Brian Lee Crowley

Why 50% plus 1 shouldn’t be enough to break up European countries either

Regular readers of this site and blog will know that I am a ferocious opponent of the idea that Canada should be vulnerable to being broken up by a vote of 50% plus one of a province’s residents in a referendum on independence, and in this the Supreme Court of Canada and I are of one mind. But Canada is not the only place in the world where local nationalist movements are trying to use the referendum weapon to dismember venerable democratice nation-states such as the UK and Spain. Writing for CapX in the UK, I make the argument for Europeans as to why they too should learn the lessons Canada has learned from a half century wrestling with the separatist nationalist movement in Quebec, including the rules that should govern any referendum, what the threshold of success should be and what should follow a Yes vote.

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Separated at birth: Ottawa budget, 1995; Quebec budget, 2015

My latest musings for the Globe/ROB’s Economy Lab revolves around the context and significance of the year’s most important budget: Quebec’s. After years of failed attempts, the new Liberal government of Philippe Couillard will make another stab at fixing Quebec’s self-imposed economic decline by wrestling with the out-of-control growth of the Quebec state over the last 50 years. The stakes couldn’t be higher, but it is not at all clear that Couillard will be more successful than his predecessors. That very uncontrolled growth of the state has created a political climate in which a democratic mandate may not be enough to overcome the organised resistance to reform. In the column I draw parallels between the historical significance of Paul Martin’s 1995 budget and this one, 20 years later. Both aimed to fix the damage done by several generations’ worth of bribing Quebeckers to support federalism or sovereignty. Martin pulled it off, but his task was more manageable.

Wish Couillard well. He’ll need it.

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Why we need Clarity Act Mark II before next referendum

In my latest column for the Ottawa Citizen and other Postmedia papers I call for Ottawa to supplement the Clarity Act with another law that fills in the gaps left by that original landmark legislation. Mark I gives legislative form to the Supreme Court’s ruling in the Secession Reference, but only with regard to the Court’s rules about the standard Quebec must reach to trigger an obligation on the ROC to sit down and negotiate. The SCC went on to say a lot about what would have to happen wrt the negotiations themselves for them to be regarded as constitutional and respectful of the rule of law. Once the April 7th Quebec election is out of the way, if the PQ has their majority Ottawa should table Mark II, laying out what its negotiating mandate would be in any eventual negotiations (e.g. protection of minority rights, which means dismembering Quebec), and well as how Ottawa should respond if Quebec flouts the SCC rules on things like a clear question. Stern but bracing stuff!

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Column: Tell the truth, separatism is dead

In today’s Ottawa Citizen, and following on the heels of the recent Great Canadian Debate “The Government of Quebec can decide unilaterally to secede from Canada” I argue that for all practical reasons, the idea of an independent Quebec is a non-starter.

Column: Tell the truth, separatism is dead

By Brian Lee Crowley, Ottawa Citizen June 21, 2013

Why will no political leader stand up and tell the truth about Quebec separatism? That truth is that separatism is dead—not, of course as something to dream about and vote for; that, like death and taxes will always be with us. No, the truth is that the hurdle is set so high for it to be done successfully and legally that separation is, for all intents and purposes, impossible.

Even Stéphane Dion, architect of the Clarity Act and one of the most courageous and rightly admired of Quebec federalists, still maintains the fiction that the key question is whether Quebec gives a clear answer to a clear question on secession. Quebec will not be kept in Canada “against its will.” He said so again the other night at one of the Great Canadian Debates Series organised by my institute in Ottawa. If Quebeckers really want to go, he says, they can.

True, forcing Quebeckers to stay against their clearly expressed will is a recipe for misery. On the other hand, downplaying the certain costs Quebeckers would confront to get out of Confederation encourages separation fantasies, distorting that very decision about whether to vote to leave. The secessionists, like former Bloquiste Daniel Turp, who debated Dion, strive to make Quebeckers believe that independence would be essentially costless, while creating all kinds of benefits (we will finally be maîtres chez nous, or as the great Quebec chansonnier  Félix Leclerc put it, it would mean the end of the fat greasy fingers of strangers pawing through the family papers).

