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    Canada’s Institutional Landscape and The Governmen Essay

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    t’s Ignorance of Farmer’s NeedsSaskatchewan farmers have been continually ignored in Canada’sinstitutional landscape. Never has the situation been more evident as it iswith the possibility of Quebec separation. The Canadian governments ignoranceof farmers’ needs has caused a cynical view of the political process in the eyesof farmers. One of the major sources of the cynicism is that Canadian federalinstitutions are developed so that most political of the clout is developed fromthe east. The eastern domination of the House of Commons, and indirectly theSenate, means that Saskatchewan wheat farmers do not have a strong voice inCanadian political decisions. But what does the Saskatchewan lack ofrepresentation in Canada’s political institutions in Ottawa mean? What canSaskatchewan wheat farmers do to rectify the situation? And, following a Quebecseparation what can wheat farmers do to uphold their livelihood? The intent ofthis report is to focus on the actions Saskatchewan wheat farmers can take toensure their success in the future.

    A focus on the recent political policydecisions by the federal government, the need for intrastate institutionalreform, and effects of a possible Quebec separation will all be analyzed. The current institutional landscape of Canada has not acted favorablyfor Saskatchewan wheat farmers. The development of the institutions, ie. theHouse of Commons and the Senate, and the policies that have developed from theseinstitutions have continually ignored the needs of prairie farmers, emphasizingthe cynicism Saskatchewan wheat farmers have towards the political process. Theantipathy towards the political institutions has developed because of recentcost-cutting initiatives and deregulatory procedures by the government and bymis-representation of farmers’ needs in government today. The failure ofSaskatchewan wheat farmers to express their needs in the Canadian politicalarena successfully, when compared to other constituencies, is based on the factthat Saskatchewan’s representation in Canada’s political institutions is weak.

    The result is the development of policies contrary to what would be accepted byfarmers. Saskatchewan wheat farmers, in accordance with most constituencies inthe west, have desired a institutional change to the Upper House in Canada. In1867, when the institutions were developed, the goal was to develop twodifferent political “bodies”. One, the House of Commons, would represent theCanadian people by means of elected representatives in a representation bypopulation scenario. The second, the Senate, would be a source of “sober secondthought. ” In its creation the senate was intended to protect the ideals ofindividual regions.

    However, to the chagrin of Saskatchewan wheat farmers, theintended regional focus of the senate never developed and, hence, the senate hasbeen an institution that has been the focus of a lot of antipathy from the West. The drive for modifications to the Senate has been pressed by Saskatchewan wheatfarmers in an attempt to uphold their livelihood in a nation in which they’reignored. The development of intrastate federalism in the senate is typically themost desired institutional change. Intrastate federalism aids in bringingregional representation to the national political arena.

    The desire forregional representation in the Senate is held in high demand by Saskatchewanwheat farmers. The most prominent suggestion is for a Triple E senate (equal,effective, and elected) instead of the current form of the Upper House. Supportfor a Triple E senate is virtually guaranteed by Saskatchewan wheat farmer,because their views would have better representation in a central politicalinstitution which historically has ignored their needs. The reasoning behindthe lack of regionalism in the Canadian senate is based on two important factors. “First, Canadian senators were not selected by provincial legislatures orgovernments, but rather were appointed by the federal government.

    . . Secondly,Canadians opted for equal representation by region rather than equalrepresentation by province. ” Thus, the senate’s actions are extremely similarto the actions of the House of Commons. To answer the question of what Saskatchewan wheat farmers need to do touphold their livelihood concentrates on the necessity for a senate reform basedon intrastate federalism. The hope is that by doing so Saskatchewan farmerswould have a strong voice in the national political arena.

    However, modifyingthe senate is an extremely arduous task. Senate reform would most likely haveto follow the current amending formula of the seven-fifty rule. The seven-fiftyrule declares that any amendments made to the constitution have the support oftwo-thirds of the provincial legislatures (seven, in the current Confederation)containing fifty percent of the population agreeing to the modification. Themodifications would be difficult to achieve because the politicians in the east,who currently hold a lot of the clout in the current landscape, would be opposedto any changes that would see them lose power.

