Wednesday, December 07, 2005

Let's talk about currency union

The Canadian dollar has benefited handsomely from the resource boom. Our petro main course, with a side of rocks, has fed the Canadian economy. But it has also put a strain on the industrial export sectors. Those industries that benefited from a weak currency now find themselves with new challenges to remain competitive. Indeed, some of these industries will have a hard time, as a floating exchange rate bites both ways. It can also be very disruptive to the efficient working of a national economy. The dislocation that occurs during a period where one group of sectors changes the terms of trade for another group of sectors can be difficult to manage, especially when the resource sector can be so cyclical. A short-term currency revaluation does shift labour and infrastructure, but the natural allocation of these factors would be better served with more exchange rate stability.

A fixed exchange rate? Some economists argue such. Nevertheless, my feeling is that a currency union with the United States would serve the ultimate purpose of adjusting the Canadian economy to its prime equilibrium. Given that the natural marketplace for the export markets is continental, the sooner the political will for pushing toward dollarization of the loonie, the sooner the nation builds a solid economic foundation. More political media deliberation on currency union is needed.

Monday, October 03, 2005

The call for currency union grows

The petro-dollar loonie has surpassed 85 cents U.S. and the murmur of public debate about the Canadian currency is spilling into the public realm, with economists worrying about the "Dutch Currency Disease" and talk of pegging the loonie. Fear has taken hold of the pussy Canadian commercial class - the one's who rode our woeful industrial policy of exchange rate development. Yep, that would be our manufacturers (and that would include those cultural producers - Hollywood North). These are the industries that developed handsomely behind exchange rate depreciation. These are the businesses that may not exist with a Canadian dollar at parity. These are the businesses that would be forced to improve productivity at the risk of bunkruptcy. These are the businesses that would shift capital to other cheap currency countries. And in my humble opinion, Canada would be much better off.

Yes, the resources that built this country are shining again. The commodity cycle, the surging global demand for what Canada has aplenty, is putting domestic industrial interests in a bind. That would be those damned Easterners, in the eyes of the flush Western Canadians, that ones that supplied the west with overpriced industrial goods after ramming a railroad into the region. But times have changed, and one would imagine in world of global economic integration that the politics of Canada is about to shift. The ascendancy of the West is dawning, and the best way to accommodate this fundamental challenge to regional balance is to ride the strength of the currency. It is time to push for currency union with the United States. It will be painful for the slacker commercial interests and the labour they employ, but in the end the economy will be stronger, and consumers will benefit immencely. Hey, how about union at parity?

Tuesday, July 26, 2005

The border mess

Not surprisingly the voices of discontent are building in the corporate world. The Canada-US border forces an increasingly costly tax on important flows of commerce. The time is nigh for a proper accounting of the costs of the border on our economy, and our people. A report by the Coalition for Secure and trade-efficient Borders was published today, to much media notice. The report, authored by major corporate interests states clearly that the current system of managing security and trade along the border is extremely costly, taxing trade efficiency and threatening the $2-billion-a-day cross border commerce. Thankfully, the report, entitled "Rethinking our Borders" quantifies this burden, most notably stating that it addds about $800 to the cost of a North-American made automobile. Of course, we know that this is only the tip of the proverbial iceberg. The misallocation of resources in almost every industry handicaps producers and consumers alike.

Clearly, the solution is to create a single perimeter security zone around the continent. The cost of impeding commerce is far too great, and it is important that Canadians in particular take special heed of the security needs of the United States. Security integration is an important step toward harmonizing commercial trade. In fact, as I have always maintained, establishing a security perimeter, integrating our security forces, will enable an opening of the border to cross-border flows of commerce. Further, the proper allowance for migration of labour flows across the border will elevate our economic efficiency. It is time for Canadians to embrace their future in a continental economy.

Sadly, there is much fear to overcome. An example of that fear, I suppose, is the current legal wrangling of CNR and its union. The union does not want to allow CNR to transfer maintenance jobs across borders. The "multinational" CNR, not so long ago a crown coporation, shows us that times have changed, and that we had best put in place the political framework that accommodates the the economy at work. Hopefully, the process of educating the population about the costs of confederation will make the political choices more clear. We need leaders to speak the truth, and be done with the nationalistic approach.

Wednesday, April 27, 2005

Greyhound bound

It has been almost 20 years since I first arrived "off the bus" in downtown Toronto. Having made the 48 hour bus ride from Saskatoon I remember well plodding up Bay Street with my backpack, happy to be rid of the tanker that brought me there. Prior to this grueling trip I had never been east of Winnipeg. Growing up in the west my family always traveled westward to the Pacific or south to the United States on our annual vacations. After the monumental bus ride across northern Ontario I then understood why. I challenge every Canadian to make that trip. The vast distances that separate east from west become ever so real when days of your life are lost in the confines of a motor vehicle. God knows how cyclists and ambitious walkers feel.

Two decades later I still yearn to travel back to Saskatchewan. And yet it it so far. It is, for all purpose, in another country. In fact, I can fly to Europe for cheaper fares than I can to Saskatoon. That has been my unfortunate situation for too long. I feel like an immigrant unable to visit my family for lack of resources. No doubt I have many Jamaican friends who have traveled back to their homeland more often than I have returned to Saskatoon over the years. And I know that they are able to fly there for much cheaper fares than I could ever hope on a milk run to Saskatoon. Am I sounding bitter? Perhaps. But it is a constant reminder that the bonds of this country are tenuous on many very real levels.

