Canada Could Become Another Puerto Rico

Toronto Star, May. 4, 2002

`Deep integration' means deep trouble

by David Crane

CANADA TODAY is under threat. The country's capacity and even existence as an independent nation, able to shape its own political, social and economic future, are at risk.

But the threat is not external; it comes from within, from academic economists, business leaders, civil servants and politicians who advocate what they call "deep integration" with the United States.

"Deep integration" means, in reality, subjugating many of Canada's policies to those of the United States - including trade, immigration, energy, water, our dollar, taxation, defence and the environment - but without any corresponding voice in the governance structure - that is, the U.S. government - where decisions affecting many aspects of Canadian life would be made.

In effect, Canada could become another Puerto Rico, subject to many policies of the United States, but without a serious political voice in those decisions. While Texas, New York, Michigan and California have a say, through the U.S. political system, Canada would have none.

Canadians would not only become almost powerless in addressing their fundamental future economic concerns, but would also lose the capacity to control the social environment and the ability to adjust to change because social policy would also end up being driven by U.S. policies.

The Europeans have built an economic and social partnership to address shared problems by creating shared political and administrative institutions. But it would be na´ve to believe that similar institutions could be effectively created and made to work genuinely in a Canada-U.S. or a Canada-U.S.-Mexico partnership.

The United States, as an imperial superpower, acts on the basis of economic and military power, not shared decision-making, and, given the country's great size, would not consider serious sharing of decisions and power with a much smaller country. The United States is instinctively unilateral in its approach.

If Canada is to pursue "deep integration" with the United States, then logically we should seek political union as well so that Canadians in the different provinces would have some opportunity to influence decisions. But this logical implementation of "deep integration" would also mean the end of Canada as a distinct geopolitical entity and the conversion of our provinces into U.S. states.

The most recent example of "deep integration" thinking comes from Wendy Dobson, a professor at the Rotman School of Management at the University of Toronto. In a study for the C.D. Howe Institute, Dobson urges that Canada advance a "Big Idea" to show the Americans we are still reliable partners in the aftermath of Sept. 11. Her "Big Idea" is "deep integration."

For "deep integration" to happen, she says, we have to make more concessions; for example, giving the United States whatever access to our energy that our neighbour wants, even if that means dropping our pledge to deal with climate change through the Kyoto agreement.

As well, we should start talking about how we would price water exports to the United States; take on major new defence expenditures (presumably by buying lots of U.S.-made military technology); give up policies on culture and agriculture, including the Canadian Wheat Board; and so on.

Dobson has in mind what she calls a "strategic bargain," in which Canada and the United States, over time, would move to a customs union with a common (made-in-Washington?) trade policy toward the rest of the world and the free movement not only of goods and services but also of people and capital. (So much for maintaining Canadian ownership of banks, TV networks or transportation systems.) This would also affect foreign policy: If the United States decided to use trade measures to punish China, attack the Europeans or demonize the Cubans, we would have to follow suit.

Regrettably, we've heard little political response to calls for "deep integration." The Liberal party is badly divided, with only MPs John McCallum and John Godfrey raising serious concern. Industry Canada's research program advances "deep integration" and the Canadian Alliance champions the idea.

We clearly need to improve movement across the Canada-U.S. border. But we have no reason to think we have to give up the country to accomplish this. All countries in the developed world are trying to adjust to deep economic and social changes by creating institutions that facilitate more integration but also by creating institutions of governance that allow nations to influence their economic and social environment. Calls for "deep integration" do the opposite by subjecting Canadians to decisions made elsewhere without any voice in making those decisions.

---- David Crane is The Star's economics editor. His column appears Tuesday to Thursday, Saturday and Sunday. He may be reached at