Bringing Down the Barriers|
Is free trade with the U.S. a ticket to a brighter future or will it destroy a way of life?
The issue of free trade with the United States is older than Canadian confederation and as divisive as any on the political agenda. In 1988, the debate reached a climax, producing stories of both success and despair and the beginning of fundamental change in the country.
|In the late 1980s, Prime Minister Brian Mulroney favoured closer economic ties with the United States. The two countries carved out a free trade agreement that would see trade barriers gradually shrink. Pictured here, Brian and Mila Mulroney and Ronald and Nancy Reagan singing When Irish Eyes are Smiling at the "Shamrock Summit" in Quebec City, 1985.
Free trade is trade between countries unhindered by tariffs (taxes) or other obstacles. At its heart is the fundamental question: should Canada seek closer trade ties to the United States or should it try to forge its own economic destiny?
Canada's economic approach had always been characterized by an attempt to create an east/west trade flow, across the country. That was the intent of The National Policy a system of tariff walls erected by Canadas first prime minister, John A. Macdonald.
Successive governments have tried ever since, to stimulate and encourage trade between provinces. Now Canadians were considering a major shift in their economic perspective: stronger trade ties to the south
In the early 1980s, Bob Crockford had his answer when he looked south. Crockford owned Valley City Furniture in Dundas, Ontario, a community located near Toronto and less than an hour from the American border.
"We drew a circle around Dundas which was about 500 miles to see how far you could drive in a day or where you could fly in about an hour, hour and a half."
Crockford discovered that 106 million people lived in cities within the circle.
"This was real eye-opener because we were used to flying to Edmonton to get a high school job, or flying to Calgary or out to Moose Law and Gimley, Manitoba and all manner of other places. And suddenly we realize that it was closer to Dallas than it was to Regina."
By 1988, most of Bob Crockfords furniture was sold to the United States, and the issue of developing more open trade arrangement with the United States was hottest topic in the country.
At the centre of the free trade storm was Prime Minister Brian Mulroney. The Conservative leader had once been an opponent of free trade. Now, he was its biggest advocate, prompted by mounting U.S. protectionism, pressure from the business community and the recommendations of the Macdonald Commission on the economy.
In 1986 and 1987, Canadian and American negotiators hammered out a wide-ranging free-trade deal that it would phase out customs duties on all goods crossing the Canada-U.S. border.
Supporters saw it as ticket to a brighter future. It was the countrys best chance of succeeding in the increasingly competitive global market. It would create jobs, attract foreign investment, and provide access to American consumers.
Opponents argued that Canadian manufacturers who relied on tariff protection would be decimated by free trade. And American branch plants would move back to the United States and take advantage of cheaper, non-union labour.
At the Inglis factory in Toronto, workers worried about what free trade meant to them. An American company, Whirlpool, recently had bought the plant where the average age of the workers was 47; the average seniority was 17 years.
Inglis union president Mike Hersh had heard that jobs would soon go south, especially if free trade became law.
"Newspapers were saying that there would be jobs elsewhere, but people working twenty years in a factory with a grade nine education didnt think they were going to get those jobs."
The concerns at Inglis were echoed across the country.
In 1988, a federal election was called and free trade was the main issue. The anti-free trade arguments became emotionally charged, focusing beyond the economic consequences. Opponents insisted that the Canadian way of life was in peril.
Liberal opposition leader John Turner also led the anti-free trade forces.
|Liberal leader John Turner led the anti-free trade forces during the 1988 federal election campaign. Pictured here, Turner and Prime Minister Brian Mulroney during a televised debate.
"Im not going to let Brian Mulroney destroy the Canadian dream, and thats why this election is more than an election, its your future."
Turner and others argued that Canada was a place of social justice and inclusiveness, a country where the state had the authority to direct and constrain the free market ideas that were not held dear in the United States. Canadian culture, social programs and the environment would be destroyed when the federal government loses its ability to direct and constrain the free market, opponents said.
One of those vocal opponents was Maude Barlow. In 1985, she co-founded The Council of Canadians, a citizen's group dedicated to the preservation of Canadian independence.
And in 1987, while Brian Mulroney was meeting Ronald Reagan at the "Shamrock Summit" in Quebec City, Barlow was part of "The Maple Leaf Summit", a gathering in Ottawa of trade unionists, teachers, environmentalists, womens groups and aboriginals, social and cultural movements. They formed the Pro Canada Network to fight free trade.
"The energy in that room was electric; I will remember it until the day I die. One after another, people from all walks of life and from all over the country committed themselves to building a citizens movement unparalleled in our countrys history. In spite of the daunting task before us, there was enormous joy and great hope for the future in the hall that day."
At Valley City Furniture, Bob Crockford urged his blue-collar employees to consider voting Conservative. He believed Canada must embrace free trade, or be left behind.
"You want an example of countries that dont trade with the world - take a look at North Korea and Albania. You like that, terrific! You happen to like better cars, better food, better hospitals and all the rest of it, free trade is the direction."
For many Canadians, it was frustratingly difficult to sort out the competing claims.
"I know as much about free trade as I do about flying the space shuttle," said one Canadian quizzed by a reporter.
At the end of the intense campaign, Brian Mulroney won the day with help from strong majorities in Alberta and Quebec where support for free trade ran high. The Conservatives once again formed a majority government, though the party had won less than half the popular vote.
Although Canadians remained divided on the issue, the free trade deal came into effect January 1, 1989.
Bob Crockfords family business prospered. As more and more tariff barriers fell, his company won contracts to build furniture for American courthouses. The workers at Valley City Furniture were confident they could compete in this new market.
But for workers at Inglis, a way of life was definitively over. Shortly after free trade came into force, the Inglis plant shut down forever.
"You cant make a machine for what they do in the States," Mike Hersh said. "Before free trade, Inglis was still a cash cow without any investment of capital, but take away the tariffs and protection ... forget it. What free trade did was expose Canadian manufacturing. The [plants] that succeeded were the ones where the industry was not foreign-owned and controlled."
In 1992, Canada signed the North American Free Trade Agreement (NAFTA), which extended free trade to include Mexico.
There's no consensus on Canada's free trade legacy. American investment in Canada increased and Canadian imports and exports to the United States more than doubled between 1990 and 1997. Critics contend that free trade resulted in a loss of 250,000 jobs by 1992 with the sale of Canadian companies or their movement to the United States or Mexico.