Prince Edward Island Revival Plan

A Discussion Paper

by Dave Patterson

Introduction

It is the winter of 1992-3. The recession of the last few years drags on, and there is little improvement in sight. The unemployment rate is pushing 20%, the federal government is drastically cutting transfer payments, and the Prince Edward Island government says its hands are tied and they don't know what to do. Free Trade, NAFTA, GST, world recession, overbearing debt, etc. etc. - the government is bogged down in helplessness and defeatism, void of ideas. Is there anything that can be done? Is the Prince Edward Island economy doomed to join the ghostly galleon which sails the Northumberland Strait, making brief fiery appearances but ever fading deeper into the gloomy fog - or can we somehow kickstart it ourselves, and enter the 21st century as proud Islanders, not ragatags at the tailend of the sputtering Canadian flagship, which itself, under Captain Mulroney, has become a sad caboose on the derailed American Continental?

It is my belief that we have all we need to work with, and more, to return Prince Edward Island to a strong and prosperous economy, if we can just find the political vision to reach out for the future instead of sinking with the outdated and bankrupt promises of the past.

What Do We Have to Work With?

Before looking at potential solutions to the present impasse of the Island economy, we must first define the problem and establish a perspective -- it does little good to go rushing off madly in all directions, as Mr. Leacock so eloquently put it. We must look at our assets and our liabilities, and define our goals, so that our strategies for facing the future can be placed in a realistic context, and form the basis of a long- term, well-thought out plan. We must look to the recent past, and expose to public scrutiny the policies of government and business which have brought us to our present dilemma, so that we do not repeat those mistakes or continue a faulty course.

The list of our liabilities can be short or long, depending on who draws it up. In general, however, we have a few overriding problems that few would deny. We have a high unemployment rate - almost 20%, meaning not only are a large percentage of our working people dependent on the government for life's necessities, but they are also not contributing to the wellbeing of the economy. We have a provincial debt which eats up almost $100 million per year in service charges -- a substantial portion of a $700 million budget (1991). We have a government in Ottawa which has drastically reduced provincial transfer payments, and so seriously mismanaged the national economy and their programs and revenue that, as a province, we can expect even less help from them in the near future. The North Atlantic fishery is in dire straits, and tourism is failing as an economic savior. A growing number of our young people seem to be rudderless in an increasingly complex society, driven by consumerism and the shallow doctrines of selfishness and money-as-god as explained by American television and advertising. Provincially, we have a government which appears devoid of ideas -- in the last three years when PEI has been very hard hit by the recession they have done nothing substantive to alleviate our situation, offering nothing more constructive than a 'hope-for-this' and a 'hope-for-that'. Such are our major liabilities at this time in our history, and they are considerable.

But so are our assets considerable, if we examine them in a local, realistic perspective.

We have a small, reasonably well-integrated Island economy upon which to build. Small is an asset because small is flexible - much easier to bail-out a swamped dory than right a belly-up ocean liner. Our per capita income may not be as high as it is in Toronto - but our expenses are also less, and our standard of living -- in terms of such non-balance-sheet items as safety, a relatively pollution-free environment, and less stressful lifestyle -- is among the best in the world. Yes, we have a high rate of unemployment - but we can look on that as a plus, if we consider the unemployed as a large group of willing and available individuals who are highly motivated to work and contribute to the revival of the economy. We have a 'Garden in the Gulf' - an Island with half a million acres of prime, arable farmland, presently considerably under-utilized. In spite of the high unemployment figures, we still have a collective income on PEI of 1.5 billion dollars. While times are tough, we still enjoy the benefits of one of the better democratic societies in the world, even if it is presently a bit stressed and somewhat overdue for an overhaul. We are still free to exchange ideas and act on them, although our media are not serving us particularly well at the moment. All of us can still put food on the table, get health care and take a hot shower at night. And last but not least on this short list, we have a great many individuals here who care about the Island, and our way of life, and our problems, and who have a great many good ideas about how to improve things and the ability to articulate them well and willingness to act on them.

