Is Quebec Special in the Emerging North American Economy? Analysing the Impact of Continental Economic Integration on Canadian Regions

The object of this paper is twofold: * Building on previous work (Perez and Polese 1995, 1996; Paelinck and Polese 1999), to advance our thinking on modeling the regional impacts of continental integration, focusing on North America,a nd * To examine how Quebec fits into this framework, comparing it to other Canadian regions and provinces, specifically with respect to trading relationships with the United States. We shall argue that although Quebec is certainly culturally distinct within North America, the spatial orientation of its economy can nonetheless be largely explained by the same factors (specifically geographic proximity) that apply to other regions. The first part of the paper is largely conceptual, introducing our framework for analysing the impact of continental integration on sub-national regions. The second part is empirical, drawing heavily on recent data for interprovincial and international trading patterns of Canadian provinces. Quebec's specificity It is not difficult to make a case for the proposition that Quebec is a special case in North America. A French-speaking island in an English-speaking sea,(1) the majority of Quebec's population has a strong sense of forming a distinct people, some would say a distinct nation. When asked in a recent poll what their primary identity was, about 55 % `answered Quebecois (the figure rises to 76 % for the 18-24 age bracket); 24 % French-Canadian, and 21% Canadian or English-Canadian (Bernier et al 1998). This sense of nationhood finds its institutional expression in the frequent use of the adjective "national" to designate province-wide institutions or events: The National Assembly (in Quebec City); The National Confederation of Trade Unions (CSN, by its French acronym), Quebec's National Holiday (24th of June), as well as the author's own institution (INRS). At the political level, the sense of a separate identity finds its most dramatic expression in the existence of a strong independence movement. The current ruling party in Quebec (the Parti Quebecois) is officially "independantiste", aspiring to take the province out of the Canadian Federation. However, in two referendums on the issue (1980; 1995), the party has failed to convince the majority of the population to follow it along the path to independence, although the results of the last referendum were extremely close. The issue of the political status of Quebec, whether within Canada or outside, remains a hotly debated issue. However, coming back to the central subject of this paper, should we expect Quebec's distinctiveness to significantly influence its economic behaviour, specifically its evolving trading relationships with its North American partners? There are some reasons to think why this might indeed be the case. Quebecois(2) are arguably more open than most other Canadians to closer relationships with the United States. There are at least two reasons for this. First, Quebec's cultural difference (especially language), which acts as a protective barrier of sorts, means that Quebecois generally feel less threatened by U.S. culture than English-Canadians who share a common language with Americans. Indeed, the most virulent expressions of Canadian (anti-U.S.) Nationalism are generally found in English Canada. Second, because of the political and cultural tensions with the rest of Canada, some Quebecois will often turn to the U.S. as an alternative or counterweight. From a Quebec nationalist perspective, the stronger the links with the U.S. the weaker the Canadian Federation will be. North American economic integration is very much on the Quebec nationalist (i.e. "independantiste") agenda as a means both of increasing the province's autonomy (analogous to Catalonia or Scotland in an integrated Europe) and reducing the eventual economic risks of independence. It is thus not surprising that Quebecois are generally very favourably disposed to NAFTA (North Amercan Free Trade Agreement), probably more so than any other region or group in North America. …