Canada’s Place in the Canada’s Place in the International Political International Political

EconomyEconomy

January 14January 14

Summary:Summary:

What is Canada’s place in the world?What is Canada’s place in the world?

In the global hierarchy of nations, In the global hierarchy of nations, between the rich and powerful (also between the rich and powerful (also resource and energy consuming) and resource and energy consuming) and the poor and/or developing countries, the poor and/or developing countries, where is Canada situated?where is Canada situated?

The debate:The debate:

This week we’re looking at one of the This week we’re looking at one of the longstanding debates in Canadian longstanding debates in Canadian Political Economy. Political Economy.

The readings for this week present The readings for this week present different positions in the debate over different positions in the debate over the nature of the Canadian economy the nature of the Canadian economy and the strength of the Canadian and the strength of the Canadian economy.economy.

Dependency TheoryDependency Theory

Has the Canadian economy been Has the Canadian economy been historically weak, dependent and historically weak, dependent and underdeveloped? underdeveloped?

Stanford: “a hewer of wood and pumper of Stanford: “a hewer of wood and pumper of oil”oil”

Watkins: “the most neo-colonial country in Watkins: “the most neo-colonial country in the world” “the richest dependent the world” “the richest dependent developed industrialized country” he developed industrialized country” he refers to the “surrender of Canadian refers to the “surrender of Canadian sovereignty for the glory of American sovereignty for the glory of American capitalism”capitalism”

Silent SurrenderSilent Surrender Levitt: 1970: “Present-day Canada may be Levitt: 1970: “Present-day Canada may be

described as the world’s richest underdeveloped described as the world’s richest underdeveloped country.” “a rich, industrialized, underdeveloped country.” “a rich, industrialized, underdeveloped country” “structural underdevelopment” country” “structural underdevelopment”

““Laurier declared that the twentieth century Laurier declared that the twentieth century belongs to Canada. By the middle of the century belongs to Canada. By the middle of the century it had become clear that Canada belongs to the it had become clear that Canada belongs to the United States.” “The instrument by which the United States.” “The instrument by which the Canadian economy has been recolonized…is that Canadian economy has been recolonized…is that of direct foreign investment – more specifically of direct foreign investment – more specifically U.S. direct investment.”U.S. direct investment.”

Hewer of Wood, Pumper of OilHewer of Wood, Pumper of Oil Stanford: “Resources have naturally played a central Stanford: “Resources have naturally played a central

role in Canada’s economic history. Our development role in Canada’s economic history. Our development has been largely shaped by successive resource has been largely shaped by successive resource booms: first furs, fish, timber, and agricultural goods, booms: first furs, fish, timber, and agricultural goods, and later minerals and energy. These natural riches and later minerals and energy. These natural riches were harvested for export to our more advanced were harvested for export to our more advanced trading partners (first colonial Britain, then America). trading partners (first colonial Britain, then America). The resulting incomes paid for the importation of the The resulting incomes paid for the importation of the more sophisticated manufactures needed on our more sophisticated manufactures needed on our farms and in our cities.”farms and in our cities.”

““Analyzing this historical pattern, Harold Innis and Analyzing this historical pattern, Harold Innis and other Canadian political-economists worried that other Canadian political-economists worried that Canada’s role as a hewer of wood and drawer of water Canada’s role as a hewer of wood and drawer of water would constrict our prospects, leaving us perpetually would constrict our prospects, leaving us perpetually dependent on wealthier metropoles to purchase and dependent on wealthier metropoles to purchase and then transform our resources.”then transform our resources.”

Diversification, then RetreatDiversification, then Retreat

Stanford argues that over most of Stanford argues that over most of the 20th century, Canada was the 20th century, Canada was diversifying its economy and diversifying its economy and becoming less reliant upon natural becoming less reliant upon natural resource products. resource products.

Canada was successfully escaping Canada was successfully escaping from its resource pigeon-hole, until from its resource pigeon-hole, until approximately 1999.approximately 1999.

Marxist CritiqueMarxist Critique

Or, has the Canadian economy Or, has the Canadian economy developed a rich, advanced capitalist developed a rich, advanced capitalist economy that is typical of the economy that is typical of the advanced capitalist world? Has it advanced capitalist world? Has it been a diversified, fully developed been a diversified, fully developed economic success story (in capitalist economic success story (in capitalist terms, at least)?terms, at least)?

Critique of the Critique of the Dependency ApproachDependency Approach

Kellogg points out that foreign ownership Kellogg points out that foreign ownership of the Canadian economy peaked in the of the Canadian economy peaked in the early 1970s. There has been a recent but early 1970s. There has been a recent but relatively minor upsurge in recent years.relatively minor upsurge in recent years.

Foreign ownership in Canada has not Foreign ownership in Canada has not caused underdevelopment. Canada has a caused underdevelopment. Canada has a diversified economy, that shares the diversified economy, that shares the profile of an advanced capitalist country.profile of an advanced capitalist country.

Canada, in fact, becomes an important Canada, in fact, becomes an important source of FDI abroad. source of FDI abroad.

Marxist ApproachMarxist Approach

Kellogg: “That is where a renewed Kellogg: “That is where a renewed Canadian political economy has to Canadian political economy has to begin, with a focus on class relations begin, with a focus on class relations inside Canada rather than economic inside Canada rather than economic relations between Canada and the relations between Canada and the United States.” United States.”