We can ask: how many Torontonians have been to the Badlands of the prairie? How many British Columbians have seen the shoreline of Cape Breton? How many Quebecers have seen the majestry of the Rockies? No, the tally would be shy, and who could blame the population? Indeed, my first year studying Canadian economic history at the University of Toronto taught me one thing I never once before considered: that eastern Canadians know very little about their nation. I learned that the "educated" elites of Toronto yearned not for knowledge of the provincial bretheren, but instead craved attention and a place on the world stage. Almost all of the students I went to school with at the U of T had traveled to Europe, to New York, to Florida. But to Vancouver? Winnipeg? Calgary? Not unless it was a consolation prize. Maybe a chance to earn some summer dough. Nope, these people - the ones that would aspire to be great "Canadians" - cared little about the Dominion. I learned that many years ago.

Saturday, April 16, 2005

Canada Stong and Free

The Fraser Institute and the Economic Institute of Montreal released a policy paper this past week, authored by well-known conservative politicians Michael Harris and Preston Manning. Adding to the growing number of voices demanding a more proactive policy toward shaping Canada'’ future in the global economy, the paper entitled "A Canada Strong and Free", emphasizes wealth creation, democratic accountability and the creation of a Canada-U.S Customs Union. Hurrah for all!

The crisis of corruption that has the Liberal government on its heals – perhaps forced to go to the polls again – has brought upon a renewed questioning about the foundations of confederation. Political commentators are starting to to express more fervently the untenable situation our federal system faces. Regional interests are being promoted at the expense of the great federalist compromises of the past. The Adscam embarrassment, beyond bringing to light corrupt individuals, has shown that the federal bargain with Quebec is flawed. It has showed that Canada as nationalists envision is a charade, a frail marriage on the verge of dissolution. Indeed, if there is an election this June the end result will be a fragmented Canada with separatists in Quebec asserting newfound strength, and a growing power base out of western Canada. The regional interests will be heard, and the powers in Ottawa will be compromised.

From my point of view this is long overdue. It is time the regions started looking out for their own interests. Time for Quebecers to make their own fateful decision once and for all. Time for westerners to exorcise themselves from their colonial position in Canada. And it is time for Canadians to take a proper accounting of the costs of nationhood. A head on grappling of the healthcare system, of our state-centered economy, and our special relationship with the United States. It is clear the Liberal government is interested only in maintaining the status quo. Will Canadians demand broad and courageous new governance? They may be in for it regardless, as the fallout from an election this spring will surely bring the mirror to our face. Be brave, Canada.

Friday, April 15, 2005

North American Youth Exchange

Every generation of youth passes through a rite of passage. In one form or another this "coming of age" experience is often anticipated by young adults as they prepare for life upon completion of secondary school. Like many other parents of graduating teenagers, I have been witnessing the wonderful excitement of my child’s plans for travel abroad. Taking a year off before entering university studies has been a time honoured tradition of many generations of young Canadians who take on the world with their backpacks. They travel abroad to Europe mostly, but many take to Oceana. My daughter is heading to Australia and New Zealand. Intent to take to the other side of the planet, she eagerly awaits the chance to commence with her adventure. But I am wondering…why do not young Canadians take to traveling across North America. Does not the adventures of Kerouac and previous generations of youthful travelers who crisscrossed the great expanse of America captivate the imagination of today’s youth?

I think it would be wonderful if young North Americans were encouraged to travel and work freely across the continent. The people of every region would be that much more enriched by the exchange of youth. Canadians traveling to Louisiana and Mexico City. Americans discovering the old fortress of Quebec, and the lost cities of the Maya. Young Mexicans camping in Banff, and visiting the Art Institute of Chicago. Yes, there should be a universal program for young adults from all three member countries of NAFTA that facilitates an active mingling of our cultures, that encourages North American youth to see the vast community of culture here that is so sadly underestimated.

One of the chief objectives of leaders in North America should be to encourage cultural ties among the nations. Such ties are developed through travel. But more importantly, the youth
who are able to take their precious time and energy to risk on adventure should have the ability to live and work in the lands they travel to. Student Work Abroad Programs (SWAP) are popular for youth traveling abroad, but there should be a more institutionalized swapping of youth across the continent. Canadians would learn more about their neighbours, and like any exchange program the benefits would be reciprocal.

I find it sad that my daughter feels she must travel to Australia to live out her adventure. North America is full of much natural beauty, many cultural interests. And there is much fun to be had. It is unfortunate that we do not promote this kind of homegrown adventure. There would be such a wonderful expression of community if our youth discovered the world at their feet, the cultures at their doorstep. Alas, maybe it is just me in my advancing middle age. Perhaps it is I who simply wants to drive around the continent in a RV. Perhaps the grown adult in me has simply learned that there is much to see across this continent. But wouldn’t it be wonderful if there was great annual migration of young Canadians, Americans, and Mexicans across our continent. To see them traveling about with their backpacks, to see them all open-eyed and excited. I for one will always remember the Pope’s visit to Toronto for World Youth Day a couple of summers ago. There were thousands of young people from all over the world moving about the city - on sidewalks, and subways, in parks and restaurants, in museums and libraries. It was almost magical. It certainly was inspirational, too. I think we could use a lot more of that. And I think we would be much better off for it.

