By: Mitch Heimpel
Canadians are, in their heart of hearts, protectionists.
Not that Europeans aren’t, of course. But, on the whole, the European Union is an economics project about a single market. Canada is an economic project that regularly gets joked about as being “five oligopolies in a trench coat.”
No sooner had Mark Carney stepped down from the lectern at the European Parliament than the professional diplomatic class of Strasbourg was already on the phone to their favourite journalists throwing cold water over the prime minister’s ambitious plans for a new era in Canada-EU economic and defence cooperation.
Frankly, it’s a little hard to blame them. The evidence is overwhelming.
Ten EU member states have yet to ratify CETA. The list includes major European players such as France and Italy. Reasons vary, but even the read-out provided by the Prime Minister’s Office last week emphasized “non-agricultural goods” when discussing potential future areas of integration.
That sounds like bad news for those of us who might have had an interest in French butter or Italian cheese. But that’s probably an area of public policy where many of us have learned to live with disappointment.
The excuses for our protectionism are a part of the Canadian hymn book of our politics. Canadian consumers might want more choice, more competition, and the corresponding lower prices. Each of those demands is met with a well-practised line from policy makers and sector incumbents.
Want more banking competition? Clearly, you are a reckless anarchist trying to turn our pleasant Canadian firms into Wall Street cowboy capitalists.
Want more telecommunications competition? It’s a big country. Protecting incumbents rewards them for decades of infrastructure investment. Really, it’s a public service. Don’t you see?
Want more airline competition? You are attacking good Canadian jobs. No European airline will ever employ Canadians the way Canadian carriers do.
This is all plainly hogwash. The only person who is harmed by this, of course, is the consumer. Canadians. Canadian airline policy means we pay more for flights. Canadian banking policy plays a role in why Canadians are a generation behind our allies on real-time payments infrastructure. Canadian cell phones? Well, there’s a reason Canadians fear our monthly bill.
That is Mark Carney’s opportunity.
All the concerns with EU “associate membership” — whatever it turns out to mean — are real. Free movement and the Schengen Area are not small concerns. Handing off significant rule-making authority to Brussels in any area of Canadian law ought to be a non-starter.
That doesn’t mean we can’t change the rules on our own. That doesn’t mean we can’t open our own markets to foreign competition because we think it will improve costs and customer service for Canadians. If the prime minister wants “Associate Membership” to mean anything, it has to mean that we understand our protectionist past cannot become our protectionist future.
Carney, for his part, might recognize this. The same read-out that ruled out agricultural goods, specifically highlighted things like “AI and Compute,” and “financial services and payments.” La Presse journalist Mathieu Boivin reported on Sept. 17 that Canada and the EU have set up six “sectoral tables” in advance of their next meeting in Montreal at the end of October.
You can have real problems with “associate membership.” God knows, I’ve got questions. But I think a lot of Conservatives are missing the opportunity and focusing on the downsides. We spent two years talking about economic “gatekeepers” prior to the last election. If the cost of breaking down the gates is that we’re forced to have conversations about European ownership, payment systems integration or, God help us, more consumer choice on flights or cellphone packages, bring it on.
The Europeans are right to point at our decades of entrenched protectionism. We’re just as right to point back that the EU signed a trade agreement with us a decade ago that their members still haven’t all ratified. But that pretends there is no opportunity in front of us. I’m not sure that’s true. It may be limited. But the status quo clearly isn’t serving anyone other than incumbents who don’t need the help.
If the Prime Minister wants his big EU announcement to mean anything, it’s probably about time our five oligopolies lost their trench coat.
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I commend the author for his courage, and his persistence.
I am in my sixty-fourth year. I studied economics in the late Seventies, and very early Eighties.
The very real concerns expressed by this author were basically our second year policy course.
We opined on these subjects then, and ever since.
Nothing changes in this Country, not because we don’t know the proper polices to follow; we know the optimal courses of action.
Nothing changes in this Country because Canadians lack the courage to try.
Our own apathy and unaccountability are our greatest enemies.
A tip of my cap to the author, but we’ve heard the song before.
Very well said.
Canada has had a very strong protectionist streal ever since Sir. John A. MacDonald's National Policy in the 1870s. The world has changed, but our old instincts are still there.
In addition to the air transport, telecommunications, financial services and agricultural (supply management) sectors, I would point to occupational licensing. We are extremely reluctant to recognize foreign credentials. A doctor qualified in France can be required up to six years of extra training in Canada before we let them practice. Why?