Canada: On the Edge of EmpireCanada: On the Edge of Empire

Canada: On the Edge of EmpireCanada: On the Edge of Empire

Canada was formed as an outpost of Canada was formed as an outpost of first the French then the British first the French then the British EmpiresEmpires

Canada shares a border with the Canada shares a border with the United States, the dominant global United States, the dominant global power of the 20power of the 20thth century and beyond century and beyond

Canada: Shaped by EmpireCanada: Shaped by Empire

Canada’s relationship with Britain Canada’s relationship with Britain and the United States has shaped the and the United States has shaped the Canadian economy and the Canadian Canadian economy and the Canadian identity.identity.

There have always been debates in There have always been debates in Canada about the advantages and Canada about the advantages and disadvantages of these close disadvantages of these close relationships with the global power.relationships with the global power.

When did Canada When did Canada become an independent become an independent

country?country?

The British IdentityThe British Identity

For many English-speaking Canadians, For many English-speaking Canadians, our ties to Britain defined the our ties to Britain defined the Canadian identity.Canadian identity.

““A British subject I A British subject I was born, a British was born, a British subject I will die” subject I will die”

John A. Macdonald John A. Macdonald during the election during the election campaign of 1891campaign of 1891

““the empire on which the empire on which the sun never sets”the sun never sets”

The Flag DebateThe Flag Debate

In the mid-1960s when the federal In the mid-1960s when the federal government considered the adoption of a government considered the adoption of a new flag to replace the Union Jack and the new flag to replace the Union Jack and the Red Ensign, it was highly controversial and Red Ensign, it was highly controversial and divisive.divisive.

Far from all Canadians were enthusiastic Far from all Canadians were enthusiastic about the new flag and it faced much about the new flag and it faced much opposition within the House of Commons opposition within the House of Commons and from the public.and from the public.

Canada’s Red EnsignCanada’s Red Ensign

The Flag DebateThe Flag Debate

The red maple leaf was one proposal The red maple leaf was one proposal amid many. For more information, amid many. For more information, including a range of alternative including a range of alternative proposals, see:proposals, see:

http://scaa.usask.ca/gallery/flagdisplay/index.htmhttp://scaa.usask.ca/gallery/flagdisplay/index.htm

For more information see the CBC For more information see the CBC video archives:video archives:

http://archives.cbc.ca/IDD-1-73-80/politics_economy/canada_flag/http://archives.cbc.ca/IDD-1-73-80/politics_economy/canada_flag/

Canada’s Oath of CitizenshipCanada’s Oath of Citizenship

I swear that I will be I swear that I will be faithful and bear true faithful and bear true

allegiance to Her allegiance to Her Majesty Queen Majesty Queen

Elizabeth the Second, Elizabeth the Second, Queen of Canada, Her Queen of Canada, Her Heirs and Successors, Heirs and Successors,

and that I will and that I will faithfully observe the faithfully observe the laws of Canada and laws of Canada and fulfil my duties as a fulfil my duties as a Canadian citizen.Canadian citizen.

The Outward Orientation of the The Outward Orientation of the Canadian EconomyCanadian Economy

Canada’s economic development has Canada’s economic development has often been portrayed as the often been portrayed as the exploitation of various natural exploitation of various natural resource products (or staples) for resource products (or staples) for foreign marketsforeign markets

fish, furs, lumber, wheat, minerals, fish, furs, lumber, wheat, minerals, oil and natural gasoil and natural gas

From the British to the From the British to the American EmpireAmerican Empire

British and US investment British and US investment in Canadain Canada

Canada’s Export Market:Canada’s Export Market:From the UK to the USAFrom the UK to the USA

YearYear Canadian exports to UKCanadian exports to UKas % of exports to USAas % of exports to USA

18861886 109%109%18961896 166%166%19061906 151%151%19161916 225%225%19261926 102%102%19361936 119%119%19461946 67%67%19561956 29%29%19661966 19%19%19751975 9%9%

Source: McBride, Stephen. 2001. Paradigm Shift. Halifax: Fernwood.

Canada and the US

"The Americans are our best friends whether we like it or not."

- Robert Thompson

Population Distribution

Reciprocity

British North America and the United States had a Reciprocity Treaty 1854-1866.

External influence on Confederation After Britain’s repeal of the Corn Laws and

the end of the Reciprocity Treaty with the US, Canada was without a trading partner.

Fear of American military power, the Fenian raids and the rivalry over the western portion of the continent were factors leading to Confederation in Canada.

Second World War

During the Second World War, Canadian and American defence policy and production for the war effort were highly integrated.

Ogdensburg Agreement 1940 created Permanent Joint Board on Defence

Hyde Park Declaration 1941

Globalization or Continentalization? For Canada, increasing globalization has

often appeared to involve greater integration with the United States (rather than integration with the rest of the globe).

Canada: An American Colony?“Canada moved from colony to nation to

colony” - Harold Innis, 1949

American ownership of the Canadian economy, particularly in manufacturing and resources, grew over most the 20th century (until the 1970s).

Conclusion: External Influence Canadian politics, economics and culture have

always been shaped by the external environment, but particularly by our relations with Britain and the US.

Our relations with these countries have been a cause for celebration for some and for concern for other Canadians.

There has been an on-going debate about the desirability and possibility of greater Canadian independence in foreign and domestic policy, economics and culture.

Conclusion: State Response

In general, the Canadian state has pursued three different goals:

managing, maintaining and increasing our relations with the US,

while seeking to broaden our foreign relations through contacts with other countries and through multilateral institutions,

and maintaining or increasing the scope (or at least appearance) of Canadian policy independence and distinctive Canadian cultural development.