So what should our goals be, with the recession paralyzing our governments, so many of our citizens on unemployment insurance or welfare, and the provincial coffers low? What can we do to revitalize our economy? How can we bring prosperity back to Prince Edward Island? How can we best utilize our considerable assets to improve our situation'?

THE REVIVAL PROCESS

Step I: Confronting the Past

I am an optimist. I believe that if we get together, and work together with a common goal, almost anything is possible. Good ideas are available, and the people willing to implement them are available also - the average Canadian, or Islander, wants a decent standard of living and is willing to work for it. This being the case, why then isn't anything being done to improve our situation? This is an important question, deserving of some study. We will not improve our situation by repeating the mistaken policies that landed us here in the first place.

If we are to tackle a problem with any hope of success, we must first carefully define it. In this case, we must understand that our situation is not improving because the people with the ideas that would improve things, and the willingness to work for them, are not at present running the government. Our governments are operating under a different set of imperatives, and, quite contrary to improving the situation, they are fixed on a course that has created the present set of problems and will only worsen matters if left alone. Essentially, they are undertaking a financial strategy which allows the few individuals and companies who have over the years accumulated great wealth and power, to increase that wealth and power, while paying minimal and decreasing lip-service to our old-fashioned notions of democracy and social responsibility. Their initiatives do not consider the wellbeing of the average citizen, except as a very peripheral issue. The evidence for this is overwhelming, and I need not delve into it deeply here. It is imperative, however, that we recognize and acknowledge this fact. As the wealth of the country is siphoned off to the top, and much of it even beyond our borders, there is increasingly little left for the rest of us, either in wage paying jobs or to finance our social programs.

The economic force known as 'Big Business' is pulling the important strings in Canada (and the western world); it is their policies of maximizing corporate profits with no regard for the wellbeing of their host country (or province) or the average people therein which have impoverished the federal government in Ottawa, forcing Ottawa to slash funding for national programs which were in place to further the good of all citizens, and until we publicly acknowledge this fact and face up to it, we are not going to have any real chance of improving our situation. If the foundations of the house are being eaten from within by termites, there is no point in putting on the new paint until the rot has been thoroughly exposed and controlled.

Incidentally, this is another considerable asset we have on PEI - we are so small that Big Business doesn't really care too much about us, although national policies set in Ottawa certainly limit the options of the provincial government.

There is a considerable gap in the 1990s between the theory of democracy and the realities under which we live, and if we insist on discussing our problems in theoretical terms rather than in the light of reality, we are not going to arrive at a useful solution to them. I may seem to be dwelling overly long on this point, and repeating myself, but I cannot stress too highly the necessity of recognizing the fundamental source of our immediate problems. Canada is an immensely wealthy country, and that we are now in a financial recession which imposes severe hardships on a large number of our people is a serious indictment of the governmental policies of the last decade which have allowed the few to accumulate immense wealth while the large majority suffers.

Here on PEI, obviously, we are not going to affect corporate decisions made in Toronto or New York, or federal government policies made in Ottawa - we must simply recognize that there is a powerful force in the larger economic sphere of which we are a part which is antithetical to our own interests, and implement policies of our own, in the local arena where we have influence, to counteract the deleterious atmosphere surrounding us. It can, I believe, be accomplished, although we will have to assume a position of leadership, daring to implement new economic policies even though they may be resisted by these exterior forces.

To expose and control these economic ghosts of our past, I believe we must take three steps. First, a refocusing of the emphasis of our governing institutions, so they become more democratic, more responsive to the wishes and needs of the majority of citizens and less acceding to the lobbying of the wealthy few. I think the need for this is obvious for a number of reasons, not the least of which is the apparent inability of the present government to accomplish anything useful (at least for the majority of non-wealthy citizens) under the existing conditions.

Second, with our government firmly under the control and guidance of the people, we must develop a comprehensive economic and social strategy which analyzes our present position and explores options for the future. A well-defined frame of reference lays the foundation for the vision, which guides the decisions which will lead us there.

