bout de papier, Vol. 20, No. 3 (2004) — Winter/Spring 2004 // Hiver/Printemps 2004, pp. 32–37
n light of recently announced changes in the Department of Foreign Affairs and International
Trade, many of whose implications are still uncertain, there has been renewed interest in an earlier initiative whose avowed purpose was to raise the profile of foreign trade on Canada’s agenda in international relations. When responsibility for international commerce was added to the mandate of the Department of External Affairs twenty-two years ago, that involved the intersection of at least two processes which had been mooted and anticipated for some time. Prime Minister Pierre Elliott Trudeau had long argued that Canadian foreign policy should pay greater heed to Canada’s national interests (notably its economic self-interest) in the formulation and conduct of the country’s external relations. There had also been increased attention over the years to the possible consolidation of the Canadian foreign service within one government department, a notion most recently advocated in the report of the Royal Commission on Conditions of Foreign Service headed by Pamela McDougall. However, it is worth recalling that there was a greater emphasis in the prime minister’s announcement on the other reorganization that took place at the same time, the establishment of the Department of Regional Industrial Expansion and associated measures to foster economic development in Western Canada and the Atlantic provinces.
The statement reproduced below comes from the files of the Jules Léger Library of the now presumably former Department of Foreign Affairs and International Trade, many of whose elements remain housed in the Lester B. Pearson Building. Those awash in nostalgia may also visit the library to read copies of the newsletter that was circulated to employees (disgruntled and otherwise – perhaps gruntled?) of the gradually consolidated Department of External Affairs, later known as External Affairs and International Trade Canada and still later (but not finally) renamed the Department of Foreign Affairs and International Trade.
Office of the Prime Minister, Release Date: January 12, 1982 For release: EMBARGOED UNTIL 2:30 p.m.
REORGANIZATION FOR ECONOMIC DEVELOPMENT
Prime Minister Pierre Trudeau today announced measures to increase the Government’s capacity to assist Canadians in every region of the country to better exploit major economic and employment opportunities.
Economic departments and the Cabinet decision-making process are being reorganized to provide a Government-wide focus on regional economic development and to help exporters to successfully confront tough trade competition abroad.
This marks the first major step toward implementation of the strategies outlined in the document “Economic Development for Canada in the 1980s” which was released in conjunction with the November 12 Budget. It will ensure effective action in support of the Government’s priorities in the areas of regional and industrial development and trade and export promotion.
Every economy-related department within Government will be more sensitive and responsive to opportunities. New and major regional economic opportunities now make it imperative that the regional perspective be brought to bear on the work of all economic development departments and in all economic decision-making by the Cabinet.
“It is no longer enough that one department alone is primarily responsible for regional economic development. I have instructed all ministers in the economic development field to strengthen their departmental organizations and programs in the regions. All economic departments are to play a more direct and active role in regional economic development. Government is being structured to ensure this major objective is attained.”
“The long-standing priority of assisting the disadvantaged regions of Canada is as high as before. The groundwork laid by the Department of Regional Economic Expansion will be substantially augmented by a government-wide focus on regional economic development,” the Prime Minister said.
A second set of initiatives will increase the Federal Government’s capacity to aggressively pursue international export markets for the goods produced by every region of the country, be they resource products, manufactured goods or services. Much greater weight will be attached to economic factors in the design of foreign policy and the conduct of our foreign relations, to ensure they serve Canadian trade objectives. Trade matters are becoming a more significant political issue in relations between governments. Canada must therefore speak with a strong, unified voice abroad.
“The Government is taking action to promote economic development and generate employment in the medium and long term in every region in Canada. This reorganization is a necessary response to changing regional and industrial circumstances and a more competitive and complex trading world,” the Prime Minister said.
In capsule form, the following will occur:
• A new central agency which provides support to Cabinet, the Ministry of State for Economic and Regional Development, will be created by the addition of the regional policy and coordination functions to those of the existing Ministry of State for Economic Development. This agency will ensure that regional concerns are elevated to a priority position in all economic decision-making by Cabinet.
