February 2004: The Vanishing Country (Part III of III)

After years of kowtowing, our influence with the U.S. is still zilch, Canada is too good a country to let our Americanizers destroy it
February 1, 2004

U.S. President George W. Bush and the U.S. ambassador to Canada, Paul Cellucci, were “disappointed” that Canada didn’t join in the American-led invasion of Iraq. Their predecessors in the 1960s and ‘70s

were also disappointed that we didn’t join them in their catastrophic Vietnam quagmire. Too bad. Back then, we were right and they were dead wrong. Today we are right again, and they are dead wrong again.

Too bad the likes of The National Post and the Alliance Party, among others, who warn us of the supposed terrible punishment we will receive, seem to have such poor memories about what happened in the First and Second World Wars, when the Americans sat back while tens of thousands of young Canadian men lost their lives in Europe, and while millions of Jews, intellectuals, gays, and mothers with their children were gassed and cremated in Nazi concentration camp ovens, while Washington sat back for well over two years until the United States was attacked by the Japanese at Pearl Harbour in December, 1941. Shouldn’t we tell Bush and Cellucci just how terribly disappointed we Canadians have been with the American record in the past?

This said, if Canada’s decision to stay out of the Iraq war produces--in Toronto Star columnist Tom Walkom’s well-chosen words--a fawning, embarrassingly obsequious and apologetic behaviour on the part of our big business leaders and some of our media and some of our most important federal and provincial politicians, it’s difficult to be proud of our principled decision to stay out of the unjustified U.S.-UK war on Iraq--a decision that was supported by a strong majority of Canadians.

If one almost certain result is joining in Bush’s reckless Star Wars adventure, as appears will almost certainly be the case, knowing full well that the Americans without the slightest question intend to embark on the weaponizing of space in total contradiction to Canada’s long-established position, one must wonder whether in fact, rather than holding our heads high, we should be lowering them in shame.

What does it say about our political leadership when our Defence Minister and Finance Minister and the man who will soon be Prime Minister are all in favour of Bush’s dangerous, massively destabilizing National Missile Defence plan? And what does it say about our Foreign Minister, Bill Graham, who fully understands the implications of the National Missile Defence plan, yet not only fails to condemn it, but is supporting it with the lame excuse that this will supposedly give us some influence “at the table” with the Americans?

Graham says that Foreign Affairs “wants to make sure that Canada’s voice is raised against the weaponizing of space.” But the suggestion that joining in the NMD would somehow give us some chance of reversing the Americans’ plans to weaponize space is simply 100% pure nonsense.

Shouldn’t this vitally important decision, with such profound implications, be the subject of a thorough national public debate?

With such impending military integration, noted defence historian Desmond Morton sums it up succinctly in a single sentence: “American wars will be Canadian wars in the future.”

Given our ongoing and further proposed integration, is our major consideration from now on to be forever constantly looking south over both shoulders when we are considering domestic or foreign and defence policy?

People like Globe and Mail columnist John Ibbotson warn us that, “Simply put, if we get too far from the Americans, we get punished.” Such neo-colonial drivel is sickening.

So let’s see, now. For almost 15 years, we’ve been harmonizing, integrating, and Americanizing, and today we still have zilch influence over U.S. policies. In fact, exactly the opposite has occurred. Any influence we may once have had has disappeared. Now, somehow, Wendy Dobson, Tom d’Aquino and Allan Gotlieb tell us that, if we make even more major new concessions and integrate and Americanize even more, we will somehow have greater influence over the White House, the Congress, and the Pentagon.

Does anyone, for a moment, believe, for example, that we would ever be able to convince the Americans that they should support the long list of important international agreements that Canadians support, and in some cases helped to initiate? Agreements such as the Land Mines Treaty, the

International Criminal Court, the Small Arms Treaty, the Kyoto Protocol, the U.N. Protocol on Developing, Producing or Stockpiling Biological or Toxic Weapons, the Nuclear Test Ban Treaty, the Convention on the Rights of the Child,

the International Covenant of Economic, Social and Cultural Rights, the Convention on the Elimination of all Forms of Discrimination Against Women, and the proposed international agreement to allow developing countries to purchase low-cost drugs to battle AIDS and other diseases.

Every single one of these international agreements is supported by a minimum of 139 countries, some by over 190 countries. But not by the United States.

If you know anyone who thinks we might be able to change the Americans’ minds about any of these international treaties, or deter them from their plans to weaponize space or develop a new generation of nuclear weapons, please have them get in touch with me. I know someone who has some Enron shares they would love to get rid of.

