Northern Perspectives Interview: Tony Penikett
Since leading his New Democratic Party to an upset victory at the polls in the spring of 1985, Yukon Government Leader Tony Penikett has been innovative in his approach to economic development and adamant in his contention that Yukoners deserve a better deal from Confederation. A staunch opponent of the Meech Lake constitutional accord, he argues that the unanimity clause now governing the creation of new provinces effectively "freezes out" both Yukon and the Northwest Territories and denies what has been a long-standing aspiration of northern Canadians.
In the following interview, conducted in December 1987, Mr Penikett discusses the origins and underlying philosophy of the Yukon 2000 economic development initiative, as well as related issues such as constitutional development, native land claims, and the effects of the Canada-United States free-trade agreement on northern economies.
NP: Where did the concept of Yukon 2000 originate? Why that approach and not another?
Penikett: The genesis of the idea came from a problem I've always had, as a person of the democratic Left, in trying to resolve the contradiction between the need for planning and the need to do it democratically. If you go back and read a lot of the writings of the CCF or NDP, or parties of the Centre and the Left in Europe that have established the need to assert some local control over their economies, you find that much of the work in that area has been done from the centre, from the top down. I am also, I suppose because of my age, very much influenced by the ideas of the New Left-people like Schumacher- who wanted to do things democratically, to have a more popular approach.
The concept was that, rather than trying to plan from some central planning agency, as a number of governments have done, we could start to build on what seemed to be a good idea of a number of people, of saying that one needed to involve many more interests in the process. Even Mr Mulroney had the same idea, when he came into office, of drawing on the opinionators from the great establishments of business, labour, and government. Also, the size of the Yukon population made it possible to carry out the process-with enough time, and through a series of conferences, workshops, study groups, and so forth-to involve practically everybody in the community who wanted to be involved.
NP: Were other alternatives considered? The Government of the Northwest Territories has recently set up a committee to develop an economic plan but has not opted for the concept of public hearings across the territory. As well, there have been similar exercises in other parts of North America.
Penikett: I know the GNWT has tried several experiments over the years, and I know they have attended meetings and looked at Yukon 2000 in the latter stages. But I'd have to answer, no, we didn't consciously look at the GNWT. Once we had the basic idea about how to do it in a particular time and how we would try to facilitate the process, we were very much feeling our way. We perceived that there was nobody else anywhere who had done it exactly this way before. To some extent, we had to learn and adapt as we went, according to what we were hearing. For example, we slowed the process down, and we made the final conference smaller because it was felt that the big grand finale with hundreds of people was not a good idea and beyond a useful size for a consultative body.
We were aware of the model in Cape Breton and the Sudbury experiment, and I was certainly aware that a number of states had done the same sort of thing3/4 Alabama 2000, Georgia 2000-but they had done, basically, one big conference. Ours was longer, because we decided it would be much more of a process of discovery. We did have some experts-academics and consultants-writing papers, but I think we were very much mining the popular wisdom and trying to identify what I thought was a latent consensus about many things that we needed to have the process articulate. I think that is what's happening. I had a sense that, rather than rejecting another model, we were aware of what had gone before and were trying to build on it-not improve on it necessarily, but adapt it or other models and build on experience. We wanted to do something that would be, perhaps, unique, but also particularly relevant to our needs, our geography, and the size of our population.
NP: Were there any surprises in what emerged from the consultative process?
Penikett: There were a lot of things that surprised me. For example, as someone who has been involved in political life in the North for a number of years, I knew about the subsistence economy, but I was surprised, as we began to quantify it, how large it is relative to other sectors. I don't think I had ever had it articulated in quite the way Yukon 2000 did-the idea that there is a very distinct subsistence economy in the Yukon, which is not unrelated to the industrial economy but is still a very separate and enduring feature of our life.
There was also the sense that our community valued the voluntary work that people put into everything from hockey to theatre and other organizations. As you know, everybody in the North is a president or secretary-treasurer of some organization in the community, and people obviously put a great value on that. Yukoners feel that much of life here would be impossible without the contribution of volunteers and that we need to take into account the value of work done in the home. In a sense, even some of our ideas about what employment or full employment meant-ideas I inherited from my own background-were turned on their head. There is obviously considerable movement back and forth from the wage economy to the subsistence economy. We gained a sense that many people traditionally described as "unemployed" are not idle at all but are very busy. The traditional measures of some economic activities-unemployment rate, employment rate, Gross Territorial Product-are nets with big holes in them, because they miss a lot; they don't capture a lot of the reality of our economy.
Not surprisingly, of course, other ideas emerged. For example, people felt we had an excessive dependence on primary resources, particularly mining, but those are things that could have been anticipated.
NP: Does the amount of information you've obtained present any difficulties in formulating a strategy? With so many opinions and so many ideas, is it hard to establish an overall sense of economic direction?
