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Canadian Politics: Canada For Sale, First Come First Served

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In Canada we have three political parties on the national stage that pretty much cover the spectrum of mainstream of political thinking these days (With apologies to the Bloc Quebecois, but they really are a regional party on the national stage.) We have the New Democratic Party (N.D.P.) who can't decide whether they are in the "New Labour" mould of Tony Blair or the older European social–democrat form as practiced in Scandinavia; the centre-right Liberal party who are socially liberal but fiscally conservative; and the right–wing Conservative Party Of Canada (Which was the result of a merger of two parties the ultra right-wing Reform party and a party very similar to what the Liberals are today the Progressive Conservative Party of Canada) who are socially and fiscally conservative.

The N.D.P. claim to represent the little guy and are defenders of social programs, the Liberals like social programs but also like the business community, the Conservative Party Of Canada calls itself fiscally responsible which means it spends money on things which fit its moral agenda but not much of anything else. Hey but they're all pretty clear about these things in advance and make no bones about it, so if they get elected and start doing what they said they were going to do, people shouldn't be so surprised.

The Stephen Harper-led Conservative Party of Canada has always been pretty ambivalent about the Kyoto Accord on greenhouse gas emissions and have vacillated between officially withdrawing from it or just unofficially letting it fall by the wayside. While on the international scene, like at the most recent G-8 conference, he might sign a communiqué supporting a program to help developing countries reduce their emissions, back at home he's cutting that funding from his spending plans.

Using the familiar mantra of protecting taxpayer's money as their excuse, they are not going to spend the 1.8 million dollars that the previous government had pledged towards that program. Of course they're not so concerned about taxpayer's money when they fast-track military spending by cutting out the unnecessary step of asking for tenders and bids on the projects. Nope, they'll just hand out 15 billion in spending without any care about getting the best deal for the buck.

But like I said, fiscal responsibility for them means spending money on what they think is important. Although since you can say that about every political party, that's not exactly a fair criticism — the only reason people complain about it is because we don't agree with their spending priorities.

There's a problem though if we let ourselves get caught up in the small fry issues of how much is being spent on what and what's being cut from where. We miss out on the bigger problems that face the economy, and how the Conservative Party of Canada's agenda will do the most damage in the long term. The whole issue of foreign ownership of Canadian firms, specifically firms involved with natural resources and research and development has implications that may not be felt until years down the road, but could end up causing the most real damage.

There's even a new name for it, the process of losing ownership to foreign companies, it's called Hollowing Out. It refers to the fact that while the company might be located in Canada, the ownership is void of any Canadian presence.

In recent months this has been most noticeable in three industries: mining, steel, and natural gas. Much has been made of how both China and India are looking to guarantee their supply of natural gas and fuel through the acquisition of companies in Western Canada and their attempts to purchase various concerns and properties. In fact the two countries have even gone to the extent of beginning negotiations to join forces so they stop bidding against each other and driving prices up to their detriment.

But the ones that have really been striking close to home are the recent sales or bids for some of the biggest names in Canadian steel and mining. These companies have been the cornerstones of industry in Canada for literally more then a century. Inco, Falconbridge, Stelco, and Defrasco are names that are familiar to almost every Canadian who pays any attention to the world of labour, industry, or business.

The major concern about foreign ownership is, as usual, what happens to the local company now that it's owned by a corporation in France, Belgium, or Germany? If the parent company starts feeling the financial squeeze where are they going to lay off jobs first? Their home country where they need the support of the locals, or Canada where it doesn't really matter what people think of them?

In the first wave of foreign ownership back in the postwar boom of the 1950's, we didn't even have our own manufacturing base. Most of the companies were what's known as branch plants. American corporations would open for business here, hire locals to do the factory work, and send the profits back home. When times got tough in a recession workers could show up for their shift and find the plant locked and management back in the States owing them wages and severance packages.

The governments of Canada starting wising up to this practice, realizing it was doing nothing to actually help our economy in the long term, and started a foreign investment review board that would make decisions on applications for foreign ownership of Canadian plants, and set regulations for outside companies wanting to set up a business in Canada.
The amount of actual regulating this board would do and does depends entirely on the flavour of the government of the day. But in general they've tried to strike a balance between allowing the capital Canada lacks to be invested in our economy, ensuring that majority control stays in the hands of Canadians. Decisions that effect Canadians are at least being made by people who are going to have to wake up in the morning and see their names vilified in the local news media, not by someone sitting in Paris, Bonn, or another foreign capital.

