–19, 304, 365n46; provincial-federal relations, 10, 86, 155, 169, 218, 268, 275, 291, 304 Allaire, Jean, 269 Anglo-Newfoundland Development Company, 43, 63 Association in Favour of Meech Lake, 246 Atlantic Accord (1985), 216–20, 276, 278, 279, 282, 284–8, 318, 321; redraft, 292–3, 295, 300–2, 304–5, 310 Atlantic Charter (1941), 103 Atlantic Province Adjustment Grants, 38–9, 46 Atlantic Provinces Economic Council, Charlottetown (1957), 29 Atlantic Provinces Power Development Act, 66–7 Atomic Energy of Canada Ltd., 76 Australia, 167 Azzi, Stephen, 197

Baker, Melvin, 94 Bannister, Jerry, 99, 183 Banting, Keith, 104 Barry, Leo, 163, 171 Bay d’Espoir, 66–7, 94, 99 Beaudoin-Dobbie Committee (Special Joint Committee on a Renewed Canada), 269 Beaudoin, Gérald, 269 Bélanger-Campeau Commission, 270 Bennett, William A.C., 68, 72, 186 Benson, E.J., 93 Bill C-111 (Federal-Provincial Fiscal Revision Act, 1964), 57 Blackburn, Jean-Pierre, 246, 267 Blakeney, Allan, 179, 186, 190, 196, 202 Borden, Henry, 80, 86, 90 Bouchard, Benoit, 232 Bouchard, Lucien, 234, 250; resignation, 255–6 Bourassa, Robert, 7, 226–7, 231, 232, 234, 241, 244, 246, 248, 250, 252–7, 259–60, 269–71. See also Meech Lake Accord Bradley, F. Gordon, 26, 39, 102, 314–15, 319 Briggs, H.L., 84 Brinco. See British Newfoundland Corporation British Columbia, 268, 278, 304, 310; constitutional negotiations, 196, 197, 271–2; energy and power resources, 67–8, 70, 154–5, 158, 199, 218; joins confederation, 4; Supreme Court offshore ruling, 155–6, 159, 213

418 Index British Newfoundland Corporation (Brinco), 62–4, 66; Churchill Falls negotiations, 71–97; provincial nationalization, 151 British North America Act, 82, 84, 89, 165 Broadbent, Ed, 196, 234 Brodie, Janine, 182 Browne, W.J., 37, 39, 45, 50, 54 Bryce, R.B., 83, 87 Bryden, P.E., 10 Buchanan, John, 174–5, 186, 196 Burns, R.M., 29, 32–3, 36, 40–1 Burry, Lester, 105 Cabinet Committee on Priorities and Planning, 190 Calgary Herald, 85 Callahan, William R., 162 Campaign for Fairness (2001), 275 Campbell, Douglas, 36–7 Canada: constitutional battles, 10, 18–19, 189, 192–3, 205, 226–47; diversity, 10; energy crisis, 167, 169; energy selfsufficiency, 201–9, 217, 283; federal court, 200–1; federal government, 26, 60, 110; welfare state, 13. See also individual provinces and events Canada-European Union Comprehensive Economic and Trade Agreement (CETA), 313 Canada Labour Relations Board (CLRB), 200 Canada Manpower Mobility Assistance Program, 149 Canada-Newfoundland Accord (2005), 300–2 Canada-Newfoundland Offshore Petroleum Board, 217 Canada-Nova Scotia Agreement on Offshore Oil and Gas Resource Management and Revenue Sharing, 201–2 Canada Oil and Gas Land Regulations (1961), 154 Canada-United States Automotive Product Agreement, 70

Canadian Bar Association Committee on the Constitution, 224 Canadian Broadcasting Corporation (CBC), 53, 67, 232, 235, 250, 295 Canadian Television (CTV), 289 Carleton University, 197 Carney, Pat, 216, 218 Carr, D.W., 121 Carstairs, Sharon, 231 Castonguay, Claude, 233, 246 Chaput-Rolland, Solange, 80 Charest committee, 251–2, 255, 257 Charest, Jean, 251. See also Charest committee Charlottetown Accord, 12, 169, 271, 274 Charter of Rights and Freedoms, 194, 196, 229–30, 237–8, 242–3, 252, 255, 257–8 Cheeseman, J.T., 113–14 Chrétien, Jean, 190, 203, 215, 265–6, 275, 281, 285; and the Kitchen Accord, 194–5, 368n50; and negotiations regarding the offshore, 208–12, 214, 219; as prime minister, 275, 281, 286, 287, 384n142; provincial drilling order, 212 Churchill Falls, 15, 17, 65, 102, 139, 151, 184, 213, 251, 272, 286, 296; aftermath, 95–7, 306; lower Churchill development project, 206, 310; negotiations, 58–97; ratification of agreement (1966), 91–5 Churchill Falls Labrador Corporation, 61, 64 Churchill, Winston, 63–5, 103 Citizens’ Forum on Canada’s Future 1990 (Spicer Commission), 268 Clark, Joe, 187–8, 203, 265, 268, 270, 317; and Peckford, 178, 185 Clutterbuck, P.A., 25 cod moratorium (1992), 18–19, 220, 276 Commission on the Political and Constitutional Future of Quebec (Bélanger-Campeau Commission), 270 Community Consolidation Program. See Newfoundland Fisheries Resettlement Program Company of Young Canadians, 135

