April Freeman Banner 2014

ARTICLE

Socialism in Saskatchewan

JANUARY 01, 1967 by W. ROSS THATCHER

Saskatchewan, with a population of slightly under one million peo­ple, for 20 years from 1944 to 1964 had a socialist government—about the only one in North America, except Castro’s. Two years ago, we defeated that gov­ernment.

Saskatchewan is primarily agri­cultural. We have many well-to-do and efficient farmers. We have one of the higher standards of living in the world. The questions frequently are asked: "How did socialism take over? How did it last for 20 years?"

To find an answer, one must go back to the dark days of the de­pression. In the 1930′s a terrible drought struck. Year after year, crop failure followed crop failure. At the same time, the world price of wheat dropped to less than 35 cents per bushel. These two fac­tors brought our prairie economy to its knees. Unemployment was everywhere. Men lost their dignity and their self-respect.

Of course, the government and the economic system of the day were blamed. Out of the depths of the depression, the Socialist Party, which glibly promised to solve these terrible problems, was born.

Among other things, the social­ists proposed:

1.      To end unemployment;

2.      To provide jobs by building so­cialist factories;

3.      To provide free medical and health services;

4.      To give a new deal to the farmer.

Thus, as a protest to depression conditions, in 1944 Saskatchewan elected a socialist government.

For 20 long years, our people were subjected to a leather-lunged propaganda machine, paid for from public funds, which filled the air with plausible platitudes and clichés. You have heard some of them —

"Tax the rich to help the poor"; "The capitalist is an exploiter of the masses";

"Only a planned economy is the answer to unemployment"; and so on.

They had all the answers.

How Did They Succeed?

In 1944, the socialists said they would solve the unemployment problem by building government factories. Not only this, they prom­ised to use the profits from these socialist enterprises to build high­ways, schools, hospitals, and to finance better social welfare meas­ures generally. Over the years they set up 22 so-called Crown Corporations. By the time we had taken over the government, 24 months ago, 12 of the Crown Cor­porations had gone bankrupt or been disposed of. Others were kept operating by repeated and sub­stantial government grants. Vir­tually without exception, those which have had to compete with private enterprise on equal terms lost huge sums of money regularly and consistently. The whole Crown Corporation program became bogged down in a morass of bun­gling, red tape, and inefficiencies. The experiment cost the taxpayers of Saskatchewan millions of dollars.

War on Business

During the whole period, the socialists waged war against pri­vate business. They passed legisla­tion giving the government power to expropriate and operate any in­dustry or business in the province. The making of profits was con­demned as an unforgivable sin. The public and avowed objective of the socialist government was to "eradicate capitalism."

What was the result?

Investors from Eastern Canada, from Europe, from the States, simply turned their back on the socialists. Industry after industry looked over sites in our province, only to by-pass Saskatchewan and locate elsewhere in Canada. Dozens of oil companies pulled up -stakes lock, stock, and barrel and moved out of the province because of dis­criminatory legislation. Gas ex­ploration ground to a complete halt. Prospecting in our vast north became almost nonexistent. Dur­ing the period, while Canada was experiencing the greatest economic boom in her history, Saskatchewan received only a handful of new factories.

From 1945 to 1963, more than a million new industrial jobs were created across Canada. Yet in Sas­katchewan, after 18 years of so­cialism, there were fewer jobs in manufacturing than existed in 1945 — this despite the investment of $500 million in Crown Corpora­tions.

Social Services

As I said earlier, prior to tak­ing office the socialists promised a greatly expanded program of so­cial welfare measures. There was to be "free" medical care, "free" hospitalization care, "free" drugs, and so on. The money to finance these projects was to come from the profits of the Crown Corpora­tions. Of course, in the overall picture, there were no profits; rather, there were colossal losses. Thus, the welfare program had to be financed from taxation.

