The Arabs have cut off oil supplies and investments. Britain, teetering on the verge of economic collapse, has asked Canada to accept two million English refugees. Quebec's premier, whose party was elected on the promise it would hold a referendum on independence, serves notice on the federal government it will secede from the Canadian federation rather than accept the immigrants. British Columbia and Alberta say they will leave if the Britons are not admitted.
Quebec negotiators demand a per capita share of all the nation's assets. Violence flares in the streets of Montreal. The American president, warning he must protect $5 billion in U.S. investments in Quebec, offers the prime minister guns and troops to keep Quebec in the confederation. Finally, the referendum is held. The vote is 2 to 1 in favor of unity. Canada is saved!
This is the scenario of a docu-drama Canadians already have dubbed Ottawa Behind Closed Doors. When it aired almost two weeks ago on Toronto television, viewer response was 8 to 1 in favor. John Bassett, chairman of Glen Warren Productions, which made the two-hour movie for his TV station, is pushing syndication in Britain and the United States. He says "'SeparatiQn' shows what the referendum is all about. And it comes to the kind of conclusion we hope in our hearts and our minds will truly develop."
Yet Los Angeles distributor Peter Simpson, a Canadian, wondered whether Americans know enough - or care enough - about Quebec to air the show here. "Why some Western Canadians don't even care!" he said.
"SeparatiQn" illustrates the attitude of the vast majority of English-speaking Canadians in Ontario and Quebec toward Rene Levesque's politics. It also represents the type of bad image he claims the English media and "certain (business) milieux" are maliciously spreading about him and his government in an effort to create panic in Quebec. To counter this offensive and restore business confidence in his province, Quebec's premier will make another speaking tour in the U.S. next month.
Contrary to popular American opinion, the concept of an independent Quebec antedates Levesque's election on Nov. 15, 1975, and even General de Gaulle's famous 1967 "Vive le Quebec Libre!" speech by a century. It surfaces periodically. Likewise the post-World War II migration of business away from Quebec toward Western Canada roughly parallels the move to the Sun Belt in the United States. William Shaw, an independent member of parliament, has estimated that, of more than 150,000 head office jobs in Montreal in 1960, less than a third remained in 1975.
Notwithstanding these historical trends, the present separatist government's policies have greatly accelerated the flight of English-speaking Canadians from Quebec. Outwardly the precipitating factor was Bill 101 which makes the French language mandatory in education and business with a few exceptions. It is expected that some will apply to head offices of nationally chartered corporations that now work exclusively in English. Non-exempt firms will be required to obtain a "francization" certificate, stating their company is implementing a program to make French the working language, or risk fines of up to $2,000 a day. Yet the school-age children of the head office personel would not be exempt, and not all parents can afford private schools.
The underlying reason was stated by Levesque on CBS's "60 Minutes" last month. "If they feel that if the (French) natives take over, it's the end of the world, then they should pack up and leave. Those who can't adapt to change . . . should leave." He told a Time interviewer the flight of business from Montreal is a "promising trend" over the long term.
Accurate statistics on the number of Anglophones who have left Quebec are difficult to obtain. The federal government estimates 40,000 Quebecers, most of them probably English-speaking, left last year. Quebec has an Anglophone population of 12 million, or about 19 percent. The worst case has been drawn by Donald E. Armstrong, an economist at McGill University's faculty of management studies, after a survey of regional and head offices plus the manufacturing sector. Armstrong believes that passage of laws enforcing unilingualism and corporate control will result in 49,500 lost jobs from offices and 41,700 from manufacturing.
If separation occurred peacefully and economic association with Canada were achieved, the losses would be 78,200 and 85,000 respectively. This would amount to 23 percent of the manufacturing sector and a much higher percentage of office personnel. He says separatism easily could cause 90 percent of the construction jobs to disappear. Montreal would lose half its current population.
Moreover, according to Armstrong, the multiplying factor means that for every head-office job transfered out of Montreal, three other jobs, such as taxi driver, maid or hotel employe, would be lost. Most of these job holders are Francophones who would remain, unemployed.
Armstrong added that Finance Minister Jacques Parizeau reportedly said that if Armstrong were right, "We are dead." The Levesque government estimates a maximum of 30,000 jobs would be lost.
For want of a tally of personnel shifts, the number of departing head offices has become hemeasure of the situation. The federal Department of Consumer and Corporate Affairs, which registers business transfers, reported that as of Jan. 1 some 339 corporations had moved their headquarters out of Quebec since Levesque's election compared with 61 the preceding year. At the same time, 31 moved in.
Both sides concede a head office tally is not a valid indicator, yet for different reasons. For example, in April of last year, an English language newspaper calculated that if the 25 largest Canadian and multinational companies in Quebec were to leave, it would cost more than 25,000 jobs, direct spending of $750 million a year and indirect support for economic activity worth $2.5 billion annually. Three days later, a French-language newspaper studied 91 corporate outward moves (the total at that time) and found that 79 of the head offices were not even listed in the telephone directory, and none was listed on the Montreal Stock Exchange. It turns out that some of the head offices that left were little more than mail drops or "paper" corporations set up to handle family investments. Parizeau characterized the shift as "humbug."