Saturday, April 02, 2005

Dodging the issue - the failure of Canada's monetary regime

David Dodge, governor of the Canada’s central bank, spoke this week about issues pertaining to productivity levels and the importance of developing policies that improve education. Although Mr. Dodge has every duty to speak of productivity levels in relation to economic growth, he stepped too far into fiscal policy agenda with his direct suggestions pertaining to childcare. It is not the job of the central bank head to give such policy prescriptions – his domain should be strictly monetary policy. In fact, it is symptomatic that the root cause of our country’s chronic failures to keep up to the United States in labour productivity is the very monetary edifice Mr. Dodge heads. A country that depends on trade with America is ill served by the current floating exchange rate regime. Canadian productivity ailments are directly attributable to the effects of exchange rate depreciation.

Our export sector has been sweeping its failure to modernize under the carpet of a cheap Canadian dollar for a generation. Further, we have developed new export industries under the framework of a cheap dollar. This is the industrial strategy of a developing nation. It has served the economy with short-term gains at the cost – far greater cost – of poor capital allocation, research and development, education, and labour productivity. Exchange rate depreciation has also opened our export industries up to trade conflicts with our major market to the south. If the head of Canada’s monetary policy wants to improve productivity levels he need speak less of solutions beyond his purview and more of monetary policies that make exchange rate appreciation and par value a Bank of Canada objective. An even more progressive stance would be an open discussion of currency union with the United States. Of course, that may be too much to expect for a regime head to speak openly of its own demise.

Tuesday, March 29, 2005

Natural continental migration

By the end of the 19th century millions of European migrants had made their way to the New World. All were in search of opportunity and a better life. The great migratory patterns of the age created tremendous wealth, and the North American heritage was shaped by the human capital that flowed to this vast land. Indeed, the economies of Canada and the United States are still highly dependent on immigrant flows. Without immigrants our economies would be stagnant.

But in a world where increasing globalization is being fed by relatively unrestricted capital flows, our population is being handicapped by restrictions on labour mobility. Indeed, the national borders that cross the North American continent will be increasingly seen for what they are: fences that prevent human capital from maximizing value. The end result of is that North American economic development is being hindered and the human capital - that is in real terms our lives - is being misallocated and at times squandered.

The capacity for individuals to seek new or better opportuities is limited by the east-west flows enabled by the current national borders. But these flows are not the natural flows that would be the economic and cultural basis of a strong North America. Confederation, as our history tells us, is a construct of political will and engineering. It is a history of overcoming vast natural barriers to link disparate regions across a Dominion. It is a history of the CPR and commercial design on regional development. It is the history of creating an east-west axis across a continental divide.

But for those that know the regions of North America, those that know the sisterhood of the Maritimes and the Eastern seaboard, those that have traveled to the American midwest and seen the Canadian prairie too, and those that live in the Pacific Northwest, North America is a community the follows the geographic boundaries of the north-south barriers that sculpt the continent. As surely as Canada is divided by the the Precambrian Shield, the Great Plain, and the Rockies, the the pull of the communities along these divides is great. That is the nature of our shared continental history.

But what of our population now? What capacity have we to migrate as opportunity and self-interest allow? Unfortunately, only high value labour like Hollywood entertainers, rock stars, and professional athletes have true mobility in the North American divide. However, what of average Joe Canadian or average Joe American? Why cannot they enjoy the same labour mobility that allows Jim Carrey, Celine Dion, or Wayne Gretzky to maximize their human capital? It is ultimately the individual who suffers from the restrictions on labour movement but the drag on economic development in all regions commands a large, unseen opportunity cost. In what ways would our society benefit from increased labour mobility? In the most dynamic sense regional economies would be rejuvenated by inflows of human capital. Entrpreneurship and an efficient allocation of resources would enable even stagnant economies to renew economic development.

The United States faces a deep challenge in dealing with its relationship with Mexico, the border struggle representing a very real conflict of the issues spoken of here. But the resistance to migrant flows there, although charged by extreme fears in border states, is not so different from the fears and resistance that would develop when any two communities tear down walls between freedom and servitude. This would also be the case at the border of Canada and the United States. Fear of change, fear of the influx of new people has always made immigration a difficult policy for governments - despite the evidence that immigration is an extremely positive economic and cultural process. Nevertheless, Arizona fears the Mexican horde. The cultural protectionism at work in the nation state is anti-productive and violates the tenets of a free market economy. Better we embrace the community we live in, a community that should include all North Americans.

Why should we consider North American labour integration as an important and increasingly urgent policy? In a word: globalization. The net effects of globalization is a reallocation of resources to their most productive use. In our continental community we can facilitate a more fluid reallocation of labour if borders that prevented productive movement were eliminated. Labour mobility is the great missing component in our free market economies. We need to recreate the spirit of mobility that brought our parents and ancestors to the New World. This spirit will unleash new potential in the face of unfolding economic challenges. Canada would benefit from a more open border with migrants from the United States and Mexico just as surely as the United States would benefit from the same exchange. We need not depend on immigration from other continents to feed our economies. A reallocation of the current North American population would allow for greater optimization of the human capital already available.

