A Secessionist View of Quebec's Options

0:00First of all, Eric and I, I would like to thank the Ludwig von Mises Institute for allowing us the opportunity to present you today with the secessionist view of Quebec options. Unfortunately, we get the feeling most of the time in Quebec that you only hear one side of the story, namely, of course, the English-Canadian side of it, and when you hear about us in the media, usually it is something like, at its worst, Quebec nationalism is profoundly unsavory as a fault of the resentful toxins of a decaying religious, linguistic and racial world were pumped violently into the province's bloodstream. There is far more anti-Semitism in Quebec than in English Canada. The better paradox for English Canadians is the knowledge that without their financial, legal and moral support, the French language and the better strain of politics that grew up around it, they would have died out.

0:52This is taken from a small report in the New Republic, the real magazine, that was published two years ago. Of course, this is utter nonsense and once more the New Republic was dead off the track, was the drawing of the track. We keep reading reports similar to that in various publications in the United States. So of course we cannot undo all the damage that has been done to us in the last decades, but what we will try to do today is briefly to introduce you to a Quebec view of our national I will do that in less than 15 minutes, and Eric will then give you a more detailed account, a more detailed picture of what is actually going on in Quebec and what is likely to happen in the coming months. I've brought some maps with me. Okay, as you can all see, this is a map of North America, but it usually points out the French view of the early North American history.

1:43To put things briefly, the first French explorer who came to this part of the continent was Jacques Cartier in 1534. 1534. It landed somewhere around here in what is now the gaspip in Anzalov, Quebec province. However, for many reasons, the French crown didn't pay any attention to the new territory. It was only 70 years later that another explorer, Samuel de Champlain, founded two settlements. One is what is now Nova Scotia, this area here, was the Port Royal. This was the cradle of what is today Arcadia In 1608, he founded another one, Quebec City, along the St. Lawrence River here, which proved over time to be much more significant. This is the cradle of the Québécois, if you will. Eric and I are both Québécois.

2:29Today, you have about 230,000 Acadians living in the maritime provinces of Canada and roughly 5.5 million Québécois living in Quebec and in the neighboring Ontario province. In time, the French colony was thus settled, if you will, in the early 17th century, and it lasted until 1760. In time, it became a thriving counter for the fur trade. At its peak, the French expansion, of course, grew along the waterways of North America, namely the St. Lawrence, the Great Lakes River system and the Mississippi River system. The first map up here shows you the greatest expansion of the French colony. It ran at its peak from the Gulf of St. Lawrence all the way down to New Orleans. The French kept the territory by having various forts along the way, and then we found Duquesne, which became Pittsburgh, Port-Chartret-des-Troyes, which became Detroit, St. Louis, New Orleans and other places.

3:23However, for many reasons, namely the harsh climate of the place, the exclusion of Huguenot immigration from Canada, and most of all mercantilist policies from France that prevented the development of local industries, When the colony fell under British rule in 1760, you had only 60,000 inhabitants in it, as compared to well over one and a half million in the 13 colonies. What happened following the conquest was that New France, which was all this area here, was shrank into two tiny bays along the St. Lawrence River. And the French subjects were given two choices, either to stay and become British citizens, or pack their bags and go back to France. And now to go quickly, then the British authority made a mistake. In order to keep us, and to prevent the now growing successionist tension in the United States, they greatly enlarged Quebec territory.

4:24So from the tiny piece of land along the St. Lawrence River they expanded it to cover all the Great Lakes area and much significantly up north also. This of course infuriated the 13 colonies that over time just succeeded and Quebec went back to a smaller portion of land over the Great Lakes area here and along the St. Lawrence River. Now following the conquest, following the US secession, sorry, what happened was that a large movement, a population occurred. When the population occurred, there were a lot of tourists and tories and loyalists to the British Crown who moved into Canada. So those people couldn't stand the idea of living under French civil law. So they were given their own territories, namely here in what became southern Ontario. And as you can see here, what was the tiny portion of Quebec came back under, if you will.

5:14The majority of the population living in this area was French-Canadian. So this gave rise to two conflicting views of the fate of the French-speaking population. On the one hand, you had people who thought that this was the first step toward a separate country. On the other, you had the most conservative segment of the population who thought that the French-speaking Canadians were better under British rule than under American rule, because otherwise, of course, we would be overwhelmed and assimilated quickly. And they also saw British rule as kind of a buffer that would prevent the revolutionary ideas that were really popular in France at the time. And now to go quickly, what happened is that the French speaking population was granted much more authority over time, over governing its own affairs. But there was always the possibility for the local British governor to veto these legislation.

