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Notes for an address by
 

the Honourable Pierre S. Pettigrew

Minister of Human Resources Development
 
 
 

Renewing the social union and Canadian federalism:

A twofold project
 

Chamber of Commerce

Laval, Quebec
 

Friday, October 24, 1997

Check against delivery
 

Ladies and Gentlemen,

Allow me to begin my remarks today by mentioning the wonderful memories I have of my first time here with your prestigious organization. It was in January 1986. I talked to you about the Free Trade Agreement Canada and the United States were beginning to negotiate.

You gave me such a warm welcome that I completely forgot it was my maiden speech to a Chamber of Commerce. I still remember it fondly. Since then, I have become somewhat more accustomed to public speaking.

I.  Renewing the Canadian social union

Today, I am speaking to you as a social minister in the Government of Canada. For me, being a Canadian social minister, from Quebec, is both a blessing and a curse. A blessing because of Quebec's long tradition as a place of innovation and progress on the social front. A curse because the current Government of Quebec is telling us that the Government of Canada has no role to play in the social sphere, that social matters come under its jurisdiction alone.

So I would like to talk to you today about the great project of renewing the Canadian social union and the reasons I think it is important for the Bouchard government to come back to the table and participate.

The social union concept is a complicated one. Our Canadian social union is a complex system in which social programs and underlying shared values are interwoven. This interrelationship between action and values is a fundamental part of Canadian identity.

With the Chrétien government's success in putting our public finances in order, Canada has regained some manoeuvering room in its ability to make choices, major choices for society. That's what governing is all about - making choices.

And I think the country, overall, is ready to make some significant changes, the changes needed to meet the economic, political and social challenges in this era of globalization. Like all the countries in the world, Canada must adapt. Canada must change, and it is changing.

I have just returned from a meeting of the employment and labour ministers from the 29 countries in the Organization for Economic Co-operation and Development (OECD). I can tell you that I would not change places with any of my colleagues in the other countries. First, because the economic and social situation in Canada is something that impresses all observers. Some even refer to it as "the Canadian miracle". But also because my colleagues are too often wrestling with ideologies concerning government interventionism - strongly advocated by the Left and firmly ruled out by the Right.

Canadians and their governments tend to look for practical solutions to their problems. Quebecers feel the same way as all Canadians, favouring that third option that lies somewhere between the American laissez-faire approach and the social model of continental Europe. I would even say that Quebecers have profoundly influenced Canada's choice of this pragmatic middle ground, which we handle so well.

Governing means making choices

Exactly 21 months ago tomorrow, I entered active politics to be part of the effort to modernize Canadian federalism. To modernize it in a way that will meet Quebecers' needs and expectations. To modernize the country so that Canadians can benefit from the extraordinary potential globalization has to offer while ensuring that these opportunities are shared by all. That's the Canadian model! That's the Liberal ideal!

The social union: a key part of Canadian identity

I know that this audience is composed of people involved in business and economics, but let me tell you that economic development does not happen in a vacuum. There can be no true, solid economic union unless there is also a sound and vital social union to support it.

Over the past year, the Ministerial Council on Social Policy Renewal that I have the honour of co-chairing with my colleague Russell King from New Brunswick has made spectacular progress. In the social sphere, the progress benefits children in low-income families and persons with disabilities. Spectacular progress, too, toward a more harmonious, more positive and more constructive kind of federalism with a clearer idea of the respective roles of each level of government.

A striking example: the National Child Benefit

The National Child Benefit is the most recent example of this relationship between our social values and the concrete action we are taking. In the Ministerial Council, all levels of government, of every political stripe, are working together without squabbling! This is an example of federalism that works, federalism that is modern, efficient and founded on the concept of partnership among governments.

The National Child Benefit is the most important social program to be brought forward in the last 30 years. It is as important as the Canada Pension Plan, which was established for our senior citizens in the 1960s.

One thing is sure: children who lack basic needs, such as proper nutrition, are in no state to learn at school. And this is not fair. In Canada, it makes no sense. Children are our future, the future of our society, the future of our economic development. A good start in life ensures that children become healthier adults who are better able to find their place in the labour market.

