Canadian Sovereignty in a Global Economy: Can the National Dream Survive?
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The Empire Club of Canada Addresses (Toronto, Canada), 15 Nov 1990, p. 142-155


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Barlow, Maude, Speaker
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Text
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Speeches
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Canada's dream of a sovereign nation. How Canada was built. The need for sharing and our understanding of the need for community-based entrepreneurial action and the distribution of wealth and opportunities. Why and how Canadian Crown corporations were conceived. Our complex network of social programs. The belief that services should be equitable throughout the country: a fundamental Canadian value. The negative economic outlook in Canada and how it came about. The speaker's view of the Mulroney government in terms of our economy and our society. A detailed discussion of five areas in over which the speaker feels Canada is losing sovereign control: the manufacturing sector; foreign takeover; the gutting of our social programs; our resources; disputes. Some thoughts on alternatives: a different approach to becoming competitive. Finding again our shared values. Calling on Canada's fundamental principles for the role we might play in the new global order.
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15 Nov 1990
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English
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The speeches are free of charge but please note that the Empire Club of Canada retains copyright. Neither the speeches themselves nor any part of their content may be used for any purpose other than personal interest or research without the explicit permission of the Empire Club of Canada.
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Full Text
Maude BarIow, Author and National Chairperson of the Council of Canadians
CANADIAN SOVEREIGNTY IN A GLOBAL ECONOMY: CAN THE NATIONAL DREAM SURVIVE?
Chairman: Harold Roberts President

Introduction:

In a recent article on the editorial page of the Globe & Mail, Mr. Lawrence Martin, a former Washington correspondent, and author of The Presidents and The Prime Ministers wrote: "There may well be virtue in these policies (dismantling the National Energy Programme, dismantling the Investment Review Board, Free Trade, joining the Organization of American States, etc.) but Mr. Mulroney should be aware of a lesson in Canadian history. It is that, through the history of the presidents and the prime ministers, no prime minister ever gained the respect of Canadians with an "aye, aye, Uncle Sam" approach."

Mr Martin is not alone in his feelings and observations. As we come to the second anniversary of the Free Trade Agreement, Maude Barlow has written a book Parcel of Rogues--How Free Trade is Failing Canada.

Maude Barlow is National Chairperson of the Council of Canadians, a 20,000 member organization committed to the preservation and enhancement of Canadian sovereignty. She speaks and writes as one who has been on the inside. Mrs. Barlow has been involved in women's issues since the mid '70s and has worked both inside and outside the government to promote equal opportunity. Among the many appointments in her varied career, she has been Senior Advisor, Women's Issues, to Prime Minister Pierre Trudeau, and Social Justice Advisor to the Federal Liberal Party.

In September's Homemaker's Magazine Maude is quoted as saying, "Women's groups have to join other groups. I'm a very strong supporter of coalition politics. We need to get political--propose, oppose, take a stand and advocate for what we believe in." Parcel of Rogues is such a stand.

As a woman, a wife, and mother of two, Maude has a strong passion for that which is "uniquely Canadian." We welcome her today to address us on "Canadian Sovereignty in a Global Economy: Can the National Dream Survive?"

Maude Barlow:

Thank you very much. I am absolutely delighted to be here. I've been on a book tour and I was warned about these book tours. My favourite interview was in a Country and Western station in Regina. The man brought me into the studio and turned on the tape and looked at me through very tired eyes. He had several days growth of beard and he blew smoke in my face and said, "Who are you? And what book did you write?" That was the beginning of the interview. I was going to say,"I'm Christina McCall, and I just wrote a wonderful book on Trudeau," and I thought I'd better not. I could have gotten away with it though.

But this trip across the country has been quite interesting, because I've been doing a lot of direct phone call interviews and hearing from Canadians. I was reminded once again of something that a prairie politician said during the 1930s. He was talking about politics in Canada by region. It was written a long time ago and I think it's still quite apropos. He said, "In Atlantic Canada, politics is a way of life. In Quebec, it's a religion. In Ontario, it's a business. On the Prairies, it's a cause, and in British Columbia, it's entertainment." Now how did he know that, how could he look fifty years ahead?

I want to talk about what we've done over the last two years and my concern with it and my concern from the point of view of the sovereignty of this country, which is a very esoteric kind of concept and hard to get a grasp on. People say, "What do you mean by that?" I want to start off by reminding us how we built this country and why we built it the way we did. I feel that the history of this young, and I think very fragile, country is one that defies the logic of the unfettered free marketplace. Canada in many ways is a dream and in many ways is a testament to the courage and the will of a people to survive as a sovereign nation when, economically, it probably would have made more sense for us to establish north and south ties.

