There was a time not so long ago when Hull, Quebec, was just another hard-scrabble mill town, dominated by the foul-smelling E.B. Eddy pulp mill and benefiting little from the generous fed eral spending in the national capital across the Ottawa River, with scores of public buildings and well-tended parklands.

For Quebec nationalists. Hull became a symbol of the lopsided nature of federalism, with English-speaking Canadians hoarding all the best jobs and perks of the national capital. To counteract this image and bring French Canadians into the centre of power, the Trudeau government mandated in the 1970s that the centre of power be partly moved to Hull. Today, a phalanx of office towers lining the river across from Parliament Hill houses the headquarters of several major federal departments and agencies, including the Canadian International Development Agency, Environment Canada and the Human Resources Development Department. In the late 1980s, the flowing granite curves of the Canadian Museum of Civilization were added to the mix.

That effort may have succeeded in better sharing the spoils of government in the National Capital Region, but it could end up being a major headache for both Quebec and the rest of Canada in the event of a split. Not only will the federal government have to deal with a radical downsizing of the public service to accommodate the loss of a quarter of its clientele, it will also have to repatriate many of its key ministries and agencies that will then have their headquarters in a foreign country.

The challenge will be especially acute in the Ottawa-Hull region, but also in Montreal, which the federal government has long designated as home for several important national agencies and Crown corporations, including the Canadian Space Agency, Canadian National Railways, the National Film Board and Via Rail Canada.

In the rest of the country, the problem won't be as grave where federal employees are delivering locally needed services. But wherever national functions are fulfilled, whether it's at national defence headquarters in Ottawa or the citizenship documentation centre in Sydney, Nova Scoria, operations will have to be pared back to cope with the reduced workload.

For a Canada without Quebec, the major challenge will be to downsize the federal government to reflect the loss of a quarter of its clientele. The stakes are high. A study by consultant Marcel C6te and economist John McCallum estimated that the federal government's operating costs would be $3 billion higher after separation because of the loss of economies of scale and the inability to reduce the costs of the federal bureaucracy. Reducing these additional costs to zero will have to be a priority for any federal government.

But this disruption will be insignificant compared to what Quebec will have to face in setting up duplicate departments and agencies for all of the functions now handled by Ottawa, from Canada Post to national defence. (The cost of this new duplication will easily offset any savings Parizeau expects from eliminating duplication in government services now provided by both levels of government.) In addition, Quebec will face the monstrous task of integrating the federal civil servants on its territory with the existing Quebec public service, with their different cultures and contractual arrangements. This should take bureaucratic feuding and fighting to new heights.


Through the civil service, Crown corporations and scores of agencies and commissions, the federal government employs secretaries, air traffic controllers, judges, food inspectors, RCMP officers, fighter pilots, CBC announcers and letter carriers. In 1993, a total of 552,000 people from coast to coast worked for the federal government in one form or another. Roughly 20 per cent or 111,500 were working in Quebec, bringing in an annual wage bill of a cool $4.3 billion, excluding the costs of benefits and pensions.

What to do with these federal employees in Quebec and their multi-billion-dollar wage bill will likely be one of the most complex issues facing a divided Canada and a subject of difficult negotiations with Quebec. Quebec secession could leave Hull and the surrounding area, known in Quebec as the Outaouais region, an economic disaster zone comparable to Schefferville, Quebec, after corporate executive Brian Mulroney closed down the local iron mine. Ottawa would be affected as well and would have to adjust to a downsizing of its functions. But if the federal government's operations on the Hull side are repatriated to Ottawa, the long-term impact need not be great. In addition, Ottawa could benefit from the influx of anglophones and other Quebeckers leaving the province in the event of separation.

If tens of thousands of laid-off bureaucrats turn to the federal government for compensation, taxpayers across the country would be on the hook. The last thing Canadians need is to remain responsible for the salaries, pensions and benefits of tens of thousands of employees who live in a foreign country and pay taxes to a foreign government.

Every day, tens of thousands of people cross the five bridges linking Ottawa and Hull to work in the other province, not only in government but also in the private sector. Although there are big flows in both directions, more Quebeckers are dependent on Ontario jobs than Ontarians are on Quebec Jobs. About 42,000 Quebeckers earn their living in Ontario, while fewer than 20,000 Ontarians work in Quebec.

As to the federal government, an estimated 25,000 federal employees live on the Quebec side of the river, but only a minority of them actually work in Quebec. Most commute to federal jobs on the other side of the Ottawa River. But as they crowd into Ottawa on buses and by car, they pass 15,000 Ontarians heading to Quebec for their jobs in the federal highrises in Hull.