It seems clear, though, that if Quebeckers understood the real cost they would have to pay to get out of Canada, the likelihood of such a vote ever occurring would plummet. So by failing to confront Quebeckers with the truth of their legal and constitutional position, the defenders of federalism actually help to foster the climate of confusion and uncertainty that has cost the whole country so dearly, and no one more than Quebeckers themselves over the last half century.

The Supreme Court had the cojones to make clear just how high the bar to secession sits in its 1998 decision on three questions referred to it by the Chrétien government. Those questions dealt with when and under what conditions Ottawa might be required to recognise a pro-independence vote in a Quebec referendum and negotiate the province’s secession.

What many people, including the federal government, took away from the Court’s ruling was that Quebec could not unilaterally set the rules of such a referendum. Ottawa is entitled to say it will never open negotiations on Quebec independence unless a clear question has been asked and a clear majority given. The 1999 Clarity Act gives legal form to this requirement.

Ottawa has remained silent, however, on the rest of the Supreme Court’s decision, for it did not stop at setting the conditions under which Ottawa would be legally obliged to open negotiations on secession.  There were also conditions to be attached to the negotiations themselves. Those conditions include respect of the rule of law, the rights of minorities and the federal nature of Canada.

Think about what any of those conditions might mean. The rule of law means that secession must be accomplished under the Constitution. Since the Constitution does not contemplate a province leaving, it would have to be amended. Such an amendment would fall under the unanimity rule, meaning that Quebec must negotiate secession with the nine other provinces plus Ottawa; any province, even tiny Prince Edward Island, could legitimately upset the secession applecart all on its own. Nor would any province give its consent unless it got its quid pro quo; Quebec taught us that rule of constitutional negotiation. Federalism doesn’t disappear simply because Quebeckers vote to make it go away.

Respecting minority rights means that Ottawa would almost certainly have to protect the interests of at least two minorities: Aboriginals (who have zero interest in leaving Canada) and federalists who voted to remain in Canada. Accordingly, Quebec could not possibly get out of the negotiations with its territory intact. Minorities given short shrift in the negotiations could turn to the Supreme Court for relief.

Fond fantasies aside, Quebec cannot, by majority vote, wave away its legal obligations. Quebec would crave and need international recognition, but that recognition will only be forthcoming if Quebec leaves according to the rules. Those are the ones the Supreme Court has laid down.  Virtually any imaginable secession deal that could emerge from such negotiations would be repugnant and unacceptable to Quebec nationalists. Result: economic devastation and deadlock, no matter how much Quebeckers might wish to leave.

Breaking up is indeed hard to do; so hard in fact that the chances of it ever occurring are microscopic. We should say so and act accordingly.

Brian Lee Crowley (twitter.com/brianleecrowley) is the Managing Director of the Macdonald-Laurier Institute, an independent non-partisan public policy think tank in Ottawa: www.macdonaldlaurier.ca.

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VIDEO: Ottawa subsidizing risky provincial borrowing

VIDEO: Ottawa subsidizing risky provincial borrowing

 

New MLI video shows that Euro-style debt crises can happen here if status quo continues

Alberta and Ontario lead the parade of Canadian provinces running unsustainable public finances, in part thanks to the market’s belief that Ottawa will never let a province default on its debt. Based upon an exhaustive study by the Macdonald-Laurier Institute – Canada’s premier non-partisan think tank – this video explains the risk all Canadians face: that federal taxpayers will have to pick up the tab for profligate provincial governments. It also explains what we can do to fix the problem!

Click here to watch “Debtbusters: Who’re broke provinces going to call?”

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NB Power-Hydro QC: Grab the money and Run!

In today’s Globe and Mail, Tom Adams and I have another run at the proposed NB Power-Quebec-Hydro deal put forward by NB Premier Sean Graham and QC Premier Jean Charest.

As readers of this blog will know, I think this deal is a dream proposition for New Brunswickers. Ten years from now, if it goes through, people will look back and bless the name of Sean Graham, the premier who had the balls to propose it.