Saturday, March 26, 2005

Man for all seasons

Canada is admirable on different levels. Indeed, Canadians are very proud of the country. Proud for what it is, and proud of what it isn't. But sitting on the edge of capitalism, uneasy with Canada's dependency on the American benefactor, many Canadians are content to stand pat on a pattern of self-righteousness. Culturally incomplete, the nation is an amalgam of historical political economy - the curious result of man conquering nature in commercial enterprise and social compromise - and the determined counterpoint to American Manifest Destiny. Indeed, for all the different forms of Canadian cultural expression, a common thread is a sense of non-Americanism. Often this expression is delivered in the most fervent anti-Americanism we could allow in a free society. It all seems very curious.

I , too, was raised in such an environment of tepid acceptance of the American cultural sway. Indeed, there was a time when Pierre Trudeau inspired the most from my Canadianism. There was a time when Canadian social democracy stood as a supreme ideal in my young political mind. To be a member of the Liberal Party on the prairies, was, as I remember, a statement of commitment to confederation amid a society perhaps not so committal to the federalist agenda. Alas, that fantasy started to unravel in the most unlikely way.

In my early years of studies at the University of Alberta, I spent many an evening in my study den listening to political reporting on the state of the nation. It was 1982, and we had been suffering through a recession. For a young student, the r-word is a gloomy but remote expression. Unemployment beckoned, and the world seemed far less promising. There was a lot to be fearful of, perhaps no more than at any time, but enough to jar my faith in the system I was raised in. The unleashed potential of my youth seemed paralyzed by an economic world in crisis. Interest rates were phenomenally high and what came easy before - money, jobs - now was indeterminably impossible. It is no wonder I found solace in only Dostoevsky. Another existentialist born.

Alas, there came a prophet. Some people would have called him a puppet, and at the time, I too, would have accepted this preconception. But the arrival of Ronald Reagan in Ottawa was a revelation to me. It was a cold evening in my basement apartment, but the TV signal brought a strange moment that shifted my sensibilities of self. Addressing a joint session of the House of Commons and the Senate, before what surely would have been a hostile audience were it not for parliamentarian decorum (if that is possible), President Reagan delivered words of grand vision and hope. Unlike any politician I had heard speak before, the President challenged us all to achieve something much better. His delivery, his masterful oration was an epiphany. He spoke of freedom and liberty like I had never heard before.

In fact, as a Canadian I was certain that these terms were never mentioned to me before, nothing beyond archaic sermons of remebrance for lost veterens. No, the very idea that freedom was something I should cherish was foreign to me. In fact, the political constellations of Canada seemed to be rooted in something entirely different. Canada seemed to be a compromise of political expediency, a confederation of disparate regions bound by a constitutional formulation of family law. There were no guiding principles at work here. Exploitation, yes. The fur trade, the timber trade, the fisheries, the prairie bread basket. And the National Energy Policy! Yes, there was an agenda at work for the Dominion of Canada - not to mention the dangerous bargain with French Canada. These forces were becoming increasingly clear to me.

But Reagen, yes the Hollywood actor, the man so many Canadians had contempt for, stood as a beacon even in our most sacred Canadian chamber. Whether he spoke of the "City on the Hill" that day, I do not remember, but he spoke in such grand terms, in such forceful and hopeful terms that I was dumbfounded. In a moment I knew that the human spirit was indomitable. I knew that the future would be full of prosperity...if only we held true to the ideals of liberty. And I knew at that time that Canada would some day face up to this challenge because of the courage of the society to our south. There is no escaping this spirit because it is in us all. It only need be unleashed.

Wednesday, March 23, 2005

Summit in Texas

When the leaders of NAFTA nations meet today we may begin to hear subtle changes in the public voice of economic integration. It is possible that in very "measured" language the political impetus for a concerted effort to harmonize trade on the continent will expose new vigour. It is possible that issues that would profoundly affect the relationship between Canada and the United States, as well as Mexico and the United States, will be given a new agenda. It is possible that issues that have caused tension - trade issues specifically - will be addressed in an urgent and constructive manner. That the United States might see the North American economic future as an important leverage in the face of dynamic changes in the the global economy should not be unexpected. It's just that it has seemed so shamefully ignored. Is it too much to hope that the leaders of the NAFTA nations will renew their commitments to economic integration?

Certainly, President Bush has a lot on his plate, but he has been a leader of indeterminable will. If there were a time to tame the U.S. protectionist voices that have threatened the relationships with Canada and Mexico, then it must be now. Softwood lumber? This is a trade issue that can stand as a symbol of the importance of trade, and the costs of protectionism. So too, for Mexican cement. It is time for the U.S. President to stand up for American consumers just as much as it is time for the U.S. to make an unequivocal commitment to free trade with its NAFTA partners. Now would be a good time to hear some words of commitment.