A special committee of local business and government leaders that looked at the future of the Outaouais concluded in 1992 that after separation, as many as 20,000 of the 25,000 federal jobs in the Hull region would be at risk unless the Quebec government decided on a massive relocation of its own departmental headquarters to the region. The committee also worried about the fate of the 24,000 Quebeckers who work in the Ontario private sector--more than seven times the number of Ontarians who work in Quebec--if Ontario employers decided to replace them with Canadians after separation.


Conscious of these concerns about massive job loss, the Parti Quebecois has done all it can for the past two decades to reassure Outaouais residents that it will take care of them come independence. The promise has been repeated by successive separatist politicians and enshrined in the party program.

The PQ program undertakes that "every member of the federal public service will be offered a position in the new Quebec public service at conditions equivalent to their current job." It also vows to make Hull one of three administrative centres for the Quebec public service, along with Montreal and Quebec City. It makes a commitment that Hull will get the decentralized operations of some unspecified government agencies and departments. Yet the program also pledges that Quebec City will house all departmental headquarters. Parizeau himself has promised a great economic boost for Quebec City as embassies and government departments flood into the city after sovereignty.

At the same time, the PQ promises that Montreal won't lose government jobs and that there will be massive decentralization to Quebec's peripheral regions. The PQ, like other political parties, has promised everything to everybody and won't be able to deliver. The Outaouais, with its federalist voting traditions and small population base, will have trouble competing for attention with Montreal and Quebec City. It will end up the loser.

Already, there are signs that the promise to hire all federal bureaucrats in Quebec is less than it's cracked up to be. In its staff report, the Belanger-Campeau commission figured that a separate Quebec would offer jobs only to federal bureaucrats "working" in Quebec, leaving out those working in Ottawa. A consultants' report prepared for the National Assembly committee on sovereignty worked on the assumption that Quebec would offer jobs to all federal bureaucrats residing in Quebec and working in Quebec. That latter definition would exclude the close to 18,000 Quebeckers who commute every day to Ottawa and the 15,000 Ontarians who work in Hull.

In calculating the cost of separation, the Belanger-Campeau report figured that an independent Quebec would have to pick up the cost of only 18 per cent of the federal public service, even though Quebec makes up 25 per cent of the Canadian population. It based its calculation on the fact that only 18 per cent of federal civil servants actually work in Quebec, which ignores the thousands of Quebeckers who work in Ottawa for the federal government.

The PQ government has already begun to waffle on its promise to provide jobs to all federal public servants in Quebec. In the draft bill on sovereignty, the PQ government only says it will "give priority" to employees of the Government of Canada and its agencies who reside in Quebec in making appointments to its own public service. This is a far cry from a job guarantee.

For Canada, secession negotiations must define Quebeckers working for the federal government in the broadest way possible and make sure that the job offers go out to all Quebec residents working for the federal government, no matter where. This is the least that Canada can do for the thousands of Quebeckers who have worked loyally for it over the years. As for Ontarians working at departmental headquarters in Hull, they would presumably keep their jobs, which would move back across the river to Canada. The federal government should also demand that Quebec bear the cost of severance for any federal employees who choose to leave government rather than take a Quebec government job.


Quebeckers have spent a considerable amount of time figuring out how to compensate the Outaouais for the inevitable loss of jobs after sovereignty, suggesting everything from moving Quebec agencies from Quebec City to adding hospital beds and university spaces in Hull to make sure Quebeckers don't have to "humiliate" themselves by travelling to Ottawa to get medical treatment or to study. This is a problem for Quebec taxpayers. Of more concern to Canadians are the other proposals to save jobs for Quebeckers after independence at our expense.

Maurice St.-Germain, an economist at the University of Ottawa who studied the future of the Hull region in 1992, suggests that the flow of workers between Ontario and Quebec be allowed to continue uninterrupted after separation. "Border workers could retain their respective jobs and cross the Ottawa River every day in both directions, like Canadians and Americans crossing between Windsor and Detroit, or Europeans between the different countries of Europe..."

A scorched earth policy between Canada and Quebec won't help anyone. Labour mobility should remain as free as practicable between the two sovereign states, although, as St.-Germain implies, some border controls are probably inevitable. But what he fails to recognize is that freedom of movement for private-sector workers is one thing, cross-border commuting by public servants is another. The U.S. government bans non-citizens from holding public service Jobs, as do most major industrialized countries. In the European Community, strict citizenship requirements are still in place when it comes to working in the public services of national governments, even though there is barrier-free mobility for other workers. Hordes of Germans aren't crossing the border every day to work in the French public service. The French wouldn't tolerate it for a minute.