Index 419 Confederation, 8, 23, 29, 32, 40–1, 45, 56, 62–3, 171, 176, 182, 184, 187, 239, 281– 2, 284, 287, 293, 307, 308, 310, 315; in 1867, 3, 15, 17, 59, 80, 101, 111, 123, 134, 151, 153–6, 160, 165, 169, 218–9; income subsidies, 35; Newfoundland discussion of (1947–8), 4, 21–2, 27, 52, 104–7, 313, 314; Newfoundland joins, 4, 5, 7, 9, 21, 26, 34, 39, 52–3, 58–9, 98, 105–6, 127, 130, 146, 153, 156, 165, 181, 185, 205, 213, 222, 244, 273, 292, 298, 306, 312, 316, 317, 319–20, 322; policy issues, 9–10, 49–50, 54. See also Terms of Union (1949); Term 29 Confederation of Region Party (COR), 238 Confederation of Tomorrow Conference (1968), 225 Conservative Party of Canada, 281, 289– 90, 303; Anything But Conservatives campaign, 6, 307–10; Progressive Conservative Party, 15–16, 22–3, 32, 36–7, 43, 44, 46, 50, 53, 121, 147–8, 195, 215–16, 226; and Churchill Falls, 66, 85; and Meech Lake, 234, 251, 256, 266–7. See also individual leaders Constitution Act (1867), 59, 90, 154, 167, 170, 221, 314; interpretations of, 218–19; and Quebec, 226 Constitution Act (1982), 138, 189–90, 192–3, 247, 252, 268–9, 273, 301, 304, 317–18, 320; Bill 88, 248; Charlottetown Accord (1992), 12, 169, 271, 274; equalization enshrined in, 276; Meech Lake, 225–44; Section (36), 224, 244, 253, 272, 299; sexual equality rights, 258–9; signed into law, 194 constitutional negotiations, 196–8; Charlottetown Accord (1992), 12, 169, 271, 274; Meech Lake, 225–44 Continuing Committee of Ministers on the Constitution (CCMC), 190–2 Cooper, Barry, 198 cooperative federalism, 13–14, 125–51, 152–3; return of, 218–9; Wells champions, 239–40 Copes, Parzival, 98, 120, 140

Coté, Langevin, 91–2 Council of Maritime Premiers, 167, 172 Coyne, Deborah, 245, 249, 255, 267 Crosbie, Ches, 27–8 Crosbie, John, 9, 172, 174, 215, 231, 263, 267–8, 285; conflict with Smallwood, 147–8; views on Williams, 282; and Wells, 232, 234, 264–5 Crosbie Offshore Services Limited, 200 Daily News, 48 Davis, Bill, 195 Davis, Jack, 136 Davis, Paul, 312–3 De Bane, Pierre, 206 Dennison, Don, 248 Department of Community and Social Development (Newfoundland), 135, 136, 140, 143 Department of Finance (federal), 23, 29–32, 34, 36, 39–42, 44–5, 48, 50, 78, 291 Department of Fisheries (federal), 109–10, 122–3, 136, 139, 143 Department of Industry, Science, and Technology (federal), 234 Department of Public Welfare (Newfoundland), 112, 117, 132 Department of Regional Economic Expansion (DREE; federal), 15, 137–41, 143, 145, 146, 151, 189, 206 Desmarais, Paul, 261 Deutsch, John J., 29–30 Devine, Charles, 94 Devine, Grant, 229, 261 Diefenbaker, John, 6, 55, 59, 60, 62, 99, 205, 317; Churchill Falls, 85; government, 7, 13, 101, 121–2, 125, 139, 153, 338n18; national energy policy, 66, 67–71, 72; “One Canada” vision, 24, 47, 67; social welfare, 46; and Term 29, 14, 22–4, 34, 36, 38–57, 58, 319–20, 330n51, 331n58, 332n71 Dion, Stéphane, 286 Dobbie, Dorothy, 269 Dominion-Provincial Conference (1957), 36