As Tom and I show in the essay in the Globe, far from being the “province’s crown jewel” of much overheated anti-deal rhetoric, NB Power has been a poorly managed mess for years. It has drowned the province in huge debt, locked them into high-cost and low-productivity generation, and encouraged politicians to play politics with electricity rates. The multi-billion dollar debt the utility has accumulated is a millstone around the province’s neck.

This deal will allow the province to rid itself of that debt with the stroke of a pen. It will see residential rates frozen for 5 years (they’ve risen faster than inflation — 27% in the last 5 years alone), after which they will track inflation. That’s a better deal than QC-Hydro’s own customers have got in recent years. Major industrial users will benefit from a 30% cut in their power rates, a major boost to competitiveness. Future increases in electricity demand can easily be met from Quebec’s plentiful, green and low-cost hydro base. The electricity business will still be subject to regulation by the NB authorities.

Two of the main criticisms of the deal hold no water:

1) that this gives Quebec blocking power on future electricity development in other eastern provinces because QC will be able to block access to the US market.

Uhhhh, no. Quebec is itself a major exporter to the US and would like to sell a lot more. That access to the US market comes with conditions. QC-Hydro must have a licence to export from the Americans’ Federal Energy Regulatory Commission (FERC). FERC regulations unambiguously require anyone exporting to the US to allow open market access to their jurisdiction from other suppliers. If Quebec tried to exploit their geographic advantage by blocking electricity exports from, say, NL or NS, they would lose their FERC licence and with it their access to the US market. It would be incredibly self-damaging for no gain. Won’t happen folks.

2) NB is just exchanging one electricity monopoly for another. Yes, true. And yes, I would prefer to see both QC-Hydro AND NB Power broken up and sold, creating a genuine competitive electricity market in eastern Canada. That’s not happening anytime soon. What we’ve got is this: under the proposed deal, NB is still subject to a monopoly supplier of electricity. That supplier is still subject to the regulatory authority of NBers. It is the status quo in that regard, so they are no worse off. By contrast, they get rid of more than $4-billion in debt, access to lower cost sources of electricity, remove local politics from a lot of power decisions, improved competitiveness for many major industries, and can expect much better rate performance than they’ve got from NB Power for years and years. So it’s not competition, but a huge improvement on the status quo. Let’s not let the perfect become the enemy of the good here.

My main criticism of the deal: rather than springing it, Meech Lake-like, on the public, the province should have announced that the utility was for sale and invited proposals. The QC-Hydro deal is a clear improvement on the status quo, but we don’t know how it rates compared to other alternatives that might have been put on the table. In 2009, NB’s way of proceeding seems old-fashioned and paternalistic. If they’d gone ahead in a more open manner, they probably could have managed public opinion better. Still, when the emotional reaction eases a bit, and NBers can look at this deal in the cold light of day, I think they’ll realise they’ve been given a gift — a free pass out of their own self-created electricity mess. They should take it.

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Ignatieff, Harper, Martel and who’s reading what

First Chantal Hébert said that Fearful Symmetry should be the Prime Minister’s bedside reading.

Then she said in Le Devoir that if there was only one book that the Quebec political class should read this autumn, it’s Fearful Symmetry.

Then Lise Payette said (also in Le Devoir) that the book should be on the bedside table of every self-respecting Quebecker (yes, it’s true, she wants them to read it so they can see that there is no future for Quebec in Canada, but then she didn’t read the book carefully, because I talk in some detail about how Quebec can and should be accommodated within Confederation. What we agree on: that people should read the book!)

Then Yann Martel, the award-winning Quebec author gets all bent out of shape because he, in common with the rest of the Quebec cultural élite, is still beating the dead horse that says that Stephen Harper is a cultural know-nothing who should read good books (preferably ones suggested by Martel…). Instead, he learns from Chantal Hébert, the PM is reading… You guessed it: Fearful Symmetry. Not a Martel novel? Quel culot…

Not to be outdone, the Leader of Her Majesty’s Official (and Loyal) Opposition, Michael Ignatieff, has just told the National Post that the last book he read was…Fearful Symmetry.

Do I detect a trend here…?