    Upon Quebec separation senatereform would be even more difficult to achieve. Without Quebec, Ontariocurrently has 49. 8% of the remaining population. According to Statistics Canadademographics from July 1st, 1996. So, using the current amending formulawithout Quebec in confederation , the likelihood of Saskatchewan farmers havinga voice in central political institutions becomes even less likely asmodifications to the institutions would only be possible if all the provinces,besides Ontario, were in favor of the change.

    Without provincial representation in a central institution the needs ofSaskatchewan wheat farmers will be continually ignored as the provinces with thelargest population continue to develop policies to achieve their own goals. Onesuggestion has been modification to the House of Commons, however, this seemseven more unlikely then reform to the Upper House. The goal of the senate inits creation, as was noted earlier, was to provide “sober second thought. “Regional leaders can argue that the senate does not fulfill the goals it wascreated to attain, and hopefully modify the senate to attain the regional needsthey desire. The House of Commons intent was always to be an elected body thatwas selected through representation by population and, thus, modifications tothe House of Commons are less likely then changes to the Senate because theintentions of the House of Commons have been achieved.

    The fact that the institutional landscape in Canada currently favors theeast can be seen in three recent policy initiatives by the federal government. The policy changes have not been beneficial to farmers in Saskatchewan, andcontinue to be focused on what will help the east develop. The policy changeshave involved 1) the elimination of the monopoly the Canadian Wheat Board had;2) deregulatory initiatives involving the creation of the North American FreeTrade Agreement (NAFTA); and, 3) a cost-cutting policy initiative that saw theelimination of the Crow’s Nest Pass Agreement. Each policy change has causeddeep cuts at the roots of Saskatchewan wheat farmers. A focus on the policychanges shows that the policies have gained some support in other provinces,namely Alberta, but the policies have considerably hurt Saskatchewan farmers.

    Making modifications to price-support systems, such as the CanadianWheat Board (CWB), is not a pragmatic solution in the minds of Saskatchewanwheat farmers. Price-support systems have always been supported by Saskatchewanwheat farmers but recently Alberta wheat farmers have complained that the CWB isnot effective and elected for a free-market system. Currently, the CWB operatesunder a pooled-payment system in which, “Farmer’s are currently paid an averageprice based on the board’s sales profits. ” The strength of the CWB inSaskatchewan was firmly developed in the CWB’s ability to rescue farming lifeduring the Depression of the 1930’s. It is for that reason that manySaskatchewan wheat farmers are skeptical of losing the CWB and the possibilityof returning to a financially insecure market, as was prominent in the 1930’s.

    For any change to be made by the federal government there has to besupport for the change in some part of the country. In the case of developing afree-market system most of the support came from Alberta wheat farmers. Albertawheat farmers support a free market system because of the recent high priceswhich are not reflected in the CWB, as it sets a moderate price so that it cansupport farmers in times of trouble. Desiring to take advantage of the highprices Alberta wheat farmers seemingly ignore the problems that a free-marketsystem brings with it, especially in the fluctuating market that would likelydevelop following Quebec separation. Both the price-support and free-marketsystems have there pro’s and con’s and perhaps only time will tell which systemis more effective.

    Alberta farmers, however, were not affected by theDepression as much as Saskatchewan farmers which is much of the reasoning behindthe support for the CWB. The development of Free Trade has been another deregulatory concept thathas been detrimental to Saskatchewan wheat farmers. The passing of the Canada-United States Trade Agreement (CUSTA), which has since developed into the NorthAmerican Free Trade Agreement (NAFTA), has caused the agricultural economy todrop considerably. The National Farmers Union 1991 statement assists inhighlighting the effects that free trade has had on farmers. For example,milling wheat for consumption was $7.

    00 per bushel before the introduction ofCUSTA and almost instantly the price dropped to $3. 75 per bushel. The currentprice is now $3. 10 per bushel.

    The net loss forced unwillingly on the prairiewheat farmers was $300 million dollars. The loss of which is certain to have adetrimental effect on the lifestyle and progress of Saskatchewan wheat farmers. With the continuing focus of the east towards free trade and the loss ofpower held by the CWB, the international market becomes very important. Afocus on the international market is extremely important as it highlights theeffects of Saskatchewan farmers as the market proceeds in its current direction. The competition that is waged between the United States, European Community, andCanada causes the price of wheat to drop due to the elasticity of wheat on theworld market.

