Module Four |TEXT |QUESTIONS |RESOURCES |

# Canada/US Relations

By Robin Mathews

1. The USA: High Profile In Canadian Life
2. A Definition: Canada/US Relations
3. "International" Unions
4. Religious Organizations Cross Borders
   1. US Religions And US Character
   2. How Well Do We Know Each Other?
   3. Service Clubs And The US Character
5. Canadian Traditions
   1. The Psychology Of A Smaller Power
   2. New Reality In Canada
   3. Why Canada Is Changing
   4. Americanization
   5. Foreign Ownership And "Inferiority"
   6. Cultural Takeover - Two Meanings.
6. Historical Perspective
   1. Loyalties In Crisis
   2. The North Atlantic Triangle
   3. The Monroe Doctrine
   4. A Move Towards Independence
   5. Britain And The Possibilities Of Empire
   6. Three Choices For Canada
7. British Ties
   1. Winston Churchill On Empire And US Power
   2. Canada Uncooperative
8. US Ties
   1. Myths About Expansion And Empire
9. Canada In The US Empire
   1. Mackenzie King And A Subordinate Position
   2. Not Three Choices - Only Two
   3. Canada And The Force Of Destiny
   4. A New Voice For Independence
10. Military Relations And Independence
    1. Canada / US Relations In The Cuban Crisis
    2. The British And Canadians In War
    3. The US Pursues Its Interests
11. Canadian Independence And US Dominance: A Pattern Of Tension
    1. How Canada/US Relations Work: Canada's Merchant Marine and the C.S.U.
    2. Canada After The Second World War
    3. A US Criminal To The Rescue
    4. The Avro Arrow
    5. The Implications of the Cancellation: Canadian Excellence Does Not Exist
12. Nationalists And Continentalists
    1. Centennial Year And An Awakening
    2. Canadian Film In The US Empire
    3. The Charter Of Rights And Freedoms And US Individualism
    4. Legislating A Place In The US Empire
13. Free Trade - A Definition
    1. Free Trade As Imperial Policy
    2. US Power In The Postwar World
    3. Canada And The US - A Clash
    4. Two Tries: Diefenbaker And Trudeau
14. Towards Free Trade
    1. The Main Arguments
    2. What Canada Didn't Get
    3. What Has Free Trade Done To Canada?
    4. Two Things Free Trade Has Done
    5. A Short List Of Free Trade Rules
15. Summary - With A Difference
16. From 1935 To 1995

The history of Canada's external relations since 1760 has chiefly involved Canada and "the mother country," Britain. It has revealed Canada's movement from the condition of a British colony to that of an independent nation within the Commonwealth. Contemporary Canadians, however, have little doubt that, today, the USA constitutes the largest single external factor in Canadian life. It has always played a significant part in what we may call "Canadian life", but today its role is enormous. The USA has been key to Canadian self-definition from the beginning, for the establishment of the United States was the beginning of the establishment of a boundary that would define Canada territorially. From 1760 until 1776 an unimpeded British North America ran through the continent. With the founding of the United States the question of where its borders and where those of Canada (British North America) would lie was born.

## The USA: High Profile In Canadian Life

In recent years the Canada/US relation has been front and centre. It has been marked by energetic national debates on free trade, by conflicts over lumber, wheat, hogs and fishing quotas - to mention only a few matters. US political policy in Latin America and towards Cuba has excited much Canadian response. That has been especially true since the US has pressed (and even passed legislation to force) enterprise in Canada to observe US boycott laws relating to Cuba.
The most important and the most highly divisive issue, for Canadians, has been the matter of "free trade" agreements with the USA and Mexico which have produced major controversy over at least ten years. The first Agreement, before Parliament and Congress in 1987, was followed by a Canadian election in fall of 1988 in which the free trade question figured importantly. The negotiating Progressive Conservative government won a majority of seats in the election, but the two parties opposing the Free Trade Agreement, the Liberal and New Democratic parties, won the most votes. The situation was not unusual. The Progressive Conservative Party of Brian Mulroney won the most seats in the House of Commons. But the combined number of votes won by the two parties fighting against Free Trade - the Liberal and the New Democratic Parties - exceeded the number won by the Mulroney Conservatives. He could argue that he had a majority in favour of Free Trade measured in the number of seats won. The others could argue, however, that more votes were cast for those rejecting Free Trade than for the party in favour of Free Trade. Those two facts are symbolic of perceptions and feelings in Canada about free trade. To begin, the election was concerned, as is normal, with many issues. It was not a referendum with a single question asking Canadians to accept or reject the Free Trade Agreement.
In addition, large corporations - many of them US based - spent amounts of money unparalleled in Canadian history to urge acceptance of the agreement. The degree to which Canadians "freely chose," therefore, is also debated. How much the "free trade election" was a free trade election is still debated and will be for the foreseeable future.
A further symbolic set of facts related to free trade concerns perception and consciousness in the two countries. Five months after negotiation of the Agreement, in February 1988, a survey revealed that 90 percent of Canadians had an opinion about it, while only 39 percent of US people were even aware it had been negotiated. Those last two facts mark a persistent quality of Canada/US relations - there is always a distinct difference between Canada and the USA in public knowledge and public response to matters of mutual interest, matters which fairly define the meaning of Canada/US relations.

## A Definition: Canada/US Relations

The phrase must be seen both broadly and narrowly to be clearly understood. First, of course, it concerns agreements and disagreements, discussions, cooperative undertakings, and treaties between governments. The International Boundary Commission, NATO, NORAD, The Autopact, the O.A.S., The International Joint Commission, the Permanent Joint Board on Defence, and the Free Trade Agreements provide a small number of examples of formally established governmental patterns of agreement that exist. We think often of political relations as definitive, and they are very important, but they are only a part of the story. Canada/US Relations involve political, social, cultural, religious, and economic relations - though of course none of those categories is completely separable from the rest.
Organizations spring from either of the two countries, for instance, and operate in both without formal governmental agreement or action, at least at the beginning. This is a category in which governments make themselves heard and often participate. But it is not one in which the creation of relations is effected, in the first instance, by government to government agreement. Major examples are provided by commercial activity and the formation of unions. One example of business expansion into Canada relates, in fact, to government legislation. When John A. Macdonald's government brought in the National Policy (1879) to protect and develop Canadian industry, it had another effect. It was essentially a tariff policy behind which Canadian enterprise was intended to grow without facing overwhelming competition from outside. But US enterprise found ways to enter Canada, to set up what we now call "branch plants," and to get whatever preferences Canadian enterprises got. The US enterprises didn't enter Canada by governmental to government agreement, but, apparently, despite Canadian government intentions.

## "International" Unions

The creation of so-called "international unions" - unions formed in the USA to which Canadian workers become attached - have played a large role in Canadian life. Often Canadian workers have elected freely to join US unions in order to participate in larger and, therefore, perhaps, more effective organizations. As time passed, unions from the US became involved in Canadian culture and politics.
In 1974, writing about "Canadian Labour in the Continental Perspective," Robert W. Cox and Stuart Jamieson recorded the condition of the national labour body, the Canadian Labour Congress (CLC, 1956) in relation to US unionism.
"The ambiguous position of the CLC between American dominance and aspirations for Canadian independence has reflected the general mood of Canadian opinion and has not differed markedly from the position of business or the federal government. Independence has been more manifest on the more symbolic issues, those on which policies have the least immediate consequence, while the dependency pattern generally prevails where material interests are involved." [Robert W. Cox and Stuart Jamieson, "Canadian Labour in the Continental Perspective," in (eds) A.B. Fox, A.O. Hero, and J.S. Nye, Canada and the United States: Transnational and Transgovernmental Relations, New York, Columbia University Press, 1974, p. 223]
In terms unrelated to direct government action, US unions in Canada affected and affect the nature of negotiation between employers and employees as well as the ability of Canadians workers to maintain strikes. For many years representatives of US unions held a majority of votes and a dominant weight of power on the national organizations in Canada - whatever the names given to the national organization(s) from time to time. At the present time all-Canadian unions have a majority of representation on the national body, The Canadian Labour Congress.

## Religious Organizations Cross Borders

Religious organizations also expand across the borders without government involvement. Canada's principal religion is Christianity, more or less superimposed upon the native religions present when the Europeans arrived. It has added Judaism, Buddhism, Sikhism, Hinduism, Islam, and the Bahai faith over years.
But sects and other divisions of the Christian faith have been quite strongly influenced in Canada by US activities. The Jehovah's Witnesses, for example, is a faith that was founded in the US in the later nineteenth century, has established churches, and tirelessly practices door-to-door evangelism in Canada. The Morman Church, founded in the US in 1830, chose Canada for colonization in the 1880s and established the town of Cardston, Alberta, in 1887. The Christian Church (Disciples of Christ) founded in 1804 and Christian Science (First Church of Christ Scientist) founded in 1879 both spread to Canada and established churches and followings.
Judaism and the Unitarian faith, though not from the US primarily, both relied - and still rely - largely upon the US for training rabbis and ministers. Some Canadian jews study to be rabbis in the US but many were, and probably still are imported. The effect of that condition - as with a great deal of influence that comes from the US - is hard to determine. The situation may be illuminated a little, however, by a personal anecdote. In the 1970s I was invited to a Unitarian Church in Ottawa to give a talk about Québec. The minister asked me to wait in a large room adjoining the meeting place. Across the floor long lines of books were laid, backs up, in rows. I thought the church was preparing for a fund-raising book sale, and so I studied the hundreds of books to see if there were any I might be interested in. I had plenty of time. When the minister returned, I asked him if he was having a book sale. He informed me he was the new preacher, just arrived from the US, and I had been looking at his library which was about to be put on shelves. A teacher of Canadian Studies and a modest collector of Canadian books, I had observed that there was not a single Canadian book or a single book about Canada included in all the books arranged in lines across the room.

### US Religions And US Character

While the matter of "influence" of US clerics and US-created religious organizations is very hard to trace, one observation may be made. The four churches cited are four among many. The US has proliferated Christian sects and schismatic groupings very much more than Canada has. Those groupings are often consistent with US claims of special existence and US individualism. Canada rejected the image of itself as a "new Eden" and Canadian man as a "new Adam". Canada elected to see itself in history, growing from European roots, and mixing old civilization with new circumstances.
The US did the exact opposite. To Quote R.W. B. Lewis in The American Adam , [Chicago, University of Chicago Press, 1955] the US was an entirely new place.
"The new habits to be engendered on the New American scene were suggested by the image of a radically new personality, the hero of the new adventure: and individual emancipated from history, happily bereft of ancestry, untouched and undefiled by the usual inheritances of family and race; an individual standing alone, self-reliant, and self-propelling, ready to confront whatever awaited him with the aid of his own unique and inherent resources. It was not surprising, in a Bible reading generation [after the 1820s] that the new hero (in praise or disapproval) was most easily identified with Adam before the fall." (p. 5)
US religious activity persisted in both established and new formations - even in an ancient Christian Church like the Roman Catholic Church - with examples of greater individualism than is normally characteristic in Canadian society. Canada has not, for the most part, created new religions or sects that have gained followings outside of Canada.

### How Well Do We Know Each Other?

That fact leads us to another generalization about the character of Canada/US relations. Very frequently public developments in the USA are publicized in Canada and affect Canadians, if only emotionally. They very often influence Canadian activity, whether by rooting in some form in Canada or impinging upon Canadian thought and action in some other way. By comparison, public developments in Canada are most often ignored in the USA, do not affect people there, and do not spread to the US or influence US activity. The sale of poppies on Armistice Day is said to be one of the few Canadian customs, for instance, that has taken root in the US.
On the whole, the influence goes one way. Canada's highly effective Crown corporation structure has had little effect on the US. In addition, the US has ignored Canadian initiatives in development of a social safety net. Recently, however, the Canadian system of medicare has been praised and reviled in a US debate with no effect but a negative one on the US system. Indeed, the result of that debate in the US, joined to some of the implications of the recent free trade agreements, has, in Canada, seemed to strengthen US arguments against Canadian style medicare.
One of the most significant ways in which Canada failed to influence the US in any way is in the creation of a Social Democratic party. For the people of the US the Canadian example was present, and it was effective. US citizens protest and march in huge gatherings in the US capital calling for reform of the kind, often, a Social Democratic party would support. But they do not appear to have even considered in any serious way taking a leaf from the Canadian book. Once again an irony faces the other way. When in 1959 the Canadian Commonwealth Federation joined with unions to form a new Social Democratic body in Canada, they chose a name that appears to call on the US more than on Canadian traditions. The US has a Democratic Party and the Canadian Social Democrats called their new formation The New Democratic Party.

### Service Clubs And The US Character

Like religious sects and movements the extension of US service clubs has been a matter of quiet, "natural" growth across the border. The influx began in the 1920s, first of the Rotary Club in 1920 and after it the Lions, the Kiwanis, and the Gyro Club. They generally do work of use in communities and foster borderless warmth and friendship. The proliferation of social organizations of all kinds in the US is often seen as a characteristic of its boundless energy, and that is no doubt partly true. Writing in his famous two volume work Democracy in America (1835 and 1840) Alexis de Tocqueville remarks upon the many organizations formed in the US. He attributes them to US democratic individualism and egalitarianism. In more conservative societies, where classes have roles and responsibilities, matters of social concern find structures to mirror them. But in a country like the USA the individual is powerless for obvious reasons, and classes - such as they exist - are not related as in older cultures to social structure and obligation. And so people must find others of like interest, form organizations with them, and wield the power of numbers in order to have social influence and to undertake social action.