Because of our harsh geography and our sparse population, we needed to create national institutions that linked us together, east, west and north, and therefore Canada and the United States developed very different economic systems. Our distinct economy not only has served to foster a different way of life in Canada, but has prevented us from being absorbed into the United States--the mix of public and private enterprises that we've established in this country in areas where business alone would not have been able to profitably enter and deliver those kinds of services. Because these enterprises were Canadian-owned, they conducted their own research and development in Canada, therefore they became innovators in many areas from large dam construction to the first diesel locomotives and the first rural telephone system which we've exported all over the world. To have permitted the unfettered marketplace to dictate all economic decisions would have doomed the young country. It was simply too expensive to run railways to the north, or to provide basic services to Atlantic Canada unless these services were underwritten by government. The very existence of Canada depended upon our early understanding of the need for sharing, on our understanding of the need for community-based entrepreneurial action and the distribution of wealth and opportunities.

Many Canadian Crown corporations were conceived not only to serve a Canadian perspective but to retain the control of decision-making in this country. CBC, for instance, was established to prevent network radio in Canada from falling into the hands of U.S. companies. The father of the CBC, Graham Spry, used to say "The State or the United States." He fought hard so that we would have our own world view through our own broadcasting system. So we built an airline and a railway and a pipeline and a broadcasting system and they linked us from Newfoundland outports to prairie farmhouses right up to the cold reaches of the Canadian north. And we built a complex network of social programs that provide security of services for families, for seniors, for families with young children, for the unemployed and for all of us when we need health care. And these programs are founded on the belief that services should be equitable throughout the country and the people have a right to grow up, raise their own family and work in the place of their birth. This has been a fundamental Canadian value.

Now please don't misunderstand me. I am not defending the pre-1984 status quo. I am not saying that we did not make some bad economic decisions. I think there were many decisions made by a cabinet minister, without long-term economic thinking behind it. Nor am I saying the public spending did not get out of control in the Trudeau years, fuelling a deficit we should not have built up in good times. Nor am I saying that it wasn't under the Liberals that so much foreign investment built up. It was under that government that, in fact, it reached record highs during the 1970s. In fact, my argument is exactly the opposite. I argue that we have never tried the economic security of such diverse countries as Sweden, West Germany and Japan, and that is that we've never built a real economic and industrial strategy whereby government and business together try to identify what our ', needs are and what our strengths are and then build towards Our strengths to service our needs. We have never done that in this country. In my view, it is precisely this lack of economic planning and preparation that has created such a negative economic outlook in Canada and kept us, in spite of all our talk about how we know this is not good for us, as hewers of wood and destroyers of water.

However, confronted with the need to right these economic wrongs and given the enthusiastic mandate to do so, I believe that Brian Mulroney launched us on a road that, in my view, is leading to the economic and social disintegration of this country. This government has massively sold off our public enterprises, paid for by us through our taxes many times over and has deregulated huge sectors of the economy, removing public control over energy resources, our telecommunication systems and our transportation networks. Everything in Canada is for sale, parks, forests, our public services, everything. In fact, I feel the government philosophy is fairly simple and it is not a traditional conservative philosophy and that is; if it makes a profit--sell it; if it doesn't--starve it; if it talks back--cut it. But most dangerously this government entered into a lopsided far-reaching Free Trade Agreement with a superpower whose stated goal was to remove impediments at the border, in the factories, in the boardrooms and in Canadian public policy decisions to the free-entry of American business into Canada. Business in the United States does not view Canada as a separate and sovereign nation, but simply as another state, another market, much the size of California. In fact, that's kind of its equivalent.

We based our agreement on the European model, and I think we have to remember that the European model started off as a way for countries to stop the historical fighting in Europe, and later developed on a more economic line. The European model has built in a very strong social charter and environmental rights and they've put aside a huge amount of money to help workers displaced by free trade in any one country. There has been this kind of adjustment program. Unlike the European model, we entered into a deal with no protection for these very institutions or economic policies or social standards that I think have protected us as a country, as the sovereign state that we call Canada. I'm just going to quickly name five areas in which I think we are losing sovereign control and in which I feel we have to start thinking about what is happening and what to do to stop it.