    Wheat is an elastic commodity, especially with the inception offree-trade, because of the vast number of available substitutes. What theelasticity of wheat means to Saskatchewan farmers is that any price changes willhave a serious effect on the quantity of goods bought by consumers. With even amodest price increase consumers will simply look elsewhere for wheat, an optionavailable to them because of Free Trade. The result is a drop in prices as thecompetition looks for means to attract the masses towards their product. Unfortunately for farmers the low prices mean low profits, and a deprivation oftheir livelihood. Quebec separation would develop yet another arena ofcompetition from Quebec farmers, despite their small numbers.

    The argument thatCanadian farmers would be successful in a free-market system where they cancompete with international competitors is false. The elasticity of wheat meansthat, even if Canadian farmers were to become the largest wheat suppliers in theworld, they would do so only with low prices and insignificant advantages toSaskatchewan wheat farmers. One recent federal cost-recovery initiative involved the abolition ofthe Crow’s Nest Pass Agreement. The agreement was arranged in 1898 when theCanadian Pacific Railway was granted “a $3.

    3 million subsidy to build a railwayover the Crowsnest pass. . . In return, the CPR agreed to reduce in perpetuity itseastbound freight rates on grain. ” In practice, the Crow, as it was commonlyreferred too, protected wheat farmers from outlandish high transportation coststhat the CPR previously used in the prairies to cover its expensive maintenancecosts in the Rocky Mountains and Lake Superior areas of Canada. With theelimination of the Crow on August 1st, 1996 a modest increase in the cost oftransportation costs placed on farmers to $15 a tonne was seen.

    “To soften thisblow, the federal government shelled out $1. 6 billion in land payments tofarmers and spent $300 million improving the transportation system. “Unfortunately for farmers, the one-time support of the federal government afterthe crow will not prevent continuing transportation prices in the future. Withthe death of the Crow, small railways and grain elevators will shut down infavor of larger and more centralized means of collecting and preparing grain fortransport meaning that small-scale farmers will have to travel farther withtheir wheat to get it off to market. Additionally, as the quasi free-marketdevelops, an expectation for lower wheat prices gives the small-scale farmersanother slap-in-the-face.

    One author predicts, “. . . hundreds of miles ofrailway track will be abandoned, scores of elevators close, large swathes offarmland will be returned to native grasses and dozens of small communities willdie as development shifts to larger regional centers. “The abolition of the Crow has gained a small amount of support fromfarmers in Alberta.

    The reason being that the transportation costs will notaffect the farmers as bad as they will in Saskatchewan and the development oflarge regional centers, already present in Alberta, will bring new initiativesand diversity. In the meantime, the Saskatchewan wheat farmers have been forcedto sacrifice their lifestyle to survive in a new economic agenda pushed by thebureaucrats in the east and by an open market competition to the south. Survival for the common farmer in Saskatchewan has become increasingly moredifficult as the federal government continues on its policy changes based on theidea that bigger is better, to the demise of the common farmer. One of the alleviating factors during the abolition of the crow was thepossibility of Saskatchewan wheat farmers to use the St. Lawrence Seaway as ameans of finding lower costs to farmers.

    However, with the possible separationof Quebec, the use of the St. Lawrence Seaway is unknown. Depending on theagreements made by the Quebec and Canadian governments following separation theprice of transportation may go up even further as Saskatchewan wheat farmerswould lose a possible location to ship their grain. This would assuredly causean influx of prices in transportation costs to farmers as the Canadian PacificRailways would undoubtedly continue its trend of charging high prices to prairiefarmers transporting their goods to the west, to combat the expenses of gettingthrough the treacherous Rocky Mountains. Exports are a concern to Saskatchewan farmers on a whole, but more so tothose involved in the egg, poultry, and dairy aspects of agriculture. Egg,poultry, and dairy are produced under a Supply/Management organization.

    Inother words, there is a strict management of goods to ensure that farmersproduce only what will satisfy domestic needs. When the system worksefficiently no surpluses or shortages of egg, poultry, and dairy are created inCanada. If Quebec were to separate, especially with Quebec being a primarydairy producer in Canada, a number of initiatives would need to be developed toensure that there is neither a shortage or surplus of goods. The repercussionsof this would involve the need for farmers in Saskatchewan to focus more ondairy production, so that the needs of the nation are matched.

