You can't say they "refuse" to speak to people in Mandarin because they simply _can't speak_ Mandarin. Back then, many people simply did not have enough schooling to learn Mandarin, and so they simply couldn't speak it (at least not fluently). The government was not stupid. There was utterly no reason to enforce Mandarin and deprecate Cantonese when they were expecting so much investment from Hong Kongers (who usually did not speak Mandarin either) during that period.
Cantonese TV stations and radio stations are still doing just fine today. And then of course you can't have just Cantonese when there's an influx of labour from other parts of China, which is why, as a simple matter of economic adaptation, Mandarin gradually picked up. But Cantonese is not being threatened in any way. In fact, there is now a more widespread understanding of the importance of Cantonese, because it is _closer_ to Middle Chinese from the Tang and Song dynasties than many other dialects. It's an important dialect for properly studying and appreciating Tang poems. I know people in more Northern parts of China who know Cantonese songs from the 80s and 90s of Hong Kong because they appreciate the more classical wordings and rhymes of the lyrics.
Here in NZ the govt tried to force people not to speak Te Reo, literally beating it out of children in school, happily we're past that now but, well, that's how cultural imperialism works
A) Hi, I'm from Sichuan B) Oh, great! It must be nice to sit around all day drinking tea.
That's not even necessarily true, people all over China refer to themselves by their province, sometimes even prefecture or city, simply out of pride. People are proud of being from Shanghai, or proud of being from Fujian, etc. People are aware of tongue-in-cheek stereotypes regarding their own hometown among the larger Chinese population, and that makes each of them feel special and proud.