The mechanics of the National Child Benefit are simple: the Government of Canada will increase the Child Tax Credit, and thus the income of low-income families. The provinces and territories will take the savings they achieve in social assistance and reinvest them in programs and services to help welfare parents move into employment.

As things stand now, too many parents cannot move from welfare to work without penalizing their children -- moving off social assistance can mean losing up to 3,000 dollars. With our benefit, we want to help those parents get out of the welfare trap and get back to work.

Tax room will be freed up for every province. Beginning in July 1998, Quebec will have the use of an additional 150 million dollars every year. With these savings, each province will be able to offer programs and services that are specifically tailored to meet the needs of their citizens.

Is it interference by the federal government when income-based tax credits are paid out to individuals and the provinces can offer more programs and better services that are tailor-made? No, it is federalism at its best; it is simply a matter of clarifying the roles of each order of government.

How can the Government of Quebec oppose this approach as Mr. Bouchard did in St. Andrews? How can it be so dogmatic? The Government of Canada's policy and Quebec's family policy share the same goals and are mutually supportive.

Moreover, all the other provinces -- from the most conservative, such as the Harris government, to the most progressive, such as the Saskatchewan government, including the most independent-minded, the provinces of Alberta and British Columbia -- have reached a consensus to work together in the best interests of children.

That is a far cry from authoritarian federalism: each party is accountable to its citizens and not to the other order of government. That is what partnership is all about!

The Labour Market Agreement: We can agree!

We can agree, if we want to!

We proved it when we negotiated the labour market agreement. We went way beyond training and transferred to Quebec all the active measures under the new Employment Insurance Act, including Targeted Wage Subsidies and Self-Employment Assistance. All the measures to facilitate labour market integration, to the tune of 500 million dollars a year.

And we have reached similar agreements with eight of the ten provinces, in a spirit of solidarity and respect for the specific characteristics of each of them.

Every labour market agreement is custom-made to meet the specific labour market needs of each of our provincial partners. Four provinces, Quebec included, have opted for full devolution, while four more have chosen co-management with the Government of Canada. This is yet another illustration of the kind of modern flexible federalism I like: federalism that responds in different ways to different needs.

As regards labour market issues, Quebecers have the best of both worlds. They have full control over their own policies, and receive 31% of the Canadian labour market budget, although Quebec contributions make up just 23% of the Employment Insurance fund.

Parental leave: Ottawa has been open and generous

Our approach also emphasizes accommodating the particular requests of the Government of Quebec. Last summer, following this line of thinking, we responded in an open-minded, generous fashion to the specific proposal made by the Bouchard government to create a separate, innovative parental leave plan. As you know, maternity and adoption leave are currently financed through our Canadian Employment Insurance system. And our system has served Quebec's families well for many decades.

But once Quebec showed an interest in setting up its own system, you will remember that I received the initiative with open arms and real enthusiasm, and did everything within my power at the administrative and political levels to facilitate it.

Unfortunately, the Government of Quebec has not been able to pursue our offer or continue with its own plans in this area for the time being. I sincerely hope that Minister Marois will be able to persuade her colleague in Finance, Mr. Landry, to free up additional financial resources for this program, which is more generous than the current one under Employment Insurance, which used to be called Unemployment Insurance.

If Quebecers want to create a more generous program for themselves, Ottawa can do its share to accommodate them, but in all fairness we cannot do this exclusively at the expense of the people who live in the rest of Canada.

Our grand project to renew the Canadian social union is well under way now. I hope our partnership will soon have some new success stories to tell about encouraging persons with disabilities and helping them integrate more fully into Canadian society, with particular emphasis on their participation in the workforce.

II.  The government of Quebec must participate in this effort to modernize the country

Canada is an ongoing project

Creating Canada is an ongoing project. Each new generation of Canadians has had to reinvent this country to make its policies, programs and institutions ever more responsive to the changing needs of the citizenry. And our generation cannot escape its responsibility.

Now it's the baby boomers' turn to reinvent the country.

And Quebec must contribute to the modernization process, as it has done throughout its history.

At this point, I would like to refer back to a not-so-distant past and give some convincing examples of fruitful intergovernmental co-operation in Canada.