    Also, egg andpoultry producers in Saskatchewan may be down-scaled or forced to close as thegoods they produce would no longer be needed by the rest of the country. Toprevent any developing problems it is imperative that the Saskatchewan farmershave some voice in the political discussion following a Quebec separation. Theoretically, we could simply import from Quebec after separation is made toensure that the demand of Canadians are met by Quebec supply. However, thesolution is not an easy one because the cost of dealing with Quebec would likelybe a high one due to an increase in transaction costs. Transaction costs are,”the costs arising from finding a trading partner, negotiating an agreementabout the price and other aspects of the exchange, and of ensuring that theterms of the agreement are fulfilled.

    ” Simply put there would be an influx inthe transaction costs between Quebec and Canada as the trading agreement ismodified. Again Saskatchewan farmers, upon Quebec separation, are faced withyet another hurdle to clear in their attempts to uphold their lifestyle. In sum, the political policy development that has been developed in theEast has seriously effected Saskatchewan wheat farmers. They have lost a meansfor protection from a fluctuating market because of modifications to the price-support structure of the CWB, which could be extremely detrimental with thedevelopment of a new country and unstable economy.

    The internationalcompetition, witnessed through the eastern politicians focus for free trade, hascaused the price of grain to drop considerably because of the elasticity ofwheat caused by an increase in competition and substitutes. Finally, the risingtransportation costs, due to the elimination of the Crow’s Nest Pass Agreement,has meant that Saskatchewan wheat farmers spend more money to get their productto a market which has gotten progressively worse. Saskatchewan farmers areforced to spend more money to get their product to a weak market, which couldget weaker in a new developing country due to an unstable economy and theincrease in transaction costs. The importance of the institutions ability to steer Canada’s policyneeds to be analyzed here to ensure its power and importance is understood.

    “Institutions are like channels or grooves along which economic, ideological,cultural and political forces flow. ” Simply, the power of politicalinstitutions is not an abstract quality . With the branches of government builtunder the principle of representation by population the political clout is goingto be held where the largest population is held, the east. The result is thatof small constituencies are weakly represented in national governments whichfail to realize the practical implications their policy developments have toconstituencies not prominent in the east, such as Saskatchewan wheat farmers.

    The policies the national government have developed in recent events havespoiled the agricultural community in Saskatchewan. However, a change to thepolitical institutions would cause a change in the policies that the governmentscreated simply because the “grooves” would cause policies to follow a differentpolitical, cultural, and economic flow. Canadian political institutions have a serious effect on policydevelopment in the nation. With the power being held almost solely in the eastsmall constituencies, such as Saskatchewan wheat farmers are forced toconcentrate on methods to modify the institutions so that they serve their needs. Recent policy developments have had a detrimental effect on Saskatchewan wheatfarmers growth and the only means for farmers to prevent this in the future isto modify the institutions. However, Quebec separation poses a difficultproblem for Saskatchewan wheat farmers.

    Not only does separation mean that theeconomy farmers rely heavily on will drop but it separation also means thatinstitutional reform is even less likely. The situation is not futile, andalthough the road is a difficult one Saskatchewan wheat farmers have facedadversity before. It appears that their unity and strength will be called uponagain as they attempt to gain representation in Canada’s national institutionsbefore their lifestyle becomes a concept of the past. BibliographyKeith Archer et al.

    , Paramters of Power: Canada’s Political Institutions. Scarborough:Nelson Canada (1995), pg. 180. Canadian Dimensions- Population and average growth rates, Canada, the provinces,and territories.

    ” Statistics Canada, Ottawa, Ontario, July 1st, 1996. Website: http://WWW. StatCan. CA/Documents/English/Pgdb/People/Population/demo02a. htmDavid Roberts, “Farmers worry report won’t bring change,” The Globe and Mail(July 11, 1996), A9. Terry Johnson, “After the Crow, new hope in the country,” Alberta Report (August21st, 1995), 15.

    Richard Gwyn, “End of an Era,” Calgary Herald (August 1st, 1995), A5. Terry Johnson, “After the Crow, new hope in the country,” Alberta Report (August21st, 1995), 15. Robin Bade et al. , Economics: Canada in the Global Enviroment.

    Toronto: AddisonWesley Publishers Ltd. (1991), pg. G-13. Keith Archer et al. , Paramters of Power: Canada’s Political Institutions.

    Scarborough: Nelson Canada (1995), pg. 3.Category: History

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