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John A. Macdonald: Maker of a second-class nation

September 26, 2011 Leave a comment

The second volume of Richard J. Gwynn’s biography of Sir John A. Macdonald — Nation Maker — dealing with the epochal final years of Canada’s first Prime Minister will be one of the most discussed of Canadian non-fiction books of 2011. In Kingston, where Macdonald lived most of his life and  where I’ve lived for the past year, Macdonald is a revered figure and much effort is being put into preparing for the bicentenary of his birth in 2015.

Richard Gwynn spoke of his subject at the Kingston Writers’ Festival last weekend and the line-up to buy his book and have him sign copies was satisfying long. During an appearance with two other authors of books on Scottish-Canadians, Ken McGoogan  (“How the Scots Invented Canada”) and Vincent Lam (“Tommy Douglas”) he spoke knowingly of Macdonald’s undisputed impact on Canada. In his book, Gwynn concludes that “Had there been no Macdonald, there almost certainly would be today no Canada.”

It is not always easy to challenge the shibboleths of Canadian history, but after reading this latest of Richard Gwynn’s meticulously researched and finely crafted Macdonald biographies, I feel compelled to do so.

Macdonald’s achievements were indeed historic. His crafting of the scheme to confederate the British colonies of North America in 1867 and his purposeful resolve to build a transnational railway that would provide the spine to keep the country together (completed in 1885) are not to be disputed.

Macdonald is also remembered for a third reason. Little more than a decade after Confederation, he addressed himself to the great economic issue of the times: protectionism vs. free trade. He came down on the side of protectionism, which he saw as a way of building up manufacturing and reducing the appeal of the United States. As Gwynn points out, Macdonald worried that “our work-people have gone off to the United States … adding to the strength, to the power, and to the wealth of a foreign country instead of adding to ours.”

Macdonald was right that there was a great Canadian migration to the United States in the 19th century. Population levels stagnated as the movement to the United States offset, and in some years exceeded, immigration from Europe. Job creation was lagging at a time when the younger sons of farmers, knowing they would never inherit the homestead, headed to the cities in search of jobs.

Macdonald’s solution was his National Policy, a system of tariffs high enough to protect existing Canadian manufactures and to encourage the establishment of new ones. The new tariffs that came into effect after Macdonald’s relection in 1878 ran as high as 34 per cent on finished goods. In a short time, Canadian farmers were paying 25 cents a gallon for inferior coal oil, compared to eight cents a gallon for high-quality oil in the U.S. The duty on iron was 80 per cent, vastly increasing the cost of an American harvester and ensuring a comfortable home market, with high prices, for such companies as Massey-Harris. To make Canadian manufacturers even more comfortable, a healthy portion of the tariff was passed to them rather than the Canadian treasury.

The upshot of Macdonald’s National Policy was to deepen and extend the “Long Depression ” that ran through the 1870s and 1880s. Limiting Canadian farmers to a small home market of just a few million consumers, while they had to pay exorbitant prices for farm equipment,  condemned thousands in the countryside to impoverishment. The new jobs in industry created by protectionism were far fewer than if Canadian companies had had to go after the sixty million eager consumers making up the American market. Richard Gwynn observes astutely that in the years immediately before Confederation, the Reciprocity Treaty then in effect with the United States “had been a boom period for Canadians.”

Macdonald’s National Policy had a second and even more damaging consequence for Canada. It made the country an economic vassal of the United States when, in order to get around the tariffs, American companies began to establish branch plants here. They were, of course,  pleased to charge the higher prices allowed by the Canadian marketplace, a circumstance that continues to this day.

The Liberal-Conservative party of Sir John A. Macdonald continued as the champion of high tariffs and protectionism. The Opposition Liberals under Wilfrid Laurier, campaigned unsuccessfully for “unrestricted reciprocity” in 1891 but finally won election, after the Old Chieftain’s death, in 1896. The Liberals lost power in 1911 over their attempt to bring in a free trade agreement with the United States. It was left, ironically, to Brian Mulroney’s Progressive Conservatives to drink from the holy grail of Canadian politics with their free trade victory in 1988, leading to the North American Free Trade Alliance (NAFTA).

Richard Gwynn’s latest book represents an important addition to the literature of Canadian politics and history. It fails, however, to recognize the disastrous consequences of Macdonald’s National Policy and the fact that for a century it relegated Canada to economic and industrial second-class status.

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Merger: What’s in it for the NDP?

September 7, 2011 Leave a comment

Former Liberal Prime Minister Jean Chretien, looking fit under a mask of TV make-up, gave an interview this week in which he predicted that a merger of the Liberals and the NDP, “will be done one day.”

A master politician, Chretien is probably right. There is a solid case to be made for an NDP-Liberal merger, which would create a centre left party that would give Canadians a single, clear alternative  to the centre right of Stephen Harper”s Conservative Party.

The question is, what time frame does “one day” mean?

Amid the heavy discussions about the possibility of a merger — intensified by the death of Jack Layton and the beginnings of a race to name his successor — the issue of what might be in it for the NDP is being overlooked.

Parties only unite when they see it in their mutual interest to do so. That was the case early in the 20th century when Mackenzie King’s Liberals swept up the remnants of the Progressive Party. The leaderless Progressives had no where else to go.

Turn the clock ahead to the 2000s, and we have the merger of the Canadian Alliance and the Progressive Conservative party. As Mr. Chretien mentioned, that came about despite PC leader Peter McKay’s promise that he would never entertain such a horror.

Despite their differences, it wasn’t as much a merger of two parties as it was the reassembly in one tent of an old party — the party of Brian Mulroney. But it didn’t come about easily, and it took time. Both parties went through three leaders and three elections before Stephen Harper struck his deal with McKay to “unite the right.”

The NDP and Liberals share many values: a commitment to a strong public sector, belief in the social safety net, support for multiculturalism, and suspicion of adventurous foreign entanglements. Both parties also have blocs bitterly opposed to their opposite numbers: right-wing Bay Street Liberals that a merger would send into the arms of the Conservatives, and the NDP’s left wing activists, quiet under Layton, who would be tempted to start their own party.

Overriding all of these concerns, however, is the fact that having become the Official Opposition, the NDP now has a historic opportunity to nudge the Liberals out of the political centre, the great mainstream where most Canadian voters spend most of their time.

With this prospect, may NDPers are asking: Why bother with a merger? What’s in it for us?

The Liberal governments of Pierre Trudeau and Jean Chretien, in doing their duty as they saw it, lost both Quebec and the West. Quebec went when the PQ was able to convince voters that Trudeau’s new Constitution and Charter of Rights was the product of a conspiracy against la Belle Province. The Clarity Act cinched the myth. The West started to go when Trudeau asked Western farmers, “Why should I sell your wheat?”  The rout was completed with the National Energy Policy, a 1970s program that stripped the three Far Western provinces of oil revenue and paralyzed the exploration industry, beggaring the oil patch of Alberta.

The NDP is at a historic junction, made all the more challenging due to the fact of its sudden and unexpected successes in Quebec. Embracing the Liberal party at this stage would hardly reinforce its tentative hold on its 59 Quebec seats.In the West, embracing the Liberal party would put new difficulties in the way of the NDP rebuilding its federal strength on the prairies.

There may be an NDP-Liberal merger some day, but I would not expect it to come about before at least one, or perhaps two federal elections have passed into history. Along about 2020, when Canadians have grown tired of Jason Kenney as their Conservative Prime Minister, Mr. Chretien’s prediction could well come true: “One day.”