• This Ministry will serve a new Cabinet Committee on Economic and Regional Development, which replaces the existing Cabinet Committee on Economic Development. The new Committee will have responsibility for the economic development spending envelope of $6.8 billion and the energy spending envelope of $2.6 billion. The Committee will also administer a new Regional Fund.
• The Ministry will operate in a highly decentralized way with senior executives located in each province to provide direct and convenient access to the Federal Government, to ensure coordination of federal departments on the ground, and to give Cabinet direct and immediate access to information on regional needs and opportunities. Cabinet will appoint project directors to cut red tape on Mega-Projects and avoid undue delay in project planning, approval and completion.
• A new Department of Regional Industrial Expansion will be established through the amalgamation of the regional programmes of DREE with the industry, small business and tourism components of the Department of Industry, Trade and Commerce. The administration of regional programs will be enhanced and the capacity of the Government to pursue balanced industrial growth on a national basis will be improved.
• The new Department will focus the Government’s industrial policies and programs in support of regional development strategies. The Government is determined to ensure that the benefits of industrial activity are widely shared across the country.
• These three new institutions will work in concert, and together will create a powerful Government-wide focus on regional and industrial development.
• The Department of External Affairs will be radically restructured to aggressively pursue international export markets and give greater priority to economic matters in the development of foreign policy.
• Other Government measures will see the Department of Consumer and Corporate Affairs take over the Metric Commission and the Standards Council of Canada. The reorganization will be achieved without increasing the size of Government or the cost of operations. While no absolute guarantee of job security can be given, ministers and deputy ministers concerned, as well as the Treasury Board Secretariat and the Public Service Commission will ensure that the reorganization proceeds in such a way that present indeterminate employees of those departments directly affected will not, as a direct result of the reorganization, be laid off, reduced in classification level, or, as far as possible, be subjected to unacceptable geographic relocation.
THE REGIONAL INITIATIVES
A number of factors have combined to make necessary the regional development changes.
The traditional Canadian economic balance between have and have-not provinces is shifting, largely under the impetus of present and forecast resource developments in the West and offshore of the Atlantic provinces. For the first time in our history, every region of the country, and not just those that traditionally have been well-off, is faced with major opportunities for development.
The Government, in line with its economic development strategy, is broadening its regional development focus to include all regions. This policy will help maintain the manufacturing and industrial strength of Ontario and Quebec while aiding the decentralized growth that has long been a cherished objective of Western Canada and the Atlantic Provinces.
Cabinet Committee on Economic
The existing Cabinet Committee on Economic Development, which sets policy for and allocates money to every department involved in the economy from the economic and energy envelopes of $9.4 billion, becomes, effective immediately, the Cabinet Committee on Economic and Regional Development. The Committee will review all existing and new national economic development programs to determine if they can be further directed towards regional economic objectives.
Existing General Development Agreements and Subsidiary Agreements with the provinces will continue until their expiry date, ensuring that provincial budget plans are not disrupted. New and simpler sets of agreements with the provinces, involving a wider range of federal departments, will subsequently be developed.
Money freed up as the existing GDAs expire will be used by the Committee to create a Regional Fund to support special regional economic development efforts. The fund should reach $200 million by 1984-85.
Ministry of State for Economic
As the new MSERD is a central agency with direct input to the Cabinet Committee and the budgetary process, it will be able to ensure that the regional perspective is brought to the work of all economic development departments.
MSERD will open a Regional Office in each province, headed by a Federal Economic Development Coordinator of senior rank. The Offices will feed regional considerations into the ministerial decision-making process of the Cabinet Committee, and help transmit Government policy back to the regions. The Offices will develop regional economic policies and coordinate the activities of other Government departments, making it possible to identify and eliminate duplication or gaps in departmental activity.