420 Index Doody, C.W., 164, 166 Doyle, Gerald S., 28 Doyle, John C., 160 Duffy, Mike, 194 Duffy, Robert, 33–4 Duncan, Sir Val, 90 Dunderdale, Kathy, 312 Duplessis, Maurice, 64, 65, 68, 71, 180 Eastcan, 177 Economic Fairness Principle, 7–8, 16, 17, 20, 52, 53, 66, 77, 82, 110, 138, 146, 152–3, 155–6, 170, 187–8, 191, 193, 213, 217, 225, 253, 255, 272–3, 276, 299, 301, 315–22 Edmonton Declaration, 227 Efford, John, 288, 289, 295, 301 equalization transfers, 5–6, 17, 36–8, 46, 106, 124, 131, 146, 185, 207, 214, 221, 275–7, 280, 282–91, 294–6, 298–303, 305–10, 315, 318, 319, 321; calculation reform (1994), 278, 279; calculation reform (2004), 292–3; provincial uproar (2006), 304 Established Program Funding, 189 Evening Telegram, 48 executive federalism, 11, 12, 14, 23, 62, 66–8, 96, 97, 227, 239, 254, 255, 271, 273, 274; avoids financial intervention in Newfoundland, 108–13; resettlement of Newfoundland and Labrador, 98–102, 108–18, 126–51 family allowance, 13, 105–6 federal-provincial relations, 3, 7–22, 29, 54, 60–1, 99, 147–60, 201–11, 216–7, 221–9, 235, 241, 243, 253, 256, 259, 267–8, 274–5, 281, 284, 291, 294, 305–6, 310, 312, 314–22; centralization vs. decentralization, 15, 16, 98–101, 152–3, 185, 189, 198–9, 205, 318; concerns regarding Newfoundland’s slow development, 118; conference (1964) 155; deficit, 222; economic balancing policies, 126, 127, 153, 170; fisheries conference, 122–3; infrastructure investment, 56, 108, 121, 122, 138, 139,

217, 314, 319; investigation of fisheries, 106, 107, 108, 109, 110, 111; mistrust and isolation of Newfoundland, 23, 37, 46, 47; Office of Federal-Provincial Relations, 288; Order on Council, (P. C. 1957-27), 31; revenue sharing, 279, 285; revenue-sharing proposal (1968), 158, 159, 191, 198–200, 301; revenue-sharing proposal (1981), 198; social security implementation, 105–10, 117, 118, 319; tax exemptions, 21; transfer concessions, 6, 24, 25, 35, 37, 38, 40, 44­9, 118, 207, 300–4 Federal-Provincial Tax-Sharing Arrangements Act, 37, 39, 41, 56 Feehan, James, 90, 94, 336n6 Filmon, Gary, 231–2, 242, 244, 247, 249, 256–61 Financial Post, 85 First Ministers’ conferences, 146, 155, 169, 180, 192, 196, 225, 233, 236, 256, 260, 263, 265 First Nations, 18, 19, 261, 269. See also Aboriginal self-government and indigenous rights fisheries conference, 122–3 Fisheries Household Resettlement Committee, 132–37, 139–5, 149–51 Fleming, Donald, 33, 36, 37, 40–1, 42–5, 50, 54 Forsey, Eugene, 249 Fort Pepperell dispute, 56 Framework for an Agreement, A (1981), 199 Friends of Meech Lake, 246 Front de Libération du Quebec (FLQ), 59, 68, 81, 87 Froschauer, Karl, 70 Frozen Fish Trade Association, 135 Fullerton, Doug H., 73–4 Fulton, Davie, 43, 47 Fund for Rural Economic Development, 135 Gang of Eight, 192, 196 Ghiz, Joe, 260 Gillespie, Alastair, 174–5 Glace Bay Heavy Water Plant, 166

Index 421 Globe and Mail, 208–9, 211–12; on Churchill Falls, 79–80, 91; on constitutional negotiations, 196–7; on equalization, 303; on Meech Lake, 232, 242, 244, 245, 252, 256; on Peckford, 203, 205; on Term 29, 33–4, 50; on Williams, 296, 298 Goldenberg, Carl, 29, 32–4 Goldenberg, Eddie, 208 Gomery, John, 288–9 Goodale, Ralph, 291–8, 293, 302 Gordon Commission (Royal Commission on Canada’s Economic Prospects), 46, 114, 120, 125 Gordon, Donald, 92, 95; concerns regarding ARDA precedents, 130 Gordon, Walter, 78, 83, 86–7, 114, 125, 130 Gosse, E.M., 143 Goundrey, Gordon, 116 Graham, Ron, 193, 195–6 Grande Noirceur, 180 Greene, Joe, 162 Grimes, Robert, 275–6, 284, 287 “growth pole” concept, 126 Gruchy, Philip, 27 Gulf of St. Lawrence, 157, 164 Gwyn, Richard, 23, 50 Gwyn, Sandra, 99 Hamilton, Alvin, 66 Hamilton Falls. See Churchill Falls Hamm, John, 275, 295, 299 Harbour Breton Landslide (1972), 150 Harnum, K.M., 136 Harper, Elijah, 198; Meech Lake, 198, 260, 261, 263, 274 Harper, Stephen, 3, 6, 17, 18, 281, 295, 318; equalization increases (2007), 304; federal election (2004), 289; federal election (2006), 303–4; federal election (2008), 308–10; government, 308–13; migrants statement (2001), 307; pre-election promises of equalization reform, 303, 305–7 Harris, Les, 178 Harris, Michael, 205