From Prime Minister Martin I would hope that he is able to garner some respect and trust from President Bush. Regardless of the Liberal government's tenuous minority position, it is important that Bush knows our two countries are on the same page. Security issues must be dealt with in a satisfactory manner - there will be no room for political grandstanding. The sooner we have a Canadian government that commits to a security arrangement with the United States the better our trade positions will evolve productively. Mr. Martin: assure President Bush of a Canadian commitment to U.S. security.

It is unreasonable to expect too much from the summit this week, but I hope the message that comes out is conciliatory and at the very least engages further talks on a regular basis. The global political economy will evolve, and certainly U.S. interests in shaping that political economy are in the forefront of policy makers, analysts, and the media. But one should always tend to one's own yard first. Economic prosperity in North America, and the Americas in general, should be a primary policy objective.

Wednesday, March 16, 2005

N.A. economic integration - the China antidote

Perceptions in the United States about the U.S. merchandise trade deficit are almost exclusively focused on the newly emergent Chinese economy and its trade balance with America. One would think that the Chinese trade is causing serious problems for the U.S. economy. In fact, the way trade issues are expressed by mainstream media, trade with China is a major component of U.S. trade. This is a gross misrepresentation.

Based on 2004 trading data, Chinese trade accounts for only 13% of U.S. imports. By comparison, 28% of U.S. imports come from its NAFTA partners, Canada and Mexico. In terms of export markets, NAFTA partners account for 37% of total U.S. exports. Of course, the issue for critics of trade with China is the anemic export totals to China – merely $37.4-billion or 4% of total U.S. exports. The end result is a trade deficit with China that reflects the immaturity of the Chinese market. However, the trade deficit with NAFTA partners, at $111.9-billion (compared to $162-billion trade deficit with China) reflects how important continental trade is to the U.S. picture.

The trade interdependency of the NAFTA nations is well established, but the monetary implications of these relationships does not seem to attract the same level of evaluation as other less significant trading relationships. Surely once a discussion of trade and monetary integration in the NAFTA framework seriously commences the important capital implications of union will motivate the political forces in the United States. The continental framework, and perhaps an Americas (North and South) framework would counteract the presumed ascendancy of China in world trade.

Currency Union should be on the table, too.

Trade is exchange, and the medium of exchange is generally currency. Foreign exchange is the currency of international trade, so the absence of this integral medium in the proposals to integrate the North American community presented by the Council on Foreign Relations seems a gross oversight. How can we manage harmonization effectively in a trinational agreement on trade and security if the costs and barriers of currency exchange remain in effect?

For a country like Canada exchange costs on merchandise trade with the United States and Mexico might amount to several billion dollars a year (see Fraser Institute's "Case for the Amero"). Add to that the considerable currency costs on capital flows and monetary policies and it is not an overstatement that the "static costs" of multiple North American currencies are a considerable drag on the economic integration of the continent. Indeed, a monetary union of North America would facilitate even greater economic growth by eliminating the inefficiency bias of exchange rate mechanisms, imposing discipline on industries that currently hide poor productivity under the cloak of currency depreciation.

There are many issues related to a currency union, and the process of adjustment would certainly change the scope of monetary and fiscal "sovereignty" currently exercised in Canada and Mexico. But the benefits of union and economic integration would catapult our economic well-being. The political obstacles of getting to that point remain considerable.

Tuesday, March 15, 2005

Alas, brave words...

Yesterday was a day to remember. A day in which a grand dare on the people of North America has been lodged. At a news conference in Washington, under the auspices of the Council for Foreign Relations, the Independent Task Force on the Future of North America presented a statement in anticipation of the March 23 trinational summit in Texas. (Visit the Council for Foreign Relations web site at to view the full statement.)

The task force includes John Manley, Pedro Aspe, William Weld, Thomas d'Aquino, Andres Rozental, and Robert Pastor - all respected men of their respective nations, and all standing forth to boldly speak of embracing the future for North America. In simple terms they have presented an honest assessment of the challenges that Canada, Mexico, and the United States share. They include shared concerns for security, economic competitiveness, and development. They propose a trinational collaboration on six key recommendations:

1. Create institutions to monitor and implement strategic decisions made at annual trinational summits.

2. Create a unified North American Border Action Plan, harmonizing trade and creating a continental security perimeter while promoting the free flow of goods, services and nationals within the territory. Included in these measures would be expanded defense and law enforcement cooperation.

3. Adopt a common external tariff, effectively moving toward a Customs Union.

4. Stimulate economic growth in Mexico in order to improve the standard of living to bring it on par with the United States and Canada.

5. Develop and common energy strategy for North America.

6. Expand cross-border educational ties.

Indeed this plan, while curiously omitting a discussion of currency union, stands as a great challenge for politicians across the continent. It speaks of taking command of forces already at work. It stands as a plan to secure our borders in the face of global threats - threats like terrorism that can cripple our economies and the trade dependent relationships our counties have. It recognizes that without security for the United States, there is no economic security for Canada or Mexico. We must eliminate our common borders as security perimeters and establish a continental defense perimeter. Further, the harmonization that would accompany these efforts would result in great economic benefit.

