The continuing crisis in federalism fuelled a full-blown sovereignty movement in Québec through the eighties. This would prove to have significant consequences for the
development path of co-operation. The Parti Québécois (PQ) first formed government in 1976. It won forty percent of the population to a ―Oui‖ vote in the 1980 referendum, nearly securing a mandate to negotiate political sovereignty and economic association. It won a second term in 1981. As part of their social democratic program, the Péquistes introduced several important reforms to strengthen the emerging co-operative sectors (Lévesque, 1990), particularly worker co-operatives (Quarter, 1992; Melnyk, 1989;
Bridault & Lafrèniere, 1989). However, it also faced a sustained campaign of economic destabilization from federalist forces, and the reality—and threats—of capital flight
(Conway, 2004). This political dynamic, too, introduced significant new threats and opportunities for co-operative proponents.
In 1981, two critical conflicts raised the stakes in the sovereignty debate, and deepened the resolve of the sovereignists. The first was Claude Morin‘s private admission to PQ Premier René Lévesque in October 1981, that he had been an informer for the RCMP‘s Security Service since the early sixties. Although the truth did not come out publicly until 1992, Lévesque found out about the betrayal of his Minister of Inter-Governmental Affairs on the eve of the first minister‘s conference on the constitution in November.42 It was with this personal betrayal and the spectre of federal conspiracy as a backdrop that Lévesque was subjected to the public humiliation of a back-room deal that excluded and isolated Québec (Conway, 2004). This would come to be known as ―the night of the long knives‖ and would further stoke the embers of melancholic nationalism (Maclure, 2004).
It would also set in motion a chain of events that would nearly mark the end of Confederation as we know it. Lévesque‘s controversial and divisive ―beau risque‖
gambit—to postpone the sovereignty question as an insurance policy to negotiate a better accommodation with Prime Minister Brian Mulroney—collapsed in 1985. On Lévesque‘s death in 1987, a hundred thousand mourners washed into the streets (Conway, 2004). The subsequent failure of the 1990 Meech Lake Accord was exploited to support the
formation of the Bloc Québécois, a sovereignist party in the federal House of Commons.
The Charlottetown Accord‘s failure, followed by the Bloc‘s rise to official opposition in 1993, would push the indépendantistes back to a hairs-length from victory in the 1995 sovereignty referendum. 49.4 percent voted ―Oui‖ to secede from Canada, if efforts to negotiate a new partnership with Québec were unsuccessful.
42 As Conway (2004) recounts, the impact on Lévesque was devastating: ―Evidence presented to the McDonald Commission, a royal commission established in 1977 to inquire into the RCMP‘s secret ―dirty tricks‖ campaign against separation in Québec, revealed the high quality of the information obtained by the RCMP from ―paid sources in the PQ,‖ including ―the annual budget of the PQ, a project for an independent Québec, a possible Québec cabinet shuffle, the legislative priorities of the Québec government, a proposed federal-provincial agreement and the instructions from a Québec cabinet minister to Québec public servants on how they could use federal funds abroad to promote Québec interests.‖ (p. 118)
One central theme throughout this secessionist period had special significance for co-operative development: the theme of economic fear. The province was plagued by a series of recessions—in the mid-70s, in 1981-82, and in 1990-93 (Girard, 1999). The shifting base of Canadian capitalism to Toronto and the initial shocks of globalization both hit Montréal hard. They presented two disturbing trends to an already politically anxious and economically insecure Québec working class. Separatists cast Québec‘s economic woes as a function of limited powers and wrong-headed federal policies;
Ottawa sold its transfer payments and program spending as a lifeline without which Québec would certainly plunge into a far more desperate crisis. As Conway (2004) has documented, politics in Québec throughout this period were largely shaped by this debate.
In 1978, the PQ drew the battle lines with the introduction of Bill 101, enforcing English as the official language in all areas of life. Like the dramatic spectacle of capital flight seared into the public‘s imagination by Royal Trust‘s convoy of Brinks trucks in 1970, Sun Life Insurance very publicly announced it would now move its head office from Montréal to Toronto: ―There was a haemorrhage of English head offices leaving Québec in the ensuing years, including, according to a survey by Québec‘s organized business lobby, 629 firms between 1979 and 1982 alone‖ (Conway, 2004, p. 101). This
politicization of investment decisions was polarizing. It led both to trauma and increased anxiety for an economically vulnerable population and to outrage and defiance for sovereignists and trade unionists, in particular. The importance of economic policy and economic reassurance to a nervous electorate could not have been clearer to the
indépendantistes. Predictably, a renewed interest in the development of member-based, territorially-rooted co-operatives resulted. They were owned and controlled by
Francophone Québécois and they were not a flight risk. This new interest in co-operatives was shared by federalists eager to stabilize the union. Jobs lost to Anglo-capital flight and global structural adjustment concentrated the attention of a wide constituency on job creation.
The downgrading of the PQ‘s credit rating in 1982 accelerated the rollback of state investment and program spending. Since it coincided with a deep recession (McGrane, 2007), it also reinforced the need for grassroots economic action. Much as the early Rochdale co-ops benefited from the release of activist energy and commitment after the political failure of Chartism (Fairbairn, 1994), many sovereignty and federalist activists alike now embraced local economic action between elections and referenda. For example, one CDR manager described the co-operative movement to the author as an expression of the cultural struggle for national emancipation and the francization of the economy.