The new Ministry is also tasked with providing the Cabinet Committee with the information and support it needs to ensure the regional dimension is built into all economic decision-making, so that programs can be directed towards achieving specific economic development objectives in the regions.
Last year’s report of the Major Projects Task Force identified $440 billion in developments, each costing $100 million or more, under consideration for investment between now and the year 2000. It is clearly in the national interest that these projects, such as Hibernia, Cold Lake, or the building of the Trans-Quebec and Maritimes Pipeline, proceed as smoothly as possible.
Cabinet may name Project Directors, who will be attached to MSERD, to coordinate federal involvement in certain Mega-Project developments.
These appointments would be made in the case of complex projects requiring close coordination at the local and regional level among several departments and agencies, as well as with other governments and the private sector. The Director would work closely with provincial governments and the private sector to ensure rapid and effective federal responses to any emerging difficulties and bottlenecks. The Director’s role could vary from one of coordination to one of direct authority over other departments in the region. Effectiveness of the Director would be ensured by direct access to Deputy Ministers in Ottawa, and to Cabinet Committees through MSERD.
This new department will be created through the amalgamation of most of DREE’s program functions with the existing domestic responsibilities for industry of the Department of Industry, Trade and Commerce.
The integration of industrial sector and regional expertise will provide a strong basis for the development of regionally responsive industrial policies and programs. It will allow the Government to more effectively deliver programs to assist industry in all regions of the country. Businesses in all regions of Canada will find it easier to access federal industrial development programs.
A top DRIE priority will be to concentrate the Federal Government’s efforts to derive industrial benefits from major projects. The Office of Industrial and Regional Benefits, established in August, will be strengthened. The Office’s role is that of seeking to ensure that the Mega-Projects make maximum possible use of Canadian planning skills, project development ability, machinery and material supply capability, and capacity for further processing of resources. The Office will work closely with MSERD Project Directors.
The DRIE will engage in dialogues with large Canadian industrial corporations to exchange information about government and corporate plans which will be helpful to the two parties in promoting the best interests of Canada’s development. These exchanges will focus on the development opportunities of the 1980s to ensure that Canada realizes the greatest possible industrial and regional benefits.
The Minister of Regional Industrial Expansion will be responsible for the newly-created Industrial Opportunities Program Board. The Board will coordinate the present array of programs that provide $275 million in annual direct support of industrial innovation and development. Through the IOP, the Federal Government’s resources to support innovation and development will be carefully targeted to the most promising areas of Canadian industrial strength and excellence.
Industrial adjustment will also be a demanding challenge in the 1980s. Canadian firms in some sectors will find they just can’t compete any more. Prompt and effective action to help some firms to modernize or diversify into other sectors will be required.
To provide this help, an Office of Industrial Adjustment will be established. This office will become the focal point in the Federal Government for establishing and implementing programs to deal quickly with specific industrial adjustment problems. The experience gained in designing and operating the recently-established Canadian Industrial Renewal Board will serve as one model for these efforts. The CIRB is pooling the talents of businessmen, labour and the public service to provide $250 million over five years in adjustment aid to textile, clothing and footwear industries, and the communities which depend on them.
TRADE AND EXPORT PROMOTION
Canada is one of the most trade-dependent nations in the world, as exports represent more than 25 percent of the value of all our goods and services, compared to an 18 percent average for other major traders.
The Government is reorganizing to launch a major national effort to aggressively pursue international export markets for resource products, manufactured goods, and services that are produced in every region of the country.
This is a necessary response to changing conditions in international trade. Export marketing and financing is becoming more competitive and complex; low-wage countries are broadening their range of exports; highly industrialized countries such as Japan are providing fierce competition in manufacturing and high-technology areas; world trade is being further liberalized; and state-to-state trading is growing in importance.
The Government is transferring responsibility for all aspects of trade to a radically restructured Department of External Affairs. Trade and economic matters will be a primary focus of the new department. This will result in a greater priority on trade objectives in the conduct of our international relations, give greater emphasis to the international marketing of resources and services, and strengthen Canada’s ability to adapt to changing world economic conditions.
