Allan J. MacEachen and Cape Breton Island: A Transient Legacy?

by Lachlan MacKinnon, Will Langford, and Andrew Parnaby

Warm tributes for Allan J. MacEachen poured forth after his death — from politicians, journalists, and colleagues. Prime Minister Trudeau was especially effusive.  And rightly so.  MacEachen’s parliamentary career and legislative record was unrivalled in 20th century Canadian political life – “peerless” in the prime minister’s words.  He was also deeply loved by the people of Cape Breton.

Yet amidst the tributes and reminiscences, contrarian Parker Donham struck a somewhat discordant note via Twitter: “AJMcE’s impact on #CB monumental but transient.  Coal. Steel. Heavy H2O. Sheep. NEP. All gone.  Was self-reliance also a casualty?”

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Finance Minister Allan J. MacEachen, giving the budget speech in 1981. (Fred Chartrand. / Canadian Press file photo)

Many of the tributes stressed Allan J’s national contributions – namely universal healthcare.  Others highlighted the ways in which he stuck up for the region.  Indeed, an official obituary described how MacEachen’s “first-hand exposure to the vulnerability of working families in early 20th-century Canada” prompted him to battle for miners’ pensions, minimum wage reforms, and other areas of social spending.

Certainly, these accomplishments had a nation-wide impact, but what of his contributions to the island, specifically? Were these impacts, as Donham asks, transient?

Harkening back to the 1960s and 1970s, Cape Breton was an island in crisis. Coal and steel were rapidly succumbing to structural problems – putting nearly 10,000 industrial jobs at risk — and government at all levels struggled to come to grips with what would eventually emerge as a full-blown international industrial crisis by the end of the 1970s.

“Cataclysmic” comes closest to describing the depth and severity of the moment.[1]

MacEachen, MP for Inverness-Richmond at the time, recognized the important role that government could play in “softening the blow” of industrial closure – preventing the sort of protracted, large-scale social collapse that would emerge alongside plant closures on the other side of the border in places like Homestead, PA and Youngstown, OH.[2]

Allan J’s approach to the island’s prospective collapse flowed from many sources. He combined hard living as a coal miner’s son from Inverness with an undergraduate education steeped in the philosophy of Moses Coady and Jimmy Tompkins – giants of the co-operative movement.[3] A stint in the US at MIT brought him closer to the Keynesian economic revolution, which imagined a more activist government. Nationally and internationally, the “development” model dominated public policy debates.

For MacEachen’s part, he played a key role in the creation of the Cape Breton Development Corporation (DEVCO) in 1967. The Donald Report had recommended a state-driven, managed retreat from coal.[4] Such an approach sought to minimize the social turmoil of deindustrialization while prompting the emergence of economic alternatives. Ottawa, in a sense, was morally and legally compelled to act: federal policy since 1867 was in part responsible for the distinct monopolistic shape of coal mining in Cape Breton – and the dependence of coal communities that went with it.[5]

DEVCO had a mandate to transform Cape Breton’s economy.  While the corporation’s Coal Division cut jobs and incrementally wound down mining operations, its Industrial Development Division (IDD) worked to create alternative employment.  IDD paid capital incentives to manufacturing firms, enticing them to set up plants along the mouth of Sydney Harbour.  But new jobs were short-lived. The industries went bankrupt in quick succession in 1970 and 1971 – suffering from undercapitalization, technical problems, and poor sales amid a wider North American recession.

In 1972, Tom Kent – a policymaker who had worked with Allan J. to implement Medicare – modified DEVCO’s approach.  Kent reversed plans to end coal mining, concluding that streamlined coal and steel industries remained essential sources of employment.  Yet he also pushed IDD into a much more active role in diversifying the island’s economy.  “Development is for the people,” Kent declared.  Building from local resources and involving residents in entrepreneurship, DEVCO funded and led a series of commercial and service economy ventures.

Most famously, IDD imported several airplane loads of Scottish sheep in 1975-76. Kent hoped that the livestock would improve flocks and help spur a larger-scale, more profitable island industry. In 1978, when DEVCO sold the initial round of sheep to local farmers and other buyers, Allan J. was on hand to auction off the first animal. For all DEVCO’s assistance, producers found expansion tough going. Stiff foreign competition, a few problems with disease, and the cost of protecting livestock from coyotes kept sheep farming from becoming more than a small component of some rural livelihoods.[6]

MacEachen left a cabinet post for a Senate seat in 1984.  That was also the year Mulroney won election and a resulting DEVCO leadership completed the corporation’s fiscally conservative, pro-private business transformation.  IDD’s development assets – tourist attractions, vacation accommodations, aquaculture infrastructure, craft industry initiatives, and more – were sold off.  Rather than participate directly in economic activities, DEVCO and its successors – from ECB to ECBC to ACOA – refocused on delivering tax incentives, repayable loans, and other assistance to small businesses.[7] The shift away from “development” is not hard to see.