But the cycle of foreign ownership seems to have picked up speed again. Of course the Conservative Party of Canada wasn't around when it started, but they also don't seem to be doing anything about it. In fact they keep bleating on about making Canada a place that's more inviting to invest in. In other words giving out special tax breaks for money invested in Canada etc., jobs created, and plants opened.

Now that all sounds very good on paper, and I'm all for anything that's going to put people to work and give them hope of a better future, but will these jobs be here in five or ten years down the line when the employees are reaching an age where starting over again becomes difficult if not impossible? That's what's happened before when these companies have bailed.  Employees who had given twenty to twenty-five years of good work were left in their late forties and early fifties with no other marketable skills, or a job market that doesn't want to hire somebody who is going to be retiring in ten to fifteen years.

When government's encourage foreign ownership and investment, they aren't going to be placing conditions on how the money is spent. Wouldn't want them to think we don't want them here now, would we? Who cares what happens in ten years?  We'll have retired on our great government pensions by then. We'll have lots of nice statistics showing how many jobs we created this year when we go into the election and that's all that matters.

Now I'm not saying that the Conservative Party of Canada are the only ones guilty of this way of thinking, but they are the ones who are currently pimping us to the world by making ringing pronouncements like "Canada is open and ready for business." What does that mean in reality? How much of our future are they prepared to trade away for a quick roll in the hay to bolster their political fortunes by increasing job numbers?

Is this why they are being so wishy-washy about Kyoto so that they don't have to apply the rule about emission reductions to foreign investors? Are they reneging on our contribution to helping developing nations offset the costs of reducing emissions because we are trying to steal business from them?

I can see the new brochures they send out now. Thinking of investing in the Developing World? Consider Canada as a viable alternative: laxer environmental controls, no need to worry about Kyoto accord emissions, generous tax allowances, no need to worry about tropical diseases and nationalist revolutions. Canada, the best little developing nation in our hemisphere: you've seen the rest now raid our nest, natural and human resources ripe for the plucking, we're bent over and ready for…!

Conservative governments and economists have been talking about the short term pain of globalization for years now, but no one seems to mention the long term pain of what happens when the global investment heads home with their pockets full and our forests, mines, and oil fields empty. What we really need is a government who would be dedicated to the short term pain of actually developing our own economy and figuring out ways or securing investment dollars from within Canada to establish Canadian businesses.

Without that we will continue to go through cycles of boom and bust dependant on the fortunes of other economies far more then we need to be. We're never going to be a major economic power in the world, our population base is just too small for that, but that doesn't mean we are stuck being dependant on others for creating jobs and industry. But we are dependant on a Government who will care about the future of Canada. This one doesn't.

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About Richard Marcus

Richard Marcus is the author of two books commissioned by Ulysses Press, "What Will Happen In Eragon IV?" (2009) and "The Unofficial Heroes Of Olympus Companion". Aside from Blogcritics his work has appeared around the world in publications like the German edition of Rolling Stone Magazine and the multilingual web site Qantara.de. He has been writing for Blogcritics.org since 2005 and has published around 1900 articles at the site.
  • http://no1citizen.blogspot.com mike

    Richard this is nothing new in Canada we have been on the American and British underbelly for so long it is disheartening ,And at no time in the past have we stood on our own.
    The only time in Canadian history that we came close was after WW2 ,and we screwed up -polititions started to want Canada to become the next american State and have been trying ever since
    Examples : The Avro Canada fiasco
    – Korea
    – Vietnam
    – Free Trade
    You name it we have been right up the Americans behind . I am in favour of equal trade with someone with equallity in mind. That being said there is the other aspect of we lost control years ago (even the #407 highway in Ontario is owned by a company from Spain ) And where I am from Cape Breton Island
    Americans and Germans own most of the property , Spend huge amounts of money and I can only assume it is to hide Their money from the same contry they spend all but 2 weeks a year in ..

  • Dragon in Ottawa

    If there is one thing I have learned living in Ottawa for the past 10 years,
    “Eat or be eaten…..it’s ALL about the money baby”.

  • http://centrerion.blogspot.com Canadian Politics

    Actually, if you look at both sides of the equation, we’re buying more of their companies than they are of ours. No need to be alarmist. Actually, it’s funny you should bring this up, because the Americans this site hates so much (esp. the right wing ones) have the same concern.

    More, from wikipedia: Canadian banks also have far more of a presence in the United States than American firms do in Canada. In part this is because American firms cannot buy Canadian banks, but Canadian banks have, at times, been able to buy American ones. Since the large Canadian banks already operated nationwide chains of a thousand or more branches, they find it relatively easy to integrate smaller chains of American banks into their systems.