Hartnett, Arthur E., 39 Hatfield, Richard, 193, 227, 230, 248 Head, Ivan, 161 Hepburn, Mitchell, 24 Hebron oil project, 296 Heritage of the Sea, 177 Hermitage, 99 Hibernia Project, 180, 203, 212, 214, 220, 235, 268, 285, 286, 298, 321 Himelfarb, Alex, 295 Hobbs, George P., 92 Hollett, Malcolm, 38, 53, 56 Howe, C.D., 64 Howe, Joseph E., 24, 32 Hoy, Claire, 194 hydroelectricity, 66–8, 72–97; Churchill Falls, 15, 17, 59, 61–2, 64, 65, 67–97, 213, 306; Hydro-Québec, 61, 68, 72–4, 76, 84, 86–9, 91–6; Nova Scotia Power Commission, 83; Ontario Hydro, 76, 84 Hydro-Québec. See hydroelectricity Innu Nation, 312 International Brotherhood of Teamsters, 43, 94 International Woodworkers of America, 43, 47, 48, 50, 51, 53 interstate federalism, 9–11 intrastate federalism, 9–10 Iron Ore Company of Canada, 184 Iverson, Noel, 138 Jamieson, Donald, 9, 48, 137, 147–8, 178, 203 Johnson, Daniel, 75, 87–93, 146 Joint Mineral Resources Committee (JMRC), 159–60, 162–3, 166, 169 Judicial Committee of the Privy Council (1927), 87–8 Kent, Tom, 137 Keough, W.J., 68 Kierans, Eric, 73, 78, 80 King, Mackenzie, 16, 29 Kirby, Michael, 189 Kitchen Accord, 194, 195, 197 Kitchen, H.W., 94

422 Index Klein, Ralph, 291, 304; healthcare summit, 291 Kristjanson, Baldur, 121 Labrador City, 184 Labrador Mining and Exploration Limited, 184 LaForest, Gérard, 154, 160 Lalonde, Marc, 200, 203, 207, 210, 211 Lane, C.M., 131 Langevin Agreements (1987), 229 Layton, Jack, 289 Le Devoir, 78, 88 Leeson, Howard, 195, 197 Lesage, Jean, 64, 68–71, 69, 73, 77–9, 81– 7, 93; urges Johnson to ratify Churchill Falls Agreement, 88 Lessard, Jean, 73, 77–9, 91, 94 Létourneau, Roger, 73 Lévesque, René, 186, 206, 227; and Churchill Falls, 71, 73–8, 82, 94, 95, 340n50, 341n53; and constitutional negotiations, 190, 193, 196, 197, 227, 368n50, 369n64 Lewis, Philip J., 28, 32 Liberal Party of Canada, 13, 15, 16, 21, 22–3, 48, 58, 109, 121, 122, 147, 164, 178, 195, 203, 206, 209, 215–16, 220, 265, 275, 286, 289–90, 299, 308–10; and development at Churchill Falls, 59, 61–2, 96; energy policy, 169; equalization, 36; misappropriation of funds scandal, 289; National Liberal Convention, 266; Term 29, 54, 56. See also individual leaders Liberal Party of Newfoundland and Labrador, 147–8, 178, 220, 230, 252, 265, 267, 295, 309, 310; change of policy regarding centralization, 147; convention (1970), 147; Rural Community Development Program, 147. See also individual leaders Liberal Party of Quebec, 269 Library and Archives Canada, 194, 195 Locke, Wade, 308 Lord, Bernard, 302 Lougheed, Peter, 10, 179, 180, 186, 211