Clearly, this task force is an independent body and has the freedom to posit such brave proposals because it is not politically accountable. But it is critical that business leaders and credible statesmen put the seeds of discussion before our politicians. More importantly, the establishment of grassroots forums for grappling with these issues must take the mantle of change and force political consensus. Politicians must yield to the will of the electorate and it is critical that the population becomes literate in the issues - economic, cultural, and political - that are jointly affecting the nations of North America.

Saturday, March 12, 2005

Help wanted - brave Canadian leader

North American economic integration is inevitable. No amount of political will can stop this flow. Unfortunately, the flow is more glacial at this time. Yes, NAFTA represented an important step for the national governments of Canada, Mexico, and the United States. But there has been far too little debate about the next steps beyond the smattering of papers that are published by the likes of the C.D. Howe Institute and other forward-minded think-tanks. The political consciousness is still divided by historical boundaries that separate our nations. There is no single voice that seeks to embody an new vision of North America. This must end.

Visionaries are brave and crazy people. This is their appearance to contemporaries rooted in past realities. Fear is the anchor that prevents the population from even thinking aloud about brave solutions, or even recognizing that there is a problem. Many prophets have had to risk their lives and their well-being to put forth honest self-criticism and bold new visions. Canada needs a prophet. It needs a political and cultural leader who will speak truthfully and convincingly about Canada's state. A leader who will stand up and say enough to sweeping under the carpet. Enough to the foundations of confederation that shackle Canadians and deny them a better life. Canada needs a leader who will carve out a future for Canadians before one is thrust upon us. Bring us this messiah who can spell out the costs of Confederation, and the benefits of Continentalism. Better that we grapple with the choices that are at hand while we have a credible bargaining position with our powerful neighbour.

Leaders in Mexico and Canada would best now deliberate a proper strategy toward negotiating a customs union with the United States. Issues of security and labour migration must be dealt with before the hurling forces of global demands create unfortunate circumstances for North Americans. Global terrorism and globalization will put these issues at the forefront soon enough. We need not wait for crisis. This is not simply about American security and economic interests. we are all intertwined in one community.

Friday, March 11, 2005

Sovereignty? I'll take economic liberty, please.

Nationalists aften couch their rhetoric with a healthy smattering of protestations about the pre-eminence of sovereignty. They hold tight to the the sacred notion that soverienty delivers liberty. But in truth, it is the opposite causal relationship. Our economic liberty enables true soverignty. When we have uninhibited economic vitality, our states serve citizen's best interests. When the state assumes directive control of individual rights to exercise consumer and productive interests we lose true sovereinty. In Canada, we have a state that has assumed this mantle without true regard for the real interests of its constituents. Are Canadian's economic interests, their economic liberty, served by marketing boards, restrictive cultural and trade policies, and a culture of government that stifles economic growth?

Tuesday, March 08, 2005

I saw Mexicans in Whistler

There is a wonder in travel. I should wish to be more familiar with it. But I have seen it near my home. My home is a place where many cultures come together in one community. Although it is not without its faults, the city is a miracle of diversity. I cannot deny that. And when visitors come here they see that this is a world where people of different race, culture and creed live side-by-side. Somehow it works.

I would expect that travellers have a better sense of community. They see the differences, yes, but it is the similarities that divine understanding. To see people move freely around the world is truly inspiring. Wipe away the fear. Wipe away the distrust. We are all together as one on this planet. These would be the sentiments of many of my nationalist foes, I am sure. But what of this community that lives beyond our bouders? Are we not sharing in experience, if not in culture, then economy? I must feed my family as surely as the Chinese factory worker. I must maneuver the rules of a complex society just like the citizens of Paris or London. Why is it that there can be such division of interest?

I am a libertarian. If not so in degree, I can at least claim to the belief in liberty. And in that belief I place my faith in the economic system that demands the most of our liberty. No, I do not come from privilege. What inspires this faith is sense of responsibility toward myself. That hope can spring from responsibility is a wonderous achievement of the capitalist system.

Unfortunately, capitalism suffers from great handicaps. Almost all of these come from one place: fear. Fear of trade, fear of migration, and fear of our neighbours. If anything, globalism will force us to confront these fears.

Sunday, March 06, 2005

Cross-border relations

It is inevitable that the seats of political power in Canada will hold steady to their command. The federal government has much to lose, for those politicians and bureauocrats with power in their hands. The seed of their dissolution, though, is already planted. The primarily economic interests of cross border states and provinces will bring to the forefront many issues of trade rationalization. These border states know that the flow of goods and people across their international borders is critical to their political fortunes. It is not surprising to see an era of cooperation and consultation taking place between some provincial and state governements.

We can expect that as issues of U.S. security affect trade issues, whether it be border traffic or health concerns affecting trade (cattle industry, for example), the politics of the nation state as represented by governments in Ottawa and Washington will become increasingly beholden to the important realtionships that make our border communities codependent. This, ultimately, will force the Canadian national interests to confront its destiny. Surely, there will be a time when the forces of commerce, of mutual self-interest and common cultural formations will direct our political wills toward an open border. Labour free to move as capital and goods. This will unleash powerful economic forces that will benefit all North Americans. Most importantly, it will deliver a more prosperous reality for Canadians.

