Globalization: the End of Canadian Autonomy?

Marc Chartrand
HIST 3441
Dr. C.M. Davis
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“I believe that the free-trade issue has the potential to fragment and destroy
the country in a way that nothing else has succeeded in doing” 1
- Margaret Atwood

Modern Canada is the result of almost 150 years of political, economic, and social

evolution. Since the earliest days of Confederation, our nation has undergone considerable

transformation and development as the result of change, progress, and reform. In the 21st century,

Canada has evolved into an internationally recognized modern nation-state with an important

role in global affairs. Canada is renowned in the global community as one of the most highly

developed, democratic, liberated, and peaceful nations on earth. Citizens of Canada enjoy

reasonable political stability, prolific economic prosperity, bountiful social benefits, and live in

relative temperance and harmony. However, the country is far from perfect, and faces many

modern issues and obstacles.

The division which marked Canada in its earliest stages of development still persists

today as one of the nation‟s most palpable features. Age-old ethnic tensions have been renewed

in recent decades, best exemplified by the 1995 Quebec independence referendum in which the

separatist agenda for Quebec sovereignty was dashed by the fraction of a percentage in a popular

vote.2 Political division between Canadians has also led to inefficiency in national governance in

recent decades as a series of minority governments have been incapable of implementing any

tangible form of polity or direction. This division has also hindered the ability of Canada to

perform an active international role, specifically in matters of foreign policy, a department

incompetent in formulating any kind of decisive or unambiguous approach to issues within the

1
Margaret Atwood, "Blind Faith and Free Trade," in The Case against "free trade": GATT, NAFTA, and the globalization of
corporate power, by Ralph Nader (San Francisco, CA: Earth Island Press, 1993), pg. 92.
2
Robert D. Francis, Richard Jones, and Donald B. Smith, Destinies: Canadian history since confederation (Scarborough:
Thomson Nelson, 2006), pg. 466-467.
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realm of global relations. The most difficult and troubling issue which besets contemporary

Canada, however, is a transcendental force which, over the course of the last 30 years, has grown

to such an enormous magnitude that it now undermines almost every facet and element of our

nation. This powerful dynamic is frequently referred to as globalization.i

Globalization is all around us; it has become one of the most contentious topics of debate

and discourse among academics, politicians, and the public. We hear about it, read about it, or

encounter it almost every day. It has been offered as both the solution and source to almost every

problem in the modern world. It has been used in an immeasurable number of contexts, and in an

infinite amount of ways. In my mind globalization is something like the neo-religion of the 21 st

century: it can be, and has been, manipulated to mean anything, and everything. What is

globalization?

In the most simple terms, when people use the world “globalization” they generally refer

to an on-going process of deeper integration and increased “inter-connectedness” between

countries and people all over the globe. While there is much speculation and commentary as to

its origins, many agree that the modern process of globalization commenced in the years

following the Second World War, and emerged as a powerful, sweeping and pervasive force in

international affairs during the 1980s is a “combined result of two factors: technological

innovation (e.g., mass air travel, global communications, falling transport costs) and a powerful

surge of transnational liberalism among an unprecedented number of countries around the

world.”3 Today, globalization has become an enveloping and overwhelmingly powerful force

which permeates all aspects of the modern world, and most importantly, has significantly

marginalized the role of the nation-state. Globalization, accompanied by revolutions in

3
John V. O'Loughlin, Lynn A. Staeheli, and Edward S. Greenberg, Globalization and its outcomes, Illustrated ed. (New York:
Guilford Press, 2004), pg. 48.
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information technology and communications systems, and together with bi-lateral and

multilateral regional economic trade agreements, the rise of powerful transnational corporations,

increased direct foreign investment, and the establishment of international banking and financial

regulatory institutions, pose a serious threat to Canadian sovereignty.

