How Canada can fi­nally break free of its de­pen­dence on the U.S.

The Hamilton Spectator - - Opinion - THOMAS WALKOM Thomas Walkom is a Toronto-based colum­nist cov­er­ing pol­i­tics. Fol­low him on Twit­ter: @tomwalkom

How can Canada break its de­pen­dence on the United States? This ques­tion has be­dev­illed both the left and the right since 1945.

Con­ser­va­tive Prime Min­is­ter John Diefen­baker tried to an­swer it and failed. So did Lib­eral Prime Min­is­ter Pierre Trudeau. In the 1970s, dur­ing one of Canada’s pe­ri­odic bouts of eco­nomic na­tion­al­ism, the de­pen­dency ques­tion was front and cen­tre. But by the 1990s, free trade ap­peared to have made it moot. Now, spurred by the ex­cesses of U.S. Pres­i­dent Don­ald Trump, it is back on the agenda.

The lat­est or­ga­ni­za­tion to ad­dress Canada’s de­pen­dency is the Pub­lic Pol­icy Fo­rum, a non-par­ti­san think tank funded by gov­ern­ments, busi­ness and some unions.

In a re­port re­leased Thurs­day en­ti­tled “Di­ver­si­fi­ca­tion not De­pen­dence,” it makes a com­pelling case for Canada to es­cape the “honey trap” of its re­liance on the U.S. by mov­ing quickly to boost both eco­nomic and po­lit­i­cal re­la­tions with China. Writ­ten by for­mer journalist Ed­ward Green­spon and for­mer Ot­tawa man­darin Kevin Lynch, it says the best way to do this is not through an all-en­com­pass­ing free trade treaty, as Prime Min­is­ter Justin Trudeau has sug­gested. Such treaties can take years to ne­go­ti­ate.

As well, in the just-com­pleted U.S. Mex­ico Canada Agree­ment, Ot­tawa ef­fec­tively gave Wash­ing­ton the right to veto any fu­ture full-blown free trade pact Canada might try to strike with China.

Rather, the au­thors say, Canada should start small by ne­go­ti­at­ing sec­toral deals with China that are not sub­ject to the U.S. veto — in spe­cific ar­eas such as agri­cul­ture, en­ergy, tourism and in­sur­ance.

And in ar­eas of mu­tual ben­e­fit, such as fight­ing cli­mate change, Ot­tawa should pur­sue bi­lat­eral po­lit­i­cal agree­ments with Bei­jing. China’s ag­gres­sive stance on cli­mate change, the au­thors say, makes it “a nat­u­ral part­ner for Canada.”

Nei­ther Green­spon, a for­mer ed­i­tor-inchief of the Globe and Mail, nor Lynch, who served as Ot­tawa’s top civil ser­vant un­der Stephen Harper, can be ac­cused of be­ing anti-es­tab­lish­ment. Yet in this re­port, they use an anal­y­sis usu­ally as­so­ci­ated with the na­tion­al­ist left to de­scribe Canada’s predica­ment.

In the past, they write, Canada’s de­pen­dence on the U.S. was ame­lio­rated by the fact that this coun­try en­joyed “spe­cial sta­tus” in the Amer­i­can sphere of in­flu­ence. But even be­fore Trump be­came pres­i­dent, that spe­cial sta­tus was erod­ing.

Un­der Barack Obama, for in­stance, the U.S. re­fused to share the costs of cre­at­ing a new bor­der cross­ing at Wind­sor that Canada deemed es­sen­tial to its econ­omy.

Mean­while, even as Canada loses this spe­cial sta­tus, the au­thors write, its busi­ness class re­mains too com­fort­able. Smaller and medium-sized busi­nesses fo­cus on the do­mes­tic mar­ket. Big busi­ness tends to be for­eign-con­trolled and U.S.-ori­ented.

Over­all, Cana­dian busi­ness is al­low­ing it­self to be left be­hind as the U.S. de­clines and China rises. Lit­tle more than 10 per cent of small and medium-sized Cana­dian busi­nesses ex­port at all and only 1 per cent ex­port to fast-grow­ing economies like China. As the au­thors put it: “While Canada is a trad­ing na­tion, it is not a na­tion of traders.”

The Pub­lic Pol­icy Fo­rum is cer­tainly not the first to call for more trade with China. It is com­mon­place to say that Asia is the mar­ket of the fu­ture. Yet there is a sense of ur­gency to this re­port that is un­usual.

Amer­ica, the au­thors write, will al­ways be im­por­tant to Canada. Ge­og­ra­phy makes this so. Con­versely, they have no il­lu­sions about China and its vari­ant of au­thor­i­tar­ian cap­i­tal­ism.

But the U.S., they say, is no longer the sin­gle driver of the world econ­omy. Nor is it re­li­able. It is turn­ing its back on the idea of a rules-based in­ter­na­tional sys­tem – a sys­tem that ben­e­fits smaller coun­tries like Canada – while China is pro­gress­ing ten­ta­tively in the op­po­site di­rec­tion.

The or­der is rapidly fading. Canada, they write, has to change too. Quickly.

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