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NB Power: free, free, free at last

To listen to the whining of the New Brunswick Opposition and Newfoundland Premier Danny Williams, you’d think that the recently announced deal to sell NB Power, the New Brunswick Crown-owned power utility to Quebec Hydro was a sell-out of the province’s interests. Balderdash. New Brunswick has been staggering under the weight of the poorly managed utility and its burgeoning debt for years. This deal provides a profitable way out. New Brunswickers should take it and be glad. Here is a piece that Tom Adams and I co-wrote for the NB Telegraph-Journal laying out the reasons why:

N.B. Power Deal: Good News Not Bad

By Tom Adams and Brian Lee Crowley

 

The proposed deal between NB Power and Hydro-Quebec brightens New Brunswick’s future. Consumers and taxpayers would reap huge savings while the province’s public finances would be transformed for the better overnight. Industrial users would immediately move to rate parity with comparable users in Quebec, where power prices are among the lowest in the world. Households, small businesses and institutional customers, for whom NB Power was planning rate increases of 3% per year out into the future, would get rates frozen for five years and regulated rates after that.

Yet Conservative David Alward, Leader of the Opposition, opines, “This deal is outrageous. If you are an ordinary New Brunswicker, you’re being sold down the river.” MLA Jeannot Volpé, former energy minister in the Bernard Lord government, called it, “a very stupid, stupid deal.”

In this the Opposition is taking their lead from Premier Danny Williams of Newfoundland and Labrador. He derides Quebec’s intention as a “despicable power grab”.  He reserves his most vicious vituperation for New Brunswick’s government, which he accuses of “complete capitulation” in having “agreed to sell away their future.”

What does the future hold for New Brunswickers under this deal? Mr. Volpé complains that rates for non-industrial customers after the rate freeze expires will increase at inflation and that potential future growth in demand will be served by power at market prices. Of course, NB Power’s rates have been rising faster than inflation and will continue this pace if the deal does not go through. NB Power’s recently acquired new supplies of generation are priced well above market.

NB Power’s government-guaranteed debt, which Hydro Quebec is taking over, is about $12,600 per customer. That monkey will be off New Brunswick’s back. NB Power’s operating costs and rates are some of the highest of any utility in Canada and both are under severe upward pressure. In most years New Brunswickers are lucky if the utility breaks even; punishing losses are frequent.  Those losses will no longer be backstopped by provincial taxpayers.

Notwithstanding guaranteeing rate decreases and freezes, Hydro Quebec says the transaction will be profitable from year one, with an astounding expected return on equity of more than 10 per cent – well above the average return for Canadian utilities.

Hydro Quebec’s decision to take over NB Power is obviously based on Quebec’s assessment that it will have surplus electricity at rock bottom cost well into the future. Hydro Quebec’s sharply declining export revenues, declining load across the region, persistent negative prices in Ontario’s wholesale power market this year, and low market prices in New England, support the view that power will remain cheap for a while. New Brunswickers will benefit from those cheap prices under the proposed deal. Where is Mr. Alward’s proposal for bringing those cheap prices to New Brunswick while servicing NB Power’s debt?

Premier Williams’ opposition actually comes from another source that has nothing to do with New Brunswickers or their interests; the politicians in Fredericton should make sure they know what they’re getting into before following this pied piper.

Premier Williams wants to build a big hydro project on the Lower Churchill in Labrador and sell the power for top dollar. He fears that anything that reinforces Quebec Hydro’s dominant position in eastern North America makes that project less likely. But Premier Williams’ ephemeral dream to press ahead with Lower Churchill cannot proceed in today’s circumstances. This is not because of opposition from Quebec, but precisely because power prices are low and will stay that way for a while. Whatever other virtues Lower Churchill has, its power once delivered to paying customers would be very dear. Taxpayers in that province should be relieved, not outraged, that Nalcor, Newfoundland’s Crown energy company, is not out in the market the trying to sell costly power right now.

Rather than denigrating neighbours for their success, a success that costs his province nothing, Premier Williams should instead turn the Quebec – New Brunswick deal to his long-term advantage. How? By negotiating a transmission access agreement with Quebec to be activated in the future, when Lower Churchill power becomes competitive. Such a deal would cost Quebec little but would help to remove suspicion of their intentions while creating a constructive relationship with a potentially important business partner.

