Canada’s advantage shredding in real time
The damage is done.
Finally propelled into action by compounding economic losses, authorities are at last taking measures that will restore order, allow people to get back to work and business to resume after the disruptions of the so-called “Freedom Convoy” demonstrations.
But Canada has taken a reputational hit that will be hard to overcome. The emergency steps in Ontario and the escalation of police intervention may resolve the immediate crisis at hand, but the longer-term harm will be much harder to undo.
Over the past two weeks, we have seen a flagrant disrespect for so many virtues that made the Canadian economy an attractive place to invest and grow.
What started as an outpouring of frustration by demonstrators weary of COVID-19 rules has soured into a toxic mess of law-flaunting intolerance that has seen hundreds of Ottawa retail workers thrown out of their jobs, schoolchildren threatened and a days-long shutdown of busy border crossings — all funded in part by what looks to be foreign money.
We’ve heard lots about the immediate economic harm — auto plants shutting down, parts manufacturers cutting shifts on both sides of the border, fruit and vegetables not getting through, livestock not getting their feed, already-fragile supply chains facing new fractures. Economists have downgraded their growth projections for the first quarter of the year, with the damage inflicted by the protesters coming hard on the heels of widespread workplace illness due to the Omicron variant over December and January. Canada’s economy is likely contracting a bit right now, and prices are rising.
Indeed, that was enough economic pain to push interim Conservative Leader Candice Bergen out of her complacency about the protesters this week, and to ask them to leave.
We know, from having gone through many rounds of pandemic and climate crisis over the past couple of years, that Canada’s businesses and workforce will figure out innovative ways to get by. They’ll drive the extra mile to find another border crossing or fill in the missing links of their supply chains with temporary replacements.
But the world is watching, and what it sees is Canada’s competitive advantage being shredded.
Canada’s selling point is its boringness, our adherence to the rule of law even when it’s inconvenient, and our dependability. We are sticklers for jurisdiction and consultation. We were calm, moderate and earnest while the United States and Europe buckled with populism. The “disruption, intimidation and chaos” that Premier Doug Ford referred to on Friday is anathema to our collective pitch.
It was certainly not a throwaway line when Toronto Mayor John Tory reminded us Friday of Canada’s founding principles — peace, order and good government.
Not that we were ever a perfect oasis for investment and growth. Excellence in our economy has often been held back by conflicting layers of federal and provincial bureaucracy and ever-changing rules around environmental approvals. Allowing the protesters to tighten their grip on the Canadian economy for two weeks has compounded suspicions that governments in Canada are unco-operative and ineffective when it comes to fostering business conditions.
And so even as Prime Minister Justin Trudeau met with Ford, key ministers, opposition leaders and U.S. President Joe Biden, business leaders were also meeting in an attempt to save the furniture.
“Allowing these illegal closures to continue will also have serious economic and reputational consequences for the years ahead,” said a statement spearheaded by the Canadian Chamber of Commerce and signed by more than 100 of the country’s main business associations.
“The blockades not only strike against the rule of law that protects our rights and freedoms, but also undermine Canada’s international reputation. We are already hearing calls to move investment, contracts, and production from Canada because of our inability to guarantee timely delivery to international customers.”
The business associations called for strong and united leadership in bringing the blockades to an end, immediate measures to protect critical infrastructure, and all available tools to be used to end the lawlessness.
But even if the emergency declared by Ford, the commitment from Trudeau to act quickly, and the determination of police forces succeed in ending the blockades, Canada has now become noted for its tenuous grasp on law and order.
Even if federal and provincial governments move quickly to relax COVID-19 restrictions that have made some Canadians so restless, Canada now has the reputation of holding on too long, playing chicken with the careful balance between health and economics that has kept us afloat through the pandemic.
“We’ve already got a strained global supply chain. We don’t need this,” Bank of Canada governor Tiff Macklem said Wednesday about the blockades.
Macklem went on to urge businesses to reinvigorate their investment plans if they want to see a full recovery.
That makes sense from the ivory tower of the central bank.
But it will be easier said than done.