Market champions and the Canada trap (part one)

Canada was born to set limits. Victorian liberals feared that its protectionist logic and aristocratic architecture would inhibit the budding liberal passions of the age. (Throughout the English-speaking world, liberals battled high tariff walls as well as ethnic, class, and religious limits to the emancipation of the individual.)

Today, in the economic sphere, market champions appeal to textbook liberal economics but long ago stopped questioning our Confederation’s founding ambition: building a distinct transcontinental economy out of the remnants of British North America.  

The hottest liberal society on earth (just next door) and Canada’s awesome and unfailing natural endowments have made it possible for Canada to keep getting better without being truly liberal or too reactionary.

Center-right liberals and economic conservatives champion the value of markets in stimulating productivity, innovation and enhancing the consumer’s purchasing power. They defend Canada’s 25-year-old tariff-free zone with the US and Mexico (and love the pressure-cooker environment of landing trade agreements elsewhere). They worry about the country’s poor productivity performance and stagnating middle class.

They’ll trade with the devil.

Yet, they limit their "radical" outbursts to strengthening Canada’s economic union and attacking asinine provincial protectionists.

They’ll call for bold leadership to strengthen the east-west machinery of our federation—while assigning our north-south prospects to commercial lawyers and mood swings in Washington. They’ll rail against a century of provincial market monopolies in electricity, in booze, in the oldest white-collar professions, in eggs and in milk, and in local government procurement. They’ll editorialize about labor-market and government-transfer policies that ensure quality living amidst economic stagnation.

Then, they’ll rest. Worn down by the so-called statist bias of a country with an old soul. 

Rather than robust commercial and cultural integration with 320-million like-minded neighbors, rigorous "Canada First" thinking among 35-million Canadians across six time zones is their battle cry, their quixotic reform agenda!

Andrew Coyne is the best muse we have for better housekeeping inside the box. Stephen Harper is exhibit A, as its most promising failure. He didn’t invent the term "economic union." But, unlike any prime minister before, he clearly detests the barriers in its way and has had a majority to work against them. Yet his biggest accomplishment in smoothing the bumps in our federation has been to harmonize Brian Mulroney’s sales tax.

Coyne’s contempt for Harper allows him to keep his hopes alive. Besides, after eight years in office, Harper is surrounded by young conservatives who think they could be more persuasive, more persistent, and, of course, harder on the unenlightened. New champions of a seamless Canadian market will speak up.

What’s to lose when they lose tomorrow?

In Canada, policy failure is forgivable. And it’s a lot safer to fail at something wrapped in the flag than at something truly important.

Rather than honor past and pending failures, however, let’s consider why their project is inadequate as well as futile—and what they lack the courage to try.