You Keep Yonge Street

Worth A Look, Agriculture, Frontier Centre

Lawrence Solomon has written several columns about rural Canada. His main points: the rural economy is grossly subsidized, the resource sector — also heavily subsidized — generates only 6% of Canada’s GDP; rural Canadians are fat and depressed; and both the rural economy and rural communities should be encouraged to die.

While we wholeheartedly believe the Canadian economy should be de-subsidized and, above all, deregulated, much of what Mr. Solomon has said is factually wrong. First, the issue of subsidies. He seems to regard the rural economy as singularly subsidized and, therefore, a parasite on wealth-generating urban Canada. But he’s letting his urban idyll deceive him.

Let’s spend a night on the town and play “spot the subsidy” as we go. After a hard day’s column writing, we’re ready to cut loose with our thin urban intellectual buddy. We eschew our cars, more likely than not built in federally and provincially subsidized auto plants, for mass transit.

Purchasing massively subsidized bus fares, we settle in for a good read. One opts for Canadiana, published by a house kept alive by federal subsidies and protectionism. Another leafs through that other national newspaper, whose owners benefit from such anti-competitive measures as foreign ownership restrictions.

While passing through the charming inner city, we glimpse youths breaking into an automobile — no bus riding for them dudes — as we peer down an alley at some ghost-like figures shooting up heroin and dealing Ecstasy. In the city of light, you can never be too thin or too happy.

On the great white way lies our municipally, provincially and federally subsidized concert hall. Tonight it’s gloriously lit, thanks in part to subsidized nuclear energy provided by a tax-exempt Crown monopoly. Inside, we rub shoulders with professors, doctors, teachers and government officials — all owing their livelihoods to state outlays. Some of the bureaucrats work for agencies doling out subsidies, including to those fat, depressed Ruritarians. Mr. Solomon chortles when we point out the irony. The uniformly thin, happy multitudes are delighted by the Heritage Canada-funded musicians and singers.

Our point should now be clear. Rural subsidies are dwarfed in number and magnitude by the subsidization of urban life and the urban economy. Nor are rural areas singular repositories of social pathologies. Rural people may be chubby and downbeat, but they are far less likely to die of AIDS or be raped in a parkade.

Still we’re unclear why Mr. Solomon is obsessed with destroying a part of Canada that, by his own reckoning, is so inconsequential. There may be some aesthetic elegance to rural depopulation, but it defies economic and social realities. His underlying, imputed urban-rural divide, while true for some isolated communities, is typically not two solitudes, but a continuum.

Look at Calgary. A high-density business/residential core is ringed by older neighbourhoods, in turn by vast, expanding suburbs, then acreage developments and country-style subdivisions, then former farming towns mushrooming into bedroom communities, and finally still more acreages and hobby farms. Hundreds of thousands live in a rural setting, but work in an urban environment, thereby supporting urban and rural economy alike.

One of us lives on an acreage. Some days he works in the city, others he avoids the lengthy commute. Is he urban or rural? Office work makes him fat and grumpy, while yardwork and fly-fishing restore physical form and contentment. Reading or watching the sun set over the Rocky Mountains doesn’t make him feel isolated. He doesn’t confuse solitude with loneliness. His neighbours are farmers doubling as commercial pilots, city travel agents married to rural contractors and retirees — are these rural or urban?

The same false dichotomy extends to the economy. Remove the resource sector that Mr. Solomon claims generates almost no wealth and you essentially wipe out two major cities. The office workers shuffling paper in the shiny towers are tallying all the oil and gas the rural “rig pigs” produce and process.

And what about the claim that Canada’s entire resource sector generates a heavily subsidized 6% of GDP. News flash: In 2003, Canada exported $62-billion worth of energy. One portion of one branch of the resource sector accounted for 6% of national GDP. The entire resource sector is much larger. By any measure — revenues and profits, taxes remitted, employment created, capital appreciation (including for urban pensioners) — resource industries generate enormous wealth. The Hemlo gold deposit alone is worth upwards of $6-billion — and how much infrastructure has been built north of Superior?

If subsidies are out, then urbanites must choose: Either pay real prices for hinterland products or import from Botswana.

We itch to annihilate Canada’s nasty apparatus of subsidies and subsidy-granting agencies, plus all the anti-competitive, protectionist, anti-foreign-investment regulations. While that should include killing farm subsidies — not least supply-managed poultry and dairy in Quebec and Ontario — our “night on the town” shows there would be a vastly greater harvest downtown than on the farm. The savings should enable major tax cuts.

Ironically, Prairie grain farming is one of the few substantially de-subsidized sectors. Begun by the Crow freight rate phase-out in the 1980s, our grain farmers are now much less subsidized than their counterparts in Europe and the United States. This Western contribution to balancing the Mulroney government’s budget sadly fell short in part because the same bracing medicine wasn’t administered to central Canada’s hugely subsidized aircraft industry.

If “unsustainable rural areas” were “taken off life-support and allowed to die a natural death,” as Mr. Solomon recently suggested, the consequences might surprise him. Many rural communities, in Alberta at least, are booming. Alberta’s “Highway 2 Corridor” between Edmonton and Calgary was recently named Canada’s most productive economic zone. This mixed area, from farms to small cities, has an economy based on energy, agriculture and related industries — transportation, manufacturing, services. It’s one reason we fat, depressed rednecks can afford to transfer a net $11-billion per year to Canada’s “have-not” provinces.

Don’t all cities spring out of the countryside? London, England, began as a Roman military camp — talk about “unsustainable.” Calgary was buffalo pasture 150 years ago. If we neglect rural areas, aren’t we aborting our next cities?

Fort McMurray in Alberta’s oil sands is the scene of the greatest capital investment in Canada’s history, with investors worldwide awakening to the implications of a 500-year supply of oil. In our lifetime, Fort McMurray has soared from little more than an outpost to a population of 47,000. If this is the unsustainable rural economy, then Canada needs more of it.

Cut off rural communities’ infrastructure funding, but allow our big city mayors to subvert the constitution and get their grubby fingers on federal tax dollars? It’s a false economy to crow about saving, say, $500,000 by re-wilding McBride, B.C., if you then hand Montreal $500-million in tax points.

Mr. Solomon specifically mentioned cutting loose northern communities. Obvious political suicide, but he also seems unaware that Canada’s North is on the cusp of becoming a net wealth creator for the first time since the fur trade. This is thanks to diamond mining, two massive planned natural gas pipelines, possible oil development, hydroelectric projects and, at long last, some highways. Canada’s resource sector has a lot left to give. What is needed is a campaign to free up the machinery of wealth creation everywhere.

George Koch and John Weisenberger are Calgary-based writers.

© National Post 2004