Less than a year later, the list of corporations that have moved their head offices includes some big names such as British Airways, Brinco Mining Ltd, Smith Kline and French, and Combustion Engineering Canada Ltd. A far longer list can be drawn of major corporations that have transferred significant numbers of employes to Toronto and other cities in Ontario and Western Canada: Canadian Pacific, Air Canada, Bank of Montreal, Royal Trust, Standard Brands, Canadian Industries Ltd., Domglas, Alcan, Nothern Telecom, and Royal Bank, Canada's largest bank. Some of these have stated their moves were planned before Levesque's election or had nothing to do with politics.
It is widely held in the Anglophone business community that the decision by many of these companies whether to take the final step of shifting their corporate headquarters out of Quebec and leaving branch offices there will depend to a large extent on the action of Sun Life Assurance, Canada's biggest life insurance company. Like its massive, gray, 26-story, wedding-cake building that stands in the heart of the modern downtown business district sullied but unshaken recently be hostile French graffiti. 107-year-old Sun Life symbolizes resistance to what many English Canadians consider the brash, unreasonable intransigence of the Parti Quebecois.
Last January, after failing to get an exemption froms Bill 101, Sun Life announced it would move its 1,800-employe head office from Montreal to Toronto because it could not - and would not - operate in French when 90 percent of its clients were English. Moreover, the company said it was becoming inreasingly difficult to recruit and hold Anglophone employes.
Parizeau countered by charging that Sun Life had moved some $400 million of Quebec savings investments out of the province. Sun Life retorted it was underinvested in Quebec to the extent of just $8.8 million, or 1.5 percent. Sun Life backed down a bit, reportedly at the personal request of Prime Minister Pierre Trudeau, and agreed to delay a proxy vote of its one million policyholders until an April meeting in Toronto. Although the outcome would seem assured, Sun Life also has said it does not intend to move any large number of staff for two years. By that time, the separation issue should be decided. In the intervening months, substantial numbers of Anglo and Franco-Canadians hope some accommodation can be reached.
In making its announcement, Sun Life brought out into the open another issue that many Anglo companies fear but have been unwilling to acknowledge: staying in Quebec is hurting business. President Thomas M. Galt stated in January, "Some policyholders or prospective policyholders refuse to buy from any company with its head office in Quebec" (due to anxiety over the well-being of funds invested in that province). "We have been losing considerable business because of the location of our had office." The company's individual life insurance sales were down 2 percent last year in Canada.
And pressure comes also from the Francophone side. Galt said, "Some labor unions are pressing companies to cancel their Sun Life group policies because of our supposed lack of Quebec investments." They are being urged by the government to give their business to French-owned companies.
There is a sense of foreboding along English Canadian business executives interviewed that goes far beyond concern about regionalization, of the transformation of Montreal head offices into branches. They also worry about government interference, such as an antiscab labor bill, and administration of a no-fault automobile insurance plans. The latter will funnel [WORD ILLEGIBLE] million in its first year into the Quebec Deposit and Investment Fund, a provincial crown corporation that is the principal investor in bonds issued by the provincially owned hydroelectric utility and the steel company. Planned nationalization of the asbestos industry includes a takeover of Asbestos Corp., the second largest asbestos mining company in Quebec, which is 54.6 percent owned by General Dynamics Corp. A Levesque campaign promise to nationalize banks was dropped.
As a result of political as well as economic uncertainty caused by the recession, private investment has diminished noticeably this past year. Per capita investment amounted to $570 in Quebec compared with $2,600 in Alberta and a national average of $890. An insurance agent confided he no longer is able to sell a Sun Life longterm product to an Anglophone. In just one year, Parizeau has forced the entire electronics industry out of Montreal to Toronto, he charged. Management consultants and executive recruiters followed.
Nine Canadian businesses moved to Vermont last year, and New Hampshire, New York and Rhode Island have received inquiries. Canadian corporations and individuals have become the largest foreign investors in Florida. The Montreal Stock Exchange, which now has only 8 percent of the volume of Canadian trading compared with 11 percent last year, may be contemplating a merger with the Toronto Stock Exchange to survive. French and English brokerage firms in Montreal are merging, with the Francophone chief executive coming out on top.
An evident End of Empire atmosphere pervades the English-speaking business community here. Tim H. Dunn of the brokerage firm of Gendron, Norris, Osler is a bilingual native of Quebec city. "I've always said I'd rather be English from 9 to 5 and French from 5 to 9," he joked. Turning serious, he said, "Quebec will never be the same businesswise. The French (Canadians) always preferred the English to run their clubs and their money. Now all the private clubs are disappearing. The bodies are still here but the money has gone; pension funds, institutional sales have moved to Toronto. Many of the richest families in Montreal have taken their fortunes to Calgary or the United States.