Most people in Saskatchewan like the principle of our hospitali­zation plan — all hospital bills are paid by the government, from tax revenue. However, in 16 years, costs have gone from $71/2 million to $57 million. Three years ago, a medical care scheme was intro­duced — under which all medical bills are paid. The same pattern of skyrocketing costs is evident also in this field. Our people have found that medicare and hospitalization are anything but "free." On the contrary, they will cost our people $110 million this year — and are still rising 10 per cent annually.

Taxes

Under the socialist government, our provincial debt went from $150 million to $600 million. Dur­ing the period more than 600 com­pletely new taxes were introduced; 650 other taxes were increased. "Per capita" taxes in Saskatche­wan were soon substantially out of line with our sister provinces — one more reason why industry located elsewhere.

Compulsion

Throughout their regime, the socialists tended to use compul­sion. Repeatedly, their boards and agencies were manned by some so­cial theorists, who told business­men how their businesses should be run. Everyone in the north was forced by law to sell his timber to the government-monopolized timber board, every trapper, his fur through the government fur mar­keting board. Every fisherman who caught a fish was forced by law to sell it through the govern­ment fish board. Every purchaser of an automobile license was forced to take his insurance from the Government Insurance Com­pany. Two years ago, they intro­duced a medical plan where every doctor would have been forced to receive his remuneration from the government. Only an aroused pub­lic opinion forced them to with­draw this contentious legislation. Drivers of government cars and trucks were instructed to buy their gasoline from Co-ops.

Population

Twenty years ago, the socialists promised to make Saskatchewan a Mecca for the working man. In­stead, we saw the greatest mass exodus of people out of an area since Moses led the Jews out of Egypt more than 3,000 years ago. Each of the other nine provinces which had a "private enterprise" government increased in popula­tion by leaps and bounds after 1945. On the other hand, Saskatche­wan virtually stood still. Her pop­ulation increased 12 per cent while the nation’s increased 60 per cent. Since the war, 270,000 of our citi­zens left Saskatchewan to find em­ployment elsewhere.

Socialist Defeat

Finally, two years ago, our peo­ple decided they had been the Ca­nadian guinea pig for socialism long enough. They threw the so­cialists out. The Saskatchewan Liberal Party campaigned on a straight program of private enter­prise. We made no extravagant social welfare promises. Instead, we committed ourselves to reduced government spending, reduced taxes, incentive programs for in­dustry, and so on. The people gave us the job of cleaning up the mess.

Lesson

Is there a lesson to be learned from Saskatchewan’s experiences? I think there is — a rather horrible lesson.

If there are any Americans who think that socialism is the an­swer, I wish they would come to Saskatchewan and study what has happened to our province. Twenty years of socialism gave us indus­trial stagnation, retarded develop­ment, oppressive taxation, major depopulation.

At this moment, you are doubt­less saying to yourself, "It can’t happen here." Yet, people all over the world are finding, "It can."

We know, as you do, that the private enterprise system is not perfect — but it is still the best system devised for progress. Un­der the system, Americans and Canadians have enjoyed the high­est living standards in the world. It is our task to prove in the next few years that the private enter­prise system can do more for our people than socialism.

I would like to tell you some of the actions we have taken to get Saskatchewan moving again eco­nomically.

Timber Board Monopoly Ended, Private Interests at Work

One-third of the land in Sas­katchewan is covered by timber. We are told there is sufficient lum­ber for three or four major pulp mills. During the socialist regime, the government had assumed a complete monopoly in the produc­tion of lumber. Producers could not sell a toothpick unless it went through the Timber Board. The new administration has discon­tinued this monopoly. We are en­couraging private enterprise to come into our timber limits. We are providing incentives for them to do so. Already three lumber complexes have moved into our north — employing an average of 250 men each. Four months ago, we persuaded a New York com­pany to invest $65 million in a huge pulp mill, which will employ, when in operation, 3,500 men. We are hopeful that a second mill may also locate in our province within a year.