Penikett: I think there is some skill required in trying to read the consensus, or areas of agreement, because sometimes, in a process of this type, different words describe the same thing. There is no doubt that it's difficult in some respects, but I think there are some themes that, for me, became very clear. Translating that into action will be difficult for many government departments or for some sectors of the economy, but that's another problem. Implementation is something we are beginning to wrestle with now, and I don't expect to have it finally solved by the time we publish the strategy. One of the reasons that we decided to keep it organic was that we knew we might have to revisit some sectors next year or the year after, just because events would have dated the strategy in some particulars. We would have to come back, and we would want to continue to have that opportunity.
NP: The approach taken in Yukon 2000 has received a lot of praise, but there have been criticisms- that perhaps too much was spent on the consultation process, that some of the problems could have been readily identified by other means.
Penikett: Since the final report isn't public yet, I think it would be a mistake to prejudge the conclusions. But I suppose, for example, if you are a mining person, you would say not enough is devoted to mining; if you are from another point of view, you may say something else. There may be no one who is totally satisfied with the report as an expression of their views, but that's not surprising. It is supposed to be a statement about those areas in which we reached agreement rather than those things about which there is still profound disagreement-things we would leave to the conventional political process. It was a consensus-building exercise rather than the traditional conflict situation that's found in legislative forums or others. There will be some things about which we don't make definitive statements, just because the community has not yet come to any firm conclusions about them.
As far as the cost is concerned, given the advantage of hindsight, I doubt if any serious person will have very much criticism. We've done other consultations on some very narrow, specific issues-for example, our recent task force on education-compared with the global approach we're talking about here, and those probably cost a major fraction of what Yukon 2000 will eventually cost. In any case, I think much of the work we're doing in Yukon 2000-the sectoral studies and economic environment papers and so forth-were things we would have had to do anyway in some form or another. What we've done is better: an attempt to gather this information in such a way that we can have a co-ordinated approach in the final report. With the traditional way we departmentalize problems, we would have been looking at transportation, for example, in isolation from other problems. This is an attempt to take a more holistic approach. I'm sure we haven't achieved a perfect synthesis, but we've gone a long way toward that. The cost involved-I think we've spent a little under $400 000 to date, according to the last report I had-is not at all out of line for a two-year exercise, given the scope of this project.
NP: What kind of constraints are placed on economic development by the Yukon's status vis-a-vis the rest of the country and the federal government? Yukon has been described as a colonial economy. and it would certainly seem to display some of the classic centre-periphery characteristics.
Penikett: We have had a history in which most big decisions about our economy, and many of the small ones were made by people outside the territory. If there's one thing about which there is a consensus in the Yukon, it's that Yukoners want to have more local control over every dimension of their lives. That's a normal appetite in a democracy. Of course, because we are a hinterland resource-producing area, many of the sensitive issues involve resources, and, because we are not a province, we don't control renewable resources.
Another feature of Yukon reality is that people are fairly creative or fairly flexible. Over time, even if we are permanently frozen out of Confederation as a result of Meech Lake, people will find ways of getting involved in decisions about different sectors of the economy. As an example, when we responded to the crisis in the community of Watson Lake and bought the bankrupt Watson Lake Forest Products, we did something that gave us, as a government, a good window on the forestry sector. Since ours is now the largest company involved in that sector, we are making decisions in that area and taking actions that improve our stake in that resource, our knowledge of it, and our ability to behave responsibly in that field. That is just one example of how we can get involved. Another one is the reopening of the mine at Faro. We negotiated a development agreement with the company, and the development agreement's terms were largely crafted by the Yukon government, as opposed to the federal government. So that's another instrument by which we can increase our voice in the decisions in an area-in that case, through a deal with the largest mine in the territory3/4 without actually having the constitutional authority to do so.
NP: In what way might the recent free-trade agreement affect arrangements such as the one that reopened the Faro operation?
Penikett: At one level, our concerns are quite predictable. We're concerned about a "Fortress America" trading bloc and whether there might be a negative reaction in Asia or Europe, where we're selling most of our mineral products. Also, I think it would have been very hard to put together the kind of deal that reopened the mine at Faro in a post-free-trade environment. I'm sure the Americans would have screamed "Subsidy!" about the particular arrangements we made there. We think that the instruments we are using-local control and a local materials policy, and import substitution-will become much more difficult in a free-trade environment than they were before. If I could quote Nellie Cournoyea, I think the problem, in terms of northern energy resources, is that they are treated as if they are the property of southern metropolitan centres, to be traded away for other considerations at the free-trade table.
I think all of that, in the grand tradition of Meech Lake, brings us back to the reality that we did not have access to the first ministers' conferences on free trade. We were never really consulted by Simon Reisman or anybody involved in the trade negotiations. At one point during his time as minister, Mr Crombie indicated that he would speak for the North when it came to free trade, but as far as I know he never consulted with the Yukon government or the Northwest Territories government. If you go back to the Macdonald commission, which argued that we should take a leap of faith on free trade, it did actually note that there could be some adverse effects on the North and that some special arrangements should be made for our region. Clearly, that was not done and not contemplated in the negotiations.