Lundrigan, Arthur, 76 Lyon, Sterling, 186, 190 MacLean, Angus, 186, 190, 196 Macdonald, John A., 101 Macdonald, Rodney, 305 MacEachen, Allan J., 198 Mackay, R.A., 25 Mackinnon, Ian, 84 Mackintosh, George M., 63 Maloney, Aidan, 141 Managing All Our Resources (1980), 187 Manitoba, 155, 278, 304; constitutional ­reforms, 190, 192, 198, 231–2, 242, 247, 250–1, 259–66, 274, 382n98; electricity and energy, 63, 67–8; leadership review (2014), 12, 324n11 Maritime Offshore Resources Board, 172 Marshall, T.H., 103 Marshall, W.M., 86, 87, 200, 202, 209–12, 216 Martin, Cabot, 90, 169–70 Martin, Paul, 3, 6, 17, 18, 281, 287, 292–6, 293, 300–4, 301, 307, 318; election promise (2004), 290, 298, 299, 308; healthcare summit and funding, 291; misappropriation of public funds scandal, 288–9 Matthews, D. Ralph, 138 Mayhew, R.W., 107 McArthur, Jack, 85 McGarth, James, 150–1, 209 McGuinty, Dalton, 303, 304, 307 McGuire, Francis, 232 McKenna, Frank, 242, 230–3, 244, 245, 247–51, 255, 256, 259–60 McNair, John B., 29, 30, 44 McParland, Donald J., 88–90 Medicare, 271 Meech Lake Accord, 7, 12, 18, 198, 225, 271, 273, 274, 296, 320, 321; distinct-­ society clause, 241–3, 246, 249, 251, 253, 255–9, 263, 269; negotiations, 226–9; ratification issues, 229–68 Memorial University, 118, 138, 151, 178, 224, 261; analysis of equalization payments, 308

Index 423 Menzies, M.W., 121 Métis people, 19, 261 Milne, David, 180 Mobil Oil affair, 212 modernization theory, 103 Montreal Star, 78 Moore, Rob, 313 Moores, Frank, 18, 76, 164, 166–9, 168, 176–7, 317; Churchill Falls, 95; government, 148–50, 163, 165, 171, 175; “North Sea Oil” approach, 170, 171; rejection of community resettlement, 148–53; Resettlement Advisory Committee, 149–51; resource development policy, 163, 170 Morgan, Moses, 261 Morton, Ted, 198 Mowat, Oliver, 177 Mulroney, Brian, 7, 15, 182, 215, 219, 221– 4, 228, 230, 232–4, 253–7, 254, 262, 269, 271, 275, 282, 284, 295, 300, 317–18, 320; decentralization policies, 181; federal election (1984), 216, 226; Meech Lake, 226, 227, 228, 229, 236, 237, 241, 242–51, 257–68; Memorandum of Understanding (MOU) with Peckford, 216; resource-sharing principles, 216, 218, 285; speech in Newfoundland Legislature, 261–4; views on federalism, 220; and Wells, 236, 241–51, 272; The Western Accord (1985), 218 Multicultural Meeting on the Constitution (MMC), 270 Murray, Lowell, 227, 232, 236, 245, 247–8, 256, 263–5; Newfoundland visit (1989), 250 Muskrat Falls Project, 312 National Action Committee on the Status of Women, 272; concerns with Meech Lake, 229, 249 National Energy Board, 67, 84 National Energy Program (NEP), 198, 215 National Post, 198 National Power Grid, 14 natural resources, 152–3; jurisdiction, 151–92, 196, 198, 200, 202–5, 210–11,

222–4, 284, 318, 321; minerals, 7, 18, 151, 154, 155, 157, 159–61, 163, 172, 285, 286, 320; oil and gas, 16–18, 154–81, 185–92, 198, 201–20, 275–6, 279–96, 317 Neary, Peter, 62, 63 National Energy Board Act, 79 Nelles, H. V., 101 New Brunswick, 31, 32, 111, 167; Acadian community, 230, 248; constitutional negotiations, 193, 230, 232–3, 238, 242, 245, 247–51, 271; energy and hydroelectric development, 63, 66, 82–3; fiscal transfers, 37, 304; offshore resources, 160, 173–4, 302 New Democratic Party (NDP; federal), 169, 234, 289, 308–9. See also individual politicians Newfoundland Action Committee, 95 Newfoundland and Labrador: board of trade, 39; centralization program, 107– 18, 120, 121, 123, 125, 126, 128, 130, 131–3, 144, 147; Confederation, 4, 5, 105, 106; deficits, 28, 33, 112, 208, 221, 276; Department of Community and Social Development, 135; Department of Finance, 279; Department of Mines and Energy, 170, 175; Department of Rural Development, 148–9; Department of Social Services, 150; federal election (1968), 147–8; fisheries, 13, 18, 19, 21, 49, 56, 98, 106–14, 117, 118, 120–3, 127–9, 134, 136, 138, 140, 141, 143, 312, 313; House of Assembly, 38, 261–6, 297; legacy of colonialism, 8, 19; Managing All Our Resources (1980), 187; natural resources, 151–8; provincial centralization program, 125–30, 147–51, 205; provincial elections (1971), 148; provincial elections (1972), 153; provincial election (1975), 171; public service standards (1957), 32–4, 37, 41, 53, 98, 105, 111–18, 120, 127–9, 131, 146, 147, 150, 151, 222–4, 227, 273, 276, 282, 294, 296, 302, 314, 318–20, 322; “White Paper” (1970), 143