The new DEA will be headed by three ministers. The Secretary of State for External Affairs will be supported by a Minister for International Trade and a Minister for External Relations.
The trade side of the Department of Industry, Trade and Commerce will be transferred to the new Department of External Affairs, completing the consolidation which has already begun. The existing trade commissioner service will retain its cohesiveness within the DEA. The trade branch will have its own Minister and its own Deputy Minister.
In addition, other reorganization measures will significantly enhance the economic capacity of the Department of External Affairs, creating a department that is very different from what now exists. Canada’s representatives abroad will give higher priority to promotion of our trade and economic interests.
The reorganization of the DEA will allow it to act abroad with a better appreciation of strategic opportunities over the full range of Canadian interests. At the same time it will integrate the department more effectively into the broader economic policy process in Ottawa.
To ensure the DEA is kept in close touch with Canadian economic concerns there will be an extensive program of secondments to and from domestic departments. Trade policy units within the DEA will work closely with the MSERD and the relevant departments in developing the trade aspects of domestic economic and regional policies. The MSERD regional offices and those of other departments will play an active role in transmitting business feedback from across the country.
In addition to the trade side of IT&C, the transfer brings to the External Affairs portfolio the Export Development Corporation and the Canadian Commercial Corporation. The latter has an increasingly important role in state-to-state trading. Ministerial responsibility for these corporations will be delegated to the Minister for International Trade.
“The measures I’ve outlined here today don’t involve the outlay of any new money, or the hiring of more personnel. What they do represent is a significant effort to allocate financial and human resources to more effectively serve the needs of Canadians by facilitating appropriate economie development in all regions, and marketing the product of these developments in a tough and competitive world trade environment,” the Prime Minister said.
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For further information: R. Rabinovitch
EMBARGOED UNTIL 2:30 p.m. EST January 12, 1982 Background Paper Reorganization for Economic Development [Ed. Note: Extracts]
This paper provides more detailed information on the reorganization within the Federal Government required to give effect to the Government’s economic strategy. The major elements of this reorganization will be the following:
1. A Ministry of State for Economic and Regional Development, with a focus on regional economic development issues and the related development of a “single window” major project management capability.
2. A Department of Regional Industrial Expansion, providing a regionally balanced and national focus to the Federal Government’s industrial development policies and programs.
3. A restructured Department of External Affairs, giving new priority to the expansion of international trade and economic issues.
Detailed information on these organizational changes, and implications for Ministerial portfolio’s [sic| and Deputy Minister’s assignments is provided.
Ministry of State for Economic and Regional Development Regional Activities of Other Central Agencies Department of Regional Industrial Expansion (DRIE)
Department of External Affairs
Because of the domestic industrial focus of the new DRIE and the need to give increased priority to trade objectives in the conduct of our international relations, the trade function will be set apart from the Department of Regional Industrial Expansion. The need to underline economic development priorities and concerns across the entire range of foreign service activity argues for the transfer of the trade function to External Affairs. This transfer will enable External Affairs to act abroad with a better appreciation of Canada’s strategio economic interests and will serve to integrate the department more effectively into the broader economic policy process in Ottawa.
A. Responsibilities
To its existing mandate, External Affairs will add responsibility for trade policy and export promotion, now held by ITC. This includes the conduct of bilateral trade negotiations, administration of export and import controls and substantial involvement with Finance in tariff issues. In addition to the trade side of ITC, the transfer brings to the External Affairs portfolio the Export Development Corporation (EDC) and the Canadian Commercial Corporation (CCC) which increasingly is becoming involved in state to state trading.
