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Mulroney: Not all good

NAFTA didn’t lead to the promised land of free-market competition, but to domination by giant foreign corporations

Canadian PoliticsLabourGlobalization

Canadian Prime Minister Brian Mulroney and US President Ronald Reagan in the mid-1980s. Photo by AP.

Much deserved praise has been heaped on Brian Mulroney’s legacy, but the universal lauding of NAFTA misses the mark. Mulroney made major contributions by pushing Washington to cut acid rain wafting across the border, was key to fixing the ozone layer in the Montréal protocol and took international leadership in helping end apartheid in South Africa.

But bringing Canada into NAFTA was a huge mistake. It made us too vulnerable to economic coercion by Washington, something we may well regret now that Donald Trump could become president again.

The 1988 federal election was a de facto referendum on the Canada-US Free Trade Agreement (FTA). Mulroney’s Progressive Conservatives won a majority government with only 43 percent of the vote.

The FTA and its subsequent broadening to include Mexico in NAFTA brought in its wake unregulated capitalism, called the Washington Consensus or neoliberalism. Margaret Thatcher and Ronald Reagan had already brought that ethos to Britain and the US. But neoliberalism only fully came into Canada when it was disguised as free trade.

We already pretty well had free trade with the US before the FTA. Tariffs were very low to non-existent on most US imports. What was new? The FTA granted citizen-like rights to US corporations to enter Canada and be off limits to Canadianization initiatives to buy or take them over.

Rather than bring prosperity and more jobs, Canada regressed into its earlier role as a land of hewers of wood and drawers of water, and a new role as retailers of services and goods made outside Canada.

NAFTA also ended Canada’s prevailing ethos as a caring, sharing society, symbolized by medicare, geared to people’s needs rather than just their ability to pay. The ethic was support for communities huddling together against the cold and putting bread on the table when private markets failed to do so.

With the FTA and NAFTA Canada was to be ruled by the market that knows the price of everything, but the true value of little. Profits for corporations and the rich rather than the well-being of working people were paramount. NAFTA didn’t lead to the promised land of free-market competition among local ma and pa shops, but to domination by giant foreign corporations.

Canada lost the ability and spirit to do distinctly Canadian things.

Canada was built by grabbing Indigenous land, but the best parts of Canada’s story were built on defiance of the north-south pull of the American market and the creation of an east-west economy held together by transcontinental railways running from Montréal to Winnipeg and beyond.

Ditched was the distinctive tradition of Crown corporations like the CBC and the CNR. To meet the threat of Hitler’s Germany, Ottawa created 28 government-owned Crown corporations, to build a range of industries, for the war effort. They transformed Canada from a primarily resource-exporting country into a major manufacturing one, that supported a middle-class living standard for many.

Perhaps Mulroney’s longest-lasting legacy was to reverse promising steps to Canadianize the oil and gas industry, partly through public ownership of the Crown corporation Petro-Canada. It was supported and paid for by Canadians, 84 percent of whom initially supported the previous Liberal government’s goal of Canadianizing the oil industry. No major Canadian-owned oil corporation has existed since Suncor took over Petro-Canada in 2009.

Mulroney told Margaret Thatcher she was on the wrong side of history on South Africa’s apartheid. True. But Mulroney’s steps to privatize Petro-Canada helped put Canada on the wrong side of climate change history. The genius of Crown corporations is that they can pursue the public good and not be totally beholden to the bottom line. Imagine a publicly owned Petro-Canada today helping people use less oil and gas, switching to renewables and leading Canada to the next energy paradigm.

Mulroney has been called a great patriot. Hardly. He understood Québec nationalism but so wanted to merge Canada into the United States that Marci McDonald, Washington Bureau Chief for Maclean’s while Mulroney was prime minister, wrote a book titled Yankee Doodle Dandy, and said he was born to the wrong country.

Gordon Laxer is a political economist and professor emeritus at the University of Alberta.

This article originally appeared in the Winnipeg Free Press.


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