Trade Issue Drives Quebec Vote

PRESERVING French culture is dear to most Quebeckers, but concern over a worse living standard, coupled with the prospect of not gaining NAFTA membership, will drive 60 percent of the electorate to turn thumbs down on the sovereignty referendum Oct. 30. The prospect of a worse living standard in a sovereign Quebec is the most important factor cited by those who will vote No. For these voters, long-standing issues such as protection of the French language will take a back seat.

In a recent speech to Montreal business leaders, federal finance minister Paul Martin outlined the economic risks an independent Quebec would face. He said a special economic union with Canada was impossible under NAFTA rules and that NAFTA membership for Quebec would be years away.

Without NAFTA membership, independent Quebec's products would be subject to Canadian, US, and Mexican tariffs. Quebec would become a less desirable place for foreign investors because goods produced in the new nation would not qualify for duty-free export to the rest of North America. A smaller Canada also would strengthen US domination of North America.

Sovereigntists dismiss those who predict dire economic consequences should independence occur, citing the separatists' commitment to using the Canadian dollar, to free trade, and to NAFTA membership. In a sense they're right, but only if separation is friendly and independence comes quickly. NAFTA's accession clause requires unanimous consent for adding new members.

Perhaps the Quebec public coffers would suffer with the elimination of Canadian equalization payments, public investment, and other programs. Such losses would pinch, but would not be devastating. Would the freedom-loving United States deny trading rights to a people declaring their independence? Would English-speaking Canada try to scuttle these aspirations?

Other major stumbling blocks would be demands that Quebec assume at least one-quarter of Canada's huge debt, and the need to resolve the status of aboriginal groups residing in Quebec that wish to remain in Canada. (Quebec's Inuit and Cree have scheduled separate votes, on Oct. 26 and Oct 24, respectively, but are likely to also vote in the Oct. 30 referendum). Should independence come, lawyers would have a field day, since Canada's constitution is silent regarding the rights of provinces to secede. The old Ungava territory, a major part of modern Quebec, was ceded in 1912 under the assumption that Quebec would forever remain in Canada.

A strong vote in favor of sovereignty might be difficult for Canada and the US not to accept in principle (and the devil will be in the details), but there is virtually no chance that this will occur. Even the international financial markets appear to agree that the Parti Quebecois dream of sovereignty will be frustrated - the Canadian dollar jumped two cents after the Sept. 12, 1994, election that brought the PQ to power, and has since remained stable, trading in the US 73-to-75-cent price range.

English-speaking Canadians are in no mood to let Quebec go its own way for a simple reason - the very survival of Canada. Any lessons from quick independence would not be lost on would-be secessionists in British Columbia and Alberta. Canada without Quebec would have no choice but to isolate Quebec politically and economically - through a NAFTA veto and legal maneuvers to block independence.

But most Quebeckers will avoid that scenario when they cast the deciding No vote on Oct. 30.

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