| Reviews / Comptes Rendus | Labour/Le Travail, 59

Reviews / Comptes Rendus

Gregory J. Inwood, Continentalizing Canada: The Politics and Legacy of the Macdonald Royal Commission (Toronto: University of Toronto Press 2005)

THIS IS A TIMELY and very important book. For those of us old enough to remember the debate around free trade initiated by the Macdonald Commission, the role it played in legitimizing the decision by the Mulroney government to negotiate a free trade deal with the US was critical and, I would argue, transformative. Canada under free trade is a very different country than it was, or perhaps might have been, in the absence of the Canada-US Free Trade Agreement [FTA] and North American Free Trade Agreement [NAFTA].

Inwood begins his analysis with an interesting discussion of the role of royal commissions in Canada's history. He notes that there have been over 450 since Confederation. However, arguably, none has had a more profound impact on the future direction of the country than the Macdonald Commission. Unlike many others, the Macdonald Commission's mandate was broad and general, permitting it to examine virtually all aspects of Canada's economic and social life. As a result, it was able to initiate the most comprehensive program of economic and social policy research in Canada's history. Yet, ironically, despite the scope of its mandate, its recommendations reflected a much more narrow neo-conservative approach to addressing Canada's social and economic policy challenges.

In researching the origins, composition, deliberations, and recommendations of the Commission, Inwood has done his homework well. He has examined, in depth, the work of the commissioners, the consultative process they utilized, their extensive research program, and the very large number of submissions they received. He has also looked at the internal dynamics of the Commission itself, explaining how this process led, eventually, to Macdonald's free-trade recommendations. Inwood interviewed virtually all the key players involved with the Commission, both inside and outside government. The book is an impressive model of good research and Inwood can lay claim to being author of what will probably be the standard text on this aspect of Canada's recent history for many years to come.

Inwood sees the debate — and struggle — over free trade as being between adherents to social-democratic nationalism and neo-conservative continentalism. While shaped by these competing ideologies, it was also a reflection of conflicting state and societal interests with sharply divided factions within the (Liberal) federal government and profound disagreements between business on the one side and popular sector organizations and labour on the other.

Interestingly, when the Commission was appointed, the Liberal government of Pierre Trudeau did not see free trade as a major issue. However, the deep recession of the early 1980s, the slow progress in the General Agreement on Tariffs and Trade [GATT] negotiations, and the lack of progress in developing a 'third way' for Canada's trade with countries outside the US provided the neo-conservatives with the argument that the post-war Keynesian nationalist (and social-democratic) economic strategy was failing and more radical, market-based alternatives were needed to address Canada's economic problems.

Initially, the commissioners were not focused on the issue of free trade. Some were open to the idea, while others were skeptical. However, as their work progressed, many — but certainly not all — of the commissioners became more sympathetic to the arguments of the economists who dominated the Commission's research agenda and who fervently believed in the benefits of free trade. Their analysis was supported by their use of sophisticated, if narrowly based, econometric models to assess the potential benefits of lowering trade barriers. The disproportionate influence of neo-conservative economists reflected the inclinations of its research coordinator whose outlook and priorities were given free rein by a group of commissioners too preoccupied with their other responsibilities — and particularly their brutal schedule of consultations with the public. Of course not all of the research was carried out by the core team of economists that dominated the research staff. Political scientists, sociologists, and other social scientists also did research for the Commission. But, subsequently, they found that their analyses were marginalized.

Similarly, the commissioners themselves were also marginalized to a significant degree. Despite the enormous amount of time they spent hearing submissions from the public, very little of this input ended up being included in the main recommendations. Rather than drafting the report themselves, they agreed to have a small team of researchers, overwhelmingly committed to free trade, do this work for them. Admittedly, drafts were run by the commissioners, but in a way that effectively channelled their reservations into footnotes and dissenting opinions, rather than the body of the recommendations.

One of the significant findings, statistically, of Inwood's detailed review of the huge number of submissions presented to the Macdonald Commission during its lengthy deliberations is that the overwhelming number did not support free trade. The key — but critically important — exceptions were those from the business community, most notably the Business Council on National Issues and the Canadian Chamber of Commerce. While there had been divisions within the business community about the advisability of free trade at the beginning of the process, by the end, the major business organizations had reached a consensus among themselves that they wanted such a deal.