424 Index Newfoundland and Labrador Construction Association, 211 Newfoundland and Labrador Corporation, 63, 95, 200 Newfoundland and Labrador Petroleum Corporation (NLPC), 212 Newfoundland Council for Rural Development, 147 Newfoundland Fisheries Conference (1962), 120–1 Newfoundland Fisheries Development Committee (Walsh Report) (1953), 107–11, 120, 123 Newfoundland Fisheries Resettlement Program, 17, 18, 98–102, 107–18, 120–38; map of relocation centres (1968), 142; renewed agreement (1970), 139–51; renamed Community Consolidation Program, 149–50 Newfoundland Fishing Development Authority, 110 Newfoundland Labour Relations Board (NLRB), 200 Newfoundland Liquor Commission, 76 Newfoundland Power Commission, 63, 92 Newfoundland Royal Commission on Renewing and Strengthening Our Place in Canada (2003), 22, 316 New Labrador Party, 148 Newman, Peter C., 264, 266 Nicholson, L.H., 47 Noel S.J.R., 183 North Sea, 170, 177 Nova Scotia, 31, 32, 111, 354n64; fiscal transfers, 37, 275, 286, 294–5, 299, 300, 302, 304–5; hydroelectric power, 82–3, 86, 97, 312; offshore resources, 154, 160–3, 165–7, 173–5, 199–203, 208–9, 214, 217–18 Nova Scotia Power Commission, 83. See also hydroelectricity O’Brien Report (Achieving National Purpose: Putting Equalization Back on Track [2006]), 304–6 O’Dea, Fabian, 76 Office of Federal-Provincial Relations, 288

Offshore Canada Conference, 198 oil and gas ownership, 17, 18, 151–92, 198, 201–20, 283, 318 old-age pensions, 13, 104–6, 126 Ommer, Rosemary E., 18, 23 Ontario, 9, 10, 144, 155, 170, 214, 285; constitutional negotiations, 194–5, 197, 224–5, 234, 238–9, 243, 244, 248, 257, 271, 320; electricity transmission and use, 63, 64, 73, 76, 84, 94, 101; fiscal transfers, 146, 250, 278, 292, 294, 296, 302–4, 307 Ontario Hydro, 76, 84. See also hydroelectricity Osgoode Hall Law School, 236, 239 O’Sullivan, Louis, 68 Ottawa Citizen, 260 Overton, James, 146 Pan American-Imperial Oil Consortium, 156 Parti Québcois, 226, 255 Party for Economic Union, 27 Pawley, Howard, 231 Pearson, Lester B., 60 ; centralization and modern fishery plan, 128, 130, 134–5; and Churchill Falls, 15, 61–2, 70–1, 79, 81–7, 89–91, 306; federal election (1963), 56–7, 58, 122; FederalProvincial Fisheries Conference, 122–4; government, 14–15, 59–62, 96, 121, 139; national policies, 152–6; on offshore ownership, 155–6, 158, 285; political beliefs, 14, 16, 48, 152–3, 317; secret meeting with Smallwood, 90–1; Term 29, 54 Peckford, Brian, 7, 15–16, 18, 152, 172, 176, 186, 206, 228, 283–6, 372n89; becomes Premier (1979), 177–8; constitutional negotiations, 189–98; A Framework for an Agreement, 199; Meech Lake Accord, 225, 228–30, 233, 320; Memorandum of Understanding (MOU) with Mulroney, 216; Mobil Oil affair, 212; offshore resources, struggle for, 174–5, 177, 178–9, 187, 198–205, 207–20, 283, 285–6, 370n71; political

