Wednesday, February 6, 2013

Dependence vs independence: Newfoundland and Iceland

Over sixty years ago, Iceland and Newfoundland were both colonies, dependent on the motherland.  In 1944, Iceland, a desperately poor place, took its independence from Denmark. Five years later, Newfoundlanders went in the opposite direction and voted to join Canada. 

Iceland and Newfoundland share more than their rugged appearance. They are isolated. They are similar in size. They depend on the fishery as their mainstay and have done so for centuries. The people are as rugged as the land. They drink excessively. They live intensely. They are fiercely independent. Their cultural roots run deep. Iceland has its sagas, Newfoundland its folksongs.

But that's where the similarities end. Although Iceland was much worse off than Newfoundland, since winning their independence Iceland has prospered while Newfoundland hasn't fared as well. Unlike Newfoundland, Iceland has very few resources, save the codfish. Yet, it is one of the most prosperous countries in the world. Unlike Newfoundland, Iceland is not losing its young people for lack of work. And Iceland still has a thriving cod fishery, and a bright future.

From The Passionate Eye's blurb for the June 2005 showing of "Hard Rock and Water".

Cod fish and sovereignty

So, why did Iceland prosper and Newfoundland stagnate? History has rarely given us such a perfect test case. Both countries were heavily dependent on the cod industry in the 1940s. Independent Iceland took complete control of its vital industry, managed it well and it is still going strong today. Newfoundland, however, handed over an industry that represented 80% of its GDP to the Canadian government in 1949, since fisheries is federal jurisdiction.

The result has been called “managed annihilation,” “Confederation’s greatest failure,” “a national embarrassment, a national shame.” The demise of the cod fishery off Newfoundland is now legendary as an environmental and economic disaster. Over 19,000 fishers and plant workers laid off indefinitely, another 20,000 jobs directly impacted – the biggest layoff in Canadian history. And yet, for most Canadians the loss of the Northern cod is at most a distant misfortune – something that was probably inevitable and had nothing to do with them.

When Newfoundland and Labrador became a province, Canada was more than happy to take over the fisheries jurisdiction and subject it to federal priorities. The end result was the replacement of the traditional salt-fish trade with deep-sea factory-freezer trawler, and corporations taking over from the merchants of St. John’s and the outports.

Soon both Canadian and foreign vessels were dragging the ocean floor for the largest catches in history. In 1968, a record 810,000 tonnes of northern cod were harvested – more than three times the estimated maximum sustainable catch at the time. These vessels vacuumed up the fish and took over the markets. The smaller, more sustainable community-based fisheries of Newfoundland were increasingly marginalized. It was only a matter of time before the whole thing would collapse.

In 1992, the Canadian government imposed a moratorium on Newfoundland's cod fishery. This closure ended almost 500 years of fishing activity in Newfoundland, and it put over 35,000 people out of work. Fish plants closed, boats remained docked, and hundreds of coastal communities that had depended on the fishery for generations watched their economic and cultural mainstay disappear overnight.

Iceland, on the other hand, was far more protective of its cod industry. In the 1970s Iceland nearly went to war when British boats began fishing in its waters. When cod stocks starting depleting on both sides of the Atlantic, Iceland took pre-emptive measures, slashing quotas and protecting its waters from other European boats. That approach has payed off today. Iceland still has a cod fish industry. But despite a nearly 25 year moratorium, Newfoundland's cod industry has yet to recover.

Vital industry vs plunder

The real power brokers in Canada don't live in Newfoundland. Most of them live in Ontario's Golden Horseshoe. To them the economic engine of Canada has always been Southern Ontario and now, to some degree, Alberta. Other regions are mainly for extracting resources and fishing has never made up more than 1% of Canada's GDP. Should we really be surprised that Newfoundland's cod industry was mismanaged? No one will look after your interests better than you will. It's a basic lesson you learn once you're out of childhood.

It's far easier to simply send welfare checks to Newfoundland than it is to spend the time and energy necessary to properly build up and manage its economy for the benefit of the people living there. You know, like what the Icelanders did with their own economy. I think the answer to the question of why Iceland prospered while Newfoundland stagnated is obvious. Newfoundlanders made the colossal mistake of handing over their sovereignty to the Canadian government and in return they got mismanagement and neglect. Then came the welfare checks and the derision in the Canadian media for being beggars and welfare bums; a derision that is usually reserved for Quebecers.

