A new book looks at the economic idea that’s ruining Canada

NATION by Gregory Beatty


If a Canadian from the “Just Society” era of the Pierre Trudeau-led Liberals in the late 1960s was magically transported to present day they might not recognize their country. Since that halcyon period of counter-culture ferment, there’s been a huge shift to neoliberalism, an economic system that puts the economy before everything else.

Ronald Reagan in the U.S., Margaret Thatcher in Britain — and, in Canada and Saskatchewan, Brian Mulroney and Grant Devine — were early proponents. In the succeeding decades, through corporate/individual tax cuts, international trade and investment agreements, deregulation, privatization and other “free market” initiatives, neoliberalism has seemingly become embedded in our DNA.

This despite the fact that reviews have been decidedly mixed. Neoliberalism has been blamed for, among other things, escalating damage to the environment, stagnant wages and the decline of the middle class and the widening gap between the wealthy and everyone else.

Tracing the growth of neoliberalism at the provincial and territorial level is the goal of a new book titled Transforming Provincial Politics: The Political Economy of Canada’s Provinces and Territories in the Neoliberal Era.

Bracketed by an introduction and epilogue by co-editors Charles Smith and Bryan Evans, who teach at the University of Saskatchewan and Ryerson University respectively, the book features 13 essays examining the impact of neoliberalism in the 10 provinces and three territories.

After obtaining a review copy of Transforming Provincial Politics from University of Toronto Press, I spoke with Smith.

What was your motivation for the book?

Social scientists used to focus a lot on the provinces and provincial affairs but if you look at the volumes that were available in the 1990s, none got updated in the ’00s. So if you’re trying to teach a course on provincial politics today you have no material outside of newspaper articles. That led us to reach out to some traditional names, plus some new scholars, to try to explain what’s going on.

Under the BNA Act, provinces have exclusive jurisdiction over many areas. So they’re important political and economic players.

Historically, provinces were supposed to be weak. If you look at Confederation, there was a sense they were going to be relegated to minor policy areas. But minor policy issues in the 19th century such as education, health, [municipalities, and property and civil rights], have become very important in our time. And they’re provincial responsibilities.

Neoliberalism has brought many changes to the country. Could you describe some of them?

One thing the book does well is explain how there’s been a shift in political power from central Canada to the west in the last 35 years. We also look at the shift in economic power — the transition from a manufacturing hub in central Canada to a resource hub in western Canada.

Another issue we were interested in exploring is what’s happened to the social left? There’s no question when you elect conservatives, or blue liberals, you expect to get cost-cutting and austerity. But we’ve also got that when we’ve elected NDP governments, or PQ governments in Quebec. We didn’t understand why some of the most radical restructuring of post-WWII institutions also occurred under their watch.

There have been changes in the North too. Yukon, Northwest Territories and Nunavut are all evolving entities in Confederation.

We enjoyed editing those chapters, and the authors are all first rate. The North is a mystery for many Canadians, and they have their own unique situation. They suffer from under-development and lack of self-government. But at the same time you’re seeing large capital investment [in the resource sector] which brings conflict with First Nations land claims and Canadian government overreach. The story being told is one of rapid development and transformation, and the question is how will that play out?

Getting back to the social left — it’s like progressive governments have abandoned the field. Why do you think that is?

Certainly, there’s been a lack of political will. There are also external factors. NAFTA and other global bodies, for instance, can’t be ignored. They’ve put downward pressure on governments to not do certain things. In Saskatchewan, for example, you’re not seeing any discussion around nationalizing potash or oil the way you did in the 1970s.

At this stage, to be honest, that would be difficult for any progressive party to propose. That said, I think there’s been a serious abandonment of core principles by centre-left parties. Taxation is one example. The realm of the possible is how do we keep taxes low rather than how can we have a tax system that’s both fair, but also says if you have wealth, a lot of it was accumulated with help from other people, so there’s an obligation to pay some of it back. That whole conversation has been abandoned in favour of the idea that tax cuts always produce growth and you can’t tax businesses above certain levels. And it would take a strong political figure or movement to bring it back.

Do you agree that while we once lived in a market economy, we now live in a market society, where the influence money exerts has power well beyond the marketplace?

I agree 100 per cent. That’s been one of the successes of the neoliberal transformation, from markets sort of serving the needs of the public with significant government regulation to markets addressing the problems of society in ways we never would have envisioned in the post-war period. Social programs are underfunded, school construction is contracted out, and the private sector is supposed to deliver basic infrastructure and perform all these other services. Now, we’re having discussions about privatizing health care to solve the “crisis” there.

The Alberta chapter is great for that, because it shows how governments envision policy-making, and who they’re going to for advice. Increasingly, you see that close connection between government and industry.

With income inequality at record levels, severe environmental challenges and a general sense with legislation such as Bill C-51 that we’re moving toward a police state, are we reaching a breaking point?

The post-war period now seems like an aberration between two really extreme forms of capitalism. And I wonder if we’re headed in a direction where democracy becomes not something that empowers people, but something that reinforces the power of the ruling class.

If we want to understand the dramatic increase in inequality, we know that letting markets function unregulated has contributed to that. The question I would pose is, when does austerity end? It seems like we’re in this permanent politics of austerity, and it’s always about making people pay more for health care, introducing P3s into hospitals and schools instead of investing in the next generation of public infrastructure, hiking tuition fees so students have to finance their own education. In my mind, these policies are taking us backwards and not forwards.

Is this a done deal, or do you and the other contributors think the neoliberal tide can be rolled back?

Two sources stood out for us. The first is the labour movement. Really, I don’t think there can be a sustained left response to the current political and economic crisis without the organized working class taking a lead role. They have the formal organization, and the financial resources to address the power of the right — obviously not equally, but they have some capacity to engage in class struggle.

Second, and probably most promising for anyone interested in social transformation, has been the incredible response by Canada’s indigenous community. In many ways, neoliberalism has been a step back economically because we’ve moved away from secondary manufacturing and value-added economic development to the old way of taking stuff out of the ground and selling it. As we’re seeing today in Saskatchewan and Alberta, that’s incredibly unstable. And it’s First Nations communities in rural areas and the north who are most actively engaged in resisting that model.

But until there’s solidarity between those anti-colonial activists and other progressives, I don’t think we’ll see a reinvigoration.

Although I think there are young people eager and willing to have that discussion. So there’s always hope.