As the preceding comments suggest, the author is not entirely sympathetic to the role of the economics profession in this process. He argues that the economists elbowed out the views of other disciplines — as well as labour and popular-sector organizations — dismissing as largely irrelevant any concerns about the impact of free trade on the future role of government in Canada and on the issue of sovereignty itself. He notes that the research agenda of the Commission privileged the economists and allowed their world view to predominate in the way the issues were framed. Thus the Commission's recommendations largely ignored the political significance of greater integration with the US because it was outside the framework of the economic modeling that played such a key role in the Commission's recommendations.

Inwood's detailed research uncovers many interesting sidebars to the work of the Commission. Under Trudeau, the trade component of the Department of Industry, Trade and Commerce was merged with the Department of External Affairs — almost by accident — as the government did not know where to put it. However, its pro-free-trade economists, under the leadership of Michael Hart, soon took over the policy direction of the reconfigured Department of Foreign Affairs and International Trade [DFAIT]. And Hart exercised a critical role in shaping the research agenda and the ultimate recommendations of the Commission

Inwood rightly notes that the actual Canada-US FTA was different in numerous ways from the model of free trade advocated by the Macdonald Commission. It failed to achieve market access in key areas important to Canada. It included a toothless disputes settlement mechanism. More importantly, it expanded the scope of the concept of free trade to include a wide range of government activities and public policies previously not considered to be within the realm of trade agreements. Nevertheless the Macdonald Commission laid the ideological and political groundwork for the subsequent conversion of the Mulroney government to free trade and bears at least some responsibility for the resulting outcomes.

The one representative of the trade union movement on the Commission was Gerrard Docquier, Canadian Director of the Steelworkers. Like other commissioners, Docquier found the workload of the Commission taxing. He also found his ability to influence its research agenda and final recommendations very limited. Although he, like several other commissioners, submitted written dissents, his views were overshadowed by the majority's recommendations and his objections relegated to a supplementary item in the final document.

Inwood notes that concerns about the need for a comprehensive labour adjustment program to address the anticipated disruption to certain industries were largely ignored in the Commission's final report. In sum, labour's opposition to free trade as expressed in the numerous submissions by the CLC, various national unions, and independent locals was effectively ignored.

Docquier's concerns about free trade, like those of some other commissioners, were also pre-empted by Donald Macdonald's unilateral statement as chair, before the final report was released, that the Commission was going to recommend free trade. This action effectively defined the Commission's position even though the actual recommendations were more nuanced and, as noted, accompanied by a variety of dissenting views.

If there are weaknesses in the book — and there are very few — the most important is Inwood's tendency to downplay the role of the United States. The book's impressive research focuses almost exclusively on developments within Canada. It sees the Commission — and its recommendation in favour of free trade — as essentially a domestic matter. Arguably, the election of Ronald Reagan at the beginning of the 1980s signalled a much more aggressive approach by a US government determined to impose a neo-conservative economic model not just domestically, but throughout the world. US policy-makers recognized that trade agreements could be a vehicle for expanding US economic hegemony. They also understood that the US had a major stake in promoting free trade and economic integration with Canada — and within Canada. Free-trade agreements could be a powerful vehicle for restructuring the economies of their trading partners, both to provide new opportunities for US business and to curtail troublesome nationalist economic developments such as Trudeau's National Energy Plan.

It would have been useful for Inwood to have included a more extensive analysis of the role of the US government and US business interests in Canada in the promotion of free trade, particularly as the Canada-US FTA was clearly part of a larger US agenda that was reflected in trade agreements being negotiated with Israel and several Caribbean countries at the same time. As subsequent developments quickly demonstrated, this agenda was soon expanded to include Mexico (through NAFTA), a drastically re-shaped GATT (in the form of the new WTO) and numerous other free-trade agreements with individual trading partners of the US around the globe.

Nevertheless, this is an impressive book. It provides well-researched analysis of the establishment, operation, and recommendations of the Commission, while commenting thoughtfully on the ensuing free-trade debate leading up to the 1988 election. Its author should be commended for this fine piece of scholarly research.


John Calvert Simon Fraser University

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