As prominent United States politician and activist Ralph Nader explains in the

introduction to the book The Case of “free trade”: GATT, NAFTA, and the globalization of

corporate power, “operating under the deceptive banner of „free trade‟, multinational

corporations are working hard to expand their control over the international economy and to

undo vital health, safety, and environmental protection won by citizen movements across the

globe in recent decades.”4 The book identifies the North American Free Trade Agreement

(NAFTA) and the General Agreement on Tariffs and Trade (GATT) as grounds for public and

consumer exploitation by international corporations and bankers. Nader explains that Non-tariff

trade barriers are used by corporations to escape national regulation in order to gain profit, often

at the expense of national identity and sovereignty. The book goes on to explore the “devastating

effects”5 NAFTA has on Canada‟s economic and social protections including “wage erosion and

job loss”6 as a result of competition from foreign labour markets and “an extra $400 million a

year in higher [pharmaceutical] drug prices”7 as a result of Mexico‟s access to Canadian markets.

The implications of these trade agreements, which are sponsored by the World Trade

Organization (WTO) and World Bank, have also forced Canada to “loosen its stricter regulations

4
Ralph Nader, "Free Trade & the Decline of Democracy," introduction to The Case against "free trade": GATT, NAFTA, and
the globalization of corporate power (San Francisco, CA: Earth Island Press, 1993), pg. 1.
5
Lori Wallach, "Hidden Dangers of GATT and NAFTA," in The Case against "free trade": GATT, NAFTA, and the
globalization of corporate power, by Ralph Nader (San Francisco, CA: Earth Island Press, 1993), pg. 24.
6
Thea Lee, "Happily Never NAFTA - There's No Such Thing as a Free Trade," in The Case against "free trade": GATT,
NAFTA, and the globalization of corporate power, by Ralph Nader (San Francisco, CA: Earth Island Press, 1993), pg. 74-75.
7
Lee, pg. 76.
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on pesticides and food irrigation,8” and “accept U.S. food imports which contain 30% more

pesticide”9. Canadian domestic meat and livestock industries have also been subject to new

“inspection mechanisms”10 implemented by an external actor, the government of the United

States. The ramifications of these trade agreements are particularly troublesome not only because

of their detrimental effects of domestic industries, social welfare, and public safety, but because

they also compromise the authority of the Canadian government.

In the Investment Chapter (Chapter 11) of the North American Free Trade Agreement,

policies on investor protection are outlined. This section of the agreement is particularly

noteworthy because it enables private corporations to file lawsuits against sovereign nations. In

their report Challenging Corporate Investor Rule, Sarah Anderson and Sara Grusky of the

Institute for Policy Studies and Food and Water Watch identify two cases in which Canadian

sovereignty has been undermined as a result of NAFTA investor protection.

In the case V.G. Gallo v. Government of Canada, an American financier was successful

in filing a lawsuit against Canada. On October 12, 2006, a “Notice of Arbitration” was served to

the Canadian government 11, informing them that they were being sued by Gallo for $335.1

million in damages for essentially upholding public safety and environmental standards when

they “blocked his project to create a garbage mega-dump out of an abandoned open-pit iron mine

… an action he charges was „tantamount to expropriation.‟” 12 The project was proposed in 1989,

8
Mark Ritchie, "Agricultural Trade Liberalization: Implications for Sustainable Agriculture," in The Case against "free trade":
GATT, NAFTA, and the globalization of corporate power, by Ralph Nader (San Francisco, CA: Earth Island Press, 1993),
pg. 170.
9
Wallach, pg. 26.
10
Wallach, pg. 45.
11
Foreign Affairs and International Trade Canada (DFAIT), "NAFTA - Chapter 11 - Investment," Trade Negotiations and
Agreements Trade Topics Dispute Settlement, Case Filed Against the Government of Canada,
http://www.international.gc.ca/trade-agreements-accords-commerciaux/disp-diff/gallo.aspx?lang=en (accessed July 03,
2010).
12
Sarah Anderson and Sara Grusky, Challenging corporate investor rule: how the World Bank's Investment Court, free trade
agreements, and bilateral investment treaties have unleashed a new era of corporate power and what to do about
it (Washington, DC: Food & Water Watch, 2007), pg. 10.
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and became a controversial topic, enduring years of national dispute between Liberal and

Conservative party politicians, local indigenous tribes, local farmers, and corporate lobbyists.