If the Newfoundland government could find the will to be constructive, it would set out terms for the design for a future transmission tolling agreement that allocates costs fairly, moves new Labrador power to market most efficiently, permits Quebec to earn a reasonable return on any prudent investment it makes, enshrines Newfoundland’s right to market access, and establishes an arm’s length dispute resolution mechanism. An excellent model for a deal would be to follow the lead of the transmission access requirements of the U.S. Federal Energy Regulatory Commission that already governs Quebec’s exports. If and when the economics of Labrador power development turn around, the challenging transmission riddle would then be solved.

When neighbouring provinces find creative solutions making both sides much better off, it is corrosive of our federation and antithetical to the essence of Canada for another province to take a bitter, beggar-thy-neighbour position. Instead of fostering acrimony, Premier Williams should butt out of the Quebec-New Brunswick deal and position Newfoundland to get into the power trading game on reasonable terms when the time is ripe.

 

 

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Laying the ghosts of Quebec’s past

In their critique of my book published in Le Devoir (“Les vraies origines de l’État providence”, 7th October), Jean-Luc Migué and Gérard Bélanger take issue with several of Fearful Symmetry’s central ideas. I don’t have the space here to respond to all their arguments (those who care to do so may consult an earlier post on my blog where I respond to many of the criticisms they raised in a similar article they published in the National Post: http://brianleecrowley.com/blog/.)

On the other hand, in this new piece the authors offer a counter-interpretation of Quebec’s history that really demands a response, if for no other reason than it repeats a number of tired old myths that recent Quebec historians have firmly placed in the dustbin of history.

Migué and Bélanger write, “Before 1960, our social conscience owed much more to the rules laid down by our authoritarian Church than — contrary to Crowley’s assertions — to a commitment to limited government and the rule of law. For most of our history we lived, first, under the “ancien regime” and thereafter as a rural minority.”

The authors thus repeat the myth of the “grande noirceur” (Great Darkness), according to which, prior to the Quiet Revolution, French-Canadian society was essentially a backward, feudal, rural and economically underdeveloped society living under the thumb of the clergy.

This myth has mostly been propagated by non-historians who wished to blacken Quebec’s past once they became dominant politically in the Sixties, and is now repeated widely by other non-historians (such as Migué and Bélanger) who really ought to know better by now. There is no denying that there is an important debate about whether or not the Quiet Revolution in fact constitutes a radical break or “rupture” in Quebec’s history. On the other hand, to my knowledge, no serious Quebec historian today subscribes to this kind of account of the allegedly wretched and pitiful state of Quebec society before 1960.

One wonders if the authors haven’t quite simply got their societies mixed up when they talk about French-Canada as a « rural minority ». French-Canadians have never been even close to being a minority in Quebec at any point in Canadian history, while the statistics concerning urbanization and industrialization paint a completely different portrait than the one presented by Migué and Bélanger.

According to the Université de Montréal historian Professor Jacques Rouillard,

The image according to which the Franco-Québécois are latecomers to urban life, or that they rejected jobs in the industrial economy, does not correspond to reality when one compares the relevant indicators to those observable in the rest of North America or other industrialised countries. Their rate of urbanisation and of participation in industrial activities is comparable that of other highly industrialised societies. [My translation]

What about the belief in the principles of economic liberalism in Quebec society before 1960, or what Migué and Bélanger are referring to when they reject my contention that the ideas of limited government and the rule of law were guiding principles at the time?

In his book on the economic history of Quebec, Professor Robert Armstrong of McGill University wrote,

Throughout the first four decades of the twentieth century, the government of Quebec occupied a unique position among provincial governments in Canada. Provincial government intervention in the regional economy lagged behind all of the other provinces; the Quebec government practiced the strongest of laissez-faire strategies.

