THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, October 29, 1995 TAG: 9510300197
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: STAFF AND WIRE REPORT
LENGTH: Long : 190 lines
Only in the past few days has it begun to dawn on most Americans that they may wake up Tuesday morning to a northern neighbor with a new face.
In a climactic referendum on independence Monday, residents of French-speaking Quebec will decide an issue that has both defined and divided Canada virtually since its discovery. Differences in language, culture and religion, as well as issues of power, have simmered for centuries. The vote is bringing them, and the emotions that accompany them, to a head.
The options: Either take the first steps toward creating a new country or maintain a fragile, 128-year confederation with the rest of Canada.
Pollsters say the vote is too close to call.
So why should Americans care?
It's more than just a matter of geographic proximity. Canada is a staunch U.S. ally. It's also far and away the largest trading partner of the United States, with two-way trade worth $292.9 billion last year.
But there is scant sympathy and little understanding among Americans when it comes to Quebec's dream of independence.
``Americans fought a terrible civil war that still haunts us to some extent,'' said Charles Doran, director of Canadian studies at Johns Hopkins University's School of Advanced International Studies.
``There is little understanding why people in a country that is one of the best, most peaceful and prosperous in the world would want to split up.''
For that matter, many Canadians are puzzled by the separatist sentiment. They point out that Canada is a free and democratic country, a respected member of the world community. It boasts relatively problem-free cities, clean air, fresh water and a social assistance safety net, including universal medical care and pensions.
Many ask: Why leave?
The separatist response is emotional, certainly, but the emotion is not a new one. It stems from a deeply felt desire to protect the French culture and language - the very things that French-speaking Quebecois feel create and define their identity. To them, heritage is nearly sacred. Preserving it is a time-honored practice, and one for which French people in Canada and Europe have fought for centuries.
French explorers discovered the region in 1534, and began to settle it in 1541. France ceded eastern Canada to the English in 1763, at the end of the Seven Years' War.
The French-English distrust that defined Western Europe continued to flourish in Canada. For the most part, it was quiet, if constant. But in 1969, Quebecois began the process that has made theirs a French-speaking area. The country's economic dependence on Quebec, and the continued bristling of English-speakers has made the French - proud by nature, bitter by experience - defend their culture and position ever more vigorously.
Quebec is the only province in which French speakers form the majority of the population, about 80 percent of 6.9 million inhabitants. Many Quebecois believe their unique culture cannot survive unless it is given special political status.
But twice in eight years, Canadian voters defeated proposed constitutional revisions that would have recognized the province as a ``distinct society.'' Humiliated by the defeats, separatists concluded that Quebec's identity can be preserved only through independence.
As the vote nears, proponents of unity are relying on a surprising ally: Wall Street.
They predict that a secession vote would spell trouble for Quebec's economy, mainly due to the uncertainty over such issues as trade and economic relations with the rest of North America, the division of Canada's debt and monetary issues.
``The biggest question, in my opinion, would be how the external debt would be divided,'' said Gary Hufbauer, researcher at the Institute for International Economics.
Canada's public debt, which is perhaps the largest of all the developed countries if measured as a share of the total economy, exceeds its annual gross domestic product. Some 60 percent to 70 percent of the total is external debt.
American investors learned during the Mexican peso crisis early this year that foreign money can influence government policy. Prime Minister Jean Chretien seems to be hoping it will influence votes - that Quebecois will choose to stay in Canada in part to avoid the economic consequences of a financial pullout by foreign investors.
``Probably a little bit of panicking is to their advantage,'' said Marc DeBlois, manager of investment services for the Montreal-based financial-planning service of T.E. Financial Consultants.
A week ago, Canada's financial markets took a beating as investors moved their money elsewhere. The value of the Canadian dollar fell 2.2 percent and the Toronto stock market fell 2.8 percent over two days in response to new polls showing a separatist surge.
The consequences could be very real for the average Canadian.
When the value of the Canadian dollar falls, anything bought in American currency becomes more expensive. For the people of Canada, that includes $100 billion worth of imports from the United States every year, not to mention the Florida vacations taken by 1 million Canadians annually.
Almost half that many - 487,800 - came to Virginia in 1994, according to the Virginia Division of Tourism. That number accounted for almost two-thirds of the state's international visitors.
Canada was the third-largest market for Virginia exports in 1990, according to the state Department of Economic Development. Canadians spent $802 million on Virginia products.