Index 425 philosophy, 152–3, 177–85, 182–9, 205, 208, 222–4, 317–20, 366n12; A Proposal for Settlement (1982), 199; provincial election (1982), 202–3; Supreme Court loss (1984), 213, 216, 219, 318, 321; views on fisheries management, 185, 227, 233 Pépin, Jean-Luc, 87, 206 Perlin, Albert, 28 Perroux, François, 126 Peterson, David, 7, 243, 244, 245, 248, 249, 257, 261; feelings on Wells, 257 Petro-Canada, 169, 174, 212 Petroleum and Natural Gas Act (1977), 175, 177 Pickersgill, Jack, 9, 30, 56, 58, 79, 83, 86, 87, 89, 246 Power, Gregory, 111 Prairie Farm Rehabilitation Act, 101, 139 Pratt, Christopher, 179 Premiers’ Conference (1978), 190 Prince Edward Island, 4, 31, 36, 37, 155, 160, 167, 172, 186, 190, 233, 260, 304 Progressive Conservative Party (federal). See Conservative Party of Canada Progressive Conservative Party of Newfoundland and Labrador, 16, 38, 43, 53, 56, 148, 153, 169, 178, 187, 215– 16, 220, 312. See also individual leaders Proposal for Settlement, A (1982), 199 Prowse, D.W., 183 Public Utilities Income Tax Transfer Act, 86 Pushie, Gordon, 95 Pushthrough, 99, 100, 112, 137, 147 Quebec, 5, 9, 10, 155, 180, 182, 191, 224, 225; constitutional negotiations, 189–92, 195, 226–7, 229–39, 241–71; hydroelectricity development and transmission, 15, 17, 59, 61–2, 64–5, 67–97, 172, 205, 213, 306; and Labrador border, 64, 71, 72, 75, 77, 79, 81, 88, 165; offshore consultations, 160, 164–6, 169–70; referendum (1980), 189, 206, 255 Quinton, Herbert W., 106

rationality policy, 102 Red Sucker Lake Cree First Nation, 198, 260 Reform Party of Canada, 224, 272 Regan, Geoff, 295 Regan, Gerald, 162, 165–7, 172 Reid, James, 150 Rémillard, Gil, 227, 229, 242, 250 Renewed Canada, A, 269 Resettlement Committee of Newfound­ land, 144 resettlement program. See Newfoundland Fisheries Resettlement Program Richie, Ronald A., 32–3 Rideout, Thomas, 220, 266 Robertson, Gordon R., 79 Robichaud, H. J., 122, 130–1 Roblin, Dufferin, 68 Romanow, Roy, 194–5 Rompkey, William, 206–7, 255 Roosevelt, Franklin D., 103 Rothschild, Edmund de, 63, 72, 80 Rowe, Frederick W., 48, 112 Rowe, William N., 117, 145–6, 288 Royal Canadian Mounted Police, 24, 47–50, 53 Royal Commission on Canada’s Economic Prospects (Gordon Commission), 46, 114, 120, 125 Royal Commission on the Economic State and Prospects of Newfoundland and Labrador, 131 Royal Commission on Newfoundland’s Place in the Canadian Federation (2002), 283–7 Ryan, Claude, 79 Sable Island, 154, 159, 163, 174 Saddle Island, 100, 112 Sametz, Z.W., 143 Saskatchewan: constitutional discussions, 194–5, 197, 202, 229, 261, 264; fiscal transfers, 278, 291, 302, 304, 310; natural resources, 81, 155, 169, 218, 278, 302, 304 Savoie, Donald, 126, 127 Schrank, William, 18

426 Index Seafarers’ International Union (SIU), 200 Second World War, 4, 46, 100, 103–4, 184 senate, 223–5, 227; reform, 231, 238–45, 249, 253, 255, 257–8, 269, 171, 173, 320 Shaping Canada’s Future Together: Proposals (1991), 268 Sharp, Mitchell, 79, 84 Shaw, Walter R., 155 Sheppard, Robert, 195, 244 Simeon, Richard, 12, 23, 229; views on federalism, 317 Simpson, Jeffrey, 211, 256 Smallwood, Joseph R., 6, 7, 21, 27, 51, 55, 56, 58, 60, 66, 69, 107, 126, 146, 151, 157, 184, 205, 232, 310, 330n51; and Churchill Falls, 61–4, 66, 69, 71–84, 86–95, 103, 306, 335n5, 341n60, 345n137, 346n140; Confederation, 25–6; fisheries nationalization, 141, 144; general election defeat (1968), 147–8; investigation of financial dealings, 76–7; loggers labour dispute, 42–3, 47–8, 325n6, 332n71, 333n72; national power grid, 67–70; offshore, 155–6, 160, 161, 163; political philosophy, 13–14, 15, 110, 146, 152–3, 222, 225, 317, 319, 342n62; provincial election (1959), 54, 56; resettlement and fisheries development, 109–11, 114, 116, 118, 120–4, 128, 134–7, 140; secret meeting with Pearson, 90–1; and Term 29, 21–24, 28–32, 34, 35–42, 43–5, 49–54, 58, 283, 319–20; views on Newfoundland exceptionalism, 48–9, 52, 106, 155, 222; wasting provincial funds, 39, 45, 184 Smith, Donald, 164 Smith, H. Grenville, 72 Smith, Jennifer, 305 Smith, Philip, 78 Snyder, Harold, 170 Southam, A.W., 64 Spector, Norman, 227, 247–8 Speirs, Rosemary, 197 Spicer Commission, 268 Spicer, Keith, 268 Standing Senate Committee on National