The first is the death of our manufacturing sector. Now, I know you're going to say to me it is not free trade alone and I am going to agree with you. It's many things. But it's my long-term belief that the high dollar was connected to the Free Trade Agreement. In 1986, a Senator went before the Brookings Institute and he said, "Let me make it clear to the Canadians. If there is no high dollar, that dollar is not brought up, there will be no Free Trade Agreement." They had to go hand-in-hand because part of what free trade was about was harmonizing our economic system to the U.S. and our low dollar was hurting American exporters. We estimate that we can link 160,000 lost manufacturing jobs to some extent to the Free Trade Agreement, either because those are areas in which the market's becoming flooded and those companies cannot survive as the tariffs came down, or they are Canadian branch plants of American multi-nationals that have said, "Now that the tariffs are down, we're going to pull back our manufacturing into our base." We're looking at auto parts, furniture, appliances, trucking, textiles, food manufacturing and processing. I believe these industries are going to be wiped out. They will all but disappear.

I'm also very concerned about our high-technology sector in the secondary firms that are either being taken over and then shut down or the research facilities are being shipped out of the country. I don't know if you noticed in the paper not long ago -it was just a small article in the business section that said--"Professional openings in the province of Ontario are down 41 percent in the last year." So we have seen a massive transfer of manufacturing to the United States. In fact, in Buffalo alone in 1989, 92 percent of the new jobs, or the new businesses created, were Canadian. And that's Canadian companies picking up, moving across the border, moving down to the low wage states who are now of course moving down to Mexico. I just came back from a fact-finding tour of free trade in Mexico and I warned Canadians what we're dealing with when we're talking about an open border that goes from the north of our continent right through Mexico into Latin America. We're talking about an agreement that's based on American technology in capital, our resources, and $3.25 a day labour, unlimited in Mexico. The talk that this is going to bring Mexico up to our standards, I think is a false premise because we are talking about an agreement, both ours with the United States and the one that's about to be undertaken with Mexico that has no standards and no protections for those social programs, for those wages. I think we're going to see this increasingly like a funnel, with not only the jobs moving south, but our standards moving down to the lowest common denominator. I defy anyone in this country to live on $3.25 a day. I'm not saying it'll ever get that bad, but there's no question Mexico's a silent partner at many a bargaining table now. So that's the first concern.

The second is the foreign takeover. It has been unleashed and I feel very strongly we haven't seen the end of it. I think it's as bad as anything we saw in the late seventies and is going to surpass that by far. I monitored Investment Canada from when they were first set up. It was first set up in 1985 and I estimate that it has taken over 2,000 Canadian companies. I am very worried that if we don't own our land and our factories and our resources and our forests and our farms that we are not going to have the economic ability to determine our own sovereign future. That's what I mean by sovereignty, and I wonder how we are going to build for the future.

Now we are told this money is going to be good for Canada, but I strongly argue that. I give you as an example Power Corporation that sold Consolidated Bathurst to a Chicago firm who ploughed the money into Europe and said--the situation in Canada is unstable now. I believe that we're going to see the same thing happen with the money that comes from the sale of Consumers Gas. I believe Reichman is going to turn around and put that money into Canary Wharf in England and I don't think we're going to benefit from it. Prudential Bache Securities put out a report several months ago that said foreigners own an unprecedented 36 percent of all provincial bonds, 30 percent of all Canadian Government bonds and 50 percent of all corporate bonds. This has placed a virtual straight-jacket on our ability to establish our own monetary policy. A U.S. investment banker warns that Canada is developing a third world currency and I don't have to tell the people in this room about our shrinking trade picture or our current account deficit or dramatically reduced business investment or our manufacturing production. You know that story. So that's my second concern.

And my third is what I believe is the beginning of the gutting of our social programs. I think once our manufacturing base goes, we're not going to be able to afford them anyway. We have harmonized our unemployment insurance system--and again, please believe me, I am not saying all was well before. It did need revisions, but we have harmonized the unemployment insurance system in this country almost directly to the system that exists in the States, where only 26 percent of Americans are insured for unemployment. We also, of course, have brought in the call-back of provisions for old-age pension and family allowance. One study that I quote in my book says that using the statistics on inflation that we have now any senior who has an income of only $40,000 and over by the year 2000 will not be eligible for old age pension.