Few Canadians understand that already both the Canada U.S. Free Trade Agreement and NAFTA go well beyond beyond the current harmonization policies in the European Union.

But never mind. Tom d’Aquino of the Canadian Council of Chief Executives, before a Senate Committee, tells us that what big business now wants is much greater integration with the U.S.--even if Canadians don’t “want to accept it,” including harmonization of standards and policies, military integration, the “free flow of capital,” and the “elimination of duplicate systems of approvals.”

But aren’t we already far too integrated?

According to economist Rick Harris, Canada is already more integrated with the United States economically than any two European countries are with each other.

In their testimony to the Senate committee, the Canadian Chamber of Commerce representatives had this to say: “De facto integration is here, whether many Canadians realize it or want to accept it, and we don’t need duplicate systems of approval.”

So there you have it: Like it or not, both d’Aquino and the Chamber of Commerce tell us, this is what you’re going to get--even if most Canadians don’t want to accept it! Because, after all, big business is in charge and big business is setting the agenda.

Former Mulroney trade official Michael Hart spells it out even more clearly: “We already have deepening silent integration to a depth that now goes far beyond the free trade agreements . . . we need to acknowledge that a broad convergence in policy and ideas already exists between the two countries.”

He and other business, political and media champions of the Americanization of Canada see no problem with this process of “deep integration.” After all, they argue, we have “largely shared values,” and already exist in a free trade partnership that is “more of a practically functioning customs union than the Europeans have, in every way which you look at it.”

I sometimes think that big business and some of our other rabid Americanizers won’t really be satisfied until the Stars and Stripes flies from the Peace Tower.

I’m sometimes asked: what’s wrong with NAFTA? If I had to sum up my analysis of this agreement in only a single sentence, I would say that it is entirely beyond my comprehension how any Canadian politician could have negotiated and agreed to a trade deal that is so blatantly harmful to the best interests of our country and its citizens.

NAFTA, which the Tories negotiated and the Liberals now strongly support, broke new ground in several areas, including some that were only indirectly related to existing trade agreements, expanding into services, intellectual property rights, trampling on domestic legislation to favour corporate rights, compromising government’s ability at all levels to take action in many key areas, including health care, education, and other areas where the public interest would normally prevail over corporate interests.

Do most Canadians really want to create a world in which owners of capital based in foreign countries enjoy greater rights than those of our own citizens? Do we really want to create a world in which democratic regulation of economic activity is replaced by an international regulatory regime driven by the needs of big business, where the most important decisions about our economy are taken out of the hands of democratically elected governments?

Well, that’s exactly what our political leaders have done--and incredibly, without question, Ottawa is fully prepared now to do it once again in the FTAA and the GATS.

What’s new about the trade deals we’re already locked into, and those still being negotiated, is not that they promote trade. What’s new is that they promote trade (and investment) at the expense of everything else.

Take NAFTA’s infamous Chapter 11, for example. It gives foreign corporations the right to directly sue our government for passing laws in the public interest, if those laws in any way lessen or threaten their profits. I cannot imagine any Canadian who understands NAFTA’s Chapter 11 having the slightest modicum of confidence in the ability of our trade negotiators, or their political masters.

One of the worst aspects of the FTA and NAFTA is the inability of future governments to change course should they so desire. For example, if Ontario Hydro were to be privatized, and if U.S. corporations entered the power business in the province, and if privatization and deregulation turned out to be a terrible disaster for the people of Ontario, not only would the provincial government have to reimburse U.S. investors for their assets if public ownership were to be reintroduced, but the government also would have to pay these corporations enormous punitive potential-profit compensation. Essentially, it would be impossible to reintroduce public ownership. Just as it is now likely impossible to introduce public automobile insurance, or expand Medicare to cover drugs or dental care.

In short, the FTA and NAFTA both tie the hands of future democratically elected governments, producing a policy freeze that will never thaw as long as these agreements remain in force.

In The Vanishing Country, I wrote about the things that I believe must happen if Canada is to survive as an independent country. The list begins with stopping the growth of foreign ownership and foreign control, but we can’t do that because of the poorly-negotiated investment clauses in NAFTA. So, to regain our economic freedom, we first have to exercise our right to withdraw from the FTA and NAFTA. Among the enormous benefits to be derived from such an abrogation would be to preserve in Canada the many values and traditions that differentiate us from Americans. Differences in crime and violence, in health care and social programs, in education, in the role of religion in society, in immigration and multiculturalism.