Quebecers should learn the lesson of Newfoundland and Iceland. Independence for Quebec is not just for cultural reasons; it is also for economic reasons. No one will look after our economic interests better than we will. It's that simple. Iceland, a country with very few natural resources, doesn't need handouts from anyone. They are masters of their own destiny and we should be, too.


  1. Vive le Québec libre.

  2. Let's not forget, however, that Newfoundland was already financially finished before 1949. In 1933, faced with default, it had no choice but to revert to the status of a British colony, I will just quote one passage from the 1933 Newfoundland Royal Commission (aka the Amulree Commission) which recommended that course of action:

    "219. As a general statement, it is not too much to say that the present generation of Newfoundlanders have never known enlightened government. The process of deterioration, once started, could not be controlled. The simple-minded electorate were visited every few years by rival politicians, who, in the desire to secure election, were accustomed to make the wildest promises involving increased public expenditure in the constituency and the satisfaction of all the cherished desires of the inhabitants. The latter, as was not unnatural, chose the candidate who promised them the most. This might be said of other countries, but in Newfoundland this cajoling of the electorate was carried to such lengths that, until the recent crisis brought them to their senses, the electors in many cases preferred to vote for a candidate who was known to possess an aptitude for promoting his own interests at the public expense rather than for a man who disdained to adopt such a course. They argued that, if a man had proved himself capable of using his political opportunities to his personal advantage, he would be the better equipped to promote the advantage of his constituents: an honest man would only preach to them.

    220. The country was thus exposed to the evils of paternalism in its most extreme form. The people, instead of being trained to independence and self-reliance, became increasingly dependent on those who were placed in authority; instead of being trained to think in terms of the national interest, they were encouraged to think only of the interests of their own district. Even within a district, or a church denomination, there was no public spirit; in the struggle to secure a decent living, the average man sought only his personal advantage. The Government was looked upon as the universal provider, and it was thought to be the duty of the Member for the constituency to see that there was an ever-increasing flow of public money. (...) The people were in fact taught to look to the Government for everything and to do as little as possible to provide for their own requirements. If the fishing was good, agriculture was neglected. If the fishing was bad, more attention was paid to the land but the Government were expected to provide the seeds for the people to plant. Roads, bridges, town halls and public buildings; all these, often superfluous luxuries, the Government, through the Member, was expected to provide and maintain. The Member on his part, knew that unless he gave satisfaction to the people, he stood little chance of re-election: consequently, he was tempted to concentrate his energy on obtaining the maximum amount of money from the Government for allocation in his constituency. When it is said that, under the system adopted, there was no adequate audit of the money so allotted, it will be appreciated what opportunities there were for waste and extravagance. With no training in citizenship, and unversed in the elementary canons of public finance, the people were unable to realise that excessive expenditure would inevitably recoil on their own heads; the Government evidently possessed or could raise the money and, if that was so, it was held to be their right to have the maximum share of it."

    1. According to the British, therefore, the mismanagement and neglect of Newfoundland was its own doing, the child of political corruption and general ignorance, exacerbated by the international economic climate of the early thirties. Frederick Alderdice, the Newfoundland PM who voted his own job out of existence by implementing Lord Amulree's recommendations (only to be rewarded with an appointment to the subsequent Commission of Government), was very much a representative of the St. John's business elite of the day, concerned above all with political and economic stability. (And Canada, of course, was already meddling in the affairs of Newfoundland because of shared economic interests.)

      In 1948, the first referendum on the future of Newfoundland offered three options: the continuation of the Commission of Government, Confederation with Canada, or a return to responsible government. The third option won, but since it only obtained a plurality, a second referendum was held, in which the majority of people who had voted to continue the Commission chose to vote for Confederation. From this, it can safely be surmised that the additional people who voted first for the Commission, then for Confederation, were concerned, above all, with economic stability.

      The lesson here is not so much that Newfoundland made a mistake in joining Canada, but that there are persons for whom economic considerations will always trump any sense of national pride. I'm thinking, right away, of Quebec's vociferous libertarian Right, but they are rabble for the most part, and I'm more worried about the power of our much vaunted Quebec Inc. elite and its hangers-on; see how Lucien Bouchard, decidedly part of the latter, has spent the last decade backstabbing the cause of independence...

    2. Hah, I saw you later wrote about this. That's what I get from starting to read a blog from the beginning.

  3. Edward Banfield wrote a book about such Newfie behavior in Italy. I'm using the Mulcair nuance on Newfie. All apologies.