6:01Over time this became so frustrating that you had a rebellion in 1837 against British rule. To put this quickly, British army moved in, local leaders were either killed or sent to Australia. For the first time in London, they explicitly stated policies saying that they wanted to assimilate the French-speaking population. So in 1840, you can see that the two colonies have merged, and for the first time in their history, French-Canadian were now a minority on their own ground. However, this union proved politically unworkable. There was no way French-Canadian politicians and English-Canadian politicians could get along. So a new deal had to be struck a generation later, in 1867. This was the British North America Act. As you can see, the British North America Act is kind of the birth date, if you will, of modern Canada.

6:48Quebec has regained its own autonomy. Ontario has become Ontario. The maritime provinces are joined, with also British Columbia on the Pacific coast. There were many reasons behind that. First of all, there was a threat of US aggression. You must remember that in 1867, when Canada was born, was also the year the US bought Alaska and that during the Civil War, the United Kingdom had sided with the South. So somehow, there was also a lack of willingness in London to pay for the defense of the colony and a lot of English-Canadian fear and another US invasion. There was also the perceived need to build a link between British Columbia, Ontario, Quebec and the Maritime provinces.

7:33Now, a new private capitalist in his own mind would think of, you know, building a railway system that would cover basically what were empty lands in a spirit of old climate and territories that offered no promise of development. They would rather, usually people in the West would either go by boat around, of course, to South America or go by Minneapolis, Chicago, other places and send over tax to Montreal. So somehow the English-Canadian, or at least politicians, came up with this idea that you needed a transcontinental railway link and that of course taxpayer would finance it. So to put things briefly, following this British North America Act, things did not improve at all in Canada. In fact, things were so bad in economic terms that people in the early 1870s in Quebec began migrating to New England. Now in 20 years, half of the French-speaking population of Canada had left for the United States to work in the mills in New England.

8:24in New England. Now, witnessing this, some politicians in Ottawa came up with what has since then been known a national policy of high tariffs and after building more railways to unite the country together. The whole idea behind this, of course, would be that instead of being north-south, the flow of trades of goods and services would be east-west. Now, of course, over time, this didn't work out well at all. So in short, I guess we can say that Canada, as we know it today, was built on productionism and this railway system that never made any sense. Now, quickly, what will then follow after that is the creation of the other Canadian provinces, as you can see, you've got Alberta, Saskatchewan, Manitoba and all the other provinces that are added to... So, Quebec at the beginning of the Confederation was one, first among four and then among five, and now it is one of ten Canadian provinces.

9:14Now, in the Constitution, being a province carries many implications. I won't go into the details now, but just keep in mind You must also understand that over time Canada moved from being a de jure British colony to being a de facto American economic colony. This can be shown among other things by the fact that after World War I the level of investment in Canada that was of US origins greatly overtook the level of British investment in it. There was also, after the Second World War, what came to be known as the big takeover, namely US companies would come into Canada, engage in conglomerate building and so on. We don't have a word in French for the big takeover, it was never a big story for us, but for English-Canadian you've got a whole literature on this issue.

10:03To put things really quickly again, what happened was that the people in Ottawa became much more political activists to try to go on with this kind of Canadian nation building. So they came up with, among other things, TransCanada Airlines, the Canadian Broadcasting Corporation, foreign investment review agencies, a regulator agency that enforces Canadian content quotas on our airwaves, we cannot watch the TV we want to, we've got an agency that decides, well, we've got to have that much Canadian television on the air and so on. All of this, again, in the name of nation building. However, the most favorite mode of intervention over time came to be fiscal policies and subsidies. At first they were targeted towards specific industries, but over time, and much more, what became much more preponderant toward targeted region.

10:49The idea, of course, beyond that was that Canada was a much more just society than the United States, that's the term that English Canadians usually use. And that if you want to stay in the Maritimes, work three months a year and get a welfare check for nine months, well, that's okay, this is a Canadian way and we can go on forever like that. Of course, all of this failed miserably and Eric will give you a much more detailed picture of what is actually going on in Canada right now. Suffice it to say that this has been going on for well over 30 years, but that now recent studies have shown that regional discrepancies are much higher in Canada than in the United States, and that most than 80% of our external trade, of Canadian external trade should I say, is still erected toward the United States. So clearly, all this nation building hasn't achieved much. Now quickly, to understand what is actually going on in Quebec, you must understand that

11:37things have changed drastically in Quebec in the last 30 years. For one thing, the process that had been going on between Ottawa and Washington was repeated on a somewhat lower extent between Quebec City, the capital of the province of Quebec where majority of the French-speaking population live, and Ottawa. So a fearing intrusion of Ottawa in all aspects of Quebec lives, you had a bunch of technocrats in Quebec who came up with various rule regulations, shames, nationalization and so on. So we're now stuck with two levels of stiffening bureaucracies that are always cutting each other's throat. You must also understand that in the mid-60s, the secessionist movement in Quebec enjoyed a tremendous revert, if you will, there was one before, but I won't get into this. So in 1968, the Parti Québécois, EPQ, the official organ of the secessionist movement, was born.