Before the stock-market crash of 1929, health, education and social assistance were essentially left to the private sector, especially charitable and religious institutions. But since then, much has changed.

Unemployment insurance

The Great Depression prompted the federal and provincial governments to unanimously agree to amend the constitution so that they could set up an unemployment insurance system across Canada in 1940-41.

Of course, die-hard separatists in Quebec were fiercely opposed to this change, although it meant a real step ahead for Quebecers - a rather incredible position to take, according to a recent biographer of Adélard Godbout, Premier of Quebec at the time. Fortunately, the vision and pragmatism of Godbout's Liberal Party won out over ideological dogmatism. This vision gave the people of Quebec access to a major new social program for workers. Other partnership ventures were to follow.

Hospital insurance

Canadian federalism is characterized by experimentation and competition, as well as solidarity.

What I mean is that the Canadian federal system provides a flexible framework for trying out good ideas in one province and eventually implementing them across the country for the greater good of all Canadians. These ideas include hospital insurance, which started in Saskatchewan and was extended across the country in the early 1960s. Healthy competition between orders of government and among the provinces themselves means that each one tries to surpass the others and all Canadians benefit from this rivalry.

Quebec-style pragmatism

In social matters, Quebec's successive governments have always practised healthy pragmatism. They have, of course, insisted on the primacy of the provinces in social matters, but Quebec's governments have always tempered this approach with a large dose of openness and willingness to enter into partnerships. They have placed the best interests of Quebecers above all other considerations.

I have already mentioned unemployment insurance and Adélard Godbout.

Premier Paul Sauvé also took this pragmatic approach and declared in his time that Quebec had no constitutional objection to the introduction of a Canadian hospital insurance plan. Jean Lesage, in turn, implemented the plan in Quebec in partnership with the Government of Canada.

The governments of Lester Pearson and Jean Lesage took this same pragmatic approach to providing income security for seniors with the Quebec Pension Plan, which parallels the Canada Pension Plan. Incidentally, the Quebec Pension Plan gave rise to the Caisse de dépôt, an important tool for economic development in Quebec.

The Caisse de dépôt has been so successful that the Canada Pension Plan is about to institute something similar for the rest of the country. We in Quebec were 35 years ahead of our time.

It was Robert Bourassa who said that Quebec recognized the federal government's essential role in ensuring that all Canadians have an acceptable standard of living. He also maintained that the administration of social policy programs should be shared, depending on the type of management required in each case - sometimes it needed to be centralized, sometimes decentralized.

Under his premiership, health insurance was introduced in Quebec. This major social initiative is the envy of many countries in the world. Ottawa and Quebec also reached an agreement on family allowances where Quebec's uniqueness was clearly recognized. Whenever social innovations were introduced at the federal level, Robert Bourassa participated in the progress on behalf of the people of Quebec.

Daniel Johnson, leader of the official opposition in Quebec, reminded us of that recently when he said with conviction that they should stop quoting Jean Lesage, his father Daniel Johnson and Robert Bourassa to support their view which is the minority view in Quebec; that it was futile to think that Mr. Bouchard was upholding the historical traditions of Quebec; and that it was inappropriate for Mr. Bouchard to be drawing his inspiration from Daniel Johnson's father, Jean Lesage or Robert Bourassa because Mr. Bouchard was the successor of none of those people. And I am not alone in sharing Mr. Johnson's opinion.

Renewing the social union: an opportunity

In a recent article in La Presse, Claude Castonguay, considered the father of health insurance in Quebec, and certainly not a person one would call a centralizing federalist, urged Premier Bouchard to view the renewal of the Canadian social union as an opportunity rather than a dark plot hatched by federal forces acting in bad faith and by the other provinces to divest Quebec of its authority and control over social matters.

Referring to his own experiences as Minister of Social Affairs in Bourassa's Cabinet, Mr. Castonguay described the approach of the Quebec government of the day, saying that the aim was to clear up the question of the division of powers; it was not to claim a special status for Quebec or to force the federal government to withdraw from the field of social programs, such as old age security. In short, Mr. Castonguay advised moving ahead on issues, instead of merely making demands or, worse yet, these days, clamouring about being slighted!

