Canada's unfinished task of integrating provincial potential

They were a sorry-looking lot. From just about every corner of this prairie province, farmers had come to the Manitoba legislature to call attention to the unhappy plight facing Canada's once-prosperous agricultural community.

They told tales of misery and financial failure. Many are up to their ears in debt, on the verge of bankruptcy. They want provincial, if not federal assistance.

All across Canada, one hears the same story.

''For every one of those farmers present, there are 10 more, maybe 20 more who should be here,'' said Don Holgerson, a milk farmer from Woodridge, Manitoba , and organizer of the farm protest. ''But many are simply too proud to be here.''

Owners of the thousands of small family farms, the backbone of Canada's farm community, are indeed a proud people, loath to whine about their personal hardship.

These farmers are also a hardy lot, accustomed to problems - and finding their own solutions.

But the current economic slump, which has Canada in its tight grip, has caused them greater hardship than they have known in a generation. Although there are some hints that the worst of the slump may be over and that ''recovery is on the way,'' as the Toronto Globe and Mail newspaper headlined recently, such hope seems illusory here.

This past month, many Canadian farmers did not have enough money for spring seeding. And many Canadian banks simply are not lending money ''to a dying cause ,'' as one local banker put it, perhaps a bit too poignantly, as he talked of the family farm.

Many of these farms will eventually bounce back. The bankers, the provincial lawmakers in Manitoba and Saskatchewan and Alberta, and federal officials in far-off Ottawa believe the present agricultural trauma will dissipate as Canada's overall economy gears up its recovery.

Ironically, while small farms are in deep trouble, spring wheat seeding is at a record level - due largely to agribusiness operations which are gobbling up more and more of Canada's rich, abundant agricultural land. These bigger operations are, to some extent, more resistant to the recession affecting the rest of Canada's farm community. But even for the big farms, recovery seems a long way off.

And west of here, in the oil-rich province of Alberta, where oil rigs jostle farm silos, recovery also appears distant.

To people like Ron Swenson, an oil-rig roustabout who hasn't worked for 14 months, there is a feeling of deep hopelessness.

''There isn't much drilling going on,'' he says in his Viking-accented English, reminiscent of his Norwegian ancestry. ''I doubt there will be any new drilling for some time to come. Those idle rigs out there are rusting,'' he continues, pointing to some of the metal behemoths that drill for oil and natural gas.

''There is little hope those rigs will be back at work for another year or so.''

There are many Ron Swensons in Alberta. From a high of nearly 400 rigs working throughout the province during 1980, each employing at least 16 men, drilling has slackened to the point that fewer than 100 are operating today. The prospect for the remainder of 1983 is not good, nor is 1984 expected to see much of a turnaround.

The Canadian Association of Oilwell Drilling Contractors, noting declining oil and gas sales, suggests that demand for new wells will not improve until the 1990s. Other economists forecast substantial depression in Canada's petroleum industry for years ahead.

Yet, the economic barometers are suddenly brightening. For the first time in 18 months, Canada's gross domestic product rose 3.4 percent in the first quarter of 1983 over the previous quarter. Retail sales in April similarly jumped 3.7 percent, again a surprise, according to federal officials.

These figures will, of course, have to be sustained over many months to make certain that recovery is indeed on the way after 2 1/2 years of slowdown.

But the statistics are promising and may ''prove to be more than simply straws in the wind,'' as Finance Minister Marc LaLonde suggests.

Equally important is a report by the Conference Board of Canada that consumer confidence rose sharply in the first three months of 1983. That confidence is not yet backed with much cash, although consumer spending is up a bit. The point is that in the past, a rise in confidence has generally been followed by a rise in demand and in output.

How this will affect the unemployed remains unclear. But it is likely that they will have to wait quite a few more months to see much improvement in the farm and petroleum industries. Moreover, the recovery so far is geographically spotty, affecting eastern Canada substantially more than western Canada.

That is not so surprising. The bulk of manufacturing upon which the apparent confidence is based - and upon which the recovery must be based - is concentrated in Ontario and Quebec.

Unlike his western counterparts, Toronto construction worker Harry Schwartz, jobless for 19 months, went back to work June 1. An estimated 497,000 idle workers in Ontario hope to be rehired by the end of the year. Mr. Schwartz says he is ''at long last beginning to pay off my debts and regain a bit of self-respect in the process.''

Statistics aside, it is this human drama being played out all across Canada, as in the US, that reveals the hardship behind the hard numbers of recession and recovery.

In many ways, of course, the two countries are close not only in geography, but in the way their economies dovetail. The US is Canada's biggest customer, buying $45 billion worth of Canadian goods, or 68 percent of total Canadian exports, in 1982. Canada's economic fortunes are so tied to those of the US that when the US experiences difficult times, Canada is not far behind. But when the US economy rebounds, so Canada's likewise does the same - within a few months. That seems to be what is happening now.

Canadians can be excused if they ''watch the American economy like wary hawks ,'' says Calgary journalist Hap Witherspoon. ''Like it or not, we are tied to what happens across the border.''

Complicating the picture is Canada's high living standard. Like so much else in Canada, this standard is partly the result of simply trying to keep up with the American Joneses next door. Yet Canada has a relatively limited, albeit educated population with which to do the ''keeping up.''

For Canadian economists, the geographic mix of agriculture, manufacturing, and mining which dominates much of the economy is another problem. The mix shows how regional Canada has become - with agriculture dominating the central prairies, industry heavily concentrated in Ontario and Quebec, and mining stretching from western Ontario across the prairies to Alberta where the bulk of petroleum production is located.

The economies of the eastern maritime provinces, traditionally based on fishing and the sea, are depressed, although a recent surge of offshore oil drilling may alter that somewhat. Then far-western Canada in British Columbia is another world - with timber as its traditional resource and a prodigious potential in minerals. And finally there is that far-northern frontier, largely untapped and unexplored, that offers promise for a future that to some Canadians seems as distant as the region itself.

One of Canada's unfinished tasks is the integration of this mighty potential. Many people in the provinces think of themselves and their economic activities in provincial rather than national terms.

This provincial-federal struggle underlies much of Canada's current economic troubles. Alberta, with its oil and natural gas, is perennially unhappy with federal energy policies that control prices and production, limiting revenue to the province.

At the moment, however, there is an effort on the part of both the provincial and federal leadership to harmonize energy policies, by dividing up the tax revenues on petroleum. If this trend continues, this longstanding problem may be heading toward some solution.

But there are other problems crying out for solutions.

Take farming. Like their US counterparts, Canadian farmers traditionally produce more grain and other agricultural products than Canada can consume or sell abroad. Even in this year of recession and farm bankruptcies, Canadian farmers are seeding a record wheat acreage - some 33.2 million acres, a 6.8 percent jump over 1982.

Selling the yield from this record acreage on a world market glutted with high wheat inventories is no easy task. It is likely farmers will find prices slipping to new lows in the months ahead, further depressing the farm economy, without much relief from federal or provincial governments.

Federal officials in Ottawa, urging farmers to cut back on their wheat acreage to support US efforts to limit grain production, doubt there will be much of a cut. The farmers, meanwhile, are unhappy with federal farm policies that ''seem to change with the wind,'' as a farmer in Saskatchewan said recently.

Farmers say they would prefer a government headed by Progressive Conservative leader Brian Mulroney to the present Liberal Party govermnent of Pierre Trudeau. The ruling party, they feel, has exacerbated the provincial-federal division. They may get their preference at the next general election, but whether a Conservative government can harmonize the provincial-federal relationship remains to be seen.

Next: Canada's relations with the United States

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