St.-Germain, echoing a PQ promise, also suggests that Hull be the site of any so-called "supranational" agencies to emerge from a new economic union between Quebec and Canada, such as a joint customs administration. These agencies would be costly and unnecessary. Canada and the United States operate the biggest two-way trading relationship in the world and have no supranational bureaucracy. The same should be true of Canada and a sovereign Quebec. Even if there were any such agencies, Hull should get only a share of jobs proportional to Quebec's importance in any such relationship with Canada--about one-quarter.

The Public Service Alliance of Canada, the biggest federal public service union, has already done a lot of thinking on the sovereignty issue. The union has set up a Quebec wing based in Montreal that covers 35,000 federal public servants in the province. Joane Hurens, vice-president of PSAC-Quebec, is sympathetic to the PQ but she's worried about the fate of her Quebec members. "If there's sovereignty, we'll adjust and we'll work with the new government." Yet she admits that there's a clear contradiction between the Parti Quebecois's promise to eliminate what it claims is costly duplication and overlap between the federal and provincial governments and its simultaneous vow to offer job guarantees to all federal civil servants in Quebec.

Hurens worries least about the fate of her members who fulfill tasks that would be equally essential in a separate Quebec. They include federal employees such as food inspectors, penitentiary workers and officials administering unemployment insurance. She even jokes that Quebec would have even more borders to patrol than it has now, and federal customs inspectors already wear blue uniforms. "All you'd need to do is change their maple leaf crests for fleur-de-lis ones."

She's a lot more preoccupied about the employees who work in the headquarters of ministries and agencies located in the National Capital Region as well as in facilities like the national cheque processing centre in Matane, Quebec. These officials are in jobs that depend on a nationwide mandate and would see their raison d'etre disappear with independence. Hurens is particularly sensitive to this issue because half her members live in the Hull region and occupy just those types of jobs. Another vulnerable group consists of Revenue Canada employees living in Quebec, whose jobs are largely duplicated by employees of Revenue Quebec, but she hopes their positions will be safe, at least through a transition phase, because governments are desperate for tax revenue. Quebec taxpayers, take heed.

Noting that the average age of her members in Quebec is more than forty-five, Hurens sees one way of slimming down the number of federal civil servants subject to transfer is to offer early retirement packages to older bureaucrats. That's fine as long as Quebec picks up the tab. When 500 Revenue Canada employees were transferred to the Quebec Revenue department a few years back as part of the agreement that provided for Quebec to collect the GST for Ottawa, it cost the federal government over $20 million because the federal pension scheme was more generous than Quebec's.


Also unclear is what responsibility a sovereign Quebec plans to take for employees of the federal Crown corporations operating within its borders. The Belanger-Campeau report sets out a list of the Crowns it would like to take, picking the best and leaving the rest for us. Some, like the Montreal Port Corporation, it would take over completely. In the case of the CBC, Canada Post, Canadian National Railways and Via Rail, the report suggests Quebec would pick up a piece of each company to protect Quebec jobs and Quebec operations. As to the Federal Business Development Bank and Canada Mortgage and Housing, Belanger-Campeau suggests that Quebec leave Ottawa with full ownership. Not only is this unacceptable from a financial point of view, but it could leave Ottawa holding the bag for thousands of Quebec-based employees in Crown corporations who should become the province's responsibility.

Take the case of the Federal Business Development Bank, currently based in Montreal, which Belanger-Campeau leaves with Ottawa, The federal government would have to move the bank's head office back to Canada and wind down its Quebec operations, which would eventually be axed if Quebec were unwilling to keep them going. The same fate would await employees of CMHC. In all such cases, Canada should press Quebec City hard to give those employees jobs in its civil service.

In other words, Quebec can't be allowed to pick and choose when it comes to its commitments to federal employees in Quebec- All Quebec-based employees of federal agencies, departments and Crown corporations, as well as the armed forces and the RCMP, must become the responsibility of Quebec with secession.

One other Montreal-based headquarters requires special attention--the International Civil Aviation Organization. This UN agency, which employs almost 650 people at its headquarters and attracts permanent diplomatic representation from many of its 183 member nations, has been based in Montreal since it was founded in the 1940s. ICAO owes its Montreal presence to a longstanding agreement with the Canadian government under which Ottawa subsidizes 75 per cent of the rental cost for the ICAO headquarters.