Wednesday, March 02, 2005

Security trumps trade - always

Canadians baulking at today's U.S. Court decision to block the border again to Canadian cattle should think hard about this matter - not just because it has such a devastating effect on the Canadian beef industry. They should take note of the truth of Ambassador Cellucci's dictum "security trumps trade", as this will always be the guiding principle of any society. Without security any economy is threatened. We must create an environment of security to enable economic growth and trade. Canadians, heavily dependent on U.S. trade access, should be extremely wary of issues that affect U.S. security interests. Health security cannot be excepted, regardless of the political lobby pushing the U.S. beef industry's case. The best intentions of the Canadian cattle industry to push the trade issues at stake stand little chance against opposing U.S. trade interests that can play the security trump.

The solution for Canada's exporters? Elimination of the bifurcation of security at the 49th parallel. Without the border there is no trump card. The problems of the cattle industry in Alberta are the problems of the cattle industry in Montana. The politics of security cannot cannabalize industry under common jurisdiction. The billions of dollars of lost income that the Canadian cattle indutry has endured is an unfortunate consequence of the Canadian political reality. Our livelihoods need not be so threatened in a world where Canadians and Americans are united in politics and security.

Monday, February 28, 2005

The danger of nationalism

If there were a coin with a head of socialism embedded on one side, the insidious countenance of nationalism would surely be on the other. Together these make the prospects of growth and liberty a mean handicap. Each is a violation of the liberty we are granted as individuals, but nationalism is an underestimated foe of humanity.

Although religious intolerance appears to stand high and mighty as the single most threat to the liberty of our world's most challenged people, even the most obvious cinder box - the Middle East - is being inflamed more by the outmoded sway of nationalism. Yes, the same nationalism that brings the Lebanese people to the streets, that ignites the Palestinians, and perhaps inspires the Syrians to regime change - all are falling into a trap that hardly resolves the real problem that plagues these people.

Indeed, for all the energy that goes toward state building in Palestine - the "two-state" vision - it is hardly an economically viable one. Better that the peoples of the Middle East look to establish values of liberty and economic self-interest in a system of political and economic union. What sense the nation, if the economy that lives under its shackles cannot thrive? Yes, religious intolerance divides these people, but nationalism will eventually kill their dreams. Indeed, Iraq would best set the proper economic and political tone for the region by embracing federalism. Is there sense in making divisions where they need not be?

Europe stands as the best example of a modern effort to diminish the tone of nationalism - the European Union frail, but concerted toward economic and political union. There, we hope, the future is full of prospect. But the Middle East? What if by some miracle there is peace? Surely, the economic interests of the region are best served by abandoning division and working toward a customs union and perhaps a Pan-Arab state - one based on liberty and democracy and inclusive of Israel. Surely, that must be the vision? Unfortunately, the currency of these times still rings of nationalism, in all its small-minded forms.

So too, in Canada. Canadian nationalism continues to hold our people back. Canadians continue to hold on to a history that is flawed. And it costs us dearly. The opportunity costs of not addressing the failing of our nation state charade will become increasingly clear to Canadians - both in a domestic sense, and a foreign policy framework. We will be handicapped economically as surely as our international stature will continue to collapse. The current fiasco over missile defense and the embarrassing failure of Canadian tsunami relief execution are just the most visible recent tarnishes. The more we look like ineffectual hypocrites and free-loaders, the more the world, not just the U.S., will see us for what we are. In some cases, we will simply lose the international respect we once commanded, in other cases we will open ourselves up for abuse.

Better we start to dismantle the rhetoric of the nationalist. Better that they and their socialist mouthpieces begin to answer to the failings of this country.

Friday, February 25, 2005

Our lame duck prime minister

It might be easy to forgive a minority government for lack of conviction, but our Liberal government has already made it clear in previous majority incarnations that they are captive to paranoid nationalist sentiment - regardless of whether the issue demands heartfelt and true leadership. Instead, the Liberal government continues to shirk responsiblity. Look no further than the issue of national defense.

In a world that poses serious security threats to Canadians, we would expect that our national government would take to its proper duty and address vulnerabilities to our dominion. So what of missile defence? How does the current governments attitude really comply with its responsibility to the nation? How can this government turn its head on missile defence?

I would expect that the U.S. response to this cavalier Canadian attitude will further erode our important relationship. Too bad. This is not the time or place to play politics. A missile launched over the heads of Canadians - no matter if it is directed toward New York or Washington - is of grave concern for the population below its path. And who is to say Toronto might not be in its vector? No, I should think we should pay heed to the fact that there are ballistic missiles that could threaten Canadians as much as Americans. We should view continental security as the important foundation of Canadian defence interests. And we should use missile defence as an important leg of an incresingly integrated security and defence infrastructure shared with the United States.

Prime Minister Paul Martin is clearly a creature of politics - not nearly the bold leader we need now. But this seems to be a consistent problem in Canada. I would anticipate that the U.S. will continue to call Canada to stand up. Again, Canadians act like irresponsible citizens. The U.S. Ambassador is right to warn us that we risk our soveriegnty of defence - but we have long been doing that. I hope that behind the curtains real Canadian involvement is being promoted and executed.