Finally, once this social-economic strategy is in place, and recognizing that a caring social environment must rest firmly on a sound economy, we must allow the many individuals who wish to work for themselves and contribute to the well-being of both the society and the economy the opportunity to do so. We have seen all too often in the past the results of giving millions of dollars to big companies and hoping for miracles - they take what they can and close down, leaving no jobs and more government debt. A prosperous economy is a diverse economy - a hundred small businesses are infinitely more stable and able to provide a high standard of living for all than is a mega-corporation whose primary obligation is to its own bottom line.

Imperative I -- The Social Charter

Any economy functions within a social framework, even defining that framework to a large extent. If a society does not set out a clear statement of its goals and principles, economic bodies can act in such a manner as to direct that society to further business objectives above societal ones - our present mess is a prime example, as large corporations and banks prosper while small businesses and individuals go bankrupt or lose their jobs at an unprecedented rate. When business becomes Big Business, their bottom-line objectives become quite hostile to social progress. To set a clear general framework and define our path, we should establish a social contract, a constitution, a provincial mandate, call it what you will, and set down briefly the priorities and objectives of our Island society, upon which government legislation and programs must be based. With such a document, we could then clearly define our goals, and begin to work purposefully towards them. Such a charter should be as brief and general as possible, while still setting clear objectives to which government action must be directed; a working model should be readily achievable within a few months, subject to fine-tuning over the next few years, evolving along with our society. For instance, basic items to address might include:

• the maintenance of a modern democratic, representative government, including proportional representation, strict openness and accountability with provisions for recall if required, public funding for all candidates, referenda on all major issues, and assured, equitable representation of all segments of the populace;
• the maintenance of a minimum standard of living for all citizens, perhaps based upon a guaranteed annual income;
• availability of a full education for all citizens, and full access to all necessary health-care;
• opportunity for useful and rewarding work for everyone, with ample provision for periods of non-working time to pursue personal goals and growth;
• an impartial justice system whose stated primary purpose is the protection of the individual from either other individuals or the state, and provision of full legal services for all citizens, regardless of income;
• equality of opportunity and treatment for everyone;
• strict regulations under which corporate bodies operate in the province, to ensure that wealth generated locally is fairly taxed, and invested at least to a substantial degree in the Island economy where it originated;
• provision for this charter to be regularly examined and reaffirmed by all citizens, in order that each generation may be governed under conditions it has agreed to, and new imperatives included to address changing times and social conditions;
• obligations of the citizen should be addressed as well; we all have an obligation to conduct ourselves in a manner which furthers the common interest, and not constantly place short- term, selfish goals ahead of the common good; for instance, we all have an obligation to contribute financially through our taxes to the maintenance of such things as roads, schools, and so on; to ensure that the less-able members of our society have an opportunity for a full life; to protect the environment for ourselves and future generations; etc. etc.;
• finally, although it should be well understood, perhaps it should be set on paper and in law just who the 'citizen' is - each and every member of our society, female and male, young and old, any person of any race or religion who is living here, without discrimination. (A 'corporate body', in my opinion, should not have full citizenship rights, but be regulated as an economic entity.)

Who will be responsible for the all-important work of drafting such a charter? Obviously, I think, the elected representatives must take the initiative - who else has the resources? A discussion paper could readily be drawn up by any number of individuals, or several discussion papers; followed by full debate in the appropriate media and a series of public meetings, perhaps under the aegis of a legislative committee; and finally a referendum held to establish the parameters a majority of the population agreed with. Hopefully, and this should be the goal, there would be a consensus of a large majority for the inclusions of the final document. It would also be imperative that the final document remain a general statement of principles, rather than trying the impossible task of including something specific for every possible interest group. We have recently seen the impossibility of that form of negotiation, and that is in no way what I am suggesting here.

Imperative II: The Economic Revival Plan

With the Social Charter in hand to set the terms of reference for our future plans, we must then come up with such a plan to implement our goals as a society - social prerogatives which will inevitably be very dependent upon a strongly functioning, healthy Island economy.

We live in a global economy, but we are a small Island and should conduct ourselves accordingly. The UPEI Panthers cannot effectively challenge the Montreal Canadians - but Diagnostic Chemicals can find a market niche and exploit it with considerable success. With appropriate vision and policies we can foster the growth of successful endeavors in various fields. We must carefully study the situation, and direct our energies to areas where we can be successful.