More than twice as many Americans as Canadians (44% to only 21%) say that they are small-c conservatives. In a list of 112 countries, when the income of the richest 10% was compared with the income of the poorest 10%, Canada was a poor 23rd in terms of the fairness of distribution of income, but the United States was way down in 71st place. The poor in the U.S. are much poorer than the poor in Canada. As a percentage of total income, the lowest half of the Canadian population receives almost twice as much as the lowest half of the American population.

Michael Adams, in his recent book Fire and Ice, puts it this way: “We look at you Americans and see the National Rifle Association, rigged elections, Christian fundamentalists, and pre-emptive wars. In contrast, in Canada the societal goals are peace, order and good government in a country where the population recognizes the importance of public transit, education, health care, and many other public benefits to society.”

There are many other fundamental differences between Canadians and Americans. So, all things considered, why should we follow the advice of our would-be Americanizers?

Respected economist John Helliwell puts it well: “Further harmonization with the U.S. is both bad economics and bad politics.” Exactly.

To use Frank Underhill’s famous phrase, what will be left will be at best “a geographic expression instead of a country.”

And why choose to integrate with a country that is, among the 30 OECD countries, consistently in the bottom three with the worst records in terms of poverty, economic inequality, CO-2 emissions, infant mortality, homicide, health care coverage, teen pregnancy and voter participation--a country projecting combined federal budgetary deficits for 2003 and 2004 of at least $930 billion dollars, and, in the words of U.S. economist Paul Krugman, “deficits of $300 billion a year as far as the eye can see.”

And why would we want to integrate further with a country where states are going bankrupt, discharging criminals from their jails and penitentiaries prematurely, not prosecuting criminals, cancelling drug plans for the mentally ill and child care and other child support services, cutting back on the school year, laying off prison guards and police officers across the country?

And a country where an estimated 75 million men, women and children were without any health care insurance at some point in the last two years.

Listening to d’Aquino, Gotlieb, the Fraser and C.D. Howe Institutes, much of our media and our long list of big-business Americanizers, it’s difficult to draw any other conclusion but that our reliance on our exports to the U.S. really leave us no choice but to toe the line, to get in step with U.S. policies--or else!

According to Allan Gotlieb, Canada “generates 40% of its annual income from exports.” According to the National Post’s Diane Francis, “exports now represent 43.1% of our economy” and the NAFTA “agreement is the most beneficial policy initiative in Canadian history.”

According to the Globe’s right-wing continentalist Draw Fagan, “almost 40% of everything made here is purchased in the United States and, thanks to the FTA, Canada now exports 45% of everything it makes.” Anne Golden, head of the Conference Board, tells us that our “exports of goods and services represent 45% of our GDP.”

Brian Mulroney’s former right-hand man, Paul Tellier, until recently in charge of Canadian National (which has become 70% foreign-owned), says “45% of Canada’s economy is dependent on trade.”

Economist Sherry Cooper says, “Today, trade represents 45% of the Canadian economy,” which “has enhanced Canadian growth and employment.”

So what do all these statements have in common?

What they have in common is that all these people don’t know what they’re talking about. Either they’re weak on economics, or they have intentionally set out to mislead Canadians about our supposed great vulnerability.

Let’s see, now,

just how their logic and the math work out. If 45% of our GDP is accounted for by exports, and 37% by imports, and this adds up to 82%, does that mean that only 18% of our economy is not related to trade?

Well, of course that’s absolute nonsense. Just walk down Main Street and have a look around. Snow removal and street cleaning, health, education, construction, restaurants, dry cleaning, etc., etc., etc., are almost all, at the most, related to trade in a very small way, or not at all. The vast majority of our GDP is accounted for by activity in Canada, by Canadians, producing goods and services for the Canadian market.

Philip Cross, Chief of Current Analysis at Statistics Canada, in two recent issues of the Canadian Economic Observer, explains that, if double and triple counting is removed, the real value-added contribution of exports is less than half the GDP figures so often quoted.

This said, then, just how vulnerable are we should we decide not to toe the American line in the future? Vulnerable? When 54% of our entire trade surplus with the U.S. comes from our exports of oil, natural gas and electricity? Anyone who thinks we’re vulnerable here must be living in a cave. We supply 99% of U.S. electricity imports, 94% of their natural gas imports, 17% of oil and 35% of their uranium used for power generation.

Then, if you take away the huge annual U.S. surpluses in services, mostly imports by American branch plants in Canada from their parent companies in the U.S., and then subtract the huge $30 billion-plus annual U.S. investment income surplus with Canada, our overall surplus with the U.S. shrinks to less than $11 billion, or less than 1% of our GDP.

