BRYAN GEE/THE GLOBE AND MAIL
Peter Donolo is vice-chair of Hill + Knowlton Canada. He was director of communications for former prime minister Jean Chrétien.
The close proximity of Canada Day and the United States’ Independence Day often leads to semi-obligatory paeans about how much Canada and the United States have in common.
Canada’s business and political elites are particularly prone to gushing about, as former prime minister Brian Mulroney characteristically put it, “the special relationship of two great nations is based on shared fundamental values – liberty and democracy.”
This year’s intersection of national celebrations is a moment not just to question the accuracy and relevance of that sentiment in 2021, but to consider how far apart our countries are heading, and – most important of all – how Canada can best pursue its own interests and sustain and promote its values.
The Trump presidency should serve as a wake-up call for Canadians. We saw how easily the assumptions that undergird decades of cross-border consensus can be shredded by a demagogue with no respect or understanding of institutions or of trade and diplomatic norms. Relations with all the United States’ allies was a zero-sum, win/lose game under Donald Trump – and that very much included Canada.
So great has been our relief at Joe Biden’s victory, and the return of a palpably “normal” U.S. administration, that Canadians are ready to dismiss the Trump years as a bad memory – an extended nightmare that is thankfully over.
That would be a serious mistake.
It’s still not clear whether the Trump presidency was an aberration, or a harbinger of things to come.
The continuing Trumpist miasma engulfing the Republican Party should give us pause. So too should the reality that a significant proportion of the American population continues to deny the legitimacy of democratic elections, to embrace the politics of white nationalism and to countenance political violence. These are not the signs of a healthy, pluralist democracy.
Without question, the Biden administration is a net positive change for Canada. Its domestic priority of increasing high-end personal and corporate taxes will help even the playing field for Canada, making our own private sector more competitive. The same goes for improved U.S. environmental and labour standards and increases in the minimum wage – all of which are also high on the Biden priority list.
And the new President’s commitment to multilateralism is a huge plus for Canada. From action on climate change to countering the power and influence of China, Mr. Biden understands that real progress can only happen by working in concert with other countries. This is all good news for Canada, not just because it promises real movement on an array of vexing international issues, but because our country has traditionally done very well in multilateral forums.
But a return to normal also means a return to normal American practices: aggressive buy-American policies, trade practices that are dictated by domestic politics, and a selective honouring of trade agreements.
Three successive free trade agreements with the U.S. over the past three decades have brought significant economic benefits to Canada. But they have never been the panacea that their most ardent advocates claimed. They have not shielded our industries from capricious or unfair practices. Because they have not – and cannot – alter the fundamental power imbalance between our two countries and the Americans’ very natural inclination to do what all great powers always do – make (and on occasion, break) the rules to suit their perceived economic or political interests.
This makes the credulity of Canadian leaders even more lamentable. They express shock and outrage when the new U.S. administration cancels the Keystone XL Pipeline – despite having campaigned to do exactly that. Or consternation that it is “unwilling” to end its war on Canadian softwood – one carried on by successive U.S. presidencies of all stripes. The only surprising thing in all this is that our politicians continue to be surprised.
If Mr. Trump was the wake-up call, the Biden administration has demonstrated why it would be wrong for us to hit the snooze button. The only people who can look out for Canada’s interest are Canadians.
In the spirit of the season – and in tribute to a document that has inspired the world – it’s time for our own Declaration of Independence.
The point isn’t to renounce our trade agreements with the U.S. – they are too valuable to our economic well-being. Rather, it’s to reduce our vulnerability. Indeed, the tools for doing that are all at hand. It’s just that the muscles have atrophied from the relatively easy reach to the giant market across our southern border. It’s high time for a little stretch.
It’s one of life’s lessons that independence requires self-discipline. What’s true of individuals is also true of nations.
In Canadian terms, that means dealing with the continuing problem of interprovincial trade barriers, which a 2019 Senate report rightly termed a “national embarrassment.” More than an embarrassment, they’re a significant drag on our economy. The International Monetary Fund estimates that removing these barriers would increase Canada’s productivity by almost 4 per cent annually – a boost of almost $90-billion each year. Provinces signed an agreement to work toward freer trade four years ago, but little progress has been made. Here’s where leadership – tough, determined leadership – can make a difference.
Independence also means distributing one’s eggs among a larger number of baskets. The expansion of Canada’s export markets has been an on-again, off-again goal for Canadian governments since former foreign affairs minister Mitchell Sharp’s “Third Option” paper in 1972. Being party to a trade agreement needn’t limit a country’s ability to diversify trading partners – even when Britain was a member of the European Union, it still sent fully half of its exports outside of the EU. Interestingly, Canada is already making headway in export diversification. Over the past two decades, the U.S. has gone from being the destination for 87 per cent of our exports to 74 per cent in recent years. China, a country with whom we have had particularly ragged relations of late, has actually once more increased its imports from Canada.
That last point is important. With our population and geography, we depend on exports to enjoy a high standard of living. And the areas of real growth for us are, by definition, the fastest-growing economies in the world – not Canada’s traditional Western allies. We’ve shown we can make inroads. Why not aim to further drive down the U.S. proportion of our exports to 50 per cent over the coming decades – not by curtailing sales to Americans, but by stepping up the pace in other markets.
In its three reports to the federal government between 2017 and 2019, the independent Advisory Council on Economic Growth pointed the way ahead for Canada. Some of its recommendations, such as the Infrastructure Bank, are being implemented. Many others – such as fostering innovation, removing the barriers to capital that keep our companies small or force them into foreign hands, or transforming our country into an “agri-food superpower” – have yet to be taken on in earnest.
The road to independence isn’t without risk. But the risk of leaning on Uncle Sam are far greater. At best, we make our country’s economic priorities subordinate to the vagaries of domestic U.S. politics and interests. At worst, we tie ourselves to a country at war with itself – perhaps even lurching toward authoritarianism and political turmoil.
The truth is that the bromides about Canada and America’s “shared values” have always obscured an important fact that is at the very core of Canada Day: We came into being as a country precisely and explicitly so we would not become American. From Manifest Destiny through the various stages of American Empire, we’ve sustained that independence – if sometimes a little tentatively.
This new era, with its own challenges, requires a renewed commitment by another generation to reaffirm our independence once again.
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