How can we maximize our opportunities? How much of our money is being spent on products which are manufactured off-Island? How many of these products are consumed in large enough quantities that it would be profitable to produce them here? What possibilities exist for establishing high-value export industries? How can we reduce our dependency on seasonal occupations such as tourism and fishing? What strategies have other strong small Island economies followed? The answers to these and other similar questions should be the basis of an Island economic strategy.

We should strive towards a broad-based local economy. This will have two important results - it will offer rewarding employment to our people, and, equally as important, give us security on the home front. To take the next step and become a prosperous economy, we must carefully examine the larger marketplace - national, continental, or global - and become a world class provider of some particular goods or services. The strong agricultural background of PEI, and the existence of the Vet College, the Food Centre, the new Health of Plants and Animals Lab, the Agriculture Canada Research Station, and so on, and the new technologies of satellite communication, electronic highways, and information processing, might lend some ideas of possible places for PEI to carve out a niche in the global economy.

To focus our ideas and provide an implementing force, we must first establish a PEI Revival Council. This would be a group of community leaders, including businesspersons, academics, MLAs, and interested citizens, who are charged with establishing and implementing initiatives with the primary objective of strengthening our economy, and the well-being of all of our citizens. They would undertake wide-ranging research, consulting with Islanders and examining plans from other provinces and countries and policy institutes, searching for practical ideas to bring prosperity to PEI. They would carefully consider all options, and make their recommendations with full regard to the future, in terms of sustainability. This would be a fully public council - they would solicit full public participation, and when they were ready with a discussion paper it would be presented to the full debate of the Island citizenry, and its ultimate recommendations judged by a referendum. The results of this referendum must be binding on the government, and not subject to the fate of so many good government reports. That is to say, this must be a council with clout, not just a committee of some type put together to appear to be doing something while really doing nothing more than allowing the present policies to continue uninterrupted. Within a year or so, the government should be ready to begin the process of revitalizing the economy of PEI, based on the work of the Revival Council and the participation of all of our citizens.

Many avenues of economic revival are available to a committed and directed government and citizenry; I would anticipate the Council coming up with initiatives such as the following:

• PEI Cottage Industries: to promote the establishment of small businesses, the government would make available an interest free loan of up to $10,000 for perhaps 1,000 small groups of individuals who wish to establish their own business; cooperative efforts would be encouraged. These loans would be carefully dispensed - i.e. a proper business plan would be required, including marketing surveys and strategies to establish the potential success of the new enterprise. They would also be directed so they did not offer competition to already established Island businesses which were adequately servicing their market, but would offer goods and services presently unavailable, or available only or primarily through off-Island sources. Some of the earliest cottage industries might well be groups who are qualified to undertake such market surveys, and assess business plans and advise government or the Council; other likely early businesses would be the start-up of small but high-quality entrepreneurial training programs, to prepare people to start their own businesses; or R&D labs which will provide the new entrepreneurs with appropriate business opportunities. In our emerging technological culture, economies that invest in ideas and innovation are the most prosperous.
  Many, many other industries might easily prove viable as sources of new, small businesses, i.e. clothing, paper products, furniture, sporting goods, electronics, building materials, pharmaceutical and medical supplies production, book and magazine publishing - the list is as long as the entrepreneur's imagination. We could also explore Island food franchises, since great amounts of Island money wind up in the U.S. when spent at MacDonald's, Kentucky Fried Chicken, and the like; also a large number of other types of service which are national franchises and ship large amounts of profits off- Island. We are a small economy - we cannot afford, if we wish to be prosperous, to ship large amounts of profit off-Island. That makes someone else prosperous.
• lsland Greenhouses: another potential source of many new businesses is the establishment of a number of greenhouses across the Island, the goal being to provide a year-around source of many food items which are presently shipped in from the southern United States or elsewhere for much of the year. Related areas such as process technology and hydroponics could also be explored. We spend a large amount of money on food anyway - why not support local businesses while doing so?
• Agrarian Revival: the monolithic steamroller of agribusiness must be brought under control, and small farmers allowed to return to the land. This does not mean a return to horse drawn ploughs, it means that the advantages of a rural farm population are far more important to a healthy economy and society than the economic imperatives of giant food corporations. An economy with a healthy small-farm sector provides thousands of jobs, a diverse, stable economic base, and a societal core of hardworking individuals with down-to-earth values such as honesty and caring for one's fellow citizens. The thousands of young people who are spending their lives hanging around malls and committing various forms of petty vandalism because they have nothing better to do would be much happier and healthier if they spent some of those hours contributing to our society by working on a farm.
  The mandate of the PEI Federation of Agriculture could be expanded or redirected to encourage the establishment of new farms, in the form of small cooperatives; reduced interest loans could be made to qualified applicants. Agribusiness should be discouraged - the goal of a society, and of farmers, is to provide a high-quality of life such as farms can offer, not simply and blindly to maximize profits at any external cost to those who once were farmers, or would like to operate a small farm. An Island Farm Policy should be established to ensure that food prices reflect the cost of efficient, sustainable, environmentally-sound production plus a fair profit for the farmer. If this requires setting Island tariffs of some sort to regulate competition from subsidized farms in other parts of the world, so be it. We have a good standard of living, and good government programs, and it is unrealistic to expect us to compete with impoverished laborers or subsidized agribusinesses in other parts of the world. This would require considerable political will, but we should work towards it.
• The PEI Green Machine: another area which should be explored at the earliest possible moment is environmental technologies, providing new goods and services for an environmentally conscious, sustainable economy - this is not only a sure future growth field, but it is also an imperative philosophy we must embrace in order to ensure our survival in a long-term, global sense. There is little sense in creating a prosperous economy for ourselves if we are going to leave a desert for our grandchildren - the policies of our own preceding generation, which have created the pollution-ridden environment which we are now faced with cleaning up, should be ample warning to us of this fact. Such areas as wind and solar power, waste management, environmental research, 'green' consumer items, aquaculture, tree farming, and many other emerging ideas are ideal for a small economy such as ours, where ideas must be our path to a prosperous future, rather than depending on finite and badly abused natural resources. Science, industry and technology have acquired the power to transform the comparative advantage of nations, and those with the vision to embrace the possibilities of the future can ensure their prosperity now. There are many achievable technologies for even a small economy such as PEI, if we but have the vision and leadership to search them out and adapt them to our needs, and encourage those who have the entrepreneurial spirit to give it a shot.
• Island Futures: a number of areas should be explored with the idea of making PEI a post-modern society, albeit firmly rooted in tradition - that is, a society which has chosen which technologies are useful to advance personal growth and quality of life and embraced them, while maintaining firm roots in traditions such as small, friendly communities and not placing a dollar value on every aspect of life. For instance, the return of the railroad as a comprehensive, modern form of public transportation should be looked at as early as possible, on a business level - hundreds of jobs could be created, while implementing a long-term and environmentally sensible form of transportation; the installation of computers in every household, much as telephones or televisions are now, could be explored; such computers could provide a full communication service to all - i.e. access to many data bases, news service, even shopping or working could be done through such a computer linkup. Possibilities for a new, Island power grid could be explored, linking wind, tidal and solar power, or other emerging options. The notion of 'progress' will always be with us, but it must be controlled. New isn't necessarily better, and we have reached a stage in our society where we must be very discriminating and not let new technologies destroy our fundamental humanity.
  In any of these business initiatives, it is of fundamental importance for the government to realize that we cannot afford to put money up front for starting new businesses, if they are simply going to export the profits off-Island. There should be no government money, through these initiatives or any others, for expansion into PEI of companies whose home office is off-Island. If the economy of PEI is to prosper, one of our first priorities must be to keep as much of business profits here as possible. If the government is funding a business start-up, there must be a received commitment from that business to invest its profits locally, insofar as possible. Businesses must recognize their obligation to their community, and the debt they owe to the government and society which has provided them with the opportunity to prosper.
• Island Currency: Since one of the major problems we will face in developing any of these initiatives will be a shortage of Canadian legal tender, the Revival Council might look into the possibility of establishing a temporary Island Currency financial exchange system. Appropriate accommodations could be worked out with Revenue Canada, or if not the matter could undoubtedly be tied up in the courts for enough years to get the Island economy rolling again. Island Dollars could be part of the grants given to new businesses and part of provincial employee salaries, and used only to purchase Island goods and services; or they could be worked into local cooperative exchanges for Island producers. A computer linkage could be set up in participating businesses, and a form of Debit Card used which would coordinate these transactions - and provide somebody with another business opportunity. As always, where the political will exists, a way can be found.
• Education PEI: No economy or society can prosper in today's world without a well educated populace. Making a full education available to everyone must be a top priority if we are to revitalize our economy. Top-level opportunities must be provided in both the academic and vocational fields - and equal quality and status be assigned to both. Quality control must be implemented throughout the primary and secondary school system, to drastically curtail the number of graduates who enter the work force or university requiring remedial courses in basic subjects such as English, geography or math. The curriculum must be revised to reflect today's requirements - our goal should be well-rounded citizens, able to live a full life and contribute to our society. University and vocational training must be provided free of charge to all who desire and who qualify - and the qualifying standards must be high.