I believe we're also beginning to see the end of Medicare. The government is bringing in its contribution to the provinces at 3 percent under inflation and I estimate that somewhere between the years 1998 and 2010 there will be no mandated, legislated federal presence in that system. We've already got three provinces, B.C., Alberta and Quebec, talking about two levels, a two tiered system of medical care. So, you know, we warned this would happen and it's one of my biggest worries because I feel we will not have the money to re-establish these programs. We are also witnessing the death of the middle class. We're moving from a society that looked like the big egg, with a large middle class, to something that looks more like a pear with the wealth being concentrated in fewer and fewer hands at the top, and more and more Canadians just falling out the bottom of that pear. And of course, you know the documentation that is following the growing gap between rich and poor. So that's my third concern.

My fourth is that I believe that we are steadily losing very real control over our resources. We signed something in the Free Trade Agreement called the "Proportionality Clause." If we, in time of our own need or environmental concern with the Gulf Crisis or whatever reason, want to say we're sending too much energy south, if we want to pull that back for ourselves, we cannot do that. That's the Proportionality Clause of the Free Trade Agreement. We would have to cut back on our own use and if for environmental reasons we wanted to cut back on our use of fossil fuels, we could not impose those environmental regulations against our exports. This is called sovereignty. Whether you agree or don't agree with something like a national energy program, that's not what I'm talking about here. Those are Canadian decisions that should be thought out here in Canada. But when those decisions are taken out of the hands of our National Energy Board, which is the regulatory body that's supposed to protect our energy resources and our security, then we've removed the democratic control by Canadians of our energy policy and that's what I'm concerned about.

We just agreed as well, or the Energy Board has just given rights, for what we call "tolling." That major new pipeline that's going to be built to the United States, simply to carry exports of our natural gas, is going to be partially paid for by Canadian gas users, because we're supposed to amortize, if you will, those costs. We've done that in Canada It's a good program. It's a bad policy to subsidise exports to the United States, whereby the Americans are going to be able to lock in those long-term contracts at a much cheaper rate than we can. So we're going to end up bidding against American companies for our own gas. I have a great quote in my book from the Vice President of Shell. He says, "Well stop worrying about it. If you Canadians offer us a good price we'll sell it back to you." It is continental energy now. I assure you it does not belong to us. There was a very nasty dispute between the American government and a number of American gas companies, natural gas companies and the Energy Board, from which the Energy Board totally backed down. They maintained one small right under the Free Trade Agreement, or they claimed to maintain it. They said, "We still should be able to ask whether an export isn't a net benefit to Canada" and the Americans said, "No, you can't under free trade," and we backed down.

And the final one is the disputes. We were supposed to, through this Free Trade Agreement, have established a system where we would sit down and talk together as two friendly nations about the disputes that we have. In fact, if anything, since the Free Trade Agreement was signed the Americans have become more aggressive, more protectionist. I'm hearing an awful lot of manufacturers now who are telling me that when their products hit the American border, they're running into red tape only in the last six or eight months, because there is a big push to buy American and protect American jobs in the United States. Of course it defies the provisions of the Free Trade Agreement. Most Americans have never heard of this and wouldn't bother being concerned about it anyway. But that is an issue that's there for us, that we're hearing about. We were supposed to be this friendly favoured nation, but what we're finding is that the Americans are using the GATT in one hand and the Free Trade Agreement in the other as a kind of a club. West Coast Fish was a perfect example. They took our fish processors to the GATT and said that the Canadian law that requires unprocessed fish to be processed in Canada before it's exported, contravened international trade rules and they were found right. The GATT said that. However, without a Free Trade Agreement, we had an alternative. We could have then placed an export tax on that unprocessed fish so that would have had the same effect, but under the Free Trade Agreement we can't do that. So the government backed down. There is a very great concern on the West Coast about the loss of jobs. We just got the final ruling on the pork dispute and farmers in Canada are talking about the potential loss of up to 30,000 Canadian jobs. In this dispute, the Americans named 18 key farm aid and subsidy programs, any one of which would have caused them to rule against Canadian pork. They have made it very clear that not a regional program will survive--not a farm assistance program, not a subsidy that they do not use in their own way. Anything that we do that's different will not be allowed to survive, and that's what I mean by sovereignty.

I know I have strong thoughts on all of this, but I guess I want to end the formal part of what I say with just a few thoughts on an alternative. Yes, we have to become more competitive. I would never argue with that. But I think that abandoning full sectors of our community is the absolute wrong way to go--a heartless agenda and one that is going to bring the economy of this country down. Remember the famous dispute or dialogue between Ford and Walter Reuther, the great union leader, when Ford threatened to bring in robots to replace all his workers and Walter Reuther said, "Ah, but Mr. Ford, who will buy your automobiles?" It is not in the long-term economic interest of big business or anybody else to be building an underclass in this society but I believe it's what's happening. Nor do I think that destroying institutions that took 120 years to build is the answer. I think the answer lies in a very, very different direction and I just want to very quickly tell you some of the things that I think we have to do.