* * *

A few years ago, I had lunch with long-time CIA agent Philip Agee. I asked him if there were many CIA agents working in Canada. He said that, since Canada wasn’t his beat, he wasn’t sure how many exactly, but wasn’t there a great deal of U.S. direct investment in this country?

I told him that in fact there was more U.S. direct investment in Canada than in any country in the world.

He said, “Well, you’ve just answered your own question.”

I said, “Want to quantify your response?”

Agee said there would likely be a minimum of 50 full-time CIA agents operating in Ottawa, Toronto, Montreal, Calgary, and Vancouver.

What’s the point of this anecdote in relation to our supposed vulnerability?

First of all, U.S. corporations in Canada have hundreds of billions of dollars in assets. These corporations are for the most part very profitable and reliable year-in, year-out assets for their head offices. Overall, Canada is the No. 1 customer for American corporations. Canada buys more goods from the U.S. than all 15 E.U. countries combined, and U.S. exports of goods and services to Canada, plus their investment income from Canada, exceed their income from any other country by an enormous $177 billion.

So, in relation to our homegrown cowards who tremble every time Cellucci or some other American grimaces or raises an eyebrow, despite what you so often hear from some of our own perpetually petrified plutocracy, Canada is no way near as vulnerable as the likes of Dobson, Gotlieb and d’Aquino would have us believe.

Millions of American jobs depend on their exports to Canada, the country that has been their No. 1 export market for the last 47 consecutive years.

Only very stupid people would set out to intentionally do serious long-term harm to their No. 1 customer and their No. 1 supplier of energy, if they thought the consequences would be highly detrimental to their own interests.

Any Canadian government with any kind of backbone would long ago have told the Americans that, if they don’t cancel their egregious 27% softwood lumber tariffs and stop their 20-year harassment of our lumber exports, we will immediately put an equivalent 27% duty on all of our oil, natural gas, uranium and electricity exports to the U.S.

Do you know what would have happened in Washington if we had done that? The very next day, a delegation from Congress would have sought a meeting with President Bush, urging him to dump the softwood lumber lobby before their states suffered billions of dollars worth of irreparable higher energy costs and serious damage to their economies.

Instead, Canadian government and corporate cowards are down on their knees pleading for “big ideas” and “grand bargains,” which means giving away what remains of our sovereignty, our integrity as a nation, if only the Americans will please, please, please, not interfere with our exports.

So, given all of this, what can we expect in the future?

In one of the more ridiculous statements emanating from our Americanizing plutocracy, d’Aquino told Canadians last May that “Much of Canada’s influence in the world derives from our perceived influence with the U.S. Regaining our influential role with the U.S. will also discourage its unilateralist propensities and encourage it to re-engage with the UN.”

So what we must do, according to d’Aquino, is negotiate a resource security pact as part of a comprehensive agreement rather than just aiming for incremental steps. Above all, we should “consciously strengthen our ties to the U.S.” in case “the elephant rolls over.”

Maybe it would be better if we stopped getting into bed with the elephant.

For the Canadian Chamber of Commerce, we should recognize and accept U.S. standards and regulations, and “our nation’s No. 1 foreign policy priority” should be based on our trade with the U.S.

Let’s consider this proposal in relation to the recent remarks of American John R. MacArthur, publisher of the influential Harper’s magazine. The present U.S. administration, he tells us, “is more narrow-minded, more ideologically driven, more hostile to international cooperation than any since Ronald Reagan’s first term, back when the Cold War still raged.”

And still, our Foreign Minister, Bill Graham, said in a recent newspaper interview that he is personally interested in expanding North American integration beyond trade and tariffs into social policy. “NAFTA could be expanded to cover social, environmental, justice, and other issues,” he said.

Integrated social policy? Integrated environmental and justice policies? Does Graham really mean what he said? The implications are chilling.

There’s no doubt about what our CEOs want. For d’Aquino, visiting Washington last year with more than 100 of his organization’s leading and most influential CEOs, “we feel that Free Trade One [NAFTA] was a transforming chapter in the relationship between Canada and the United States. I would say that this is the second chapter of that transforming initiative.”

And there’s no holding back; everything should be up for debate and on the table. I would say that if his “second chapter” becomes a reality, you can close up the book on Canada once and for all.

So, given all of this, what’s likely coming down the pike? What will we likely see in 2004 and beyond?

