Socialist Experiment In Canada

The New Republic, October 13, 1973

Victoria, B.C.

A TRAVELER IN western Canada observes that the moun­tains, rivers, cities and farms are pretty much the same as in the United States.  So too are the language and ethnic mix, the gasoline brands and the fast food chains.  But similarities stop when it comes to politics.  Three of the four provinces in western Canada — Man­itoba, Sas­katchewan and British Columbia — are gov­erned by socialist parties.  With the over­throw of Salvador Allende in Chile, these are now the only democratic socialist governments in the Western Hemisphere.

Socialism, of course, takes different shapes in differ­ent places.  In Canada it is roughly a blend of North American populism and British Fabianism.  Its roots are in the early 20th century, when trade unionists and prairie farmers began agitating and organizing against employers, middlemen and “Eastern money.”  The Depression brought the farmers and trade union­ists together into a new political party called the Co­operative Commonwealth Federation (CCF), whose objective was the “estab­lish­ment in Canada of a cooperative commonwealth in which the principle regulating pro­duction, distribution and exchange will be the supply­ing of human needs rather than the making of profits.”  In 1964 the CCF joined with the Canadian Labor Con­gress to form the New Democratic Party.

Unlike the Labor Party in Britain, the CCF/NDP has not been able to replace the Liberals as the second major party at the national level, but it has carved out an en­clave in the western provinces.  In Saskatchewan the CCF was first elected in 1944 and, except for a brief interval in the 1960s, it has remained in power there ever since.  In Manitoba the NDP was voted into office in 1969 and reelected this June.   It won control in British Columbia in August 1972.

Provinces in Canada have greater power to set social and economic policy than do states in the United States, and Canadian socialists have used this power.  In Sas­katchewan the CCF’s most notable achievement was the establishment of universal health insurance administered and subsidized by the provincial gov­ernment.   Doctors fought the plan bitterly and even went on strike, but it proved to be so popular and suc­cessful that non-socialist provinces soon copied it.

IT IS IN BOOMING British Columbia that the NDP has the greatest opportunity to demon­strate how Cana­dians — and Americans if we care to learn — can benefit from socialist-inspired programs.  The new govern­ment has wasted little time.  Since its victory slightly more than a year ago, it has pushed new laws and pro­grams through the provincial legislature at a whirl­wind pace.  Here are some of the major ones.

Natural resources.  The western region of North Amer­ica is abundantly endowed with timber, coal, copper, natural gas, oil and other resources.  British Columbia has its full share of this wealth, but most of it is harvested by absentee corporations whose taxes historically have been minimal.  A major prom­ise of the NDP was that the pro­vince’s wealth would no longer be given away to private cor­porations, many of them U.S.-based, but would be used for the benefit of British Columbians.  Since taking office the NDP has doubled the royalty on oil from an average of 15 per­cent of the wellhead value to 30 percent, increased timber stumpage fees by 30 percent, imposed a tax on privately owned mineral reserves and adopted a slid­ing royalty schedule for copper and other ores.  These measures will bring in close to $75 million in increased revenues by 1975.  Further down the road the NDP wants to set up mills, smelters and refineries — with private and public capital jointly, or public capital alone — that provide resource-related jobs before the resources leave the province.

Guaranteed income.  Another major NDP pledge was a guaranteed income for the elderly and eventually for all citizens of British Columbia.  Shortly after the election the government enacted a minimum income plan — called Mincome — for persons over 65, since lowered to 60, and the handicapped.  The income of single elderly per­sons is now supplemented up to $209 a month; couples are assured $418 a month, and all senior citizens receive free prescription drugs.  To aid the working poor the government raised the minimum wage to $2.50 an hour.  At the same time it boosted welfare benefits by an aver­age of 30 percent (a family of four can now receive $350 a month).  And all this, the NDP made clear, was just a be­ginning.

The minister of human resources, Norman Levi, is studying various guaranteed in­come plans for people under sixty and is calling for a program of guaran­teed em­ploy­ment in community service centers such as health clinics, schools, day care centers and food purchasing cooperatives.  Ultimately the NDP would like Ottawa to share the cost of these programs, but in the short run it will pay for them out of new rev­enues from natural resources, an increased tax on cor­porate incomes and earnings from government-owned enterprises.

Insurance.  Another NDP campaign pledge was to pro­vide at-cost, no-fault gov­ern­ment-administered auto­mobile insurance.  The intent was twofold: to give British Columbia motorists, especially young ones, cheaper rates than those charged by pri­vate insurance companies, and to use the cash flow generated by insurance premiums for investment inside the province.  (Private insurance companies, mostly based in the U.S. or eastern Canada, take their investments outside the province, the party claims.)