12:26It took power in 1976, but on the promise of being a good government and on holding a referendum on secession. The idea that I want to leave you with right now is that Canadian and Quebec history have shaped over time two conflicting loyalties. They are of course similar on some issues, but they are now clearly at odds on other. For one thing, all the politicians in Quebec are now strongly in favor of the liberalized trade, I would also like to point out that, contrary to what some liberal intellectuals or intelligences seem to believe, there is no fascist or racist connotation to Quebec nationalism. It is simply a matter of developing our culture and taking matters into our own hands. And I would finally I'd really like to point out that Canada, as we know it today, is a political creation, but also an economic and a geographic absurdity.

13:33But now Eric will put some numbers on that and brief you on what is actually going on in Quebec. Thank you. So, as Pia said, I'll talk to you about the current situation, sorry, the current economic and political situation in Quebec as well as in Canada. As some of you probably know, year after year, the United Nations proclaim Canada as the best country of the world for its standing of living. Even Bill Clinton talks about Canada as an example for its quality of life, its low crime rate and its generous social programs. And Hillary, of course, describes the Canadian Medicare system as the dream model where everything best is available and free for everyone.

14:25Unfortunately, the Canadian reality is not exactly the one described by Ms. Clinton. As Chas said, Canada does not make sense economically. Canada was built by government's intervention rather than by people's will, and that's the big difference. It is now characterized by extraordinary levels of government intervention and by the lack of economic and commercial links between provinces. in Provinces. Canadians are now saddled with countless agencies on the federal and provincial levels and nowhere is this more apparent than in Quebec. As a rule, the provincial agency is always trying to outdo its federal counterpart and vice versa. It has been estimated that if only three of these applications between Quebec City and Ottawa were ended, the savings would be in order of $3 billion annually, a huge sum but insufficient to rally people The most stunning result of all the federal and provincial interventions, however, is that Canada is now being proclaimed by the Wall Street Journal as an honorary member of the third world in the unmanageability of its debt problem.

15:37Canada has the second highest debt to GDP ratio of any industrialized country. The deficit is equivalent to 5.4% of Canada's GDP compared to about 2.6% in the United States. So those of you who think that you have a deficit problem just think that it is more than two times bigger in Canada. Even worse, 44% of the Canadian debt is held by foreigners. If you compare with Italy, which has more debt than Canada, then you can see that it's more than four times bigger than the Italian problem. 35% of all federal revenues now go to service the debt. So it means that for each dollar that we pay in tax and services in Canada, more than one third of it is going to serve the interest on the debt.

16:27As you can see, it has been growing over the last 20 years. When the provincial debts, because provinces also have debts in Canada, when you add those debts with the federal one, the sum is even larger than the economy itself. It means that it's more than 100% of our GDP. That's those that are published by the Department of Finance in Canada. All levels of government in Canada now spend more than 51% of the GDP. If you compare over the last 15 years, it has grown by 13% and in the United States it just grew up by 3%. So those of you again who think that the government is oversizing in the United States just think that it's four times worse than Canada.

17:12Since 1979, real public expenditure per capita went up by 52% and during this period, regulations have probably grown more rapidly than expenditures. Also, taxes in Canada are high, more than 37% to less than 30% in the United States, as you can see, and the gap between our two countries is still growing. The federal government laid close to half of them, which amounts to 33% more than all provincial The two governments combined, and this is the first reason why Ottawa is responsible for the high level of Canadian taxes. And the concrete result of that bad management of Canadian public finance by politicians and bureaucrats is our unemployment rate. During the 60s, the average unemployment rate was about 5%, in the 70s, 7%, in the 80s, more than 9%, and now in the 90s, it's more than 10%.

18:05Unfortunately, the data stopped in 1993, because if 1994 was added, it would be more than 11%. Elimination of the central government would thus be a major step toward the downsizing of political bureaucratic activism. In the Canadian context, cessation would provide the only serious opportunity to get rid of the many coercive and costly institutions suffocating individual prosperity and liberty. In view of the current political system and national culture, there are simply no other alternatives. Let's take a closer look at Canada's international and internal trade. At least one would think Canadian economic integration brought some good with it. The reality is unfortunately not so clear. Consider some statistics about the movement of goods and services in the country.

18:50In 1989, the provinces traded 146 billion worth of goods and services with each other, while Canadians traded 160 billion with the rest of the world. So it means that the provinces in Canada are trading more with the rest of the world than with other provinces within their country. Although I might assume that this is proof of Canada's integration with the world economy, remember that more than 80% of this trade is directed towards the United States. But this does not show Canada's openness, but rather its geographical absurdity. It only proves that without political barriers, trade between Vancouver and Seattle, or Toronto and the American Midwest, or Montreal and New York or Boston, trade would be greater.