## Canadian Traditions

Certainly, Canada produced fewer such organizations in its early years because it was a more conservative society. Even with US organizations spilling over the border and the creation of uniquely Canadian organizations of a similar kind, Canada creates and has created fewer secular organizations, as it creates fewer new religions and sects. An aspect of the Tocquevillian explanation, moreover, carries over into Canada in slightly different and important terms. The Canadian government has held itself to be more representative of the whole population than the US government has, and so has responded more to the needs of the whole population. Having a different ideological base, the US called upon individuals to organize for action. Canada did not do so as much.
Canada has a pluralist tradition. It had two major political cultures from the outset. The need to forge national unity made legislators sensitive to differences of need among the members of the public. For that reason Canadians have been, traditionally, much less likely to think monolithically than US people. Canadians have been, too, less likely to see government as an enemy. In addition the US threat - both as a military fact and a cultural one - induced Canadians to think as a defensive community. Canadians did not bear the burden of being new Adams and Eves; they could rely on past history and tradition to guide them. The US also possessed a peculiar anomaly in being a major slave owning and then post-slave owning society. For a very large part of its history a significant portion of its population was considered - and legislated as - inferior, long after the emancipation of the slaves. An institutionalized superiority/inferiority division between black and white people, regardless of individual qualities, not only flew in the face of the preamble to the Constitution that says people of the US hold as self-evident truth that all men are created equal. It also disseminated through the society the belief that it was right and proper for some people to consider themselves better than others on no other basis than power.

### The Psychology Of A Smaller Power

Canada has always been aware that its existence has to depend on something else than sheer power; and so internally and externally it has attempted to give itself to the virtues of conciliation, compromise, pluralism, and acceptance of difference. As a result the Canadian person has been - to Canadians - quite different than the person in the USA. The quality of the individual in any major or imperial power is very different always than the quality of the individual in a defensive society conscious of a need to form solidarity of response in social and national life.
The US saw itself as much more rigidly defined as a capitalist, free enterprise country than Canada did. But capitalist activity - for that reason - also existed for Canadians, often, as a US instrument forcing its way into Canada. Both countries are and were essentially liberal capitalist democracies; but one of them used its capitalism to move into the other in a way that was not balanced by a reciprocal move. Over a long period of time, that fact had to tell upon the formation of identity and the sense of the person in the two countries.

### New Reality In Canada

In recent years Canadian government has more visibly allied itself with capitalist ideology and the market economy. "Market economy" is a phrase used to describe a system that considers the economy should be governed by the market . Government should not intervene to protect local industry, provide securities of care for the disadvantaged, or provide incentives for development. In brief, capitalist organizations should be given the whole economic (which means ultimately the social and the political field) to work out a system of supply and consumption. Of course the market economy is never achieved in any pure way. The USA, which probably trumpets the wonders of the market economy more than any other country, has had in place for decades, an enormous military production structure which is used by government to intervene significantly in the economy and to provide incentives for development of all kinds of things not seen, subsequently, as military - from medicines to advanced computer inventions.

### Why Canada Is Changing

The shift in Canada is partly a result of US control of large segments of the Canadian economy, of pressures under the free trade agreements to merge the two social cultures, and a general move in the Western world towards greater reliance on market forces for the production and distribution of wealth. Interest groups other than those created by corporate capitalism have become more visible as a result. They are groups that unite under a single interest: women, consumers, the socially disadvantaged, etc. But they have also appeared as mirrors, echoes, and extensions of US groups and activities. In Canada, the tendency to mirror, echo, or extend developments in the USA is increasingly a characteristic of the society. As Canadians become more ignorant about the distinct qualities of their own society and system, they tend to ape responses of people in the US to the US system. Just for instance, the recent Canadian gun lobby response to legislation intended to further restrict free use of weapons in Canada was a US copied response. Some spokespeople even began to say - as is regularly said in the USA - that Canadians have a constitutional right to bear arms. The argument is so completely false it didn't last long. But it was tried along with all the arguments people in the US use to support the gun lobby there.

### Americanization

C. P. Stacey is not being merely humorous in Canada And The Age Of Conflict , Vol. 2 when he writes that "Nowadays, we import even our anti-Americanism from the United States." (p. 428) His comment opens a very large vista. For it faces (without naming them) two very important factors in Canada/US relations. The first is the almost unimpeded flow of US capital into Canada in the form of equity holding. That means US investors hold in outright ownership plant and property in Canada, rather than investing in the country by gaining securities which may grow in value with the overall investment and which gain dividends or interest. The second important factor is the almost unimpeded flow of cultural, political, and other expression from the US into Canada.
The two are closely connected. The way to see the connection in quick form is in relation to sports. Hockey and basketball, for instance, are business enterprises capable of earning profit. US capital enters Canada, buys or sets up teams, purchases players, and surrounds them with a particular concept of sport. Canadian players become meaningless to the articulation of values and ideals in the Canadian community. One of Canada's most famous hockey players, Wayne Gretsky, who many Canadians saw as a peculiarly fine representative of Canadian hockey values, was sold to a US team. His sale demonstrated that whatever else he might have been and stood for, he was primarily a commodity in a market economy whose purpose was to increase profit for whomever could "invest" the most in him.
The sports example demonstrates a fundamental fact more clearly than may be visible in other areas. The takeover and ownership of significant parts of a country's economy deeply affect the cultural consciousness of the people in the country whose economy is being taken over. To begin, head offices are in another country. Orders and policy for operation come from outside. The foreign head office very often does not understand or care about local culture and often uses operations in the branch areas as cushions to ensure stability in the home office country. In addition it drains capital from the host country in the form of dividends, leases, management fees, patent costs, and transfer payments - to say nothing of publicly recorded profit. It tends to introduce and/or support ideas from its head office concerning plant safety, union validity, social benefits, and work habits. The ideas from outside the host country may be much less satisfactory to the employees than is normal in the country.

### Foreign Ownership And "Inferiority"

Even without intending to, the foreign enterprise acts, often, to convey a sense of inferiority to the people in the host country, for it does most research and development in the head office country, suggesting "the brains" of the enterprise are elsewhere. Its publicity, advertising, and customer relations are often shaped outside the host country, and employees are invited to "be like" those in the head office country. Canada is different from the United States. But that is not what people representing US enterprise often tell Canadians. Canada, they say, is just like the US was fifty years ago. That is not true, but the implication of the statement is clear.
Canada has the highest level of foreign (mainly US) ownership of its economy in the advanced industrial world. It also has one of the highest levels of cultural flow from the US. Canadians - English speaking in a majority - face an unbroken flood of magazines, newspapers, textbooks, videos, television production, radio, theatre production and musical personalities from the USA, quite apart from the resident US enterprises working in Canada from US values and directed from US head offices.

### Cultural Takeover - Two Meanings.

Here again a special character of Canada/US relations manifests itself. It may be said, as a general rule, that US culture in Canada - in all of the examples I have given - crowds out or usurps Canadian culture. A glance at any ordinary magazine rack in Canada tells the story. Of, say, 100 different magazines displayed, the most numerous and most opulent will usually be US magazines. That condition is almost universal among cultural products. The other side of the relation is that, as a general rule, the very small number of Canadian cultural products that enter the US are dissolved or absorbed into US culture. People in the US are usually unaware that the cultural products come from Canada. Canadian culture displaces nothing in US culture and, to survive there, must in effect become US culture.
If we return to the political dimension of Canada/US relations after considering the ideas expressed above, we can begin to examine how Canada came to be massively dominated by the United States, what the present condition is, and what the future holds for relations between the two countries.

## Historical Perspective

Starting in the modern world as a colony of Britain, Canada depended upon that country for both government and defence for a long time. One of the important characteristics of the relation was the presence of the "imperial" (British) military to dissuade any country (not least the USA) from having territorial designs upon Canada. Indeed, though Canadians are quite properly pleased to be able to claim victory against the USA in the War of 1812, no one doubts that the presence of professional imperial forces was significant in the outcome.
As time passed and Canada gained increasing sovereignty, the question of its share of its own and imperial defence was frequently mooted. For instance, prior to 1910 the Laurier government was pressed both by some Canadians and the British to contribute directly to the Royal Navy. The war with Germany was looming and the question of defence became important. In 1910, instead of contributing directly to the Royal Navy, the Laurier government established The Naval Defence Act (also known as the Naval Service Act) as a way of beginning an independent Canadian navy.
Nevertheless, the Conservative government leader, Robert Borden, Prime Minister from 1911 conferred with the First Lord of the Admiralty, Winston Churchill in 1912 about direct aid to the British navy. Borden agreed to provide 35 million dollars for 3 dreadnoughts for the British fleet, and forced legislation through the Canadian House of Commons using closure on May 13, 1913. The Liberal majority in the Senate defeated the bill two weeks later, and the war began before Borden could recoup the loss.

### Loyalties In Crisis

That seesawing of loyalties and directions may be said to be a thread drawn through the whole century - except that a US factor was always present and has remained. C. P. Stacey remarks that the accession of William Lyon Mackenzie King to the position of Prime Minister in December, 1921 "is an important turning point in the history of Canadian external policies, yet those policies were not an issue in the election; they were never placed before the voters." [C.P.Stacey, Canada And The Age Of Conflict, Vol. 2, 1921-1948, Toronto, U. of T. Press, 1981, p. 3] The turning point is reflected in the 1919 Liberal convention that selected King as leader: "it contained a plank on `Canadian Autonomy' which demanded a change in Canada's relation to Empire [that] should, after passage by Parliament, be submitted to the people in a referendum." (p. 3)
The change was never submitted to a referendum but it is key to all considerations of Canada's status for the rest of the century. It is made up of a fairly complex set of forces at work - the outcome of which seems no longer in doubt. Simply, the forces focussed on the three points of the Atlantic Triangle, as it has been called by Canadian theorists. The justly celebrated work of that title, North Atlantic Triangle, was published in 1945, the last in a series produced for the US Carnegie Endowment For International Peace. It's author was John Bartlet Brebner, and the series was directed by James T. Shotwell.

### The North Atlantic Triangle

The series is, at one important level, a celebration of Canada/US amity, cooperation, and friendship. Shotwell's "Foreword" to North Atlantic Triangle sounds the note. "No definition can be framed in logical terms which will wholly describe that subtle but unyielding sense of reality within [the North Atlantic Triangle] which dictates conduct according to fundamental rules of equity and fair play." [James T. Shotwell, "Foreword" to John Bartlet Brebner, North Atlantic Triangle, New Haven, Yale University Press, 1945, p. viii] John Bartlet Brebner pursues the same note, closing his eyes to the on-going struggle for Canada that went on during the Second World War years - while he was writing the book. Perhaps, "the real reasons for the termination of the great trial of strength between Britons and their American offspring," Brebner writes, "and the foundation of the basic understanding between them which has survived a century and a quarter of exacting strains, are to be found in the Anglo-American collaboration which produced the Monroe Doctrine of 1823". (p. 106)

### The Monroe Doctrine

The statement is doubly strange, for the Monroe Doctrine was essentially a unilateral declaration by the USA that it is the major power in the Western hemisphere and that it has the right to treat the area as its own sphere of influence. Continuing exercise of activity in the region to secure and maintain US power has often been accompanied by further elaborations of the meaning of the Doctrine. But critics in the region, and not only in Canada, have had harsh things to say about the validity and the purpose of the Doctrine, pointing out the basic fact that it has never been elevated into an international agreement or law, and it survives simply because the USA has the power to enforce whatever - at any moment in history - it is convenient for the Doctrine to mean. .
John Barlet Brebner and James T. Shotwell were both born in Canada, and both emigrated to the US, Shotwell becoming an enthusiastic convert. They number among distinguished men of the era who were born Canadians - Douglas Bush, A.J.M. Smith, E. K. Brown, John Kenneth Galbraith, and others who believed they could advance their careers and/or work in a more fully equipped civilization by leaving Canada and adopting the USA as their home.

### A Move Towards Independence

During the Mackenzie King era - when he led the Liberal party and was Prime Minister for nearly 22 years between 1919 and 1948 - the relations between Canada, the US, and Britain took what we can see now was a new direction. Loyalties on Canada's part seemed to, and did, seesaw in the way already illustrated, pulling back and forth through the long period of boom, the Depression, the Second World War and its aftermath. But in the process a single direction was more and more being forged. Put simply, on one side Canada was feeling greater and greater need for independence in the conduct of its own affairs. Despite some differences among the two major political parties that feeling was common to them both. Indeed, the famous Balfour Declaration of 1926 was welcomed by both. It stated that Great Britain and the dominions "are autonomous Communities within the British Empire, equal in status, in no way subordinate one to another in any aspect of their domestic or external affairs, though united by a common allegiance to the Crown and fully associated as members of the British Commonwealth of Nations." The work of Conservative Prime Minister Borden during the First World War years built as much towards that statement as anything Liberal governments did in the years before 1926.
John Bartlet Brebner remarks that the Declaration "was a mere recognition of things as they had come to be." (p. 285) Things had come to be that way because Canadian Prime Ministers and governments of both parties - regardless of expressions of affection for and loyalty to the British tie - had worked assiduously to gain Canadian independence. Partly they had done it out of a genuine pull felt by individual party members and many Canadians. Partly they were responding to the strongly isolationist insistence emanating from Québec.

