April 18, 2006

Redefining Atlantic Canada in the Corporate Image

By Garry Leech

Imagine a unified region consisting of Canada’s Atlantic Provinces and the northeastern United States in which provincial and state legislation eliminated the minimum wage, restricted the ability of workers to organize and drastically reduced public spending on social programs. If two organizations based on either side of the US-Canada border get their way, this vision would constitute the future of the region they call Atlantica, or the International Northeast Economic Region. The Atlantica Initiative is intended to benefit big business on both sides of the border and is being spearheaded by the Halifax-based Atlantic Institute for Market Studies (AIMS) and the Eastern Maine Development Corporation. As AIMS has boldly stated: “If the border cannot be made to disappear, its impact must at least be blurred.”

The Atlantica Initiative envisions a cross-border economic region consisting of Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland, Eastern Quebec, Maine, Vermont, New Hampshire and northern New York State. While AIMS claims to be “an independent economic and social policy think tank,” its ideology is clearly evident in its policy recommendations. AIMS has called on the Canadian government to “foster a development-friendly business environment” through the implementation of “federally driven corporate tax reductions.” The goal is to make Atlantic Canada more competitive under “free trade” globalization.

In Atlantic Canada, where households already earn the lowest incomes in the country, AIMS calls for “competitive wages that draw capital.” From the corporate perspective, the term “competitive wages” simply means low wages, which the Institute claims would increase corporate profits and establish a profit motive. This would in turn entice others to invest in the region and create more jobs. According to AIMS, “Allowing profitable businesses to keep a larger share of their profits … would automatically reward successful businesses and encourage them to become even more successful.”

However, AIMS fails to point out that in today’s global economy, these new investors would remain in the region only so long as the profit motive was maintained. Any increase in wages would simply result in corporations relocating to another region or country that offered a more “development-friendly business environment.” While such policies would ensure profits for corporations, they would offer only two choices for most Atlantic Canadian workers: low wages or no wages.

AIMS claims that extensive government interference in the economy is responsible for Atlantic Canada’s lagging economic performance and that the solution rests in making the region more business-friendly. But according to a 2006 report by the international auditing firm KPMG, many cities in Atlantic Canada already rank among the most business-friendly places in Canada, which itself is the top ranked G7 nation and second overall out of the nine countries studied. In fact, three Maritimes cities—Halifax, Moncton and Charlottetown—were among the top five of the 95 cities in the report. The rankings in the KPMG study echoed those of previous years and, given the continued low incomes throughout Atlantic Canada, clearly show that the establishment of a business-friendly environment does not necessarily translate into decent paying jobs for most workers.

Nevertheless, AIMS intends to move forward with its Atlantica Initiative in order to make Atlantic Canada even more business-friendly. According to AIMS, the region’s economic distress is “caused by poor quality public policy.” The authors of the Atlantica Initiative believe that the region’s “public policy distress factors” include oversized government, which they claim increases “the burden the public sector places on the private economy.” While public sector policies may need reviewing, the solution to the region’s economic problems does not lie in restructuring them to the benefit of big business. In fact, to the contrary, the solution may reside in increased regulation of corporations who move in and out of regions and countries with little accountability to local citizens.

The Atlantica Initiative’s authors also claim that the region’s economy is being negatively affected by “minimum wage legislation” and “union density” or, as they note in their free trade vernacular, by infringements on “labour market flexibility.” Naturally, “labour market flexibility” means flexibility with regard to hours, wages and working conditions for the convenience of employers, not workers. Therefore, both legislation that increases the minimum wage and the existence of unions interfere with this desired flexibility and would need to be eliminated, or at least severely restricted.

Proponents of the Atlantica Initiative have organized a conference to be held June 8-10 in Saint John, New Brunswick, with the goal of moving their project towards full implementation. The conference is titled “Reaching Atlantica: Business Without Boundaries,” with the word “boundaries” assuming a double meaning: the elimination not only of national borders, but also of government policies that restrict the ability of corporations to increase their profits.

Among the stated goals of the conference is “encouraging inter-provincial and international trade through the removal of barriers and harmonization of regulations.” Another goal is to ensure that Atlantica Initiative representatives are permitted to attend the annual New England Governors and Eastern Canadian Premiers Conference. Obviously, achievement of the latter goal would help further the first objective. Increased access to the governors and premiers of the Atlantica region would also make it easier to lobby for the removal of social policies that interfere with corporate profit making. Among the changes in social policies being advocated by AIMS is an increase in private sector involvement in Canada’s public healthcare system, the privatization of the country’s universities and the implementation of US-style welfare-to-work programs. The latter would of course provide a readily available pool of cheap labour.

The elitist nature of the Reaching Atlantica conference is evident in the list of those invited to participate. The conference is being organized by the Atlantic Chambers of Commerce and Boards of Trade and, according to the organizers, “will be open to a diverse group from all levels—small business owners, CEO’s, managers and executives, as well as Government representatives from the four Atlantic Provinces and the US Northeast.” Among the dozens of corporate figures scheduled to speak at the conference are Kenneth Irving (CEO of Irving Oil), Chris Huskilson (CEO of Emera, the parent company of Nova Scotia Power), Richard Egelton (Senior VP and Chief Economist at BMO Financial Group), Rob Bennett (CEO of Bangor Hydro) and Brian Lee Crowley (President of AIMS).

Notably absent from this “diverse group from all levels” are any representatives from the union, environmental, religious and other sectors of civil society. It is only corporate executives and government officials that will discuss crucial economic and social policies that affect millions of Canadians and Americans throughout the Atlantica region.

While the economic problems that continue to plague Atlantic Canada clearly need to be addressed, this should occur in a participatory democratic manner that provides space for input from all sectors of society. The solutions to the region’s economic malaise should not be determined un-democratically by a small group of corporate elites whose sole objective is to establish a free trade regime that ensures increased profits while workers continue to be forced to compete in a race to the bottom.

Garry Leech is a lecturer in the Department of Political Science at Cape Breton University and author of Crude Interventions: The United States, Oil and the New World (Dis)Order (Zed Books, June 2006).