Which brings us back to Donham and his assessment of Allan J.

Insiders and outsiders have analyzed DEVCO’s legacy. Donham’s perspective is consistent with one set of conclusions – that the entire experiment was a colossal waste of time. The much-lauded Ivany Report – “Now or Never: A Call to Action for Nova Scotians” — agrees. Despite the massive expenditure of public funds, so the argument goes, a different, diversified, Cape Breton economy never materialized – setting a market-driven, entrepreneurial-led transformation back by 30 years.[8] Allan J’s impact was thus “transient.”

Yet viewed from a wider angle, a somewhat more charitable reading emerges.

It is useful to recall the depth and scale of the industrial crisis that spurred Allan J to action. And that it, like the Great Depression of the 1930s, was largely a crisis of the free market.

What happened in jurisdictions where government did not respond to the social trauma of deindustrialization? Some communities made the transition to a knowledge-based or art-based revival, but many, many more – especially those in peripheral regions – utterly and totally collapsed.[9]  In the heat of the crisis, Allan J. understood where Cape Breton was likely to end up had the market been left to its own devices.

Problematic in many ways, DEVCO nevertheless managed to preserve some of the rudimentary elements of community life. And in the Tom Kent era it sought explicitly to teach Cape Bretoners about the potential of local expertise and entrepreneurialism, providing some of the grit upon which current attempts at revival find traction. If there was a self-reliance issue, Kent reasoned, it was a by-product of 200 years of corporate exploitation – not the development state created by Allan J to facilitate transformation.

At great financial cost, DEVCO acted to slow the hard pace of disintegration down — providing those who remained on the island an opportunity to remake the island anew. That’s no small impact. And a legacy far from transient.


Lachlan MacKinnon is a SSHRC Postdoctoral Fellow at the Gorsebrook Institute for Atlantic Canada Studies at Saint Mary’s University in Halifax. His current research examines policy responses to deindustrialization in Atlantic Canada and the Scottish Highlands.

Will Langford – whose recent research focuses on poverty, democracy, and development in 1960s-1970s Canada – is a SSHRC Postdoctoral Fellow in the Department of History at Dalhousie University.

Andrew Parnaby is Associate Dean in the School or Arts and Social Sciences at Cape Breton University.


Notes:

[1] Andrew Parnaby, “The Antigonish Movement and the Sydney Steel Crisis of 1967,” 11 October 2016, https://acadiensis.wordpress.com/2016/10/11/the-antigonish-movement-and-the-sydney-steel-crisis-of-1967/

[2] Steven High, Lachlan MacKinnon, and Andrew Perchard, eds., The Deindustrialized World: Confronting Ruination in Postindustrial Places (Vancouver: UBC Press, 2017).

[3] Santo Dodaro and Leonard Pluta, Big Picture: The Antigonish Movement of Eastern Nova Scotia (Montreal: McGill-Queen’s University Press, 2012).

[4] J.R. Donald, The Cape Breton Coal Problem (Ottawa: Queen’s Printer, 1966).

[5] David Frank, “The Cape Breton Coal Industry and the Rise and Fall of the British Empire Steel Corporation,” Acadiensis VII, no. 1 (1977), 3-34.

[6] Will Langford, “Trans-Atlantic Sheep, Regional Development, and the Cape Breton Development Corporation, 1972-1982,” Acadiensis XLVI, no. 1 (Winter/Spring 2017): 24-48.

[7] James Bickerton, “Federal Regional Development Policies and Atlantic Canada’s Islands,” in Competing Strategies of Socio-Economic Development for Small Islands, eds. Godfrey Baldacchino and Robert Greenwood (Charlottetown: The Institute for Island Studies, University of Prince Edward Island, 1998), 238-267.

[8] A different view is expressed by Don Nerbas: http://thechronicleherald.ca/opinion/1289314-ivany-report-put-fresh-coat-of-paint-on-decades-old-mantra

[9] Alice Mah, Industrial Ruination, Community and Place: Landscape and Legacies of Urban Decline (Toronto: University of Toronto Press, 2012).

About The Acadiensis Blog

The Acadiensis Blog is a place for Atlantic Canadian historians to share their research with both a scholarly and general audience. We welcome submissions on all topics Atlantic Canadian. If you are interested in contributing to the blog, please contact Acadiensis Digital Communications Editor Corey Slumkoski at corey.slumkoski@msvu.ca.
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1 Response to Allan J. MacEachen and Cape Breton Island: A Transient Legacy?

  1. Pingback: Canadian History Roundup – Week of November 19, 2017 | Unwritten Histories

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