### Britain And The Possibilities Of Empire

The British, on their part, still clung to a general sense described by the Imperial Unity Movement, the Imperial Federation League, the Imperial Federation Committee, the British Empire League, and the Round Table Movement. People connected to all those organizations, even before formal beginning with the Imperial Federation League in 1884 (and continuing at least into the 1920s by some of the other organizations mentioned) worked to bring about some kind of formal organization of countries within the British Empire.
In his book on The Round Table Movement And Imperial Union (1975) John Kendle characterizes the direction: "For many it was simply a desire to offset the political, military, and commercial advance of the foreign powers who were challenging British supremacy in all fields. But for others it was based on a belief in the political wisdom of the British and their system of government. Many believed the British had a duty and a moral responsibility to educate `the backward peoples' of the world to an understanding of the British System." [John E. Kendle, The Round Table Movement And Imperial Union, Toronto, U. of T. Press, 1975, p. xv]
The moralistic and racial aspects of some imperial unity people should not obscure the very real power concerns involved, the sense that a trading and military bloc formed of empire countries could, through a "united Commonwealth" - to continue Kendle's words - "be able to make a major contribution, perhaps the most significant ever made by a state or empire, to the stability of the world and the advance of its `subject races'." (p. xv) Power blocs seeking "the stability of the world" almost always do so in terms of their own interests and their own governmental forms.

### Three Choices For Canada

Alfred Milner, converted in 1873 to imperial federation by the Canadian travelling prophet of empire George Parkin, became a leading advocate and kingpin in the Round Table Movement. In 1908 he came to Canada, speaking to the Canadian clubs of Vancouver, Winnipeg, Toronto, Ottawa, Montreal, and to the Board of Trade of Montreal. Lord Milner, as he was by then, met many Canadians, but Kendle believes he learned nothing of value in Canada. The reader must decide from the following passage whether John Kendle, publishing in 1975, or Alfred Milner, writing to a friend in 1909, understood best the condition and future of Canada. Kendle writes: "As for Milner, he summed up his experiences in the northern dominion in a way that indicated how little rather than how much he had learned. Instead of forcing him to reappraise his ideas his trip seemed to have little effect." Then Kendle prints a selection from a letter Milner wrote to J.S. Sanders on January 2, 1909 concerning Canada's future. "As between the 3 possibilities of the future 1. Closer Imperial Union 2. Union with the US and 3. Independence, I believe definitely that No.2 is the real danger. I do not think the Canadians themselves are aware of it...they are wonderfully immature in political reflection on the big issues, and hardly realize how powerful those influences are... On the other hand, I see little danger to ultimate imperial unity in Canadian `nationalism'. On the contrary I think the very same sentiments, which. make a great many especially of the younger Canadians vigorously, and even bumptiously, assertive of their independence, proud and boastful of the greatness and future of their country, and so forth, would lend themselves, tactfully handled, to an enthusiastic acceptance of Imperial unity on the basis of `partner states'. This tendency is, therefore, in my opinion rather to be encouraged, not only as a safeguard against `Americanization', but as actually making, in the long run, for a union of `all the Britains'. It is obvious that Canada could play a far greater role, and have a more important and more distinctive proposition, in such a political structure, than she can ever have in a purely North American Union." (p. 55)

## British Ties

### Winston Churchill On Empire And US Power

The British sense of imperial unity was not consistently presented in that egalitarian way - the union of all the Britains. For some, it meant the unquestioning adherence to British policy and even unacceptable subordination of the Canadians whether in diplomatic or military matters. But to point up the persistence of the idea that some kind of imperial union was desirable, we can cite parts of an address given by Winston Churchill to the Canadian Club of Toronto on August 16, 1929. First, he recognizes US competition for global supremacy, at a time when the US is increasing its naval power. Churchill recalls that the Washington Conference of 1921 formed an agreement "that the two great branches of the English speaking world, the British Empire and the United States, should have equal battle fleets and in that sense be equal powers upon the sea...."
Churchill goes on to reveal the essential disadvantages the British face in competition with the US for global power.
"There never were two nations, two countries, more differently situated and circumstanced from the point of view of naval danger than the United States and Great Britain. The United States is almost a continent. It possesses within its bounds everything required to minister to its strength and prosperity and life. We are a small densely populated island with the need of importing three-fourths of the food we eat across salt water and most of our raw material, and we are also the centre of an Empire which circles the globe, the only material connection between the component parts of which is the uninterrupted passage of ships across the sea. We are close to Europe and involved in all its dangers, though we keep as clear of them as we can; whereas the United States may rejoice in having thousands and thousands of miles of ocean between her and any enemy or danger, however speculative or impossible that danger may appear." [Winston Churchill, "Address," Addresses The Canadian Club of Toronto, Vol. XXVll, 1929-30, Toronto, Warwick Bros. and Rutter, 1930, pp. 18-19]
He turns then to what he sees as the antidote, the necessary balancing force to growing US power. He calls up the united military activities of the countries of the Empire, especially in the First World War. He discusses the need to keep the trade lanes open. And he suggests a high level conference of "great captains of industry" from Canada, Australia, South Africa, and Britain to work on "what after all is the greatest merger ever thought of in human experience." Their task would be to discuss "all the different ways in which they consider Inter-Imperial trade can be fostered and developed...." (p. 23)

### Canada Uncooperative

He ends calling upon the ties of Empire. "We may trust to them as the years go by to gain and grow in strength and force. We may trust to them to enable the wonderful association of states and people, the like of which the world has never seen, our commonwealth of free nations, that they will enable us to tread the path of destiny, hand in hand and side by side, sure that whatever the future may have in store, union and freedom will lead the empire to safety and will keep us at least the equal of any organization known to man." (pp. 24-25)
Just a few years earlier, however, Canada had used some of the same arguments for quite different purposes. At the Fifth Assembly of the League of Nations in 1924, Senator Raoul Dandurand, government leader in the Senate, delivered a speech to reject a proposed protocol of stringent demands on members of the League in case of states resorting to war. He put forth Canada's position. "Not only have we had a hundred years of peace on our borders, but we think in terms of peace, while Europe, an armed camp, thinks in terms of war." (p. 463) He went on. "On the whole of the frontier stretching from the Atlantic to the Pacific, we have not a single soldier, not a single cannon, and the three thousand men in our permanent force are certainly not a threat to the peace of the world." (p. 464) Finally, he used the same point as Churchill was to use - but as one reason not to entangle in imperial or international agreements that would drag the Canadian military from its own shores. "May I be permitted to add that in this association of mutual insurance against fire the risks assumed by the different states are not equal? We live in a fire proof house, far from inflammable materials. A vast ocean separates us from Europe." [Raoul Dandurand, "The Geneva Protocol," October 2, 1924, in Walter A. Riddell, ed., Documents on Canadian Foreign Policy, 1917-1939, Toronto, Oxford University Press, 1962, pp. 462-5]
Canada was not interested in proposals like the one put forward by Churchill in Toronto. But the British continued to hope, as late as 1944. In January of that year Lord Halifax, British Ambassador to Washington, addressed the Toronto Board of Trade. In his speech he wanted to offer the Commonwealth and Empire as a power alongside the United States, Russia, and China. "Not Great Britain only, but the Commonwealth and Empire must be the fourth power in that group upon which, under Providence, the peace of the world will henceforth depend." [Quoted from Times (London), January 25, 1944, in C.P.Stacey, Canada And The Age Of Conflict, Vol . 2, p. 264.] The argument behind the speech was not complex, nor was it new. But Canada's Prime Minister, W.L. Mackenzie King was most unhappy with it. He wrote in his diary that it looked like "a conspiracy on the part of the Imperialists." (Stacey, p. 364)
Stacey points out that Malcolm MacDonald, the popular and sensitive British High Commissioner in Ottawa, had explained the situation in a paper written in February 1943. "If Britain," he wrote, "stands alone after the war, she will gradually sink to the position of a second class Power in world affairs. But there is a means by which she can retain a position of equal authority with American and Russia. That is if she makes herself the central member of a group of nations who are collectively as important as each of those two others. Such a group already exists. It is the British commonwealth of Nations." [Malcolm MacDonald, "The Postwar Position of the British Commonwealth of Nations," Feb. 23, l943, quoted in C.P. Stacey, p. 364.]
However practically possible or impossible the Imperial federation plan, it was not to be. Opposing forces were at work. Not only was the United States concerned to secure dominance in the Western hemisphere, as the regularly reiterated and reinterpreted Monroe Doctrine made clear. But also Canada's leaders, through much of the period, moved towards North American alliances. On the one hand, they may be said to have worked to secure Canada's safety, economically and militarily. On the other hand, they may be said to have sacrificed an independence that would have had to be fought for with cunning and strength for a much easier dependency status that would sap the strength of the nation and slowly hollow it of all significant power.

## US Ties

The third party to the Canadian choice needs to be considered. Almost without exception Canadian historians and most other academic commentators have been able to see the British dilemma and the Canadian thrust for independence from Britain that helped to block forms of Imperial federation. They have even traced the march of US interests gaining power in Canada. They quote US people asserting the rightness of a single country occupying North America - completing "US Manifest Destiny". But they do not see consistent policy or design in US involvement in Canada. People who see design in the shape of consistent US policy over decades are described as having a "a conspiratorial view of history." On the other hand, a refusal to see direct interest for reasons of national policy leaves some Canadian historians looking mildly ridiculous.
When Franklin D. Roosevelt showed especial interest in Canada, addressed Mackenzie King as "Mackenzie", helped in 1940 to establish a Permanent Joint Defence Board to "consider in the broad sense the defense of the north half of the Western Hemisphere," some Canadians were delighted. None, it seems, questioned the need for a permanent board. Brebner, in North Atlantic Triangle - for all his sympathetic treatment of Canada/US relations, however - chose to italicize the word Permanent and the north half of the Western Hemisphere in his discussion of the agreement in order, subtly, to draw the reader's eye to the language. (p. 323)
When, at the same time, the US leased for 99 years a string of air and naval bases from British Guiana to the Bahamas and acquired bases in Bermuda and Newfoundland, many believed wartime threats required speedy and effective action, though none, perhaps, believed the war would last 99 years.
As excellent a scholar as C.P. Stacey reveals himself puzzled at President Roosevelt's interest in Canada. "No one," Stacey remarks, "seems to have attempted to discover the source of Roosevelt's interest by exploring his papers; perhaps, in the absence of a diary, such an inquiry would be fruitless." Stacey wonders if the Roosevelt summer home on Campobello Island in New Brunswick held the secret. Drawing from the New York Times of August 1, 1936, Stacey quotes Roosevelt as saying that "since the age of 2 I have spent the majority of my Summers in the Province of New Brunswick." (Stacey, P.231)

### Myths About Expansion And Empire

Two scholars writing more recently are impelled by events to see the Canada/US relation in a somewhat clearer light - at least in part. Then, like Stacey, they find themselves unable to keep their eyes on the subject of US interests in North America.
John Herd Thompson and Stephen J. Randall, in a book devoted to an examination of Canada and the United States : Ambivalent Allies entitle their seventh chapter, "Canada in the New American Empire, 1947-1960." One might expect the astonishing boldness of their title to lead them to some research and analysis: how did Canada get out of the British Empire to be rather quickly included in the New American Empire? The problem is solved, for them, in a sentence. "Canada lost its historic British counterweight to the United States, and the United States was forced into Britain's old imperial role." (p. 184) [John Herd Thompson and Stephen J. Randall, Canada and the United States: Ambivalent Allies, Montreal, McGill-Queen's University Press, 1994] At the height of British influence people who were curious about such an enormous concentration of power were told that the British acquired an empire in a fit of absent mindedness. Now we learn that the USA "was forced into Britain's old imperial role," at least as far as Canada is concerned, the assumption being that it certainly didn't want that power. Such writing is, of course, not history, whatever else it might be.

## Canada In The US Empire

John W. Holmes, described in the 1985 Canadian Encyclopedia as the country's "most highly respected commentator on foreign policy" (p. 827) accepted the fact of "Canada in the New American Empire" as early as 1969. In an article, "Canada and the Pax Americana", Holmes writes that the US is "the heart of a neo-imperialist system, involved all over the world through alliances, treaties, and understandings, most of them ambiguous like the Monroe doctrine." (p. 73) He goes on that the "Pax Americana is an effort to maintain or, as some would say, impose, a world order favourable to the interests of the United States, but assumed to be favourable also to the interests of others." (p. 74).
Though fundamentally sympathetic to US policies, Holmes writes that United States policies "are largely unilateral. It [the US] informs its allies but does not consult them. As for international organizations, it will accept their judgements or use their procedures if it wills to do so but not otherwise. It is prepared to make a battleground of other countries to maintain the balance of power in its favour. As its military strength grows, there is a danger of domination by an industrial, military clique with a simplistic view of right and wrong. It has, along with glorious democratic traditions, a tradition of force. Americans can be inebriated by the Battle Hymn of the Republic, a magnificent tune for an iniquitous song. Those who think that their eyes have seen the glory and they have acquired a mandate from heaven to keep the truth marching on need watching." (p. 84) [John W. Holmes, "Canada and the Pax Americana," in (eds) Harvey L. Dyck and H. Peter Krosby, Empire and Nation, Toronto, University of Toronto Press, 1969, pp. 73-90]

### Mackenzie King And A Subordinate Position

The idea of imperial federation and the argument for a partnership, a bloc of equals concerting trade, defence, and foreign policy was often expressed over more than fifty years. Two forces prevented it, as already pointed out. Fear of British dominance was real among Canadians. And the actions of Britons often gave reason for the fears. In addition, Liberal governments, especially under and after W.L.Mackenzie King, tended to choose neither imperial federation nor independence, but a subordinate position in a relation with the USA.

