The great public servant Donald Macdonald died this week. He wore many hats (to go with his many bow ties) in a long career: Liberal Member of Parliament for Rosedale in Toronto, minister of defence and finance, High Commissioner to the United Kingdom.
He remains best known, however, for leading a timely royal commission that pushed free trade with the United States and a more open economy in general. Mr. Macdonald’s report, ordered by Pierre Trudeau in 1982 and handed over to Brian Mulroney in 1985, gave the Progressive Conservatives the intellectual ammunition they needed to launch free-trade negotiations with the Americans.
The idea has proved so successful that even a committed protectionist like President Donald Trump dared only tinker with it during the recent NAFTA renegotiation.
Now that his report is embedded in the marrow of the continent, it is worth considering what a Macdonald Commission would look like today. What is the issue that an esteemed former politician might turn into a chunky white paper with the power to turn the country’s tide?
It would be a subject of major national importance, obviously – but not one that already has a touchstone document attached to it. That rules out the future of Indigenous peoples in Canada, because the Truth and Reconciliation Commission produced a report that is plenty sound.
“Greening” the economy is an attractive option. But the best plan to reduce emissions and spur green technology is a carbon tax, and we don’t need anyone to tell us that – the United Nations and a Nobel Prize in Economics did so just the other day.
Oddly, the area that seems closest to fitting the bill runs against the current of the original Macdonald Commission. The thrust of its argument was that Canada should open itself to the world economy and rise to the challenge of competing in it. Our thorniest challenge for the next 30 years, meanwhile, may be helping the losers in that competition.
Rapid technological change and free trade have brought huge gains in prosperity for Canadian firms and Canadian society at large. We are not just hewers of wood and drawers of water anymore: We shipped more non-resource than resource exports, by volume, in the first 20 years of continental free trade, according to the C.D. Howe Institute.
The benefits of a more open economy have been widespread. But there has been pain, too – more concentrated, but also more acute. Yes, consumers have gotten cheaper goods and businesses have gotten new markets. But on the other side of the equation, there has been not some corresponding downtick in buying power or some corresponding loss of market access. Instead, there have been lives ruined and communities hollowed out.
There is still some dispute about how great a share of Canada’s lost manufacturing jobs can be laid at NAFTA’s door. But the losses are staggering: almost 300,000 between 2000 and 2007, and then close to 200,000 during the recession years of 2008 and 2009 alone.
The fate of a laid-off blue collar worker can be a bitter thing. The expectation of lifelong employment and an identity bound up in physical work, coupled with an education suited to little else, often makes the loss of a factory job hard to bounce back from. That’s true whether the job went to China, Mexico or a robot.
Indeed, what is true for a pink-slipped auto worker from Windsor goes equally for a dairy farmer from Quebec who can no longer compete thanks to reduced tariff protection, or a cab driver in Calgary whose savings were wiped out by Uber.
It can lead to disillusionment with government and give rise to the angry populism we have seen in the United States under Mr. Trump. People whose needs are real but who feel ignored will go looking for someone who purports to talk for them, and who says he or she is willing to tear down the global trade network whose benefits have passed them by.
Canada’s generous social safety net can’t fix the damage of such a loss. The trick is returning dignity and meaning to the lives of people, not just handing them money.
The Liberal-Conservative consensus about the value of an open economy has produced a richer, more dynamic country. Technology, too, has made us more competitive.
But the next Macdonald will need to contend with the balance between managing this progress and helping those it leaves behind.