Sunday, February 20, 2005

Defence - our common interests

Too often Canadians are misguided by the luxury of irresponsibility. The liberal delusions about international law and peace are easy to promote in a country where our liberty, should it ever be tested, will rest in the hands of the United States. We are, as Canadians, behaving like adolescent children. We want independance, the rights to form our own policy; yet, we are not prepared to responsibly enact the machinery to effectively assert it. This is very naive.

Currently, Canadian Defence expenditures account for about 7% of total federal government expenditures. On a per capita basis, Canadians spend less than $US 315 per person on our defence budget. By comparison, the the world's superpower to our south spends about $1,400 per capita on Defense, accounting for 18% of total federal government budgetary outlays. What do Americans get for their commitment to security? They are the world's greatest military power, their hegemony protecting liberty not just for Americans, but for the free world. Canada? We have a military incapable of meeting even the barest obligations of a sovereign nation. Our forces are minimal, their resources embarrassingly inadequate.

If ever there was a waste of taxpayer money, it would be for a defence that provides us no security. Surely, if we are resting on the good fortune of having U.S. self-interests protect us from national threats, then it would be worth asking in what ways we might amalgamate our military under a U.S. command. Efficiency goes beyond economic consideration: the integration of defence command and homeland security would improve our security immensely. And surely it would allow for even broader economic benefit by allowing for unrestricted border crossing between the United States and Canada. It would also allow Canadian military personel the opportunity to move into the 21st century with the U.S. military and its technological infrastructure. Canadians would be able to make military careers that make a difference in the world. More importantly, Canadians would be actively involved in their own security in a realistic way.

The current U.S. initiative for a joint missile defence program should be an important starting point, but truly, it is imperative that Canadians look at the big picture. An amalgamation of defence interests with the United States should take on a formal structure. I would sooner our tax dollars for defence priorites be directed to a new joint command with the U.S. We currently spend about $12.4-billion dollars on defence...we could get a lot more for our money by dispensing with the nationalistic pride that continues to obstruct us from being responsible to ourselves and the international community.

Friday, February 11, 2005

The Sponsorship Scandal

Millions of dollars for promotion of Canadians! A government policy of apeasement of Quebec separatists by way of hush money. Whether there is abuse, pork barreling - even out-right theft - surely Canadians have got to start looking in the mirror. Is this the basis for a nation? Subsidies. Equalization payments. Infrastructure doggie-bones. A vast nation we cannot even defend. A political culture dominated by self-interested politicians, welfare provinces and corporations. When will this insanity end? Does anybody dream of something greater? Are there Canadians who would rather stop this charade? I cannot be alone. I cannot stand the socialist mentality that pervades our country. It is a shame that that our youth cannot learn they value of responsibility, the power of liberty. Instead they are corrupted by the fear-mongering of the socialists/nationalists. Indeed, Canadian nationalists are guilty of living the great lie. And it costs us greatly. Our culture of government, so entrenched, is slowly killing us.

What do Canadians really need? A brave leader who tells the truth. We cannot afford Canada any longer. Let us make a bargain sooner than later to join in a customs union with the United States. Let us take the U.S. greenback as our currency. Let us disband the Canadian military and join America in a joint-North America military and defence perimeter. Let us open our border to commerce and labour mobility. Yes, we need a leader to take us to the future before we pay too much.

Wednesday, February 09, 2005

Nationhood: what be thy cost?

That people are fearful of change is not surprizing. Yet the forces of nature are constantly at battle, reaching for a shifting equilibrium. Nature is full of change. So too are the economic forces that shape our civilization. Individuals struggle to survive in a shifting economic landscape, and the laws of nature guide us through this evolution. With the burgeoning globalization of the international economy, we are confronting culturally and economically threatening change. Livelihoods once taken for granted are lost forever to the laws of comparative advantage. We have a growing population of people left on the fringes and whose economic well-being is threatened by the forces of capitalism. More threatening, for many nationalists, is the insidious integration of peoples and cultures within the the increasing sphere of the American political economy.

Canada, whose exports to the United States account for about 83% of total exports and over 1/4 of GDP, has always been vulnerable to the American destiny. But now that destiny, thanks to the emergence of the Asian economy, and the growing stature of the European Union's economy has placed the Canadian economy at a watershed. Canadian economic integration with the U.S. market is well underway, NAFTA just one level of formalization of what must inevitably become a Union of the nation states in North America. Security threats and currency issues will further bring the Canadian dominion into the American fold. The question will remain: at what price is Canadian nationhood? Equalization payments, subsidies, and other nationalist programs administered by our federal policy makers will continue to come under painful scrutiny. Canadians - specifically young Canadians - must come to grips with individual, and regional self-interests weighed against the price of nationhood. These costs will increasingly come to the forefront. It would be of great benefit if economists and politicians started to give the Canadian electorate a clearer picture of the costs of the current reality. The costs of nationhood for this and future generations should be enumerated.

Sunday, February 06, 2005

Voices begin to resonate

The U.S Ambassador to Canada, Paul Celucci, mused publicly about the prospect of an open border between out two countries - a future where Americans and Canadians can move freely as labourers and consumers. It will be interesting to see how the political will for this development unfolds. Certainly, the bordering states and provinces where considerable cross-border traffic already occurs would like to see reciprocity and duty-free commerce. The National Post article makes clear reference to the precedent of the European Union. Will Canadians begin to see the light?