### Not Three Choices - Only Two

The day after the Liberal government of Mackenzie King was sworn in, on October 23, 1935, for instance, King visited the US diplomatic officer at his home. Norman Armour then reported to Washington the conversation he had with the Prime Minister . King, said Armour, "made it plain, as Dr. Skelton [King's closest associate in External Affairs] had done, that there were two roads open to Canada, but that he wanted to choose `the American road' if we made it possible for him to do so." [quoted in C.P.Stacey, Canada And The Age Of Conflict, Vol. 2, p. 173]
King apparently did not say as Lord Milner had done in 1909 that there were three possibilities for Canada: "1 Closer Imperial Union 2. Union with the US and 3. Independence." For King, independence does not seem to have been an option.
He had spent much time in the US. He had been a student at Chicago and Harvard, and he worked as an industrial consultant in the US, for a time an employee and friend of the Rockefellers. Whether his US experience helped to shape his desire for subordination in a US system is impossible to tell. But, ironically, soon after the election King signed a Canada/US trade agreement which the US had stalled with the previous Bennett government, as a way, perhaps, of influencing the Canadian election of 1935. The Canadian team went back to Washington when King's Liberals won the election, settled for a much weaker agreement than the Bennett government had insisted upon, an agreement that is judged to have been more favourable to the US than to Canada. King was invited to stay at the White House, and Roosevelt expressed his pleasure that the two men were just a telephone call away from each other.

### Canada And The Force Of Destiny

To balance those remarks a few others should be entered for consideration. Of the events just described C.P. Stacey offers what might be called a "force of destiny" explanation. "1935," Stacey writes, "is visible as one of those moments when the course of history began to change. But it is not evident that in that year Canadians were presented with any real choice. And the theory of a Liberal conspiracy will not hold water, in spite of King's and Skelton's talk about the `American road.' The country's course was set by economic facts and public opinion. If the Bennett government had been returned to power, it would certainly have made a trade agreement with the United States within months if not weeks, and the Canadian public would have been delighted, as it was delighted by King's. And the move towards freer trade was only the simplest common sense; economic nationalism had done the world, and Canada, great harm. Four years after the agreement of 1935, the Second World War broke out. It was not planned by the Canadian Liberal party; but it moved Canada far down the American road. The arrangement made by King and Roosevelt at Ogdensburg in the desperate crisis of 1940 was clearly fateful for the country's future; but given the circumstances of the time any other Canadian government would have made the same arrangement if it could, and almost all Canadians applauded. The fact is that Canada was being borne along, willy nilly, by what Churchill might have called the great movement of events...." [C.P. Stacey, Canada And The Age Of Conflict, Vol. 2, p. 179 ]
The statement made by Stacey is both emotional and forceful, supposing rather a great deal. It is probably not good history or argument. In the first place, historians usually want more explanation than "the great movement of events". Indeed, Canada was not invaded; Canada had choices to make and made them freely. It is not evident, Stacey writes, that Canadians were presented with any real choice. The statement is ingenuous, for he, himself, reports King's statement to Armour "that there were two roads open to Canada, but that the [King] wanted to choose `the American road' if we made it possible for him to do so". (p. 173)
The choice was very clearly there in the mind of the Prime Minister, and he acted. It was not a choice presented in any clear way to Canadians. In that respect, they did feel a sense of drift and lack of leadership, though they, in fact, were being led. The governments of King, St. Laurent, and Pearson, overall, never gave a sense of a dynamic Canadian vision as distinct from the desires and intentions of the United States. That is perhaps why the famous Pipeline Debate, May 8 to June 6, 1956 was so rancorous and stridently fought. An altogether commendable initiative of the Liberal government to build a natural gas pipeline from Alberta to Central Canada blew up into a major confrontation, brought about the emotional procedural use of Closure, and contributed significantly to the defeat of the Liberals in the next election. The CCF asked why the undertaking was not publicly owned. The Progressive Conservatives expressed alarm that government was permitting a private consortium to have an even temporary predominance of US businessmen to build a Canadian pipeline. Both attacks struck home to Canadians for whom the increasing loss of their economy to US interests was becoming a matter of concern.

### A New Voice For Independence

Diefenbaker stormed into power in 1957, and swept the country again in 1958, taking the largest majority thus far recorded in Canada. He promised in the 1958 campaign "One Canada, one Canada where Canadians will have preserved to them the control of their own economic and political destiny." [Peter C. Newman, Renegade in Power: The Diefenbaker Years, Toronto, McClelland and Stewart, 1963, p. 69] It seemed to Canadians that the choice Mackenzie King had left out in his conversation with the US diplomat Norman Armour in 1935 was being restored. There were the choices to be subordinate to Britain or to be subordinate to the USA. Diefenbaker was offering, once again, the choice of independence.
He seemed not only to be offering independence and the great challenge of that prospect to young Canadians, but he did it with compelling charisma. Hugh MacLennan, perhaps the leading novelist of the time, fastened on one aspect of Diefenbaker's success. "A country starved of leadership for nearly half a century had reached the point where it craved leadership more than anything else." [Renegade in Power, p. 71] For all his mistakes in the years that followed, Diefenbaker electrified Canadians with the chance he had offered - briefly - to forge an independent country. Liberal historians and commentators often saw the Diefenbaker years as constituting an embarrassing, incompetent disaster. Conservatives had another view.
With George Grant in Lament for a Nation (1965) they believed a collaboration of Canadian and US corporate capitalists had destroyed a chance to derail North American liberal individualism and restore to Canada traditional national values and, necessarily, a much larger area of independence. Their argument is given some credibility by the US response to Diefenbaker. Peter C. Newman records that President John F. Kennedy took part in the defeat of the Diefenbaker government. "As his personal contribution toward the defeat of the Canadian politician, he gave his unofficial blessing to Lou Harris - the shrewd public opinion analyst who had tested the trends so effectively for him during the 1960 presidential campaign - to work for Canada's Liberal Party. Using a pseudonym and working in such secrecy that only half a dozen key people in the Party's hierarchy were aware of his activities, Harris spent much of the 1962 and 1963 election campaigns with the Pearson organization conducting extensive studies of Canadian voting behaviour. They were considered key contributions to the Liberal victory of 1963." (Renegade..., p. 267)

## Military Relations And Independence

What is plainly evident after 1935, however, is that King refused to budge with the British on any matter which he thought might intrude upon Canadian autonomy. In 1937, for instance, the Canadian Joint Staff Committee recommended that training for R.A.F. pilots be undertaken in Canada under Canadian control, paid for by Britain, manned by the R.A.F., and available to Canada if she should need it. Mackenzie King refused. Next year King discussed R.A.F. training of Canadian pilots in Canada with the British High Commissioner and then denied he had done so. [C.P. Stacey, Canada And The Age Of Conflict, Vol. 2, pp. 220-224]
On the question of the flying school King argued that the Canadian government had a long established principle that only military establishments owned and controlled by Canadians should be set up. Apart from the fact that the Royal Flying Corps had an establishment in Canada in 1917-1918, the King government soon took a very much different attitude to US requests for cooperation and, in fact, began what was to become a very close relation of Canadian and US military forces. In the war that followed Canadians could work closely with the British because Canadian training followed British patterns. A measure of uniformity was maintained with the British army in matters of armaments and weaponry, training, organization, and many procedures. The usefulness of such continuity among allies is obvious, and the Canadian military had - in a sense - grown from and with the British military for obvious reasons. After 1945, the Canadian military became increasingly integrated with the US military.

### Canada/US Relations In The Cuban Crisis

When the so-called Cuban missile crisis struck in October of 1962, the integration of Canadian and US forces became dramatically clear. Despite the North American Air Defence Agreement and the Permanent Joint Board on Defence to which the countries belong together exclusively, not to speak of NATO of which they are both members, president Kennedy neither consulted with nor informed the Canadian government of US plans almost until he was about to go on television and announce his blockade of Cuba. When US reconnaissance flights showed medium range ballistic missile sites under construction in Cuba, Kennedy unilaterally went on television to announce a naval blockade to prevent Russian warheads from being delivered to the Cuban sites.
The British were informed before the Canadians. Most interesting about the crisis from Canada's point of view, but seldom commented upon, was the role played by the Canadian military. The US asked Canadian forces to move to an advanced state of readiness. Prime Minister Diefenbaker did not refuse; he simply did not act. Nonetheless, the Canadian NORAD forces, integrated with the US forces, moved immediately to advanced readiness without the Prime Minister 's authorization. The chief of naval staff ordered the Canadian Atlantic fleet to sea. The Minister of Defence ordered the Canadian Chiefs of Staff to special preparedness. Two days later Diefenbaker authorized what had already taken place.
It is impossible to imagine at any time in the twentieth century such a series of events arising out of a British unilateral action. Diefenbaker had undeniable right to information and consultation under the terms of NORAD. President Kennedy ignored the agreement. General A.G.L. McNaughton's remark to C.P. Stacey in 1941 is painfully relevant. McNaughton said, "The acid test of sovereignty is the control of the armed forces." [C.P. Stacey, Canada And The Age Of Conflict, Vol. 2, p.349]
Extraordinary as the circumstances were - and they were extraordinary - Canadian response opens more questions than can be answered. The US president unilaterally, without consultation with allies or attempts to negotiate with Russia and Cuba, brought the world to the brink of nuclear war. Though historical evaluation is divided, one school believes strongly that the US president engaged in dangerous and unnecessary grandstanding. He did not consult with Canadians in any of the ways due to a partner in North American Defence. Prime Minister Diefenbaker was quite correct - even if in confused indecision - not to give directions immediately to follow US wishes for an increased state of alert on the part of Canadian forces. That they were placed on an advanced state of alert without his approval can only be described as astonishing.
Peter C. Newman, whose book Renegade in Power: The Diefenbaker Years, is generally unsympathetic to Diefenbaker, reveals that if confusion existed at the time of the crisis, it arose significantly from a desire in the cabinet to preserve Canadian independence. Here are Newman's words concerning Howard Green, Minister for External Affairs. "He pleaded [in cabinet] that reconsideration be given to the idea of blindly following the United States lead, particularly since the United States President had not kept the commitment to consult Canada over the impending crisis. `If we go along with the Americans now,' he said, `we'll be their vassal forever". (p. 337) Newman brushes aside as unimportant Kennedy's failure to consult - a requirement, as I have said, of the North American Defence Agreement.
Some years later Laurence Martin, in Pledge of Allegiance, The Americanization of Canada in the Mulroney Years (1993) sees Diefenbaker's role at that time as squarely in terms of Canadian sovereignty. "His fear of American dominance provoked bitter confrontations with John Kennedy over the Cuban missile crisis, the issue of nuclear warheads on Canadian soil, and other questions. In the end his rampant nationalism alienated the entire ruling class: Bay Street, Wall Street, his civil service, and politicians from all parties, including his own. Only small-town and rural Canada supported Diefenbaker. [George] Grant, who readily acknowledged that the Tory leader's own foolhardiness contributed to his downfall, credited the Chief with the strongest stance against satellite status ever attempted by a Canadian. This stance came with a high price, however. A harsh statement issued by the Kennedy administration contradicted Diefenbaker's positions on nuclear arms and NATO, touching off a Commons furore which led to the defeat of the Tories on a non-confidence motion. In Washington they cracked open the champagne. McGeorge Bundy, one among the best and brightest who had a hand in drafting the statement, wrote a memo years later to President Lyndon Johnson. `I might add that I myself have been sensitive to the need for being extra polite to Canadians ever since George Ball and I knocked over the Diefenbaker government by one incautious press release.'" [Laurence Martin, Pledge of Allegiance, The Americanization of Canada in the Mulroney Years, Toronto, McClelland and Stewart, 1993, p. 35]

### The British And Canadians In War

During the years of strong British influence, and especially during the Second World War, the British lost many opportunities to forge bonds of trust with Canadians. Historian J.L. Granatstein pursues an argument published in 1989 that Mackenzie King fought for Canadian independence and only the folly and weakness of Britain forced Canada into US arms. [J. L. Granatstein, How Britain's Weakness Forced Canada into the Arms of the United States, Toronto, University of Toronto Press, 1989] The view of historians and economists like Donald Creighton, W.L. Morton, Kari Levitt, and Melville Watkins to the contrary are dismissed by Granatstein with phrases like the one he uses to describe a major statement by Creighton - as simple nonsense. Opinions obviously differ, and the truth may lie somewhere between the two poles.
For a country that appeared to hope for a kind of Empire/Commonwealth federation, the British didn't treat the Commonwealth countries well in the war. With little effort Britain could have absorbed representatives of those countries onto committees and boards. It could have insisted upon far better liaison and consultation with Commonwealth forces than was the case. Finally, it could have intervened to prevent the US from excluding Commonwealth representatives - especially Canadian ones - from innumerable boards, councils, and activities.
Two ironies are present in that last statement. First, the British failed to win sentiment in Canada (and, doubtless, in other Commonwealth countries) about the idea of closer ties though the opportunity was plainly there to be taken. Secondly, the US - with which Canada had formed a Permanent Joint Defence Board and apparently had relations of fraternal amity - repeatedly and forcefully excluded Canada from involvement in policy and planning and power at every opportunity.

