Canada Adjusts to Troubled Times

Canadians confront a struggle with economic malaise and a new fractiousness in politics

FOR Canadians, 1993 was the beginning of a ``new realism,'' says historian Michael Bliss.

It was a year in which the economy grew without creating many new jobs, and Canada's most unpopular prime minister, Brian Mulroney, ceded his place to Kim Campbell, the first woman head of state, only to see their Progressive Conservative Party take a trouncing from voters in the October national election.

Canadians chose Liberal Party candidate Jean Chretien to lead the country just one day after the Toronto Blue Jays claimed their second-in-a-row World Series victory.

Joy over sport and politics, however, was set against the stark backdrop of a struggle with economic malaise. And the big Liberal victory was counterbalanced by the rise of two fractious regional parties.

The Bloc Qucois - dedicated to the idea that Quebec should split from Canada - will face off in Parliament next year with an equally adamant party of government reformers from Western Canada. They sent the Reform Party to tackle Ottawa's spending excesses.

``This will be seen as the year Canadians began to realize that they couldn't go on with the debt,'' Professor Bliss says.

Since October's federal election, the 1993-1994 federal budget deficit has been revised upward to a record C$46 billion (US$34.5 billion). The new Liberal government of Mr. Chretien, which promises to create jobs, is also gearing up for tough cuts to government spending.

``People can't say consistently that there's a problem with deficits but solve it on somebody else's back,'' said new Finance Minister Paul Martin. ``What people have to understand is that there can be no sector of the economy that is sacrosanct. If there's pain, then it's going to have to be shared equally.''

Huge economic pressures are tearing at the nation's social safety net (national health care, social insurance, and welfare) with which Canadians so closely identify, says Grant McCracken, a cultural anthropologist at Toronto's Royal Ontario Museum.

``My sense is that the budget cuts we're going to see in the public sector and social supports in the next decade are going to be astonishing and will fundamentally change the nature of public life and political relations in Canada,'' Mr. McCracken says.

He adds that most cherished of Canadian qualities - tolerance - will be increasingly at risk: ``This could spell the end of Canadian civility as we know it.''

Tolerance among regions and among Canada's many ethnic cultures has long been buoyed by the nation's natural resource wealth. ``Have'' and ``have not'' provinces have allowed Ottawa to tax and redistribute wealth from rich provinces to where it is needed. The Atlantic provinces of Prince Edward Island, Nova Scotia, Newfoundland, and New Brunswick, for example, have long depended on federal aid in seasons when neither fish nor tourists abound.

THERE are more than 40,000 unemployed fishermen in the Atlantic provinces. A program to reimburse the fishermen runs out in May, and no other plan is budgeted. Meanwhile, provinces like Ontario are running huge budget deficits and decrying the loss of funds to other regions.

The percentage of Canadians favoring regional development spending has fallen from 56 percent just over a year ago to 38 percent this year, says Jon Hughes, a researcher with the Gallup Canada polling firm. ``In all areas, people are reeling,'' he says. ``There is just not much money to go around.''

One sign of how well Canadians are dealing with tight budgets will come in 1994 from Ottawa, where Canadians in October sent two new members out of every three to Parliament with a new agenda: Represent my region, not just a national party program.

``The common thread that links the emergence of Reform and the Bloc is a mood of malaise in many parts of the world,'' says Philip Resnick, a political scientist at the University of British Columbia. ``That translates into a sense of a democratic deficit, a lack of control people feel over larger political and economic phenomena. The result is a real dissatisfaction with traditional parties and a lashing out.''

Mr. Hughes says Gallup found cynicism and skepticism toward public officials, and a lack of confidence in elite institutions in Canada - churches, schools, newspapers, and the House of Commons - the opposite of what is typical for Canadians.

``Chretien says the Constitutional file and the unity question are closed,'' says Stephen Scott, a law professor at McGill University. ``But the largest single political event recently has been the election of a large delegation of separatists to the House of Commons. Is this simply a protest vote or a symbol of something more?''

Next fall, provincial separatists face off against federalist Liberals in Quebec's provincial elections. If separatists are elected, the next step is a referendum on sovereignty.

While many analysts bemoan a Canada whose multicultural stitching is coming loose and whose finances are strained, some say Canadians would do well to employ more of their innate ingenuity and imagination.

``In a sense, people here are approaching this [debt] problem with a lot more pessimism than they should be,'' says Leo de Bever, chief economist at Nomura Securities Canada, Inc. ``We have lots of land, a highly educated labor force, a lot of new economic activity. I think our problems are small compared with those of other countries.''