Thursday, January 3, 1991
West's interests now differ from Canada's

For years, the Western provinces have been the darlings of economic and political reformers in Canada. The West's grievances - the dominance of Ontario and Quebec in national political institutions, high tariffs that protected central Canadian manufacturers at the expense of consumers, favoritism in federal spending for the most populous regions, and of course, the National Energy Program - were our grievances.

Many of these are detailed in two new books: Inside Outer Canada, by former Tory MP David Kilgour, and Breakup, by Alberta journalists Don Braid and Sydney Sharpe. As these traditional complaints come to be addressed, however, and as the real agenda of some leading Western agitators takes shape, the moment is fast approaching when this reform alliance will have to split. In this season of goodwill, perhaps it is now time to tell the West to shut up.

The tendency of statist economic policy to benefit entrenched interests is indeed one of the key arguments for markets. But it is not the only one, nor in a national context the most important one. The practices to which Westerners object are wrong not because they harm the West - though they undoubtedly do - nor because they profit certain quarters of central Canada - though they do that, too - but because they are wrong for the nation.

Protectionism reduces national purchasing power and impedes national productivity; the National Energy Program diverted national economic activity away from highly profitable oil production in order to cross-subsidize inefficient oil consumers; the federal pork barrel has bankrupted the national treasury, corrupted national politics, and distorted the national economy, whatever its effects in inflaming regional resentments.

The test of policy should be whether it is good or bad for the nation as a whole, not whether it hurts or harms the West. If every issue is to be filtered through the prism of regional interests, then perfectly sensible policies for the nation will end up being rejected along with the dross. Kilgour, in particular, treats every Conservative measure he doesn't like as part of a pattern of systematic persecution of the West.

High interest rates, of course, have destroyed investment in the West to remedy an Ontario problem. Cuts in subsidies to Canada Post, Via Rail and the CBC have disproportionate impact on outlying regions. The goods and services tax, natch, is only good for central Canadian manufacturers: according to Kilgour, it ''will hit most severely the residents of outer provinces.''

It would help their case if these Western whiners at least had the facts on their side. Real capital spending growth since 1982 has been faster on average in the West than in Ontario. The GST doesn't just help manufacturers, but any capital- intensive industry - such as, say, oil - since in many cases producers were formerly having to pay federal sales tax on capital goods, which now will be rebated. Finance department figures, which have not been seriously challenged, show producers in the Prairie region benefit most of all from switching to the GST.

Even in the case of a measure that disproportionately hurts outlying regions - the subsidy cuts, perhaps - that is not an argument against it. To say a certain group will lose from a given reform is only to say they profited from the pre- reform state of affairs - at the expense of everyone else. Yes, Via cuts probably hurt some communities. But if the rest of us are to pay for subsidies, these must be justified on their merits, not just because it would hurt to take them away.

Worse still are some of the remedies offered for central Canadian discrimination: essentially, affirmative pork barrelling. The Reform Party wants to subject federal measures to ''regional fairness'' tests. Kilgour speaks approvingly of the U.S. practice of distributing defence spending among all 50 states. It seems clear, also, that he sees a Triple-E Senate not as an institution of regional representation that would better promote the national interest than the First Ministers' Conferences, but as simply another means for local wardheelers to hold the national government to ransom.

We don't need to salt the pork with a regional flavor, we need to shut the pork barrel entirely. Rather than regional fairness, the criteria governing federal policy should be neutrality - do not distort markets - and social justice - help the poor. Except where regional equity is its explicit goal, how policy translates into gains or losses for particular regions is not the affair of the nation.