The Insurance Corporation of British Columbia (ICBC) created by the government will have the exclusive right to sell automobile insurance in the province begin­ning next March.  It will also offer fire, casualty and eventually life insurance policies in competition with private companies.  Based on the experience of Saskatchewan and Manitoba, which also have state-owned automobile insurance corporations, pre­mi­ums are expected to be about fifteen percent below private com­pany rates.

Private insurance com­panies fought hard to block the ICBC, arguing that the grant of exclusivity in auto insurance was an infringe­ment of freedom of choice.  Transpor­tation Minister Robert Strachan responded that “when a government, for the public good, compels citizens to buy a certain type of insurance, it has an obligation to elimi­nate profit-making from what is virtually a tax. ”

Land use.  British Columbia’s mountainous terrain leaves relatively little arable land, and much of what exists has been gobbled up in recent years by urban sprawl.  To protect what is left of the province’s farms and near-city open space, the government created a five-member commission with virtually absolute power to zone areas for agriculture, greenbelts, parks and other publicly desired uses, and to do so without compensating owners for lost development rights.  The commission also has authority and funds to purchase land for lease back to family farmers and to acquire urban land for future residential construction.

Public ownership.  Public enterprise is nothing new in Canada: the Canadian Nation­al Railroad, Air Canada, the Canadian Broadcasting System and numerous electric and telephone utilities have been government-owned for some time.  Recently the Trudeau govern­ment established a Canadian Development Corpora­tion to buy up shares of foreign-owned corporations.  Its latest acquisition, Texasgulf, is a U. S. re­sources com­pany with most of its holdings in Canada.  The right-wing Social Credit government that preceded the NDP in British Columbia established BC Hydro and BC Ferries as public enterprises, and built a provin­cially owned railroad from Van­couver to the northern frontier.

Most NDP members are committed to expanding public ownership of basic indus­tries, and the party in British Columbia is pledged to buy BC Telephone, a subsi­di­ary of General Telephone and Electronics.  As a practical matter, however, the new gov­ernment has proceeded judiciously in establishing what are pleasantly termed “Crown corporations. ”  The government’s main acquisition thus far has been an American-owned timber company called Canadian Cellulose that claimed it was losing money and wanted to sell itself to ITT.  The government blocked the sale and then bought the company for $7 million.  “We repatriated nine million acres of alienated land along with three pulp mills,” reports Lands and Forests Minister Robert Williams, “and showed a $2 million profit the first year.”

Another acquisition was the company town of Ocean Falls, complete with houses, shopping center and newsprint mill, which the government bought from Crown Zellerbach for less than one mil­lion dollars.  In this case Crown Zellerbach planned to shut down the town because it was not making money; under government owner­ship, and thanks to high prices for newsprint, the operation has turned a mod­est profit.

The government intends to enlarge the public sector, especially in the northern part of the province where resource development on public lands will be closely tied to government-built railroads, highways and communications.  If the public pays for the infrastruc­ture, says the NDP, it should reap the benefits; hence­forth public funds will be made available to private companies only in exchange for an equity position.  A vehicle for this will be the British Columbia Develop­ment Corporation, launched earlier this year with $25 million capital and authority to enter joint ventures and buy stock in private corporations.

The govern­ment is also planning to acquire control of a bank, which, in conjunction with the state-owned insurance company, will give it considerable investment capabil­ity.  “We don’t intend just to get into the game of state capitalism,” says Lands Minister Williams.  “We will have worker and community representatives on the boards of Crown corporations, and will also give workers some equity participation. ”  To do this the government is studying worker participation plans developed by West German Social Democrats and U.S. economist Louis Kelso.

Health and day care.  Government health insurance, Saskatchewan-style, was enacted in British Columbia by the previous Social Credit government, but medical services in the province remain largely on a fee-for­-service basis.  The NDP has launched a program of group-practice community health centers that will focus on preventive medicine.  Another new program provides government subsidies of up to $100 per child per month to parents who send their children to nurs­ery schools or day care centers.

WHAT MAKES ALL this possible, of course, is the politi­cal strength of the NDP, now at a high point but still far from a comfortable popular majority.  Western Canadian politics is a bit peculiar; the major national parties, the Liberals and Conservatives, have been overshadowed at the provincial level by two protest movements born of the Depression, the NDP on the left and the Social Credit Party on the right.  In British Columbia the Social Credit Party, idiosyncratically ruled by W.A.C. (“Wacky”) Bennett, had been in power since 1952 with the NDP as the leading opposi­tion party.  The NDP victory of 1972 was not so much a mandate for socialism as a throw-out-the-rascals vote and an affirmation of NDP leader David Barrett’s per­sonal popularity.