### The US Pursues Its Interests

When Germany occupied Denmark in 1940, Canada considered sending a small force to Greenland to hold it until Denmark was liberated. The US strongly rejected the idea (though it was not taking part in the war). Subsequently, however, the US announced that the Monroe Doctrine applied to Greenland and took on Greenland in 1941 as a protectorate for the term of the war. The US signed an new agreement in 1951, according to which Denmark and the USA became jointly responsible for the defence of the island, where the US had established military bases.
When the Permanent Joint Board on Defense set to work on plans in case Britain was occupied or the US came into the war, the US fought for command of all North American military, and compromised only out of necessity. When Canada wanted a military mission in Washington, Roosevelt delayed it for as long as he could. Canada also wanted a seat on the Munitions Assignment Board since this country was producing, per capita, enormously for the war effort. Roosevelt blocked Canada's admission. All the chief operational Boards during the war were composed exclusively of British and US governmental representatives. Canadians were never consulted about the formation of such bodies. When the Combined Chiefs of Staff organization was set up (1942) - incidentally, to have power over the lives of Canadians in all forces - Canada was not so much as informed. When, on two occasions, August 1943 and September 1944, the Combined Chiefs of Staff met on Canadian soil (at Québec city), Canadian Chiefs of Staff were permitted to take no part. Churchill suggested that Prime Minister King and the Canadian Chiefs of Staff be admitted to plenary sessions only, but Roosevelt vetoed even that suggestion.
Excluded from information about European strategies in which Canadians participated, Canada proposed to set up a Canadian Joint Staff Mission of senior officers in London. Its purpose, quite simply, was to ensure communication between top Canadians and the Supreme Commanders in Northwest Europe and the Mediterranean. Churchill did not oppose the idea. The US Chiefs of Staff, supported by Roosevelt, firmly rejected it. C. P Stacey comments on the effect of the US rejection.
"Except in the rather improbable case of a Canadian commander being faced with a military task so perilous that he might exercise the right of appeal to his government, the Canadian authorities had no means of influencing the course of a campaign to which a Canadian force had been committed; nor had they any source of official information on the course of planning for such a campaign as it proceeded. The American veto on the proposed liaison between the Canadian Joint Staff Mission in London and the Supreme Commanders had the effect of depriving them of this information beyond such as they might receive in reports from the Canadian Army Commander in Northwest Europe and the Canadian Corps Commander in Italy - and those two commanders had no more knowledge of high-level future planning than any other army or corps commander, and that was not a great deal." [C. P. Stacey, Canada And The Age Of Conflict, Vol. 2, p.348 ]
King was not apparently affected in his affection for the US by these and many other rejections of ideas for fair participation and communication put forward by Canada. King also presided over a calculated diminishment of British capital invested in Canada and an increase in US investment. As a way to pay for purchases the British needed from Canada, they were forced to repatriate Canadian securities held in England. That undertaking was made early in the war. At the end of the war, British capital invested in Canada had declined from $2,682.8 million in 1939 to $1,668 million in 1946. US capital in the same period increased from $4,491.7 million to $5,157 million. The size and nature of US holdings in Canada was updated in 1991 by Mel Hurtig in The Betrayal of Canada . [Toronto, Stoddart, 1991] In a chart drawn from Statistics Canada figures, Hurtig reveals that the net flow of US money into Canada from 1946 to 1990 inclusive was $6.63 billion. In that time dividend payments that went from Canada to the US amounted to $69,460 billion, and the growth in book value of US investment (from the increase of land values, etc.) was $76,710 billion. For an investment of fewer than $7 billion, US interests gained close to $150 billion of Canadian wealth.
In 1946, in a move that offended the British, Louis St. Laurent, Minister of Justice, proposed that the loan outstanding of a billion dollars and an additional loan of a further half billion should be covered by Canadian securities held in Britain. All dividends from British holdings of Canadian securities should be paid as interest. St. Laurent spoke of the dividends paid on Canadian securities held in Britain as "tribute" to Great Britain. [C. P. Stacey, Canada And The Age Of Conflict, Vol. 2, pp. 398-400]
Mackenzie King's government and successor governments did nothing to stem the flow of US capital into equity holding in Canada. They only made hesitant moves against the influx when the population showed very real concern. None of those governments, apparently, saw dividends and other wealth gained from Canada by the USA as "tribute" paid by Canada to the USA.
Perhaps the most ironic aspect of the whole matter is W.L. M. King's apparent change of heart. I say "apparent" because he took no steps of the kind he took against Britain to secure Canadian independence from the USA. As the war proceeded, he became suspicious of US intentions for Canada. C. P. Stacey says that King "became, in fact, increasingly convinced that it was American policy to absorb Canada." [C.P. Stacey, Canada And The Age Of Conflict, Vol. 2, p. 363] Indeed, King reveals disquiet more than a few times in his diary, about which an enormous amount has been written. We can be free of the debate. For our concern can be outside the diary completely, looking at what King said to others and what he did.
The diary, fascinating as it may be, is a dangerous place to find evidence of historical merit - except for the quality of the writer's mind. J.E. Rea gives a succinct reason why that is so in a review in the February/March 1995 The Beaver. "As anyone who has read a few thousand pages [of King's diary] will attest," writes Rea, "you can prove anything by it." He goes on,"What King said and did in Council could often come out differently in his diary in the evening." [J.E. Rea, "Political Pantheon," The Beaver, Winnipeg, February/March, 1995, p. 40]
The picture we have drawn from the first half of the century and into the Cuban missile crisis reveals a diminishment of British power in Canada. It reveals increasing constitutional autonomy in Canada - continuing until1982. In that year the Constitution was "patriated". It was, that is, brought to Canada in the sense that its amendment could be completed by Canadians in Canada without reference anymore to the British parliament. The picture we have drawn also reveals that the autonomy gained is paper autonomy and that Canada has become closely tied to the USA and increasingly dominated by that country. The Cuban missile crisis revealed that when the US president shouted "Wolf", very few Canadians in government or the armed forces were prepared to fight for cool heads and a calm, independent Canadian policy.
If Diefenbaker's first proposal at the time had been taken up - an on-site inspection of Cuba by the eight nations comprising the unaligned members of the eighteen nation disarmament committee in order to ascertain the facts of the situation - time could have been gained. The US could have forced the USSR into dialogue. The Western nations could have rejected the idea of medium range missiles in Cuba. The matter could have been defused without a near nuclear confrontation. Few credit Canada with at least a fumbling attempt to prevent US irrationality and to preserve a measure of Canadian sovereignty.

## Canadian Independence And US Dominance: A Pattern Of Tension

Whichever view is correct about the Diefenbaker years, they ended in 1963 when a Liberal government led by Lester B. Pearson took power. It smoothed relations with the US, and accepted US nuclear warheads on Canadian soil - a matter the Conservatives refused to agree to. But the opening months of Liberal government were marked by another sovereignty crisis. In fact there are four key dates in Canada/US relations after the Cuban missile crisis. They are as follows: 1963 and the Walter Gordon budget; Centennial Year, 1967, and its effects which extended for almost a decade; the 1982 Constitutional changes; and the Free Trade Agreement of 1987.

### How Canada/US Relations Work: Canada's Merchant Marine and the C.S.U.

Before turning to an examination of those events as they bear upon Canada/US relations, two other significant events in the economy and society need to be looked at - both occurring before the 1963 date. They are the destruction of the Canadian Seamen's Union and Canada's merchant marine fleet, and the destruction of the most advanced aeroplane of its kind in the world, the Canadian Avro Arrow.
The battle for the Canadian Seamen's Union began before the Second World War ended. The union was tough, and it needed to be because conditions for seamen when it was created in 1936 were unspeakable. Over the years the CSU gained strong loyalty from its members because it fought well and won commendable advances. The number of communists in the union, the effect of some communist membership and communists among the leadership, and whether it was a "communist union" (whatever that means, precisely) is disputed. Short of coming upon records that don't exist and probably never did, people who disagree about the communist factor are irreconcilable. But the communist factor was used constantly in the conflict that focussed on the need to destroy the union.
The shipowners disliked the union because of its effectiveness before the communist issue ever surfaced. The whole story from beginning to end is huge, international, complicated, spread from before the war's end to 1964 at least. It includes businessmen, politicians, unions, thugs, governments, the courts, national policy, ideological conflict, strikes in Canada, Britain, and Australia, It has never been treated in book form by a professional historian in Canada. It is one of Canada's most interesting stories - deserving full and extended historical examination by professionals. They ignore it. Because it could fill volumes, we must look at the story briefly from the aspect of Canada/US relations.

### Canada After The Second World War

Canada developed remarkable shipping capacity during the Second World War: shipyards, and a capable and resilient merchant marine population on the Great Lakes and the oceans. It had built and operated a large fleet in order to conduct convoys of goods to Europe, especially. In 1943 a special committee was appointed to "consider and formulate policy for Canada's merchant shipping." A report from the committee foresaw the real possibility of a permanent Canadian fleet, a permanent Canadian owned shipbuilding industry, jobs for thousands of workers. The war years had force-started what could be built upon for the years of heavy ocean traffic that had to follow the peace - and for later developing world trade. Canada, a nation on three oceans, could be a major carrier of its own and other's cargoes.
Quite simply, that was not to be. The reasons connect to much that has been said already. First, the Liberal cabinet of Mackenzie King decided not to move the existing fleet into a Crown corporation and have a merchant marine fleet in peacetime operation. Nor did it decide to have a fleet involving mixed ownership. Instead, it decided to pare down the fleet, sell the ships cheap to business people, and end the operation. Such a policy, incidentally, would meet with US approval since it foresaw a significant enlargement of its own merchant marine capacity. Doubtless, Canadian government of the time was fearful of being left with a white elephant on its hands.
Secondly, the ship owners wanted to destroy the union and to transfer from an all Canadian union to a US union. They believed they would get more "cooperation " from the Seafarer's International Union. At the same time, the CSU was the largest all Canadian union in the National Trades and Labour Congress. When it was expelled in 1949, the votes of US ("international") unions assured its expulsion.
Thirdly, the American Federation of Labour (the AFL) wanted rid of the Canadian union. In 1944 it made a unilateral decision and granted the SIU jurisdiction over all "seamen and fishermen in all waters of North America and Canada". It had, incidentally, very few members in Canada. It asked the Trades and Labour Congress to end recognition of the CSU and to recognize the SIU. The Canadian Trades and Labour Congress rejected the AFL initiative on behalf of its member union, the CSU. The AFL held a legally meaningless trial in the USA and declared the CSU a communist union.
Much was at stake: US domination of Canadian unionism; US plans for the merchant marine future; the independence of Canada both in unionism and enterprise. How did the political and legal arms of the Canadian state handle the situation? They permitted lawless strikebreaking, shipowners to illegally break contracts, shipowners to foment illegal acts, the police to foment illegal acts, the police to protect illegal acts and actors, shipowners to attempt bribes, harassment by US unions, demands that Canadians be totally dictated to by US union headquarters, and, finally, the importation of a known US criminal to lead the fight against the Canadian union on behalf of the SIU.
An Industrial Inquiry Commission headed by Leonard W. Brockington, KC, in 1948, found the Great Lakes shipping companies guilty of intolerable behaviour. Nothing was done. A delegation of union leaders convinced the Liberal convention in 1948 to call upon the government to guarantee union security and to enforce its labour laws. The Liberal government did nothing.

### A US Criminal To The Rescue

In 1949, despite years of the lawlessness used against it that I have listed, the Canadian Seamen's Union hung on. That was the year Hal Banks, a US citizen, was brought in to apply the coup-de-grace to the union. The 1985 Canadian Encyclopedia reports that Banks was sponsored by the Canadian "federal government and some union leaders and shipping executives." (p. 1668) He had a long criminal record, including a 14 year sentence to San Quentin prison. He served only three and a half years of his sentence. A Canadian judge refused to grant him immigration status and was overruled from the Canadian cabinet. He engaged, almost without interference, in thug tactics, coercion, and corruption for years in Canada. The RCMP reported on him on February 23, 1959 and June 14, 1961, to the Canadian Justice Department. But the Diefenbaker government took no action. Banks was finally arrested and convicted in criminal court to five years in prison in 1964. Bailed for $25,000, he jumped bail and fled to the US. The Ontario government applied for his removal to face perjury charges in Canada. Advisors to the Secretary of State for the USA recommended approval of the Ontario application. Dean Rusk, US Secretary of State overruled them to protect Banks.
Peter C. Newman, writing of Liberal government scandals in his book The Distemper of Our Times (1968) includes a small part of the Canadian Seamen's Union story. "In Montreal, when Harold Chambers Banks was still functioning as the despotic head of the Seafarer's International Union, Canadian District, he always sent his thugs out to help Liberal candidates on election day. On June 30, 1954, when Banks was about to be deported from Canada, Walter Harris, then Liberal Minister of Immigration, personally reversed the ruling of his own department. In a television interview with Pierre Berton on November 22, 1964, Lester Pearson admitted some of his Montreal MPs had received electoral funds from the SIU." [Peter C. Newman, The Distemper of Our Times, Toronto, McClelland and Stewart, 1968, p. 278]
When in 1962, finally, a commission of inquiry was set up under Mr. Justice Norris, Banks was defended by a CIA agent sent to Canada. Mr. Justice Norris described the man who had been protected by Canadian government for nearly 15 years. "He is the stuff of the Capones and Hoffas... He is a bully, cruel, dishonest, greedy, power hungry, contemptuous of the law. In his mouth the word "democracy" is sheer blasphemy... Contemptuous as he was of his members, he became contemptuous of public opinion, feeling sure he would retain power in his union ... with the support of his own parent body, whose president was high in the councils of the AFL-CIO...." [Hon. Mr. Justice T.G. Norris, Report..., 1963, quoted in John Stanton, Life and Death of the Canadian Seamen's Union, Ottawa, Steel Rail Publishing, 1978, pp. 145-146]
In 1964 when Banks jumped bail, the Canadian merchant marine fleet was down to 2 vessels. The Canadian shipbuilding industry was finished. The Canadian Seamen's Union was destroyed. By 1968 the Seafarer's International Union which had finally been expelled in 1960 was back in the national union organization and remains today Canada's dominant seamen's union.