The historian Fernande Roy, in her book on the history of ideologies in Quebec, explains the extent to which values such as private property and individual liberty found fertile soil in Quebec. She writes,

This liberal credo was widespread in the Quebec society of the time, and is to be found well beyond the confines of the business world. It is quite wrong to suggest, as some have done, that these ideals were somehow limited to the English-speaking community either. It is an abuse of history to attribute to all Quebeckers the ultramontanist point of view, which certainly endorsed a different set of values. [My translation]

Just a few days ago, Le Devoir published an interview with Éric Bédard regarding his latest book, devoted to the “reformers” of 19th century Quebec, people such as Louis-Hippolyte LaFontaine, Étienne Parent, Pierre Joseph-Olivier Chauveau, François-Xavier Garneau and others. Mr Bédard is one of the many historians who rejects the suggestion that Quebeckers lived through a “grande noirceur” in the years prior to 1960.

These reformers were powerful and remarkable personages who contributed mightily to Quebec’s progress and development. Nor should we forget the “rouges”, an even more radical group of reformers whose focal point was l’Institut canadien. To reduce the ideological ferment and diversity of this period to a blind adherence to the “rules of our authoritarian Church” is nothing more than a caricature with no basis in the historical record.

I am all the more mystified by the assertions of MM. Migué and Bélanger because Jean-Luc Migué knows better : in a book he published a decade ago, he contradicts the assertions he makes today and instead adopts a line completely in accordance with the one I defend in Fearful Symmetry. In particular he draws a portrait of a traditionally liberal Quebec society which was developing rapidly until the fateful moment when, in the 1960s, the province abandoned its commitment to freedom and the rule of law in favour of an unhealthy reliance on the state. In his Étatisme et déclin du Québec : Bilan de la Révolution tranquille, Migué wrote,

Throughout its modern history, from the end of the 19th century until the end of the 1960s, Quebec enjoyed a period of strong growth, which paralleled that of Ontario… The period immediately before the Quiet Revolution, namely from 1935 to 1955, a period that coincides with the high point of the rule of Maurice Duplessis, is also a period that distinguishes itself as one of the most prosperous of our entire history. Industrial production rose by 10.2% annually, a rate higher than that of both Canada and Ontario, who themselves enjoyed vigorous growth of 10% and 9.6% respectively. Between 1946 and 1958, personal income per capita grew by more than five percent per year, again a growth rate greater than Canada’s or Ontario’s… [My translation]

And how does Migué explain this economic dynamism ? He attributes it to the fact that “the political authorities of the time applied to their work the first principle of the Hippocratic oath : Do no harm.” In other words, this economic success was due to an adherence to economic freedom, limited government and the rule of law!

The unjustified blackening of Quebec’s past before 1960 has for half a century reinforced the policies that, as I explain in Fearful Symmetry, have deeply and unnecessarily damaged Quebec society. It is more than time that Quebeckers read their historians and that they reconcile themselves with their unjustly vilified past.

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CanadianImmigrant.ca discovers Fearful Symmetry

CanadianImmigrant.ca posted a review of Fearful Symmetry by George Abraham that shows that *somebody* at least is paying attention to what the book has to say about immigrants, a vital part of Canada’s future.

The review, available here, draws attention to the fact that most commentators in Canada are reluctant to tell it like it is in any politically sensitive areas:

Brian Lee Crowley strikes me as an unlikely Canadian. In his just-published book, Fearful Symmetry: The Fall and Rise of Canada’s Founding Values, he not only debunks many myths about this country, but does it directly and without pulling any punches. Evidently, Crowley is not given to political correctness — that quintessential Canadian value — and does not mind offending a few people, particularly those in Quebec.

But this reviewer, unlike many others, also recognises that I am not out to single out Quebec. There are lots of people who are benefiting from the ill-advised policies of the last 50 years, policies instituted in large part to accommodate the Boomer rush into the workforce plus the rise of Quebec nationalism. On the other hand, it is not often recognised that those poor policies harm the most vulnerable in our society, including immigrants:

To sum up, in Crowley’s reckoning, immigrants who are down on their luck and have been ejected from the workforce during this recession will benefit from the looming labour shortages. But even then they will be hobbled by what the writer rightly calls a “scandal” unworthy of Canada, the non-recognition of immigrant qualifications. He calls it like it is: “Theirs is a transparent effort to protect not the interests of supposedly vulnerable and ignorant consumers but rather the interests of those already exercising these professions in Canada.”

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Brian Lee Crowley