Opponents of separation say that if Quebec votes to leave, the financial consequences will be enormous. The Canadian dollar could fall from its current level of 73 U.S. cents to between 60 and 65 cents, they say, as domestic and foreign investors sell Canadian stocks and bonds. If it declines that much, Canada's central bank would have to raise interest rates sharply to lure money back to prop up the currency; that in turn could trigger a recession.
Leaders of the separatist movement say the reaction will be minimal, that financial markets will accept Quebec's promise that it will adhere to its financial obligations as a separate country.
``If there is a ``yes'' vote for separatism, all bets are off,'' said Robert Thacker, director of the Canadian studies program at St. Lawrence University in upstate New York. ``The U.S. should be very, very concerned about what is taking place up there. And finally it is starting to show its concern.''
The Clinton administration in recent days has begun recasting its usual mantra - ``It is for Canadians alone to decide their own political future'' - to make plain that the United States favors a unified Canada. The change in stance is subtle, but has triggered formal protests from the Quebec government.
Federalists prevailed in the province's first independence referendum in 1980, when 60 percent of Quebec voters rejected separation. But pro-separation forces, led by Quebec Premier and Parti Quebecois leader Jacques Parizeau and Bloc Quebecois leader Lucien Bouchard, have expressed confidence that this time they will prevail.
Federalists warn that Quebec independence would strip the fledgling country of the collected rights, privileges and freedoms won over the confederation's 128 years and make it a bit player on the international stage. Any new political or economic ``marriage of convenience'' with Canada after a quickie divorce is a pipe dream, they say.
A grim Chretien last week implored Quebecois to ignore the siren song of separatism - and warned Canadians that the country faces huge dangers and even dissolution if Quebec secedes.
In a move that underscored the increasing sense of national crisis as the separatist campaign gained ground, Chretien made a televised appeal for national unity.
In a voice quivering with emotion, Chretien said a vote for independence would mean ``the end of Canada . . . the end of a dream, the end of a country that has become the envy of the world.''
Most notably, in a political turnabout for him, Chretien said he now supports the constitutional recognition of Quebec as a ``distinct society.'' Also last week, three of Canada's 10 provincial governments - Ontario, New Brunswick and Newfoundland - adopted resolutions honoring the ``distinct society'' concept.
But pro-secessionist movement leader Bouchard, addressing a cheering Montreal audience of more than 10,000, said such efforts were ``too little, too late.''
Bouchard said secession is necessary because it is ``demeaning'' for Quebec to continually have to ask the rest of Canada for special recognition of its unique linguistic and cultural circumstances.
``All that is finished. We have gone beyond entreaties,'' he said.
Separatists believe a victory would put Quebec firmly on the road toward creating an independent republic. The new entity would divide Canada geographically, isolating the impoverished Atlantic provinces and perhaps spurring the breakaway of Alberta and British Columbia.
In recent days, worried Quebecois have begun crowding federal offices to secure Canadian passports, fearing they might lose the opportunity after Monday's vote. Major Canadian banks say many Quebecois are transferring their accounts to branches outside the province for fear that an independent Quebec government might freeze assets.
Most analysts say it is difficult to predict what might happen if Quebecois vote ``yes,'' although all agree Canada will be thrown into political crisis and confusion.
Under the separatist plan, a ``yes'' vote would give Quebec and the rest of Canada a year to negotiate a new political and economic ``partnership.'' Quebec could choose to go its own way by the end of that year if no accord was reached, or if its leaders concluded the negotiations were not in good faith.
Canadian Deputy Prime Minister Sheila Cropp has characterized the proposed partnership talks as ``a little bit like asking for a divorce and then looking for sleeping privileges after the fact.'' MEMO: This story was compiled from reports by staff writers Bill Sizemore,
Carrie B.C. Jacobson, The Boston Globe, the Chicago Tribune, Cox News
Service, the Journal of Commerce and The Washington Post.
ILLUSTRATION: Map
VP
Graphic
THE VOTE
What would a ``yes'' vote mean? A separatist victory would not
trigger immediate independence for Quebec, but separatists say
independence would be the result. The separatists have offered to
negotiate for up to a year on a new economic and political
partnership between Canada and an independent Quebec, with the
option of declaring independence unilaterally at any point.
How would the federal government respond? In the event of a
``yes'' vote, the government could accept Quebec's independence,
challenge it legally or try to force a Canada-wide referendum or a
second one in Quebec.
by CNB