The first will be strong. I think we have to abrogate the Free Trade Agreement. I know you'll say to me, we've brought our systems into place, how can we do that? What problems, what reaction, what retaliation? There'll be lots. But the option, as far as I can see, is not only a deteriorating economy, a deteriorating social structure, but the demise of this country as a sovereign entity. I think we need an end to the growth of foreign ownership and control in this country. We've already got far too much and it is hurting and not helping our standard of living. We need much greater Canadian ownership and control of our natural resources, particularly in the oil and gas industry. We need policies of full employment as the cornerstone of economic planning instead of the present policy of throwing people out of work to keep the rate of inflation down. We need an infinitely fairer tax system than the system that we have in place. I don't think Canadians are against paying taxes when they feel that it's being distributed evenly across the board and that everybody's paying their share. We need industrial policies in the national interest that include lower interest rates, worker ownership, profit participation and upgrading of resources. I think we need an end to what I see is a regressive tax structure that's going to be brought in. I don't see how it's going to be avoided now, but I think it's going to be inflationary and regressive. And finally, I think we need election reform which includes abolition of the Senate and more representation for the Atlantic provinces and the West in the House of Commons. A proportional representation system in federal elections, much tougher limits on election spending at all levels of politics, more free votes in the House of Commons and more opportunity for Canadians to have national referenda on issues of significant concern to Canadians.

And I'll end with the very last couple of paragraphs in my book, because I ended up saying that we have to find again our shared values. As uncomfortable as it might be for us, given our reticence for self-examination, we must learn to give expression to them. We have a proud and unique heritage and traditions worth fighting for. Our most enduring legacy is our love of the land, harsh and relenting as it can be. Survival, not dominance, is essential to our definition of self. We honour the generations that have gone before us. We cherish the survival of traditional values and the established customs of our country. We are an evolutionary, not a revolutionary people.

Our strong historical will to live and to resist the more commercial natural lines of north/south trade led to the creation of national institutions, whose role was to deliver services equal in quality to every part of the country. We believe that individual freedom can be attained only within public order and we invest in our government the responsibility to safeguard our freedom. Our collective rights to safety outweigh our individual right to bear arms, a remarkable difference between Canadians and Americans. We are a people seeking justice. We have been ashamed of poverty in our midst. We are a people with a tradition of compassion. We are also a peaceful people, proud of our international peacekeeping role. Our capital city is filled not with the symbols of war, but of peace and human rights.

Canadians can face the future with pride and hope. But I end by saying Canada must reassert its commitment to equality or we will not be recognizable in ten years. We must preserve what is of value to us, even as we prepare to meet the high technology demands of the 21st century. Rural life is a part of our past and our future. It must be safeguarded by government. We must retain the right to establish conditions of work and of social life because we don't measure everything, including a standard of living, against columns in a ledger book kept in a New York boardroom. We must be free to determine our own fate and our own priorities because we have a common heritage based on human values. These are the fundamental principles upon which this country was built. We must call them ours again not only for the next generation of Canadians, but for the role we might play in the new global order. Canadians must build upon our traditional tolerance to reclaim our future. If we fail, we will lose not only those characteristics that most truly define us, but the values vital to the survival of all humanity. In the emerging global reality of the 21st century, these values could be Canada's finest gift to the world.

The appreciation of the meeting was expressed by Eric Jackman, President, Invicta Investments Incorporated and a Director of The Empire Club of Canada.

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Canadian Sovereignty in a Global Economy: Can the National Dream Survive?


Canada's dream of a sovereign nation. How Canada was built. The need for sharing and our understanding of the need for community-based entrepreneurial action and the distribution of wealth and opportunities. Why and how Canadian Crown corporations were conceived. Our complex network of social programs. The belief that services should be equitable throughout the country: a fundamental Canadian value. The negative economic outlook in Canada and how it came about. The speaker's view of the Mulroney government in terms of our economy and our society. A detailed discussion of five areas in over which the speaker feels Canada is losing sovereign control: the manufacturing sector; foreign takeover; the gutting of our social programs; our resources; disputes. Some thoughts on alternatives: a different approach to becoming competitive. Finding again our shared values. Calling on Canada's fundamental principles for the role we might play in the new global order.