In 1996, another US corporation, Ethyl Corp., threatened to file a similar lawsuit “over a

Canadian ban on trade in the fuel additive MMT … a suspected neurotoxin”, for more than $250

million, claiming that this ban constituted a violation of “NAFTA protections against

discrimination, performance requirements, and expropriation.” 13 In response to this lawsuit, the

Canadian government lifted the ban, paid Ethyl Corp. over “$13 million for costs and profits

while the ban was in place, and issued an official apology.” 14

These kinds of “investor protection” programs demonstrate that way that globalization

has severely jeopardized the power of the Canadian government, which has been rendered

incapable of exercising autonomous authority and upholding its own national policies on public

safety standards, and environmental regulation. The implications of Canadian participation in

trade agreements have thus undermined the power of Canada as a sovereign nation. If

sovereignty or autonomy in a nation can be measured by the ability of that nation to

independently organize themselves and manage their own domestic and internal affairs without

any external exploitation or interference, bilateral and multilateral trade agreements are

indicators that Canadian sovereignty faces a serious threat.

Canada‟s participation in these agreements have also created intensified internal

animosity between commercial interests, corporateii lobbyists, government officials, and public

activists and citizens, as demonstrated in the documentary film Pressure Point – Inside the

Montreal Blockade. This film records the events which transpired during a demonstration against

13
Anderson, pg. 11.
14
Anderson, pg. 11.
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the Canadian participation in negotiations towards the ratification of the Multilateral Agreement

on Investment proposed by the Organisation for Economic Co-operation and Development. On

November 30, 1999, more than 100 protestors and activists were arrested in Montreal15. The

treaty, aimed at the “liberalisation of investment regimes and investment protection … and with

effective dispute settlement procedures,”16 which would standardize corporate and investment

law across borders,” created a great deal of public opposition and division within the nation.

Historically, disparity among the different regions of Canada has been particularly noticeable

and relentless in the eastern provinces17.

In his book Social torment: globalization in Atlantic Canadaiii, Thom Workman provides

a captivating, but forbidding portrait of globalization in the Maritimes, where the perils of

globalization are evident. Workman‟s analysis of Maritime economic culture transcends

economic statistics and indicators such as GDP, investment, interest rates, etc., which generally

only apply to the socio-economic elite, and examines the repercussions faced by working people,

families and communities as a result of globalization and commercial voracity. The book

identifies the primary disposition of every corporation or business to increase profit, and the

simplest way to do this, he contends, is to reduce the costs expounded on labour. For Workman,

globalization is the process by which corporate interests have declared war on governments who

are supportive of labour unions and the working class in their attempts to remove any restrictions

or barriers on trade which prevent them from outsourcing production to foreign labour markets

where they can capitalize on marginal production costs. Workman‟s emphasis is on Atlantic

15
Pressure Point - Inside the Montreal Blockade, dir. Magnus Isacsson and Malcolm Guy, perf. Philippe Duhamel,
Sébastien Bouchard, Freya Mackenzie, Vivianne White and Linda Hanna (Canada: Productions Multi-Monde, 1999),
http://www.pmm.qc.ca/salami/francais/frame.html (accessed June 30, 2010).
16
OECD, "Multilateral Agreement on Investment," Organisation for Economic Co-operation and Development, International
Investment Agreements, http://www.oecd.org/document/22/0,3343,en_2649_33783766_1894819_1_1_1_1,00.html
(accessed July 01, 2010).
17
Marc Chartrand, National Unity in Canada: A Paradox, Mount Allison University, History 3441: Modern Canada, (2010), p.
3
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Canada: “although the region is increasingly plugged into the globalizing world,” he explains,

“the glamorous dimension of globalization is not as obvious in the region as it is elsewhere.

Globalization does not sparkle in Nova Scotia or Prince Edward Island the way it does in

Toronto, New York and Tokyo.”18 Workman provides a desolate narrative on the plight of the

working-class demographic in Atlantic Canada: the transgressions faced by the “young

Malaysian woman toiling away in a semiconductor facility” 19 or the “single mother part-timing

in a call centre in New Brunswick” iv whose welfare has been replaced by economic profits as the

prevailing concern in public life. 20

Globalists often contend that increased interdependency, trade and communication

between nations, the removal of trade barriers, and new information technology systems have

benefited humanity by improved overall quality of life, and creating opportunity for all.