Minerals

The northern half of Saskatch­ewan lies in the Pre-Cambrian Shield. When we assumed office, we were concerned by the almost complete lack of new mineral de­velopment in our north. By 1964 prospecting in Saskatchewan had almost come to a halt. We found that royalty rates sometimes were out of line with rates applied else­where in Canada. We called repre­sentatives of the mining industry and discussed the problem with them. From those discussions emerged a new formula for min­ing incentives. Already, we are seeing results. Prospecting activ­ity throughout the whole north has gone ahead spectacularly. Fifty new companies are doing exploration work in northern Sas­katchewan at this time. Three new mines have commenced opera­tions, including a major copper mine at Lac La Ronge.

Potash

Potash is a field which offers tremendous prospects for future development. We believe that pot­ash will do for Saskatchewan what oil has done for the province of Alberta. World demand is increas­ing at a rate that doubles every 10 years. The overwhelming bulk of this demand will be met by Sas­katchewan in the years ahead. At the present time, three potash mills are in production. Six addi­tional mills are now under con­struction. We are negotiating with at least four other potash pro­ducers, which are now seriously looking at the potential of Sas­katchewan’s reserves. Investment and commitments now total more than $500 million. When it is real­ized that each of these mines costs from $50 to $80 million and em­ploys from 500 to 800 people, you can realize the impetus the indus­try is giving Saskatchewan.

Oil

Saskatchewan, in 1964, pro­duced 20 per cent of the total Ca­nadian petroleum demand. Right­ly, or wrongly, many of the oil people felt that Saskatchewan had not been friendly to the oil indus­try. We found keen resentment at some of Saskatchewan’s rules and regulations. Upon taking office, we found that drilling activity in Sas­katchewan was just holding its own with the previous year, and was lagging far behind Alberta’s. No new fields had been found for a number of years.

We immediately sought the ad­vice of the industry as to how the situation could be improved. We asked them what we could do to encourage greater development in Saskatchewan. Having received the advice, the government adopted a new major incentive program.

The results have been spectacular. Dozens and dozens and dozens of new companies have moved in. Eight new pools were discovered during 1965. Our royalties and bonus bids in the past year reached $40 million as compared to $18 million in the last year of socialist administration. Our op­ponents have accused us of selling out our resources to big business. But, the oil resources of Saskatch­ewan are not much use to our peo­ple when they are buried a mile underground.

Gas

Saskatchewan is blessed with substantial gas fields. Under the previous government, the Sas­katchewan Power Corporation was given a complete monopoly, and paid the producer a price which was substantially below market value. As a result, gas exploration last year came virtually to a halt. The new administration canceled the Power Corporation monopoly and opened the gas industry to competition. Again, the results have been most gratifying. Dozens of gas exploration crews have moved into our province in recent months.

Secondary manufacturing has also made encouraging strides, since the socialists left office. These are only a few of the excit­ing developments which have taken place recently in Saskatche­wan. Instead of exporting thou­sands of our people, as we did year after year under the social­ists, this year our population is again headed upward. Our prov­ince is one of the booming areas in all Canada.

In short, we think our "experi­ment in private enterprise" is working.

In our province, we know social­ism not from textbooks but from hard, bitter experience. We have found that there is nothing wrong with socialism, except that it doesn’t work. I am sure you have heard some people say: "We don’t agree with socialism — we wouldn’t support it generally — but a little bit of socialism might be all right." We found in Saskatchewan that once it begins to develop, it is pretty hard to stop.

I think we can all be proud of the private enterprise system. But, I also think we must be vigilant. The danger from socialists, far too frequently, is not what they can do directly, but what they can ac­complish indirectly.

Far too often we find political parties which pay lip service to the principles of private enter­prise but at the same time, for the sake of political expediency, en­deavor to neutralize the socialists by adopting large segments of their programs. Such a course can only be disastrous. 

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January 1967

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