BCNI catches up on history lessons

As more companies move headquarters south - taking CEO jobs with them - the Business Council starts to feel the heat of free trade

By: Mel Watkins

  Canada's Big Business is something to behold. Our country may be vast, but they are simply half-vast.
  And behold them you could last week in Toronto. The CEOs of the Biggest Ones, who make up the Business Council on National Issues (BCNI), met, 150 strong. (Or is it weak? Read on.)
  Now these people, who brought us free trade and the GST, demonstrably have political clout, perhaps more than any other business class that we know of. (As Linda McQuaig has told us, they don't always get all they want, but they get far more than the rest of us.)
 

It takes a particular kind of incompetence to lock yourself into another economy and then do distinctly worse than it does

  What the Canadian business class doesn't seem to have is business smarts. It's as if it doesn't understand what its first duty is in the reign of The Market. Being merely entrepreneurial and innovative seems to be missing from their DNA.
  Historically, Canadian business has always run for cover within someone else's empire, seeking special status, making special deals, trying to share in the plunder of the metropolis. That's what the Free Trade Agreement, and then the NAFTA, were supposed to deliver for us in our dealings with the U.S.
  In fact, Canada has not been able to keep up with the American rate of economic growth in the past decade. What's kept our standard of living respectable - our grass greener, as we say here at Straight Goods - are the very things the BCNI opposes, like medicare and lower drug prices.
  It takes a particular kind of incompetence to lock yourself into another economy and then do distinctly worse than it does. Of course, the BCNI won't admit that free trade agreements, aka Charters of Rights and Freedoms for Corporations, might themselves be the problem but it does, in a bizarre way, come perilously close.
 

An organization that represents the foreign-based corporations in this country is admitting, in effect, that their limitless faith in the virtues of transnational corporations is flawed

  Forty percent of their Big Boys (and they are overwhelmingly boys), now fear, we are told, that their own jobs will disappear. That, like knowing you'll hang in the morning, finally concentrates the mind. If they work for foreign- (American) owned companies, like a lot of the BCNI's CEOs do, the Canadian operation is being incorporated into the American corporate structure and the Canadian head office is disappearing.
  Who needs a Canadian CEO when the border is erased and Canada is no different from California?
  All of which was predictable. I recall saying so myself during the Great Free Trade Debate prior to the 1988 election. And wasn't there that fellow Walter Gordon, himself a successful businessman and the gutsiest of politicians, who warned us as far back as the 1960s that foreign ownership had its down and dark side.
  The BCNI is finally abreast of ancient history but that misses the real story. An organization that represents the foreign-based corporations in this country is admitting, in effect, that their limitless faith in the virtues of transnational corporations is flawed. Our masters, slow learners that they are, have apparently caught up with where most of us have been for going on half a century.
  If they work for Canadian-owned companies, the FTA sucked them into serving the American market and their very success is their undoing: the head office headed south. The Science Council of Canada warned about this back in the 1970s. Their reward was to be abolished by the Mulroney government - the better to pave the road to free trade and the consequent quantum leaps in both cross-border trade and investment.
  Remember Ross Perot's giant sucking sound, meant to represent American jobs going to Mexico? Thanks to the BCNI, we now know that for us it's about Canadian companies (no matter who owns them) and a multitude of head office jobs, going to the U.S.
  Without knowledge, there can be no sensible policy. (Professors are required to believe that.) The corporate elite now, belatedly, has the knowledge but whether it will actually let governments do anything helpful for us ordinary folk remains to be seen.

Mel Watkins is Professor Emeritus of Economics at the University of Toronto.

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