Download From Protectionist to Global: The Rise of Canadian Capital

From Protectionism to
Globalization:
The Rise and
Internationalization of
Canadian Capital
February 4
External influence on Confederation

After Britain’s repeal of the Corn Laws
(1846) and the end of the Reciprocity
Treaty with the US (1854-1866), Canada
was without a trading partner.

Fear of American military power, the Fenian
raids and the rivalry over the western
portion of the continent were factors
leading to Confederation in Canada.
Internal Influence on
Confederation

Political deadlock in the Province of
Canada.

Economic development was occurring and
the emerging industrial and political elite
saw benefits to be had in building
Confederation and transcontinental project.
Pre-Confederation
Economic Development

The strength of the wheat economy in Upper
Canada/Canada West/Ontario combined with
immigration and a canal and railway building
spree to launch economic development and the
beginnings of industrialization around the mid 19th
century.

At the time of Confederation, Canada was the 8th
largest manufacturing country in the world. By
1871, manufacturing accounted for just under
25% of GDP.
Confederation
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Ryerson: Confederation resulted from “the
growth of a native, capitalist industry, with
railway transport as its backbone, and
expansion of the home market as the prime
motive for creating a unified and autonomous
state”
Naylor: “Confederation itself was little more than
an elaborate exercise in public finance”
Underhill: “government of the people, by
lawyers, for big business”
Protectionism
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Galt Tariffs of 1858-59
National Policy Tariffs of 1879
The tariffs distinguished between semifinished goods and industrial materials (1020 percent duty) manufactured equipment
(25 percent) and finished consumer goods
(30 percent).
Protectionism
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Naylor: “The Macdonald tariff produced
industry in Canada but no Canadian
industry” Naylor called this “industrialization
by invitation”
Bliss: “the funny thing about our tariff walls
was that we always wanted the enemy to
jump over them. Some walls!”
Canadian statism

What was the significance of the active
Canadian state?

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a pragmatic, public enterprise culture
latent socialism (which is described positively or
negatively depending on the author)
public enterprise for private accumulation
Debating Free Trade



Wilfrid Laurier and the
Liberals campaigned on
freer trade with the US in
1891 and 1911.
Both times they lost to the
Conservatives.
“No truck nor trade with
the Yankees” – Robert
Borden, 1911
Second World War
During the Second World War, Canadian and
American defence policy and production for
the war effort were highly integrated.
 Ogdensburg Agreement 1940 created
Permanent Joint Board on Defence
 Hyde Park Declaration 1941
Postwar Trade Liberalization
Canada signed on to the General Agreement on
Tariffs and Trade (GATT) in 1947.
Successive rounds of negotiations led to an
increasingly open trading environment.
Growing Concerns about
American Foreign Policy


Bomarc missile crisis, 1960-63
Vietnam War
Growing Concerns Over
Foreign (esp. American) Ownership

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Pipeline Debate 1956
Royal Commission on Canada’s Economic Prospects,
Gordon Report, 1956-57
George Grant, Lament for a Nation, 1965
Taskforce on Foreign Ownership and the Structure of
Canadian Investment, Watkins Report, 1967-68
Kari Levitt, Silent Surrender: The Multinational Corporation in
Canada, 1970
Task Force on Foreign Ownership, Gray Report, 1970-72
The Waffle, 1969-74
Committee for an Independent Canada, 1970-81
Federal Government Response to
Economic Nationalism
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Canada Development Corporation 1971
The Third Option 1972
Foreign Investment Review Agency 1973
Petro-Canada 1975
National Energy Program 1980
Canadian Business Embraces
Continentalism

Business groups like the BCNI (which later
becomes the CCCE) and think tanks like C.D.
Howe Institute helped generate a business
consensus in favour of free trade with the US.
Canadian State Embraces
Continentalism


Royal Commission on the Economic Union and
Development Prospects for Canada, Macdonald
Commission, 1982-85
Canada-US Free Trade Agreement (FTA), 1989
[http://archives.cbc.ca/politics/prime_ministers/clips/9807/]

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North American Free Trade Agreement
(NAFTA), 1994
Meanwhile, GATT was transformed into the
World Trade Organization (WTO) in 1994.
The FTA and NAFTA:
More than ‘free trade’ agreements
Along with trade in goods, these deals cover:
 services
 investment and investor rights
 national procurement policies
 intellectual property rights
 energy provisions (Canadian govts can not act to give
Canadians preferential access to Canadian energy, such as oil. US
consumers and business have their access to Canadian energy
protected.)
Anti-Globalization Movement

“Anti-globalization” movement or
“global justice” movement?
Birth of a movement in Canada

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In Canada, the “anti-globalization” movement
has its roots in left nationalism of the late 60s
and early 70s.
Its intellectual roots are provided by the New
Canadian Political Economy (NCPE), including
the dependency theorists and the Marxist
theorists.
Fight Against the FTA
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Council of Canadians, formed 1985
Pro-Canada Network, 1987 which becomes
the Action Canada Network, 1991, later
becomes the Solidarity Network, 1998, and
then fizzled out around 2004.
Citizens Concerned about Free Trade led
by David Orchard
NAFTA
Battle Against NAFTA:
 Common Frontiers
Side Agreements were negotiated:
 North American Agreement on
Environmental Cooperation (NAAEC)
 North American Agreement on Labor
Cooperation (NAALC)
APEC Summit, Vancouver 1997
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Asia-Pacific Economic Cooperation
The RCMP acted with significant force to try and
keep protesters completely out of the sight of the
delegates, including the Indonesian president
Suharto.
The controversy over the RCMP response led to
an inquiry from 1998 to 2000. The inquiry was
highly critical of the RCMP and the federal
government.
http://archives.cbc.ca/war_conflict/civil_unrest/clips/2016/
http://archives.cbc.ca/politics/federal_politics/clips/11710/
Selected Anti-Globalization Demos
Around the World
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Geneva, WTO, May 1998.
Köln, Germany, G8, June 1999.
Seattle, WTO, November 1999.
Davos, World Economic Forum, January 2000.
Washington, DC, IMF, April 2000.
Prague, World Bank/IMF, September 2000.
Genoa, G8, July 2001, one protester shot dead.
Kananaskis, Alberta, G8, June 2002.
Quebec Summit, April 2001
Video: View from the Summit.
Featuring:
 demonstrations against the Free Trade Area of the Americas
(FTAA), including a march of 50,000 people.
 Operation Salami: formed during the movement against the
proposed Multilateral Agreement on Investment (MAI). It organized
and promoted peaceful civil disobedience, obstruction
 CLAC: Anti-Capitalist Convergence favoured and supported a
diversity of tactics: green zone – festive demonstration, yellow zone
- obstruction, red zone - disruption
 Thomas D’Aquino, president of the Business Council on National
Issues, now the Canadian Council of Chief Executives.
 Richard Feinberg, American academic and former consultant to the
US State Department.