Planning and the Economy: Building Federal-Provincial Consensus

Maurice J. Scarlett is a geography professor at the Memorial University
of Newfoundland.

This study, subtitled “Building Federal-Provincial Consensus,” is part of the Canadian Institute for Economic Policy Series. Thorburn is a political scientist at Queen’s University. Part 1 briefly reviews the Canadian setting and Part 2, the international setting, with a focus on French, British, German, and U.S. experience. Part 3, the “meat” of the book, looks at “Canadian responses” at the federal (chapters 6-9) and provincial (chapters 10-12) levels. Part 4 looks at the dilemma faced by a country of strong regional forces in a federal system with only a small total market. The conclusions, chapter 16, are briefly set out in four pages. They include the view that our lack of success in developing a productive, growing economy is due to our failure to “put our economic house in order”; specifically, we have developed a relationship of deadlock in federal-provincial relations that has set the pace for other relations, especially between business and government. So we have failed to agree on our economic goals, and we have been thus prevented from making rational allocations of our resources and from maximization of productivity. The author notes the featherbedding of many inefficient sectors of our economy and contrasts this with the actions of our market rivals. Our bureaucracy has grown, especially with the attempts at rational planning by the Trudeau governments, but the failure is seen as due to our not having a single planning agency, answerable to federal or provincial governments, with “one basic plan that is fair, competently elaborated and... a basis for discussions leading to implementation on a basis of consent.” It should have a board of directors, drawn equally from federal and provincial levels. What we lack, says the author, is leadership, because of confrontation, and a means to get away from “shoring up... nonviable economic operations.” But “we must be prepared to contemplate workers changing jobs, people moving to regions where opportunities exist, industries that cannot pay their way closing to make way for others that can.”

The introductory material in Part I is somewhat simplistic but gives a generally good background to what follows, though there is a tendency to over-simplify very complex economies and events. The best part of the text is in Part 3, where the analysis is clear and well presented. The conclusions seem to be naive and based on too little grasp of both foreign experience and Canadian geography. Workers already change jobs and move inter-regionally; firms do go bankrupt. But would better planning avoid or accelerate this process of adaptation? Of course we shore up inefficient sectors and regions — but then, so do all countries of the EEC, and for similar, essentially political reasons. As for a single planning agency, desirable as it might be, the prospects of its creation and effective operation seem dim, unless we are to change the whole social, political, and cultural character of Canada.

All in all, this text contains a lot of useful discussion of the political realities within which economic development has been structured. The conclusions from foreign experience are less than convincing, and overall the grasp of economic feasibilities is less sure than that of political processes. The text is well written and is a useful contribution in non-technical language to the literature of an important subject.