Finance (2002), 286 Stanfield, Robert, 37, 82, 148, 246 State of Play on a Companion Resolution to the Meech Lake Accord, 256 St. John’s Daily News, 52, 95, 113, 206 St. John’s Evening Telegram, 94, 98, 171, 260 St. Laurent, Louis, 13–14, 27, 29–31, 37, 54, 64, 314, 315, 317 Sullivan, Loyola, 294, 301 Supreme Court of Canada, 90, 165, 171, 175, 198, 201–5, 212, 227, 231, 253, 264, 283, 298; appointments of, 241, 243, 244, 255, 259; British Columbia ruling (1967), 155–9; Newfoundland ruling (1984), 213, 216, 219, 318, 321; ruling on constitutional amendments (1981), 192 Supreme Court of Newfoundland, 192, 201, 205 Taylor, K.W., 29, 31, 40, 41 Term 29, 80, 96, 213, 283, 319; background of, 25–8, 36; debate regarding in 1959, 17, 21–3, 39–44, 54, 55, 58, 62, 204, 319; McNair Commission Findings (1958), 34–48, 53, 54; reaction to, 48–50; royal commission (1954), 25–34, 40, 50; settlement of, 14, 21–5, 29, 48–57 Terms of Union (1949), 5, 21, 25–8, 32–4, 36, 37, 39–41, 44, 58, 156, 165 Terra Nova Project, 285 Thorsell, William, 232, 245 Throne Speech: in 1970, 161; in 1979, 185; in 1980, 178, 189; in 1985, 219; in 1990, 247; in 2007, 308; in 2008, 308–9 Tobin, Brian, 267, 275, 286 Toronto (Daily) Star, 48, 78, 84, 87, 110, 180, 194 Trans-Canada Highway, 41; completion (1966), 60 transactional federalism, 9, 10 Trudeau, Pierre, 7, 14, 96, 139, 140, 157, 174, 178, 195–7, 201, 204, 215–7, 219, 222, 234, 265–7, 274, 285, 299; commitment to federal centralization, 152–3, 158, 179, 188, 205, 226; economic

Index 427 equality principles, 138, 191, 193, 253, 255; government, 93, 162, 203; Meech Lake Accord, 230; meetings with Peckford, 180, 199, 208; oil and gas policy, 15, 16, 152, 157–71, 180, 181, 182–92, 198, 202–3, 316–18; “People’s Package,” 190–2, 208; revenue-sharing proposals, 159–61, 164–5, 191, 206–8, 211–14 unemployment insurance, 13, 18, 21, 106–10, 117, 123, 143 Union Jack, 179 United Newfoundland Party, 53, 56 United States of America, 120, 374n108; ice patrol warnings (1983), 212; as market for hydroelectric power, 15, 59, 67, 70–2, 78, 82, 96, 182; military presence in Newfoundland, 184 Van Mulligen, Harry, 302 Vardy, Oliver, 76 Vipond, Robert, 274 Vivian, Albert, 134 Walsh committee report, 107, 108, 109, 110, 111, 120, 123 Walsh, Sir Albert, 25, 27, 107 welfare state, 14, 27, 29, 30, 104, 127 Wells, Andy, 289 Wells, Clyde, 7, 16, 20, 147, 235, 254, 300, 312, 317, 320, 321; Charlottetown Accord, 272, 274; government, 221; letter in the Globe and Mail, 252–3;

Meech Lake Accord, 18, 198, 225–68, 270, 272–6, 279, 281, 296, 306; meets Mulroney in Ottawa (1990), 256; provincial election (1989), 220; regrets over Quebec compromise, 271; senate reform, 250; Speech from the Throne (1993), 212; views on federalism, 221–6, 240, 250, 270, 273, 320; views on premiers, 238–9 Wells, Robert, 115, 116 Wente, Margaret, 298 White Rose Project, 285; attacks Williams, 298 Whyte, John, 7, 108, 219 Williams, Danny, 3, 6, 16–18, 122, 275–6, 280, 289–94, 299–301, 303, 317, 319, 321; anger at Harper equalization reallocation, 305–10; Anything But Conservative (ABC), 307–10; background and political style, 279–82; campaign for equalization change, 287–8; disgust with O’Brien Report, 304–6; federalism, 298; legacy, 310, 312; lowering of Canadian flags (2004), 5, 295–8, 297; and Martin, 295–6; speaks to Economic Club of Toronto, 306 Winters, Robert, 62, 77, 78, 80–4, 87, 93, 97; appeals to Pearson, 81–2 World War II. See Second World War Yom Kippur War, 167, 169