Is It Possible?

Such is the basic outline for a Revival Plan for Prince Edward Island, as I see it. Can it be accomplished?

I believe so. The Island government is relatively small, and close to the people it serves. The plan does not call for any massive overhauls to be undertaken immediately, and any necessary government restructuring could occur over a period of a few years. Present systems and departments would continue to function as they have in the past, and any necessary changes resulting from the plan implemented only after careful planning and with a minimum of disruption. The alternative choice - continuing on our present course - seems to offer little hope.

Financially, the measures outlined above are quite modest - $10 to 20 million dollars per year for the work of the Revival Council and the advancement of start-up capital to several hundred small businesses and farms per year. There are various ways this relatively small sum could be raised - perhaps it would be possible for the PEI government to get the federal government to redirect the $15 million dollar subsidy it was going to pay the company that built the fixed link (over and above the present $25 million to Marine Atlantic) into this more useful endeavor; or perhaps one of the government pension funds could make this investment in our future.

Perhaps the Farmer's Bank of Rustico could be reopened, with a direct mandate to invest Islander's savings in the growth of the Island, or an Island Currency established as outlined above. Regardless, small sums such as this can always be found, if the political will is there to find it. Offsetting income would quickly begin to flow into the government coffers once the plan was under way - for instance, a large number of the several thousand individuals who are presently unemployed would begin paying taxes once their businesses were established, thus removing a financial drain from the system and providing a financial input. The overall financial picture would also begin to improve in innumerable small ways as more Island money stayed and circulated on the Island, rather than being added to profit statements in the U.S., and Islanders became more optimistic about their futures and left behind the culture of dependency and defeatism that is the legacy of the governments of Big Business.

All things are possible. Economic revival for PEI is as much a matter of political will as anything else. And the political will must once again become the will of the people.

Summary

In short, the economic revival of Prince Edward Island is contingent upon three things:

1. Democratic Revival -- remove government control from corporate interests, and return it to the people.
2. Economic Plan -- get our best minds together and let the ideas roll.
3. Economic Revival -- get some money out to all the potential small businesspeople on PEI who will do the actual work of revitalizing our economy, based on the ideas from the plan, and let them get on with it.

Postscript: Where Now?

If you are interested in the economic revival of Prince Edward Island, get involved. Talk to your MLA, or write them a letter and ask when we're going to see an Economic Revival Council established. Write to the Guardian and tell them to start a discussion page, where we can share our thoughts and ideas.

There's an election coming up soon. Ask the candidates some hard questions, and don't take standard political rhetoric for an answer. Carefully consider all the options, and vote for the person who puts forward the best ideas and seems most likely to implement them. Vote for the candidate who makes a promise to work for meaningful reform of the parliamentary system. This is the key.