B. Portfolio Considerations
To free the Secretary of State for External Affairs to manage the broad mandate of the new department, he will be supported by two other Ministers in the External Affairs portfolio. A Minister for International Trade will lead the international trade and export promotion activities of the new Department. He will also be delegated responsibility for the EDC and CCC. A Minister for External Relations will support the Secretary of State for External Affairs in the areas of international social, cultural and humanitarian affairs, relations with francophone Africa, the Agence de Coopération Culturelle et Technique and such other assignments and representational duties as the Secretary of State for External Affairs may, from time to time, ask him to undertake. In order to maintain the cohesion of the External Affairs portfolio, the three Ministers will work closely as a team.
Pending the passage of a new Department of External Affairs Act, which creates the portfolios of Minister for International Trade and Minister for External Relations, the incumbents will initially be appointed as Minister of State (International Trade) and Minister of State (External Relations).
• Organization — Senior Management The current management structure below the Under Secretary, of an Associate Under Secretary and five Deputy Secretaries will be replaced by: A Deputy Minister (Foreign Policy), with responsibility for the political geographic bureaux, international cultural matters, defence, arms control, multilateral institutions and security and intelligence. A Deputy Minister (International Trade) and Coordinator, International Economic Relations, with trade responsibilities transferred from ITC, the functional policy concerns of the present Deputy Under Secretary (Economic) and special responsibility to support the Minister for International Trade. It is anticipated that the Deputy Minister, International Trade and Coordinator, International Economic Relations will have two distinct, although interrelated, roles. As Deputy Minister he will exercise delegated authority parallel to that of the Minister for International Trade in the areas of international trade and export promotion, and will support that Minister accordingly. As Coordinator, International Relations he will, under the direction of the Secretary of State for External Affairs and the Under Secretary, have line authority over the department’s economic activities generally and be responsible for the integration of their trade and non-trade aspects. The senior management of the Department will also include three Assistant Deputy Ministers reporting to the Under Secretary, responsible for the Department’s management and program activities, planning and personnel. A key feature of the new departmental structure is a management committee providing collective direction to parallel that of the Ministerial team. This committee will consist of the Under Secretary and the two Deputy Ministers, with the three Assistant Deputy Ministers attending most meetings. Envelope Structure Resources for the Trade Commissioner Service and trade policy administration will be transferred to the External Affairs and Aid envelope. Funds for the Export Development Corporation and the Canadian Commercial Corporation will remain in the Economic and Regional Development envelope. The Department of External Affairs, through the Minister for International Trade, will become a full member of the Economic and Regional Development Cabinet Committee.
E. Linking the Domestic and the International
The transfer of trade will bring all of the foreign service under a single department and all of foreign operations into a single envelope. Canadian government operations abroad will now reflect the full range of domestic interests. One concrete expression of this will be an extensive programme of secondments with domestic departments, especially on the trade side where up to 20% of the staff should be from other departments. An interdepartmental task force will also be asked to look at the feasibility of extending the 20% target to all Canada-based program officers.
1. Other Changes — Department of Consumer and Corporate Affairs
2. Personnel Issues While the reorganization will not result in an increase in the size of government, there will be a redistribution of employees within the Public Service. For many affected employees, there may be revised work functions as well as improved career opportunities. Although no absolute guarantee of job security can be given, the Prime Minister has directed the Ministers and Deputy Ministers concerned, as well as the responsible Central Agencies, to ensure that the reorganization proceeds in such a way that present indeterminate employees of those departments will not, as a direct result of the reorganization, be laid off, reduced in classification level, or, as far as possible, be subjected to unacceptable geographic relocation. The Public Service Commission and the Treasury Board Secretariat will provide special teams to expedite the anticipated influx of classification and staffing requests. Both Agencies will also provide the necessary advice and assistance to ensure that the reorganization is completed in the shortest time possible with a minimum of disruption, while maintaining an appropriate balance between the rights of employees and the interests of the employer. The Public Service Alliance and other Bargaining Agents have been and will continue to be consulted.
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Originally published in bout de papier, Vol. 20, No. 3 (2004) — Winter/Spring 2004 // Hiver/Printemps 2004, pp. 32–37. Read the rest of this issue →