However, it is clear that corporate globalization provides a framework under which transnational

corporations are promulgating a free-market capitalist agenda in order to relegate the role of the

state and heighten their own power, at the expense of social values and the general populace. The

North American Free Trade Agreement and other multilateral trade agreements have put

Canadian sovereignty at risk, putting national interests second to those of multinational

corporations, investors, and financiers. These trade agreements have also contributed to internal

contention and friction within the realm of political and social life in Canada, as demonstrated by

popular demonstrations and protests against government apathy and complacency in matters of

globalization. The rise of the open market economy has led to increased dependency on external

actors for the organization of domestic Canadian affairs, such as the increased privatization of

18
W. Thom Workman, Social torment: globalization in Atlantic Canada, Illustrated ed. (Halifax, N.S.: Fernwood Pub., 2003),
pg. 6.
19
Workman, pg. 6.
20
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state-owned institutions, increasing market competitiveness and further marginalizing the role of

the state. Thom Workman‟s somber account of “social torment” in the Maritimes serves as a

strong reminder and testament to the powerful forces that are at work in our daily lives. The

survival sovereignty in Canada rests on the volition of the Canadian nation to put the needs and

welfare of their own citizens, regardless of their gender, ethnicity, or socio-economic status,

above the insidious interests of corporate giants, profiteers, and other artful agents of

globalization.
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Bibliography

Anderson, Sarah, and Sara Grusky. Challenging corporate investor rule: how the World Bank's
Investment Court, free trade agreements, and bilateral investment treaties have
unleashed a new era of corporate power and what to do about it. Washington, DC: Food
& Water Watch, 2007.

Atwood, Margaret. "Blind Faith and Free Trade." In The Case against "free trade": GATT,
NAFTA, and the globalization of corporate power, by Ralph Nader, 92-96. San
Francisco, CA: Earth Island Press, 1993.

Chartrand, Marc. National Unity in Canada: A Paradox. History 3441: Modern Canada. Mount
Allison University. 2010.

Foreign Affairs and International Trade Canada (DFAIT). "NAFTA - Chapter 11 - Investment."
Trade Negotiations and Agreements Trade Topics Dispute Settlement.
http://www.international.gc.ca/trade-agreements-accords-commerciaux/disp-
diff/gallo.aspx?lang=en (accessed July 03, 2010).

Francis, Robert D., Richard Jones, and Donald B. Smith. Destinies: Canadian history since
confederation. Scarborough: Thomson Nelson, 2006.

Golob, Stephanie R. North America beyond NAFTA?: sovereignty, identity, and security in
Canada-U.S. relations. Orono, ME: Canadian-American Center, University of Maine,
2003.

Lee, Thea. "Happily Never NAFTA - There's No Such Thing as a Free Trade." In The Case
against "free trade": GATT, NAFTA, and the globalization of corporate power, by Ralph
Nader, 70-77. San Francisco, CA: Earth Island Press, 1993.

Moss, Laura F. E. Is Canada postcolonial?: unsettling Canadian literature. Waterloo, Ont.:

Wilfrid Laurier University Press, 2003.

Nader, Ralph. "Free Trade & the Decline of Democracy." Introduction to The Case against "free
trade": GATT, NAFTA, and the globalization of corporate power, 1-12. San Francisco,
CA: Earth Island Press, 1993.

Nader, Ralph. The Case against "free trade": GATT, NAFTA, and the globalization of corporate
power. San Francisco, CA: Earth Island Press, 1993.

OECD. "Multilateral Agreement on Investment." Organisation for Economic Co-operation and

Development.
http://www.oecd.org/document/22/0,3343,en_2649_33783766_1894819_1_1_1_1,00.ht
ml (accessed July 01, 2010).
Chartrand 11

O'Loughlin, John V., Lynn A. Staeheli, and Edward S. Greenberg. Globalization and its
outcomes. Illustrated ed. New York: Guilford Press, 2004.