### The Avro Arrow

The other event is as bizarre as it is instructive for an understanding of Canada/US relations. The event, in its simplest terms, was the 1959 termination of all work on what was to be "the world's fastest and most advanced interceptor aircraft", [Canadian Encyclopedia, 1985, p. 123] the firing of 14,000 A.V. Roe of Canada employees involved in its creation and production, and, by government order, the literal cutting to pieces of the existing aircraft and the destruction of all plans.
Strange as the story may seem to be, it is a simple one. In 1958 Canada and the US signed a plan for joint air defence (NORAD) and the following year agreed to a Defence Production Sharing Program. Some people, among them Vincent Massey and Walter Gordon, had become uneasy about tightening links with the US. Massey in 1952 and Gordon in 1957 produced royal commission reports on cultural and economic policy. Both were critical of US influence.
Canadians had done a considerable amount of work on aircraft production and research during the Second World War and, as with merchant marine vessels, had gained considerable expertise in design and production. In 1949 they produced the first North American jetliner designed in Canada, the Avro Jetliner. Described by the 1985 Canadian Encyclopedia as "one of the outstanding achievements of its day" (p. 123), it never went into production, even for Trans-Canada Airlines, the national air carrier. The jetliner, produced and shown to the world, was sold for scrap in 1956.
In 1950 the first jet fighter designed and built in Canada, the Avro CF100 Canuck, went into production, 792 being built. Fifty three were sold to Belgium and the aircraft served ten years in NORAD and NATO squadrons.
The Avro Arrow was an advanced, supersonic, all-weather interceptor jet aircraft. Needless to say, the aircraft was expensive to design and build. It required a government determined to see production and it required a market for the product. Neither of those things was available. In 1958, the Progressive Conservative government terminated some aspects of Canadian research for the project. Strategic reasons were brought forward to doubt its usefulness - the development of intercontinental ballistic missiles, for instance. Nevertheless, Janusz Zurakowski test flew the Avro Arrow several times, exceeding 1600 km/h on the seventh flight. All involved were confident it would fly even faster. It has been claimed to be the most advanced aircraft of its day, not equalled in aerospace development for close to a decade after its creation.
Despite defence agreements - and perhaps because of them - the US refused to show any interest in purchases, and Canada could not gain sales elsewhere. The politics of major armament sales are complex and highly motivated by national economic interests at all times. The United States was plainly not interested in seeing the development of a major aerospace competitor in Canada - even though Canada was a close ally.

### The Implications of the Cancellation: Canadian Excellence Does Not Exist

The action of the Diefenbaker government in ending the project, placing A.V. Roe in a position to have to fire 14,000 employees, and having all Avro Arrows in existence or in partial construction literally cut to pieces and destroyed was a dramatic statement of Canada's position. The event hit Canadians very hard, and the Avro Arrow has entered Canadian mythology as a symbol of two things: the remarkable ingenuity and enterprise of Canadians when given a chance, and the blighting quality of Canada's relation with the US. Ironically, a large number of the scientists and engineers dismissed by A.V. Roe with the termination of the Avro Arrow went to the United States aerospace industry. There, anonymously, they contributed significantly to the success of the US as the world's leader in aerospace development.
James Eayrs, a Canadian expert on defence and foreign policy, saw the destruction of the Avro Arrow as inevitable, reasonable, and wise. "It was a blow to national morale," he records. But he goes on that the "United States became the scapegoat. That this indictment was both irrational and unfair did not prevent its being widely accepted." [James Eayrs, "Sharing a Continent," in The United States and Canada, Eaglewood Cliffs, New Jersey, 1964, p.68] The real story, according to Eayrs, was that a small undertaking to build an air frame got impossibly out of control, leaped in size and cost, faced personnel problems in the air force, unrealistic estimates of Canadian needs for the craft, and a failure to interest markets in the product. He states that the result, among other results, was that the US recognized the Canadian dilemma and agreed to the Defence Production Sharing Program. It assured Canadian enterprise defence production contracts otherwise unavailable.
The average Canadian - even willingly accepting Eayrs presentation - still wonders why the Canadian government saw fit to destroy all plans for the Avro Arrow and to have every vestige of the aircraft cut into pieces and sold for scrap hours after the announcement of the project's cancellation. That was strange behaviour, certain to elevate the suddenly nonexistent aircraft to the level of myth. It invites anyone to ask who was behind those orders? What was to be gained by destroying the visible results of a huge national expenditure?
When the Avro Jetliner was unable to find a market and had to be scrapped, its nose section and engines were placed in the National Aviation Museum. No shred of an Avro Arrow exists anywhere.

## Nationalists And Continentalists

The 1963 return of the Liberal Party to government power revealed a quality it possessed until the victory of Jean Chretien's Liberals in 1983. The party was divided between "nationalists" and "continentalists" - those who believed in significant economic independence for Canada and those who believed in ever-closer ties to the United States. Walter Gordon became Minister of Finance in the Pearson government. His budget of 1963 proposed a tax on foreign takeovers of Canadian firms.
In fact, he pointed to persistent levels of high unemployment, the continuing chronic state of Canada's balance of payments, evidence of budget deficits, and growing foreign ownership and control of the economy. His aim, quite simply, was to begin the repatriation of the Canadian economy by Canadians, with firm support and encouragement from the federal government. The civil servants of the day disliked the initiatives. Prime Minister Pearson supported him unequivocally until the budget was attacked, and then abandoned him. The president of the Montreal Stock exchange, Eric Kierans, conducted an all out attack on the budget. When his attack bore fruit, the "traders carried Kierans around the floor on their shoulders in triumph." [Denis Smith, Gentle Patriot, Edmonton, Hurtig Publishers, 1973, p.165]
Gordon's influence diminished and he resigned from the cabinet in 1965. But he returned in 1967 as president of the privy council and was the instigator of the Watkins Task Force on the Structure of Canadian Industry. It eventuated in 1968 with what has become known as the Watkins Report. Shortly after its publication, Gordon withdrew from electoral politics.
The loss of his political hopes was not taken by Gordon and his supporters as a complete defeat. A wide range of forces grew in the next years in which might fairly be called a popular movement for greater control by Canadians of all aspects of Canadian life. Certainly the celebrations of Canada's centenary year focussed attention upon Canada and its achievements. Expo' 67 brought millions of visitors to Canada and took many Canadians on trips in the country that reconfirmed for them the immensity, beauty, and good fortune of the country in which they lived.

### Centennial Year And An Awakening

The effect of that reawakening is extraordinarily difficult to measure. But it did influence future events. Out of Walter Gordon's initiative came the Watkin's Report in 1968, the Wahn Report in 1970, and the Gray Report in 1972. Dealing with the Canadian economy, all three reports were government initiated. All three reports were treated unsympathetically by government, though they influenced the setting up of the Canada Development Corporation (1971) and the Foreign Investment Review Agency (1973). All three reports recorded the high levels of foreign (especially US ) ownership of the economy and informed Canadians about the often high costs of foreign investment to Canadians and the very low cost to enterprises coming into Canada. They revealed the substantial, on-going outflow of capital from Canada, invisible to Canadians, as a product of foreign ownership.
Though government acted slowly or not at all on the recommendations of the reports, their effect, combined with the feelings released in Centennial Year produced movements, organizations, publications, and pressure groups concerned with the independence of Canada. In 1968 a movement to assure fair hiring of Canadians and using of Canadian materials began in the education system. In 1969 "the Waffle Movement" within the NDP was created to move that party leftwards and insure "an independent and socialist Canada". In 1970 (with Walter Gordon's support) The Committee for an Independent Canada was formed, presenting - less than a year later - a petition of 170,000 signatures to Prime Minister Pierre Trudeau demanding limits to foreign investment and ownership.
In the five years following Centennial Year other organizations and movements connected to the independence movement proliferated: The Writers Union of Canada, The Confederation of Canadian Unions, The National Farmers Union, The National Action Committee on the Status of Women, The League of Canadian Poets, The Canadian Artist's Registry, The Association of Canadian Studies, The Canadian Studies Foundation, The Canadian Federation of Independent Business, and the Canadian Liberation Movement are only some that appeared.
New publishers, determined to publish Canadian work, were established. New periodicals were founded, new theatres - many concerned to assure Canadian cultural vitality. And a CRTC (Canadian Radio-television and Telecommunications Commission) ruling requiring broadcasters to use a percentage of Canadian music brought many virtually unknown musicians, composers, and performers to national and international attention.
Very, very little that was structural was done to meet the demands and the enthusiasm of all the people those organizations and movements represented. In publishing, government established grants to publishers. But it didn't work to establish a strong industry by working with provincial education ministries to assure Canadian written and published textbooks would be widely used. When Ryerson Press (established 1829) was being sold by the United Church of Canada, much pressure was exerted to prevent it from being bought by the US company, McGraw-Hill in 1970. One proposal was that the federal government should provide 4 million dollars and that Canada's oldest text book producing press should be maintained as Canadian with the cooperation and, perhaps, ownership or joint ownership of already established Canadian publishers. The Trudeau government refused to act on that or any similar proposal.

### Canadian Film In The US Empire

Canadian film organizations pressed the government for some room in Canada's distribution system for Canadian films. US giants controlled and control the distribution of films in Canada. Canadian film people did not only lose in that period of active public participation and interest. In the middle 1980s Flora MacDonald, Minister of Communications in the Mulroney Progressive Conservative government, expressed determination to begin some amelioration of the lot of Canadian film makers. She consulted and drew up a policy that at last seemed as if it would start movement on problems Canadian film organizations had been working on for twenty years. But Jack Valenti of the American Motion Picture Association convinced the president of the US, Ronald Reagan, to telephone Prime Minister Mulroney. He in turn insisted that Ms. MacDonald meet Jack Valenti. The new film policy was shredded, and Canadian film organizations continue to have an almost nonexistent role in the life of Canadian viewers. US film organizations regularly take from Canada profits that they consider important to the health of their organizations, and they lobby to keep the Canadian film industry from developing.

### The Charter Of Rights And Freedoms And US Individualism

The 1982 patriation of the Canadian Constitution affected Canada/US relations in mostly invisible ways - but it did affect them. In the first place it marked a further, formal closing of a long constitutional association with Britain. It did not mark the end of the association, however, since the role of the Crown is not diminished in Canadian constitutional documents. That has significance for those who want very visible differences between the Canadian and US constitutional structures.
Patriation provided a show of independence. The reason it is a"show" is that there is no likelihood that the parliament in Britain would ever have impeded amendments to the Canadian Constitution. If the British parliament had received, for instance, the Charter of Rights and Freedoms alone as an amendment, it would have passed it without question. As a symbolic gesture, however, patriation of the Constitution probably had significance for many, especially in Québec.
The Charter of Rights and Freedoms, however, has involved a good deal of dispute. It has been accused of being an "Americanizing" document, concentrating as it does on individual rights and freedoms. Such documents are always questioned by people who wish to place faith in traditional customs and democratic parliaments. They usually supply comparisons to show that countries without Charters of Rights have no less freedom than countries with such Charters, no matter how large and elaborate.
In Canada's case, the Charter of Rights and Freedoms created a third national legislative body, the Supreme Court of Canada, and in that regard brought the Canadian system closer to the US system. The Supreme Court of Canada existed already, but the Charter of Rights and Freedoms gave the court priority in the interpretation of that document and the right to call legislation passed by the parliaments of Canada invalid if judged offensive to the Charter. Moreover, the Court may be appealed to in matters of the Charter and its findings may be in contradiction to legislation. In such cases the Court's rulings are dominant. As a result, the practice of law in Canada involves the use of US decisions, cases, and precedents in a greater degree than it did before 1982 because the United States has always had its Supreme Court superior to legislatures in matters of the US Rights document and the interpretation of the US Constitution. Canadian lawyers wanting to seek examples similar to cases that occur in relation to the Canadian Charter can, of course, often find helpful materials in US legal history.

### Legislating A Place In The US Empire

The Canada/US Free Trade Agreement of 1987 and its sequel, The North American Free Trade Agreement, are documents of enormous size with equally large ramifications for Canada/US relations. The agreements do more than has ever been done before to rob Canada of sovereignty over the economic direction of the country. They tie Canada to the US more tightly than ever before. They serve to obstruct initiatives Canada might wish to take that in any way can be said to offend free market activity in North America.
Before passage of the agreements Canada had much greater freedom to launch national programs in health, culture, social services, and the economy than it has now. In short, Canada has agreed to operate a capitalist market economy on equal terms with the USA, observing - for the most part - the definitions of social and economic operation as set out by the United States. At the same time the US has launched an Enterprise of the Americas Initiative to promote free trade agreements with Latin American countries. Many bilateral and regional agreements have been signed - always when the economies have shown a commitment to US style market principles and trade policies.