Mr. Castonguay made two important observations: that Quebecers have benefited from these programs which, in many instances, have a redistribution component that is to Quebec's advantage and, shrewdly, that if both parties in a negotiation truly want to reach an agreement, a solution can usually be found even for issues that, at the outset, appear impossible to resolve.

Modern, flexible federalism

The Ministerial Council on the Social Union is an outstanding forum for moving ahead on issues. As pointed out by Claude Castonguay, there is no question of authoritarian, hard-nosed federalism. And even though it would be difficult to find a more flexible federal system, there is clearly still room for improvement. And I have a few ideas on that. I advocate resolutely modern and effective federalism for the 21^st century.

Yet, although the Godbout, Sauvé, Lesage and Bourassa governments participated in every major step in our country's social development, the current Quebec government refuses, on principle, to have anything to do with the monumental task we have undertaken for the benefit of our children. In practice, Quebec's family policy has the same objectives as the federal benefit and, indeed, the federal benefit is advantageous for Quebec, but orthodoxy, or perhaps even dogmatism, dictates that the current government reject a program that is progressive and reflects a new style of federalism which a large majority of Quebecers clearly want.

The true traditional approach of Quebec

The Premier of Quebec's claim that his approach is based on the traditional approach taken by his predecessors with respect to the social union is, to say the least, a take on reality that is distorted, although perhaps convenient.

The "empty chair" approach has never been that preferred by Quebec governments and is, in my opinion, completely contrary to the best interests of Quebecers.

Making another divisive referendum unnecessary

I noted with interest Mario Dumont's suggestion that there be a ten-year moratorium on any new referendum on independence. I would say that we need to invest all our energy in the exciting job of modernizing our country. We simply have no need for another divisive referendum.

The time is right for the renewal that everyone wants.

Globalization is making it necessary to redefine the relationship between the State and the market place, between the State and the community, and between the State and the individual. Canada has no choice. We have to redefine, reinvent the relationships between Ottawa and the provinces, and we have to innovate. The needs of our citizens must take precedence over any other considerations.

The step-by-step and case-by-case approach advocated by Prime Minister Jean Chrétien is very promising and has already borne fruit, with the labour market agreements, the federal withdrawal in the areas of forestry, mining and social housing, and the limits on spending authority.

Giving Quebec/Ottawa partnership concrete expression by means of the social union

I say today to Premier Bouchard: you have, in Ottawa, a Minister of Human Resources Development who is open to the legitimate aspirations of Quebecers and who wants to change the country. I want to work in partnership with your government, so that we can combine our efforts and abilities to get the best results possible for our fellow citizens.

If Mr. Bouchard really wants to follow in the footsteps of his predecessors and continue to build on the heritage left by people such as Lesage and Bourassa, I warmly invite him to participate in renewal of the Canadian social union.

I say again: my purpose in politics is to modernize Canada. My vision is that of an increasingly vital Quebec that is a major partner in a modernized Canadian federation; a society that both benefits from Canada and, as recognized in the Calgary declaration, is essential to the vitality of Canada. We have to strike while the iron is hot. The time to act is now.

The Canadian social union is an excellent avenue for renewal of the federation. No one wants continued counterproductive and costly quarrelling, when a real partnership that is imaginative, based on respect and adapted to meet the challenge of the 21st century is entirely possible within our federation.

To my sovereigntist friends who tell me that they want an economic union with other Canadians, but not a social union, I say, "Look at the European experience."

The European Union shows that there cannot be economic union worthy of the name without social union. As the Europeans have developed their common market and their economic union, they have felt the need to considerably develop what they call "l'Europe sociale", Europe as a social entity. Canada is a model for many Europeans. French political thinker Alain Minc said that Europeans "dream about" Canada.

Quebecers need to find reconciliation. Let's forget about the 50% plus 1 on one side or the other. Let's be ambitious! Let's build a broader consensus - one that brings together 65%, 70%, 80% of Quebecers in favor of the renewal and modernization of Canada as a country. This is the only option that will allow Quebecers to collectively think about and prepare for their future. United, we will be stronger. You can count on me.