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Roger Gibbins, President & CEO
Canada West Foundation

The first stop in Canada for many Asian visitors is Vancouver, a spectacular Pacific port with a natural setting rivalling Hong Kong. Visitors in the energy business may well travel on to Calgary, Canada’s bustling energy capital located in the foothills of the Rocky Mountains.

These gateway cities create a very favourable first impression for visitors, leading to the assumption that contemporary Canada is a very attractive and energized country. Both cities are marked by rapid growth, dynamic multicultural societies, and a great deal of prosperity.

For most of Canada’s 144-year history, however, neither city represented the Canadian mainstream. More generally, the four western Canadian provinces of British Columbia, Alberta, Saskatchewan and Manitoba were a backwater frontier locked in continual, almost colonial conflict with the country’s "heartland" in Ontario and Quebec where the majority of the national population lived. No one then saw Vancouver or Calgary as significant gateways to Canada, or at least to the Canada that counted economically or politically.

In the heartland, Canadian eyes and economic interests were traditionally fixed firmly on Europe and the United States, and little, if any, attention was paid to Asia. Few saw western Canada’s relative proximity to Asia as a strategic asset for either that region or the whole country. Consequently, the small Asian community in the West was simply an anomaly rather than a bridge to new markets or investment.

For over a century since confederation in 1867, the overriding political challenge was integrating the western frontier into the Canadian mainstream. Whereas in the United States the western frontier came to exemplify and define core American values, western Canadian settlers were largely outsiders looking in, trying, with limited success, to help define the country they were building.

It is therefore important for investors and visitors to realize that setting foot in the West is not the same as setting foot in Canada. The culture of western Canada has been shaped by more than a century of discontent. As a consequence this negative aspect may surprise foreign visitors who are usually first impressed by the region's prosperity and unbounded optimism.

Canada and China: Contrasting Geographies

Canada’s four western provinces have a combined population of approximately 10.3 million, about half the size of metropolitan Beijing. This population, although small in a global sense, occupies about 2,900,000 square kilometres of territory. The distance from Victoria, the westernmost major city in the region, to Winnipeg, the region’s easternmost city, is approximately 2,300 kilometres, roughly the distance between Harbin and Taibei.

Canada itself stretches over 7,300 kilometres from the western edge of Vancouver Island to the eastern coast of Newfoundland and Labrador. It covers approximately 9,985,000 square kilometres, a figure strikingly similar to China's total area at 9,598,000 square kilometres.

Given this vast territory, some degree of regional difference and conflict is inevitable, and thus one would expect Canadians to have designed a political system that would be particularly sensitive to regional differences and interests. Surprisingly, however, the Canadian experience has been just the reverse. The political system has been part of the problem of regional discontent far more than it has been part of the solution.

Western Canada's Voice

When Canada was created out of a set of British colonies in 1867, the western part of the new country was virtually unsettled apart from the largely nomadic Aboriginal population in what were to become the prairie provinces and relatively small Aboriginal communities sprinkled across British Columbia. Vancouver was a small and remote port, and the entire population of what is now the province of British Columbia was only 32,000. Calgary did not even exist as a city until 1884 when its 4,000 residents formed a municipal government.

During the late 1800s and early 1900s the three prairie provinces constituted a vibrant agrarian frontier that attracted waves of immigration from around the world. This frontier economy relied heavily on distant foreign markets in Europe, and the linkages to those markets fell largely within the jurisdiction of the Government of Canada. Under the country’s federal constitution, the transcontinental railways and ports, tariff policy and trade, freight rates and international marketing were all shaped far more by national policies than by the provincial governments in the West. Frustratingly, the regional governments that were the closest to western Canadians had the least leverage on the regional economy. The key decisions were made, or not made, in distant Ottawa.

In this context it was critically important for western Canadians to have their economic interests vigorously and effectively represented within the national government in Ottawa, but unfortunately this was generally not the case. The parliamentary system reflected the interests of the majority of the population living in Ontario and Quebec, and there were few opportunities for regional representation, for an effective western Canadian voice within the national government. As a result, economic tensions between the West and the rest of Canada were exacerbated rather than ameliorated by the political system.

The endemic economic tensions of the frontier were then heightened in the wake of the Great Depression of the 1930s when the country’s economic future came to rest with the modern industrial economy being built in the central Canadian heartland. The largely agrarian West came to be seen more and more as yesterday’s economy. Indeed, western Canadians were encouraged to wean themselves from agriculture and resource extraction, and to mimic the more successful central Canadian economy.

In the last few decades of the 20th century, when growing global resource markets strengthened the western Canadian economy, political tensions increased. Conflicts erupted over the adverse impact of national policies on the economic interests of western Canada, and economic tensions were overlaid by conflict over the very nature of the country. Western Canadians resisted the bilingual, bicultural vision for Canada promoted in central Canada, preferring one that stressed Canada’s multicultural character and downplayed the necessity of bilingualism.

Although the level of animosity between western Canada and the national government has diminished substantially in recent years, particularly with the election of a majority government with strong western Canadian representation and a Prime Minister from Calgary, the effects of past conflicts linger on. Political conversations with western Canadians often have an edgy, combative tone that reflects historical grievances more than contemporary realities.

Legacy of Discontent

Western Canada’s history of political conflict with the Government of Canada means that even today there is considerable wariness when it comes to the federal government, which is often seen as a drag on the regional economy. Western Canadians are more trusting of their provincial governments, and are inherently suspicious of Ottawa. This suspicion is embedded in the region.

Visitors to the West will also encounter a growing self-confidence, a belief that the region can succeed within an increasingly competitive global economy. There is a widespread belief that Canada is now tipped east to west, that jobs, investment, economic opportunities and, finally, political power are all flowing downhill from east to west. Reality clearly supports this assumption, although the degree of tip is more modest than western Canadians like to acknowledge.

Nonetheless, Canadians are voting with their feet as tens of thousands relocate each year in the West.
The fact remains, however, that the federal government has an indispensible role to play if western Canadians are to realize their Asia Pacific potential as Canada’s gateway to Asia. While western Canada's geographic link with the Asia Pacific region brings tremendous potential, it is still not clear that this potential will be realized.

At present, the infrastructure needed to carry western resources to Asian markets is under-developed. Only a miniscule amount of oil reaches the west coast, and there is still no pipeline linking the Alberta oil sands to the coast. Moreover, the proposed routes are strongly opposed by many environmentalists and First Nations. And too this point there are no LNG terminals on the west coast, although construction has started and approval for the requisite natural gas supply lines is being sought.

Unlocking the Promise of Asia Pacific Trade

More has to be done, and this brings us to another potential flash point between the resource economy in western Canada and the Government of Canada. Will the Government of Canada play a role in bridging western Canadian resources and Asian markets? Will it help ensure that the necessary infrastructure is in place? Will it assist in the complex negotiations with First Nations? Will it help ensure that environmental expectations are met, but met in a way that does not prohibit west coast access?

The Government of Canada also has the final say about any major Asian investments in Canada, and although at present the government appears to be favourably disposed to Asian investment its limits have yet to be tested.

In the long term, economic prosperity in Canada will depend on the capacity of Canadians to build effective bridges into the dynamic Asian Pacific economy. Here western Canada is the key, but success will only come through effective cooperation between provincial governments in the West and the Government of Canada. This means that the abrasive relationship from the past must be overcome.