In the run up to the Charlottetown referendum in 1992 and the 1994 Québec election, economic fear appeared to be realizing diminishing returns for federalist forces.
Sovereignists were pushing back. Grassroots backlash encouraged many Québec
businesses, including the Chambre de Commerce du Québec, to opt for neutrality during the Charlottetown Referendum.43 The legitimacy of federalist scare tactics took another blow when Pierre Trudeau, former prime minister and iconic foe of independence, denounced the Charlottetown Accord in 1992. In a 1 October speech, he railed against Accord advocates‘ economic scare tactics. The highly publicized and credible criticism made it difficult to deploy these tactics effectively. Trudeau‘s dramatic move likely pre-empted federalists from pursuing scare tactics as energetically as they might have (Conway, 2004).
Similarly, in the run up to the 1994 provincial election the banks encountered stiff opposition to their gloomy economic forecasts for a sovereign Québec. Once again, the Royal Bank weighed in against sovereignty and once again the sovereignists pushed back. The difference this time was that the balance of public opinion had shifted.
According to a January 1994 Gallup poll the province was nearly split on whether Québec would be economically better or worse off outside Canada (Conway, 2004). The
43 ―These decisions may have had something to do with the hostility faced by the Royal Bank in Québec following its intervention on the Yes side. Many customers in Québec closed their accounts in protest, Non stickers were plastered on many branches, and Non campaign leader Parizeau accused the bank of profiting by secretly speculating on the sharp decline in the Canadian dollar that the bank had helped to provoke‖
(Conway, 2004, p. 155).
confidence of the PQ in taking the offensive against Bay Street had shifted too. Building on the new realities of a borderless world posed by globalization and the (post Free Trade Agreement) continental economy, the new leadership of the PQ and the Bloc argued that sovereignty now made even better economic sense. They also intimated that a PQ government was ready and willing to punish the banks for fear-mongering.44
In the 1995 referendum, federalists would once again resort to scare tactics. This time, the Péquistes would retaliate with more than self-confident rhetoric. When Standard Life‘s Claude Garcia urged voters to ―crush‖ the separatists, putting the sovereignty issue to rest once and for all, the government called for bids on $11.5 million worth of
insurance contracts held by Standard Life. The PQ also fired Garcia from his position as Chair of the board of the Université du Québec á Montréal. Receiving the message, this time the business community would largely sit the campaign out. What is more, business leaders were divided on sovereignty. Those opposed confined their efforts to backstage contributions to the Non campaign, which strove to create a crisis atmosphere. Prime Minister Chretien suggested the Québécois might lose their pensions, currency (and therefore their savings), and passports. Provincial Liberal leader Daniel Johnson
predicted average tax increases of $3,000, a mushrooming deficit, and an immediate loss of 92,000 jobs. Federal Finance Minister Paul Martin claimed a Oui vote would
jeopardize a million jobs (Conway, 2004).
Even after the razor-thin victory of the Non forces in the 1995 referendum, the economic warfare continued. As Conway argues, the federal government‘s post-referendum
strategy had four elements. First, it aimed to destabilize the Québec economy by forcing
44 ―Parizeau, a distinguished economist, a top-level career civil servant and academic, and member of the economic elite himself, was particularly confident in his knowledge and experience and dealt easily with complex economic issues, preferring to attack federalism as a drag on Québec‘s economy rather than apologizing for sovereignty or agreeing there might be large costs involved. Indeed Parizeau consistently blamed federalism and the constitutional deadlock for Québec‘s stagnant economy and high unemployment and poverty figures…. Whenever prominent business leaders or financial institutions warned about the heavy costs of sovereignty, Parizeau and Bouchard were both quick to rap their knuckles for ―fear-mongering‖… Parizeau and PQ candidate Daniel Paillé implied that banks, brokerage houses and other financial institutions that persisted in such economic fear tactics in the run-up to the Québec election would pay a price after a PQ victory in lost business. The result was fewer negative interventions from the business community‖ (Conway, 2004, pp. 193-4).
the PQ to contend with internal challenges from English language rights groups,
partitionists, and from Ottawa. This undermined its ability to focus on good government.
Second, it polarized by encouraging extremists in the minority and business communities, a classic form of low-intensity conflict meant to further undermine the resolve of the indépendantistes, and frighten away their soft support. Third, these tactics were meant to destroy the PQ, even if it meant losing Liberal seats in the next federal election. Finally, by punishing business friends of sovereignty and rewarding its vocal critics with high profile business patronage, Ottawa further divided the sovereignty movement. The PQ was caught between business demands for spending and tax cuts, on the one hand, and demands for new spending from its social democratic base, on the other (Conway, 2004).
This highly charged environment set the stage for the first 1996 economic summit, which would lead to the historic inclusion of the community sector and the creation of the working group on the social economy, le Chantier de l’économie sociale. Given the threats posed by globalization, capital flight, and the retreat of the state, the achievements of popular economic innovations over the past two decades, and the cumulative effects of the recession of 1990-93 (Girard, 1999), the timing was auspicious for a concerted
mobilization of popular movement forces. State support would follow.