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May 2, 2008 Last week, at the close of the fourth SPP summit in New Orleans, Prime Minister Harper issued a joint statement with Presidents Bush and Calderon that reaffirmed their commitment to the NAFTA trading model despite fresh criticism of free trade in all three countries. “The SPP complements the success of the North American Free Trade Agreement (NAFTA), which has helped to triple trade since 1993 among our three countries to a projected $1 trillion in 2008,” they said in their final statement. “NAFTA has offered our consumers a greater variety of better and less expensive goods and services, encouraged our businesses to increase investment throughout North America, and helped to create millions of new jobs in all three countries. NAFTA is key to maintaining North America's competitive edge in an increasingly complex, fast-paced and connected global marketplace.” But this week Statistics Canada tells us that for all this extra continental trade, average Canadian incomes have been stagnant since 1980, and have even gone down in British Columbia, creating one of the most dramatic income gaps in the developed world. As the Globe and Mail reports today, “The final data released from the 2006 census showed the median earnings of full-time Canadian workers had increased to $41,401 in 2005 from $41,348 in 1980 – only about $1 a week more, measured in constant dollars.” Meanwhile, “the incomes of the richest Canadians increased by 16.4 per cent while incomes of the poorest fell by 20.6 per cent.” This income gap did not grow in a vacuum, which is to say that economic policies and trends had an impact. And while it is not entirely fair to say that free trade with the United States in 1988, and then with Mexico in 1994, is the sole culprit, there is no denying that these agreements represent major structural changes to the Canadian economy in the same period as the census data was taken. As the Canadian Centre for Policy Alternatives has claimed, the overarching cause is better understood as the neoliberal – or market fundamentalist – agenda that has dominated Canada and much of the so-called western world since the 1980s. “NAFTA is about much more than deregulating trade,” wrote Bruce Campbell of the CCPA in July 2006. “It is about removing restrictions on the mobility of capital. It goes way behind the border to the heart of domestic policy-making. It is an economic constitution, conferring enforceable rights on investors, limiting the powers of government, and making it extremely difficult for future governments to change. At its core, NAFTA is about shifting the power in the economy from governments and workers to corporations.” Or, as Maude Barlow put it in the Council of Canadians’ 2005 report, “The Canada We Want,” “These free-trade deals have imposed ‘structural adjustment’ on Canada of the kind the World Bank and International Monetary Fund have imposed on many Third World countries in exchange for ‘debt relief.’” The only difference is that successive Conservative and Liberal governments did it to themselves, essentially handcuffing their ability to develop economic policies that in any way run up against big business interests. As power has shifted into a few hands so has income, according to the census data. These same corporations who encouraged Canada to sign the two free trade agreements now play a key role in determining the shape and scope of further economic integration across the continent through the Security and Prosperity Partnership. “These élites simply disregard the ‘inconvenient facts’ presented here as they push for even deeper forms of continental free market integration,” wrote Campbell. “NAFTA, they claim, has greatly increased exports and investment; Canada’s trade surplus is up, unemployment is down, inflation is low, wages are flat, business is experiencing record profits, growth is steady. Therefore NAFTA has been a success. What is there to re-examine? Let’s just move forward, they say, and build on our success. “Instead of continuing down this road… we should undertake a comprehensive assessment of NAFTA’s costs and benefits, and take a hard-headed look at the advantages and disadvantages of withdrawing from NAFTA. It is time to stand back and ask: is NAFTA working for us? Do the benefits outweigh the costs? Is it serving our needs? It is time to reconsider whether NAFTA is contrary to the well-being of Canadian workers (and indeed of workers in all three NAFTA countries) as the overarching framework for managing North American economic relations.” The new census data is powerful proof that something is wrong with Canada’s economic plan. If we are honest, we will seriously consider the real impact that free trade and neoliberal reform has had on income inequality in Canada and across the continent, and whether it’s time we developed a new trading model that benefits everyone – not just those CEOs now pushing even deeper continental integration through the SPP.
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NAFTA's legacy? Census data shows widening income gap despite promises of continental integration