We already know that John Manley, Pierre Pettigrew and Bill Graham not only don’t want to ditch NAFTA; they actually want to substantially expand it. Then there’s our next Prime Minister. As I wrote in The Vanishing Country,

“for Paul Martin, eliminating the border is overwhelmingly a commercial issue, not a sovereignty issue. And how does he and his former Department of Finance feel about the growth of foreign ownership and control in Canada? The answer is straightforward: please give us more of the same, much more. Come on in, buy up and take over the country.

The last two Speeches from the Throne waxed eloquent about the warm reception foreign investors could expect, (although they were discreet enough not to mention that much of the financial warmth was certain to come from our own Canadian banks).

There probably will be one change relating to foreign ownership and foreign control and our melding into the American Empire when Martin becomes Prime Minister. It will probably proceed even faster than under Brian Mulroney and Jean Chrétien. Let’s go for it: “the Big Idea” and “the Grand Bargain” and “a NAFTA Plus.” By all means, let’s further integrate into the U.S. and their enormous record trade and current account deficits, and their trillions of dollars in budgetary deficits and those state governments so close to bankruptcy that some can’t even produce budgets. And, by all means, let’s sell off the ownership and control of the rest of our country, a guaranteed certainty in “the Big Idea” and “the Grand Bargain.” Who cares that our grandchildren will grow up to be tenants and squatters in what should have been their own country?

Well, in fact, most Canadians do care. In the most recent poll on the subject, Ekos found that, while almost 40% of Canada’s private sector élite favour Canada becoming “more like the U.S.,” only 8% of the general public in Canada agree. And well over half of Canadians say that it’s not a good idea that American values are spreading in Canada.

Nor do most Canadians think, as has been so often erroneously claimed, that our relationship with the U.S. is “like family” or “best of friends.” In the 2002 Maclean’s year-end poll, only 5% said “like family,” and only 17% thought we were “best of friends.” And this was, of course, before the U.S. invasion of Iraq.

A recent Canadian Council of National Unity poll showed that two-thirds of Canadians felt that maintaining the sovereignty of Canada is the most important challenge now facing our country.

But how does the federal Liberal government feel?

Aside from MPs Alex Shepherd, Byron Wilfert, and John Godfrey, is there anyone in the entire Liberal caucus who is concerned about Canadian sovereignty?

If so, exactly where have they been for the last decade?

After the Liberals reneged on their solemn 1993 election promise to renegotiate the FTA and NAFTA, did they all simply forget why they had made that promise? Or was it all just a phony ruse to gain electoral support? It certainly seems that way.

Never mind that a stunning 89% of Canadians think that the quality of life in Canada is better than in the U.S. (Environics, Summer 2003).

Never mind that three in every four Canadians believe that the Canadian government should have the full right to regulate foreign ownership in the public interest, and that the government should have the right to give preference to local suppliers over foreign corporations, neither of which we can do under NAFTA.

Never mind that two-thirds of Canadians believe that the U.S. government already has too much influence in political decision-making in Canada.

Since Canada began, we Canadians have firmly resisted the idea that, just because the U.S. is so much bigger and more powerful, we must simply follow the American line.

Only the most naïve of the most naïve fail to understand that increasing American ownership and control and increasing economic, military and other integration will inevitably lead to increasing across-the-board policy harmonization. And, to repeat, it won’t be the Americans harmonizing to Canadian policies and standards. The progressive erosion of Canadian sovereignty will be almost impossible to reverse. The ability of Canadians to act in their own best interests will diminish daily. The vitally important and valued differences between Canada and the United States will disappear.

Yet, incredibly, our sellouts, our Americanizers, our anti-Canadians, our powerful, wealthy plutocracy say that our quality of life is overrated, that our social spending has “tax disadvantages,” and we should accelerate the integration of our country into the U.S. It’s “inevitable” and the need is “urgent”--even if Canadians “don’t want to accept it.

* * *

I firmly believe that there’s still a chance that we can save Canada, but I’m also convinced that we had better start taking steps very soon to halt the Americanization of our country, before the process has indeed become irreversible, and before we’ve made the long transition from colony to nation, then back to a weak, subservient U.S. colony called Canada.

I believe that Canada is too good a country to let a bunch of greedy corporate CEOs and inept politicians destroy it.

But Canadians had better wake up soon before the nation they love sleepwalks into oblivion. The “Grand Bargain” is no bargain at all, but is prohibitively expensive, and the “Big Idea” is really nothing more than a very bad idea for all Canadians who cherish their country.


(Mel Hurtig is a noted Canadian publisher and the author of many best-selling books, including his latest, The Vanishing Country, the main themes of which he has outlined and updated in this three-part series.)