## Free Trade - A Definition

Free trade is essentially a policy by which a government does not discriminate against imports in favour of national products. It does not, either, regulate exports in order to favour the nation's consumers. The economic case for free trade is still based on Adam Smith's argument in the Wealth of Nations (1776) that the division of labour in a population leads to greater efficiency and greater production. Deduced from the general argument, he went on to argue that countries, too, will use their natural advantages of geography, resources, and expertise to produce efficiently. Countries will have advantages, comparatively, over other countries and so all will be able to trade advantageously. The competition involved, moreover, will increase general efficiency in production.
In addition a political argument grew from Smith's theories. It is the argument used daily in our time that if governments interfere with competition (which is alleged to produce the greatest efficiency possible), then they will create inefficiency. They will bungle. They will protect lazy manufacturers. They will hold back new processes.

### Free Trade As Imperial Policy

Many reasons exist to examine the values of free trade to see the good it can do for international commerce and standards of living. But there are a number of reasons, as well, to question the idea. In the great nineteenth and early twentieth century era of free trade until 1930, Britain was the leading investing, manufacturing, and shipping country of the world. The self-governing colonies (of which Canada was one) imposed protective tariffs on goods entering to help internal development. The countries in the Empire that maintained free trade were the underdeveloped countries which remained underdeveloped. The collectors of bananas for export did not find that banana trees in a tropical country provided sufficient "comparative advantage" to produce the wealth they needed to reduce poverty, disease, and high infant mortality.
Historically, there is no doubt that powerful countries with highly developed economies (like Britain in the nineteenth century) are eager for free trade. Crying out for freedom of competition, they know they are best able to compete. They know, in addition, that as powerful countries they can help the cause of competition by use of the military establishments they maintain to assure peace in the world.
The US has ten times more population than Canada has. It is vastly more wealthy. It owns outright much of the Canadian economy. It possesses the most powerful military establishment in the world, and it lies along 5500 miles of a border shared with Canada. To demonstrate the degree to which Canada has resigned sovereignty over its own people and directions, we will look at a very short list of new realities in Canada since the Canada/US Free Trade Agreement.
We need first to see how the agreement came into being. It was a US initiative for reasons related to global power. In 1979, eight years before the Canada/US Free Trade Agreement, the US amended its Trade Act of 1974 to "study the desirability of entering into trade agreements with countries in the northern portion of the western hemisphere to promote economic growth of the United States and such countries...and to present findings to the Congress by July 1981." [Section 1104 of [US] Public Law 96-39, July 26, 1979]
In his 1980 election campaign Ronald Reagan envisioned a North American economic area embracing Canada, the US, Mexico, and the Caribbean. In the negotiations with both Mexico and Canada, however, the US managed to have officials of those countries publicly call for free trade agreements. US government officials feared, correctly, that if the initiative came from the US government, both the Canadian and Mexican populations would be more suspicious of the idea.
In The Fight For Canada, David Orchard sums up some of the activity in Canada.
"By 1983, the Americans already had their plan, their man and a number of prominent Canadians willing to play along. In that year, the US ambassador to Canada, Paul Robinson, invited Sam Hughes, head of the Canadian Chamber of Commerce, to his exclusive Rockcliffe Park residence in Ottawa. The United States, he said, had decided to enter into free-trade agreements with selected countries. The first was to be Israel; Washington wanted Canada to be next. Thomas d'Aquino, chairman of the Business Council on National Issues - the lobbying arm of 150 major corporations, many American owned - was the next guest at Robinson's home, followed by Roy Phillips, president of the Canadian Manufacturers Association.
These steps taken, Robinson was told by his boss in Washington, Special Trade Representative William Brock, to back off - that to be successful, the approach for free trade must be seen as coming from Canada. If Canadians realized that the push was from the United States, they would react unfavourably.
In an exceptionally candid speech in 1990, Robinson recalled with satisfaction: `I'm pleased to say I did play a principal role in the re-initiating of the free trade agreement which I know is controversial in Canada. It's not controversial in the United States - we thought it was a good idea... I thought it was a 10-year project. As it turned out to be, it was a 5-year project... We knew that if this was regarded as a purely American attempt to say, quote, gobble up Canada, close quote, which we were all aware of... that we'd be doomed to failure, and that what we rally should do is try to interest Canadians....' [David Orchard,The Fight for Canada, Toronto, Stoddart, 1993, p. 130]

### US Power In The Postwar World

The facts regarding US motivation are, again, quite simple. After the Second World War the United States emerged unscathed at home, wealthy, and powerful in the world. In real terms it could command the loyalty of nations it associated with in economic, defence, and other agreements. Offering itself as the bastion of democracy against evil communism, it could both woo and coerce approval of its own policies (as in the Cuban crisis). It became and remains without question the most powerful military force in the world.
Its expenditures for military policy - as revealed by such an expensive miscalculation as the Vietnam War - placed it increasingly in unstable financial condition. In addition, countries that had been seriously disabled by the Second World War had regained strength, and often completely retooled with modern technology. They began to threaten the US position of supremacy in trade. Europe was becoming not only self-sufficient but also competitive. Japan was flooding the world with highly competitive automobile products and computer technology. Other Asian "tigers" were successfully entering world markets.
Since the late 1950s the countries of Europe have been groping towards a modern, technologically effective, publicly attractive form of consolidation. Their intention has been to weld the more than 300 million people of Europe into a single economic community with a single citizenship and currency. As the 1980s approached the US realized its trading power was shrinking, its claims upon the world were reduced, and that it faced a future that could hold serious economic instability and threats to US wealth and standard of living.
Its most natural policy choice was to secure - to bind as tightly as possible to the US - all nearby countries possessing wealth and potential wealth, especially those with land access to the USA. Its most insistent need, to put the matter in another way, was to build a Western hemispheric trading bloc that could balance and contest the economic might of the European Community and the Asian tigers.

### Canada And The US - A Clash

The conviction of that necessity was digested by people in the US government just as the Liberal party led by Pierre Trudeau returned to power in Ottawa in 1980 after a brief interlude of Progressive Conservative government led by Joe Clark. The Liberal government was reborn in more than one way. Possessed of "nationalist " and "continentalist" wings, it had since Trudeau's leadership in 1968, balanced the two factions without ever moving strongly on issues of independence. In 1973, for instance, it created The Foreign Investment Review Agency to screen foreign business entries and takeovers in Canada. But it made the agency almost ineffective by rubber stamping the vast majority of entries, and failing to meet opposition to the agency in a way that would garner support from the electorate.
After the 1980 election the Liberals moved on a few issues to guarantee Canadian prosperity and, they hoped, unity. The oil crisis hammering the world's economies was felt in Canada. The OPEC nations had seen oil prices double and redouble. The federal government created the National Energy Program as a solution. It was intended to achieve oil self-sufficiency for Canada. In addition it was to assure financial benefits to the federal government and to consumers. Thirdly, it was intended to achieve greater ownership of the oil industry by Canadians. Fourthly, it required a 25 percent government share of oil and gas discoveries offshore and in the North. The government share policy is already in place in Britain and Norway, to name just two countries. Indeed, Statoil in Norway takes 50 percent ownership of oil and gas finds and the British National Oil Company has the right to 51 percent. Other countries have similar policies. Finally, the Liberal government hoped that with bold initiatives taken to secure the wellbeing of Canadians, Québecers would want to remain in Canada.
Trudeau had committed the Liberals to an industrial strategy in his election speeches in Ontario. That strategy would "include an expanded FIRA, new targets for research and development spending, procurement policies to stimulate industrial restructuring under increased Canadian ownership, and a strengthened automobile industry." [Christina McCall and Stephen Clarkson, Trudeau And Our Times, Vol. 2, Toronto, McClelland and Stewart, 1994, p. 157]
The sincerity of those promises was given high profile as Marc Lalonde, Minister of Energy, Mines and Resources, pushed through - compromising where he had to - the National Energy Program. The Alberta government fought the initiatives and won gains for itself. In polls taken Canadians revealed more than 80% support for the new initiatives.
The Canadian government program met US policies for the future head on. Government people in the US responded aggressively. In The Reagan Challenge, (1985) Stephen Clarkson reveals Trudeau was accused in the US of "rabid nationalism." of "fanning the flames of anti-Americanism". Clarkson reports a US official as saying, "If the US allows Canada to get away with its new policies, what about Mexico?" Still another recalled the US backed coup in Chile in 1973, and outlined a plan to topple the government by "destabilizing the industrial base in Ontario and Québec". Myer Rashish, a senior State Department official, said that Canada/US relations "are sliding dangerously towards crisis". The US Treasury secretary flew to Canada to get guarantees of subservience to US policy. Ronald Reagan's Department of State head, Alexander Haig, formally protested the NEP. [Stephen Clarkson, Canada And The Reagan Challenge, Toronto, James Lorimer, 1982, especially pp. 23-49]
The Trudeau government could not retreat - and save face - from the National Energy Program, though they gutted the 25 percent share demand and modified other aspects. In retrospect, the whole exercise was a test - especially in the light of the US move to bring a huge part of the continent into its own economy. It was a test which the Canadian government failed. Submitting to US pressure, it abandoned the strengthening of FIRA, abandoned an industrial policy, and retreated from all initiatives to strengthen and increase Canadian hold on the Canadian economy.
With a kind of prescience about the result of his own nearly sixteen years as Prime Minister, Trudeau entrusted former cabinet minister Donald Macdonald, in 1983, with a sweeping royal commission to investigate Canada's economic union and development prospects. The Macdonald report, 1985, recommended a bilateral trade agreement with the United States.

### Two Tries: Diefenbaker And Trudeau

It is not unrealistic to compare post 1980 Liberal policy with the accession to power of the Diefenbaker Progressive Conservatives in 1957. In both cases election promises were made to repatriate Canadian economic power to Canadians and to provide a national vision and direction. With Albertans raging and US government spokespeople aggressively attacking, Canadians polled revealed more than 80 percent support for the National Energy Program. They would have supported the rest of the program in a similar majority if it had been maintained. The enthusiasm for Ottawa's bold initiatives turned, however, into quiet cynicism when the Liberal government collapsed before US criticism and beat a retreat.
The stage was set for John Turner's brief Prime Ministership and for the election that delivered the Progressive Conservative party the largest victory in Canadian parliamentary history.

## Towards Free Trade

The ideal person to move in the new ambiance of quiet cynicism and to carry through the Canada/US Free Trade Agreement was Canada's Prime Minister from 1984 to 1993, Brian Mulroney. In terms of Canada/US relations the time leading up to that agreement, and the time after, has sparked endless discussion, mountains of printed materials, debate, conflict, dissension. The North American Free Trade Agreement which followed the Canada/US agreement did not significantly change Canada's role; the foundations for Canada were forged in the first agreement. The arguments around the proposal and during the negotiations were repeated in a hundred ways. But they broke down into three main arguments.

### The Main Arguments

First, some Canadians argued that Canada was doing well as it was. In 1985-86 the current account balance with the US was 13.2 billion in Canada's favour. In 1987-88 it was 5.8 billion in Canada's favour. There were strains in trade relations, of course, but there would always be strains. The countries were each other's biggest trading partners. Even though Canada's percentage of trade to the US - over 70 percent of Canadian exports - was several times larger than the percentage of US trade to Canada, the US could well hurt itself by acting punitively towards Canada. Those Canadians argued, moreover, that a bilateral agreement could not be in Canada's favour because of the power differences between the two countries. They argued that Canada would lose sovereignty and would be sucked into the US social, cultural, and political system, especially since the agreement would not simply be a trade agreement.
Secondly, some Canadians argued for a rethought, rearranged trading relation with the US. Huge developing trading blocs and growing computerization, they argued, gave room for new tariff reductions, new initiatives, and sectoral trading agreements such as had been forged between Canada and the US in the Canada/US Automotive Products Agreement (the Autopact). They argued, too, that the General Agreement on Tariffs and Trade (GATT) was bringing tariffs down effectively and, indeed, Canada's tariff protection had become minimal.
GATT is a global organization begun in the late 1940s with the aim of reducing and ultimately eliminating trade barriers between and among countries. It continues its work still and has influence on a number of clauses in the free trade agreements Canada has entered into. These Canadians also expressed fear for Canada's independence in a bilateral free trade agreement with the USA.
Thirdly, some Canadians argued that the world was growing smaller and trading blocs were becoming necessary. Canada would be left out if it didn't act. The US, they argued, was becoming more protectionist and in order to gain guaranteed access to the US market, Canada must complete a free trade agreement with the US. They argued that a free trade agreement would increase employment and gain secure access for Canadian goods to the USA.

### What Canada Didn't Get

As history records, the third argument won and Canada signed the free trade agreement. The Mulroney government wanted unimpeded access for Canadian goods. It wanted immunity from US trade remedy legislation (for punishing competitors) and from the US trade tribunal system - the system by which US tribunals are the tribunals which decide if other countries are acting fairly in trade with the US. It wanted a fast and efficient disputes settlement mechanism. It wanted a clear definition of what constitutes a subsidy and what dumping (of products) means precisely. It got none of those things.
In his election campaign in 1993, Jean Chretien promised his government would not ratify the NAFTA agreement unless within two years a subsidy and dumping protocol was agreed upon. On Sept. 2, 1995, the Globe and Mail (pp. B1, B5) reported that Ottawa has agreed to extend the deadline for those demands indefinitely.