Under the terms of a contract signed in late 1993, ICAO is getting a new $100-million headquarters complex in downtown Montreal. The two buildings are being built by a real estate development firm that is leasing the building to the federal government for twenty years. Ottawa will again sublet the complex to ICAO at a bargain-basement price and gets the right to purchase the building for $23.5 million at the end of twenty years. Should Quebec secede, the future of the ICAO lease will be just another of the headaches facing negotiators. Canada would clearly no longer want to subsidize the headquarters of a UN agency now on foreign soil. Quebec would have to take over full financial responsibility for the lease. But it's very possible that ICAO will decide that it no longer wants to stick around in an independent Quebec and would prefer to relocate to a Canadian city. After all, Montreal's claim to be an international centre of aviation will disappear if secession results in Air Canada moving its headquarters from Montreal and in a further reduction in Montreal's international air connections. If ICAO's departure from Montreal becomes inevitable, the federal government should make every effort to convince the agency to move to a Canadian city.

As to the federal civil service. Parliament may have to take steps to ensure that these employees are citizens of Canada who reside in the country. Right now, federal law doesn't formally ban non-citizens from working for the public service, nor does it deal with residency. Instead, it grants a hiring preference to citizens over others, which essentially means that a non-citizen can't be hired unless there is no qualified Canadian available. That preference is currently being challenged in the courts under the Charter of Rights and Freedoms. As with citizenship, Parliament may be forced to rewrite public service rules to ensure that employees ofthe federal government and its agencies are at least residents of Canada and preferably Canadian citizens. The only way Quebeckers should be able to continue to claim the right to work for the federal government after secession is to move to Canada.

Canada must take Parizeau at his word and assume that in all but a few exceptional circumstances, Quebec will take full responsibility for the more than 100,000 Quebec residents who work for the federal government, its agencies and Crown corporations, It will be up to Quebec to provide them with jobs or offer them acceptable severance or early retirement packages. There may be cases where the federal government wants to retain select employees with special credentials, such as employees of the Space Agency. But Canada cannot afford to make any across-the- board offer to its Quebec employees to integrate them into what remains of the federal civil service. It would simply leave us witha bloated bureaucracy. The country cannot afford this.

But this is much more than simply a financial question for Canada. In a democracy, the civil service must represent the public it is serving to be seen as legitimate. That's why Ottawa has worked so hard for so long to make sure that both French- and English-speaking Canadians are well represented in the bureaucracy. This same concern has led to programs to ensure that the civil service also properly represents women and visible minorities.

The result of this official-language promotion is that 27 per cent of Canadians employed in federal institutions, including the armed forces and Crown corporations, are now francophones. Inthe National Capital Region, fully 39 per cent of civil service jobs are held by francophones. This is fine as long as Quebec remainspart of Confederation, but once Quebec goes, official bilingualism will be dead and the Canadian government will not have to employ as many francophones to enable it to function internally and deliver government services in French. The downsizing of the francophone component of the public service should automatically follow the departure of Quebec public servants.

Western Canadians have enough doubts already about Ottawa's ability to represent their interests. Imagine how they would feel about a public service staffed by residents of a foreign country. There is no way to get around the need for a massive reduction of the Quebec element in the civil service. The simplest way to manage that difficult transition is to ensure that the Quebec government takes on responsibility for all of its future citizens who now work for federal institutions.




Bureau of Competition Policy

Canadian Heritage

Canadian International Development Agency

Canadian Museum of Civilization

Canadian Radio-television and Telecommunications Commission

Citizenship and Immigration

Consumer and Corporate Affairs (Industry Canada)

Environment Canada

Human Resources Development

Indian and Northern Affairs

National Transportation Agency

Patent Branch

Passport Office

Public Works and Government Services


Canadian National Railways

Canadian Space Agency

Federal Business Development Bank

International Centre for Human Rights and Democratic Development

National Film Board

Radio-Canada International

Telefilm Canada

Via Rail Canada

Other Facilities

Cheque Processing Centre, Matane

Customs Training College, Rigaud

Government Printing Plant, Hull

National Archives Storage Facility, Gatineau (Opens in 1996)

Biotechnology Research Institute, Montreal (National Research Council)

Industrial Materials Institute, Boucherville (National Research Council)

Canadian Museum of Nature, warehouse and laboratory facility, Aylmer (announced)

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