Barrett, 43, an ex-social worker from Vancouver, is by his own tongue-in-cheek description “the guy who brought show-biz to socialism.”  He is a master at making socialism appear folksy.  When opponents accuse him of being a Marxist, he smiles and replies, “Who do you mean, Groucho, Harpo or Zeppo?”  He defends Mincome by saying that all retired people, “not just the richies,” should have a chance to visit Hawaii, and public ownership by insisting that “we’ve got the brains right here to balance a book or two.  We don’t need those Wall Street sharpies.”

Barrett spent three years stumping every backwater settlement in the province, and when the 1972 election came he was a well-known and well-liked alternative to the aging Bennett.  NDP candidates swept Social Credit incumbents out of office in six northern districts and six in Greater Vancouver, winding up with 38 seats in the provincial legislature to 10 for Social Credit, five for the Liberals and two for the Tories.  By the nature of the parliamentary system, that gave the NDP unchal­lenged control of all ministries is well as of the legisla­ture, even though it received only a plurality (39 percent) of the total popular vote.  Now the NDP wants to expand its base of support.  Most of the legislation enacted during its first year in office has been pop­ular; only the auto insurance and land commission measures provoked outcries, in the latter case from real estate interests and farmers hoping to sell to developers.

The bulk of the NDP’s cash, foot-soldiers and votes in British Columbia have come from labor unions, especially the woodworkers’ and fishermen’s unions, and in recent years the party has picked up support from teachers, social workers and young people.  But if it is to gain wider appeal it will have to attract more of the growing middle class, which scares many NDP members.  The danger in their view is that the party will lose its socialist character and become “just an­other political party.”  Indeed, “the NDP has become more of a party and less of a movement, with all that this implies,” says Walter Young of the University of Victoria, a historian of the NDP and CCF.  Neverthe­less, it is a party with a high degree of rank-and-file participation and leadership accountability.  Constitu­ent associations, made up of dues-paying party mem­bers, choose the candidates who run in their local districts, occasionally to the dismay of central party leaders.  The leadership must be elected (or reelected) annually at party conventions that also adopt basic policy statements.

Whether or not the NDP ever gets national power, its influence has already been marked.  Its early programs in Saskatchewan had a national “demonstration ef­fect,” forcing Ottawa and other provinces to take long steps forward in health care and family assistance.  The British Columbia programs should now provide a similar impetus.  At the national level the CCF/NDP pulled the Mackenzie King and Pearson governments leftward in social and economic policy, and is having the same effect on Trudeau, whose parliamentary ma­jority hinges on NDP support.

THE QUESTION THAT intrigues the American observer is: why in Canada, but not south of the 49th parallel?  As Seymour Martin Lipset has noted, many factors are cited to explain why the United States, alone among industrial nations, lacks a significant socialist move­ment: the absence of a feudal tradition with fixed class structures; an open frontier that absorbed malcontents; the diversion of energies into racial and ethnic rather than class struggles; the steady rise in living standards that made radical change seem unnecessary.  All of these conditions prevailed in Canada, albeit in slightly different form, yet a socialist party has been moder­ately successful here.  There appear to be two reasons for this Canadian diversion from the American path.  As in the United States, the craft unions in Canada have been less prone to radicalism than the industrial unions, but the labor movement as a whole has never gone the way of Samuel Gompers; it has kept its anti­-capitalist orientation, a sense of class consciousness and a desire to operate through a radical political party in the British Labor tradition.

The fact that Canadian politics is parliamentary, while American politics is geared to presidential and gubernatorial elections, may also help explain why socialism gained a foothold here and not in the U.S.  All important protest movements that emerged in recent U.S. history either operated within the boundaries of a major party or were soon absorbed by one of them.  This will probably continue to be the case so long as it’s necessary to get 51 percent of the vote, or close to it, to be a serious political factor.

By contrast in Canadian politics it’s possible to gain executive and legislative power, become an official opposition, hold the balance of power, or merely maintain a visible .political iden­tity, with considerably less than half the vote.  Thus both Social Credit and the CCF/NDP were able to outlast the Depression, while their American equiv­alents — the Townsend and Coughlin movements on one side, the Farmer-Labor Party and Non-Partisan League on the other — faded away.  It’s an interesting side­light that Premier Barrett, tired of hearing himself described as “the Allende of the North,” views his party’s election in British Columbia as “an Upton Sinclair victory in California forty years delayed.”