NP: How important is the energy question and the prospect of a northern energy accord?
Penikett: It is very hard to say with precision what's going to happen. Clearly, there are a number of complications. I think it's quite possible that British Columbia's access to Alaskan energy resources could, over time, indirectly weaken Canada's resolve to protect the Alaska National Wildlife Refuge. In energy development under free trade, I think that a kind of continental energy market will make it extremely difficult for northern governments to extract local benefits, local business purchases, local procurement, local hire, local training, affirmative action programmes, and so forth. It will be much more difficult as a result of such a free-trade arrangement. It will probably tend to accelerate the pace of Beaufort development, although I have talked to some people who feel otherwise.
NP: Would you agree with the view that a reduction in tariffs on equipment under free trade will greatly accelerate development?
Penikett: I'm not sure that it will give us any particular advantage versus, say, some southern Canadian options that investors may be looking at. In mining, for example, I think there may be some slight acceleration, but for us the sword over our heads may be the impact of this deal in the Asian markets where we're selling ore-we don't sell much to the United States. I think the major dampener on activity in the mining sector will probably be the retirement of the flow-through shares provision by the national government. I think that will be a much more significant factor than the particulars of the free-trade deal.
NP: Looking at free trade, one might become somewhat sceptical if the experience with another "transboundary" issue, the 1002 lands, is considered. Could you comment on that situation?
Penikett: We haven't changed our position on 1002. Some of our renewable resource officials were over in Alaska recently reiterating our concerns about the impact of those developments on wildlife. I suppose, at an abstract level, what the Americans do in their territory is not our business, but the Porcupine caribou herd is a shared resource, and we have a shared responsibility to manage it. As that is where our interests can be affected, we will make no apologies to our Alaskan friends for speaking up very clearly.
NP: There is, of course, the question of land claims and its link to economic development, at least as far as investment certainty is concerned. How closely is that issue tied to what emerges from Yukon 2000 and the implementation of that strategy?
Penikett: I think that the kind of approaches that we will take, particularly when we get down to the final band-by-band negotiations, will be consistent with what we've heard in Yukon 2000. The question of certainty is obviously very important for potential investors, and, as I'm sure you know, our government was the first in the country to say that extinguishment isn't necessary to achieve certainty. We are still very much committed to that view.
NP: What is the timetable for implementation of Yukon 2000?
Penikett: The missing element, at the moment, is how the government is going to react to all the recommendations in each sector. When the strategy does comes out, it will be a statement of our government's policy. I think that there will be at least three time-frames for implementation- short, medium, and long-and that will be dictated by the nature of the issue we're addressing. As I said before, this is a strategy for Yukon 2û00, not Yukon 1989. We're not going to be able to do it all at once; we don't have the capacity as a government to do that, and I don't think we have the will of the community to do it. There may be some disappointment that we're not doing everything at once, but I don't think reasonable people will have any expectations of that.
NP: Is Yukon 2000 part of a larger change in the political ethos of Yukon?
Penikett: In a way, it is a reflection of a change, of a shift from a kind of '50s consciousness, which I think was very much the view of our political predecessors. I don't say that in a disparaging way, but I think much of the leadership of the previous government were people who came of age during the Eisenhower era. Their views on a great many issues-everything from human rights to resources-were very much those of traditional liberals, that technology equals progress and so forth. I think the consciousness of the Yukon community has risen substantially in the last few years, and I think, generally, that our community has matured in a way that is positive. We still have all the problems of a developing area and then some, but I think the desire to have a co-operative, constructive approach, rather than a confrontational one, is certainly the view of the vast majority of our citizens. The idea of having some kind of social contract, through land claims, between the aboriginal and non-aboriginal communities is very much the dominant view of the community today. Our ideas about a lot of other questions have changed: the role of women in society, the role of the community, the idea that democracy doesn't happen only every four years on election day but is something that is going to be a continuing part of the life of a community, especially one as small as ours. And I suppose a different attitude about resources3/4 that they are finite, perhaps even that there should be some sense about inter-generational equity-is part of the thinking of the people who are now coming into leadership roles in the North.
NP: Do you intend to keep fighting for the concept of provincial status despite what appears to be a freeze-out by way of the Meech Lake unanimity clause?
Penikett: Provincial status per se is not very high on our agenda. Speaking for my party, we've always felt that economic sovereignty is more important than political sovereignty. The last thing in the world I would want to be is premier of a broke province, which is what we would be under the existing financial arrangements. Yes, I will fight to continue to keep the option open for some future leaders of this place. They may want, or reasonably expect, to enter Confederation on equitable terms, as it was supposed to be in the original arrangement of this nation. It is interesting that there now seems to be a new verb that has entered the Yukon vocabulary. There was an announcement recently that some new committee had been established in Ottawa with representation from everywhere else except the Yukon. I heard someone say, "Oh, we've been 'Meeched' again." I can see that term gaining wide currency.