Pressure Point - Inside the Montreal Blockade. Directed by Magnus Isacsson and Malcolm Guy.
Performed by Philippe Duhamel, Sébastien Bouchard, Freya Mackenzie, Vivianne White
and Linda Hanna. Canada: Productions Multi-Monde, 1999.
http://www.pmm.qc.ca/salami/francais/frame.html (accessed June 30, 2010).

Ritchie, Mark. "Agricultural Trade Liberalization: Implications for Sustainable Agriculture." In

The Case against "free trade": GATT, NAFTA, and the globalization of corporate power,
by Ralph Nader, 163-94. San Francisco, CA: Earth Island Press, 1993.

Smith, Gordon, and Moisés Naím. Altered states: globalization, sovereignty, and governance.
Ottawa: International Development Research Centre, 2000.

Urmetzer, Peter. Globalization unplugged: sovereignty and the Canadian state in the twenty-first
century. Toronto: University of Toronto Press, 2005.

Unfortunately I was not able to include this source in my paper given the length
constraint, however it was still a very valuable source and provided a very alternative view on
globalization in Canada. Urmetzer argues, somewhat effectively, that globalization is nothing
new (has been around since Marx wrote the Communist Manifesto), that there is no real relation
between trade and economic growth, and that globalization has not really "eroded" the power of
the state, that foreign direct investment is less significant than many believe, and that despite
popular belief, spending on social programs and the 'Welfare state' has actually increased. His
argument, however, has many holes and his definitions of 'globalization' are equally ambiguous
as the conclusions that he draws.

Wallach, Lori. "Hidden Dangers of GATT and NAFTA." In The Case against "free trade":
GATT, NAFTA, and the globalization of corporate power, by Ralph Nader, 23-62. San
Francisco, CA: Earth Island Press, 1993.

Workman, W. Thom. Social torment: globalization in Atlantic Canada. Illustrated ed. Halifax,
N.S.: Fernwood Pub., 2003.

If you are not familiar with this book, I highly recommend it. From the sections I read (I
plan on completing the book when I have more time), Workman‟s analysis of Atlantic Canada
answered so many questions and filled in so many blanks. My last 2 years living here as a
student in Sackville was my first experience living in Canada outside of Vancouver where I lived
for 19 years. Within a week of arriving here, any previous image, conceptions, effigy, or
representation of Canada that I had mentally constructed and processed throughout my life
became illusive, leading me to acknowledge the ambiguity of the Canadian identity. This book
explains why things are the way there are in the Maritimes, and what processes are at work to
reinforce these trends.
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i
I was quite disappointed with the limited amount of information available in Destinies on globalization, the growing
importance of trade and finance, and economic evolution experienced in Canada in general since World War II. There
is only a brief mention of globalization on page 496 in respect to culture in Quebec. While economics may not be the
most important determinant of human society, as Marxists argue, it is undoubtedly one of the most significant and
important aspects in understanding the Modern Canadian State. I think that the failure of Destinies to properly
address the problems confronted by Modern Canada in these respects, and explain the historical evolution of these
processes greatly dimishes its value as an accurate exploration of Modern Canada, and so, in order to effectually
present my case and complete my essay, I used a variety of different sources
ii
An interesting note: When I did a search on the website http://www.thesaurus.com to find synonyms for the word
corporate, not one entry exists that even suggests any relation to business or commerce. Commercial, business,
economic, fiscal, marketable, are all mysteriously omitted. Instead, “corporate” is correlated to the definitions for
“allied”, “combined; in agreement”, and “concerning cities”. Most ironically, however, are the synonyms offered, which
rage from “collective, combined, communal, and domestic” to “public, reciprocal, shared, socialistic, united, and
universal”.
iii
See annotation in bibliography for this citation
iv
This example had a particularly strong resonance for me given my summer job. I am currently employed by Moneris
solutions, a credit-card processing agency, as an agent in their Sackville call-centre. Here, in my interactions with my
co-workers and employers, Workman’s powerful depictions of the Maritimes, and the evils of globalization and
capitalism in general, seem all too resonant and convincing.