### What Has Free Trade Done To Canada?

The effects of the free trade agreements upon conditions of life in Canada are never easy to discern, Opponents of the agreements bring together alarming statistics of job losses, deindustrialization, and attacks upon every sort of national program in Canada. They cite reductions in medicare, unemployment insurance, pensions, equalization payments to the provinces, threats to East-West trade, and eroding cultural support by governments as part of the process of integrating Canada into the economic and social order of the USA.
When plants close, owners may often cite free trade as a cause, but they may speak as well or instead of technological changes and a number of other forces. Slashing government budgets is not attributed to forced alignment with US practice or highly conservative dictates from bond-rating agencies or the International Monetary Fund. It is attributed to Canada's annual deficits and growing debt.
No one can deny the seriousness of unemployment in Canada - worse than in the other industrialized countries, nor that the huge increase in jobs predicted by Brian Mulroney in his 1988 election campaign as a result of free trade has never materialized. Indeed, the opposite. But the European nations, too, are suffering heavy unemployment. One global factor is revealed by the match in Canada of high unemployment and increased export trade: technological advances are making work force reductions possible without reducing production. That fact may be symbolized by the remarkable increase in billionaires and welfare recipients at the same time in Canada.
The US social and economic structure is based on a market economy that strongly resists redistributions of wealth to care for the needy of the society. As a result it resists social care programs such as Canada and Europe have. As the world economies generate technological change such as has just been described, US patterns of response are almost impervious to solutions that call for redistribution of wealth and tax supported community programs formulated by citizens with government.
Before the free trade agreements Canada was significantly more open than the USA to responses requiring redistributions of wealth. Now, for reasons we shall see in the list of new economic realities brought upon Canada by free trade, Canada does not have the freedom to undertake measures of national assistance or incentive on behalf of Canadians that US interests claim interfere with their profit or potential to make profit. The point cannot be stressed enough, for it is a dramatic change.

### Two Things Free Trade Has Done

Two examples exist, are real, and have entered Canadian history; they cannot be denied. Both have been detrimental to Canadians and to Canadian democracy. First, in the 1990 campaign that elected Bob Rae as premier of an NDP government in Ontario, the electorate was promised a publicly owned automobile insurance system such as operates in British Columbia and Saskatchewan. The NDP won the election and the promise was killed because the Free Trade Agreement demanded prior notification to the USA and payment of compensation to US companies claiming a loss or a potential loss of profit as a result of the new system. The NDP, incidentally, resisted free trade, which in Canada's case very clearly intrudes upon provincial jurisdiction and powers.
Secondly, the US government has supported patent legislation in a way that gives more support to corporate wealth than is the case in Canada. In the US, pharmaceutical companies may have patents and exact enormous profits over twenty years, even from lifesaving drugs. NAFTA legislates that practice for Canada and Mexico. But even before NAFTA was signed, the Progressive Conservative government of Brian Mulroney passed legislation in the Canadian parliament, giving pharmaceutical companies (few of them Canadian) twenty year patents in order to "harmonize" Canadian practice with US practice. That has already raised the cost of pharmaceuticals to Canadians (and Canadian medicare) by 12 percent per year. By legislating in the Canadian parliament before the signing of NAFTA, the government could hide from Canadians that the extension in time for pharmaceutical patents was a US requirement.
When the Canada/US Free Trade Agreement was signed, the US president, Ronald Reagan spoke. "This agreement will provide enormous benefits for the United States. It will remove all Canadian tariffs, secure improved access to Canada's market for our manufacturing, agriculture, high technology and financial sectors, and improve our security through additional access to Canadian energy supplies. We have also gained important investment opportunities in Canada.
I congratulate Prime Minister Mulroney." [Ronald Reagan, quoted in Mel Hurtig, The Betrayal of Canada, Toronto, Stoddart, 1991, p.13]
A considerably franker and tougher tone was taken by George Ball under secretary of the US treasury in 1968. It is worthwhile to look back nearly 25 years. George Ball had much to do with Canada in the 1960s. He was impatient with evidences of Canadian independence. In The Discipline of Power, [Boston, Atlantic-Little Brown, 1968, p. 113] he declares the meaning, for him, of free trade.
"Canada, I have long believed, is fighting a rearguard action against the inevitable. Living next to our nation, with a population ten times as large as theirs and a gross national product fourteen times as great, the Canadians recognize their need for United States capital; but at the same time they are determined to maintain their economic and political independence. The position is understandable, and the desire to maintain their national integrity is a worthy objective. But the Canadians pay heavily for it and, over the years, I do not believe they will succeed in reconciling the intrinsic contradiction of their position....
Sooner or later, commercial imperatives will bring about free movement of all goods back and forth across our long border; and when that occurs, or even before it does, it will become unmistakably clear that countries with economies so inextricably intertwined must also have free movement of the other vital factors of production - capital, services and labour. The result will inevitably be substantial economic integration, which will require for its full realization a progressively expanding area of common political decision."

### A Short List Of Free Trade Rules

A short list of the new realities in Canada's economy and social community arising from free trade reflects the purpose of the agreements. As with examples of their effect that I have given - the killed promise of provincial auto insurance for Ontario and the 20 year pharmaceutical patent law passed by the Canadian parliament - I shall attempt to list matters about which there is no question. G. Bruce Doern and Brian W. Tomlin state in their 1991 evaluation of the Canada/US free trade negotiations, Faith and Fear [Toronto, Stoddart, 1991] the chief US goal. It related "directly to Canadian energy and investment policies. The US was determined to use the negotiations to ensure that they would never again be a target of discriminatory actions like those embodied in the N[ational] E[energy] P[rogram] and FIRA. In the final agreement, the US achieved its goal." (p. 284)
At the heart of that achievement is the new reality that henceforth US investors and corporations operating in Canada shall be treated as if they are Canadian. They must be given "national treatment". No government may favour Canadian enterprise for any reason.
The US has access to all forms of Canadian energy. If there is a shortage of oil or if - for any other reason - Canada wants to cut back on its export amount to the US, it can't. It must deliver the amount it has been delivering to the US averaged over the last three years, or the same proportion of restricted output.
The US has the right to "any good" which means energy resources or anything else - at the same price as Canadians get it. If Canada (as it has done in the past) wishes to supply any form of energy to Canadian enterprise more cheaply than it sells to the US - in order to help develop Canadian industrial capacity - it may not do so. If it wishes (as it has done in the past) to place an export tax on an energy "good" to create revenue for government, it may not do so.
The US has been given a complete waiver from the operation of the laws that limit or restrict foreign ownership of Canadian controlled financial institutions. US interests may take over every federally licensed financial institution in Canada. The US has been called "Canadian" in relation to the Bank Act, the Loan Companies Act, the Trust Companies Act, and the Insurance Companies Act. The US may take over Canada's major banks; Canada may not take over US banks.
The US is given "national treatment" in a huge number of service industries. That means US enterprises must be treated as Canadian. Among them a very few are health and social services, management of hospitals, extended-care hospitals, psychiatric institutions, children's hospitals, public health clinics, medical laboratories, etc. In the list also are printing and publishing, postal and courier services, almost all building trades, drug industries, and education services. Looked at closely, the very small part of the list I have reproduced reflects on the hard push in Canada - especially by corporate interests - to break the Canadian medicare system and provide private health services. It reflects, as well, on the legislation to grant 20 year patents in drugs. It reflects upon the increasing attack in Canada upon public education, an attack which may well eventuate in some provinces establishing large, parallel, private, for-profit education services.
On all contracts over $25,000 the Canadian government will treat the US companies as Canadian for the procurement of goods by government.
The right to profit or to compete for profit is raised to a holy right. When either government "reasonably" considers that any measure (whether covered in the trade agreement or not) taken by the other country might directly or indirectly reduce benefits, the measure may be challenged before a disputes panel. Such statements throw a huge blanket over almost any freely chosen action a Canadian government might take to lessen the cost or increase the efficiency of, or extend the range of any government or nonprofit activity that offends US free enterprise interests.
Just such a blanket statement is made about culture in Canada. The Canada/US agreement specifically exempts culture from its provisions. But the very next statement, in effect, says that if Canadians make any moves in their culture that may be deemed to reduce profits by US interests, the US may retaliate in any way it thinks best.
In addition, Canada must grant unexamined "temporary" entry to an enormous range of people - among whom are scientists, teachers, researchers, medical experts, journalist, librarians, etc. - as well as most corporate personnel in transfer, or other.
Canada must grant unexamined takeover of Canadian enterprises worth between 5 million and 150 million, and it must grant unexamined takeover by indirect acquisition of enterprises worth up to a half billion dollars.
Finally, subsidies are forbidden generally, but subsidy has not yet been defined, and, as we saw, Jean Chretien broke an election promise recently so that the word doesn't have to be defined.
As an election promise to the country and to members of his own party unhappy with the Free Trade Agreement with the USA, Chretien declared he would only sign the North American Free Trade Agreement with conditions. He would sign only if the countries agreed - within two years - on definitions of subsidy (assistance to forms of national enterprise) and of dumping (usually the sale of goods to a foreign country for a price lower than that paid in the home country). Both words, undefined, plague Canada/US Trade; Canadians often believing they are bullied by US definitions. When the two-year date arrived, the Canadian government quietly annouced no agreement was reached, none was expected soon, and gave no indication that Prime Minister Chretien was in the slightest degree unhappy that the US had ignored his conditions. This means US interests can persistently attack parts of the economy unlike parts in the US, claiming Canada is using a form of "subsidy" to get advantages.
The listing of those very few points from the enormous free trade agreements reveals dramatic new realities. The two economic, social, and political systems are not now closely united - that is a false way of recording what has happened. In fact, Canada's economic, social, and political system has been set up to be increasingly absorbed into the US system.

## Summary - With A Difference

A number of forces have been discussed that have a bearing on Canada/US relations. From time to time, the reaction of the Canadian people has been referred to. But in any way that can be clearly marked and identified, the feelings of the Canadian people have not been recorded. Of course, the question has to arise immediately - what or who is/are the Canadian people? Do they think or respond as one unit? Can we ever say "the Canadian people reacted in such-and-such a way"? As a summary - with a difference - of this section, let us propose that the Canadian people can and do occasionally react with significant unity. Let us remember, too, that Canada/US relations must importantly, at some point, mean the relation between the people who live in Canada and the people who live in the United States. When O.D. Skelton and W.L. Mackenzie King decided in 1935 to take "the American road" if possible, what were the feelings of the Canadian people? As C.P. Stacey points out the Canadian people were never consulted on the question.
If we look at the response of the population, however - as this section has occasionally done - there is strong evidence that the Canada/US relations that presently exist were not such as would have been constructed by the people of Canada if they had full freedom to make their wishes known.
The Diefenbaker victory in 1958 - the largest to that point in Canadian history - was a victory for a desire by the Canadian people to move to a condition in which they had leadership on questions of national independence and vision. The Cuban missile crisis, for Canada, was about Canadian independence, and the US government helped to overthrow the Canadian government of the day because of the Canadian government's position.
The famous Walter Gordon budget of 1963 was not destroyed by the Canadian people. It was destroyed by the president of the Montreal Stock Exchange and other people in North America with his interests. When Centennial year broke upon the nation in 1967, the people responded with a surprising enthusiasm. It is easy to see now that a ten year struggle ensued, growing out of the enthusiasm of organizations among the people, to secure and enlarge areas of Canadian independence from the USA. The response of government was weak. The three reports calling for significant change in the operation of the economy in relation to foreign participation were virtually ignored by the federal government, even though they pointed to huge losses in revenue for Canada as a result of foreign ownership of the economy.
When the Trudeau government was convinced, at the closing end of its long tenure in 1980, to set to work to achieve some independence within the Canadian economy, the Canadian people polled gave larger than 80 percent support to the beginning step - the National Energy Program. The new policy involving a stronger FIRA and a national industrial strategy was not defeated by the Canadian people. It was defeated by the direct intervention of US government and US interests.
The Mulroney victory in 1984 was huge. It appears to call into question the argument of these paragraphs. But it may not, because the Canadian people wanted leadership again, and they were promised a whole, new, clean slate. Indeed, they were promised that no such thing as a free trade agreement would be entered into.
From there the waters are murky. As pointed out at the beginning of this section it is almost impossible to say there was, or was not, "a free trade election". And while there was a referendum on the ideas for a change in the constitution at the time of the Charlottetown Accords, there was no referendum on the acceptance of a free trade agreement with the USA which changed the powers held for the Canadian people in Canada more than the agreements at Charlottetown would have done.
This "summary - with a difference" seems to suggest that in the matter of Canada/US relations the Canadian people have been the losers and their wishes for their country have rarely been followed by those entrusted to express those wishes. It seems to suggest, too, that US leaders have always had, and expressed, a clear interest in subordinating Canadian wealth and freedom to the needs and wants of the USA.
Readers will have to study the section, study the readings, study their own experience, study any materials they have read elsewhere that relate, and decide whether this "summary - with a difference" points to a correct way of seeing Canada/US relations or to a way that is seriously flawed.

## From 1935 To 1995

Whatever the case, the situation of Canada/US relations today invites the observer to cast his or her mind back to the day in 1935 when the Canadian Prime Minister, W. L. Mackenzie King, told the US diplomat Norman Armour that Canada had two choices and he, King, "wanted to choose `the American road' if we [the US] made it possible for him to do so."
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