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A marriage made in the boardroom

Toronto journalist makes dubious case for Canada joining the United States

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Diane Francis, a Toronto business journalist and author of such bestsellers as Who Owns Canada and Bre-X: The Inside Story, now issues a stirring call to arms for the intellectually bankrupt.

Merger of the Century came out last fall, but it makes for instructive reading on a cold winter night in the new year.

Francis believes that a nation is nothing more than a business. Culture matters, but money matters more. "Citizenship," she writes, "is political consumerism and people (and corporations) reside where it makes the most sense or cents."

It makes sense for businesses to merge when that would create benefits otherwise not available. Therefore, she argues, Canada and the United States should become one single country for the benefit of matching Canada's undeveloped resource potential with America's money, markets and workers.

Francis sees the race among countries to acquire and hoard resources as a zero-sum game. Increasing populations and finite resources mean that "only the fittest, and fastest, nation-states will survive."

Emerging economies, notably a ruthless China, appear to be winning this Darwinian race for resources. They have perfected state capitalism by creating state-owned corporations that generate overwhelming power compared to (in Francis's opinion) the separate public and private spheres of western countries.

If they are to survive, Francis advises Canada and the U.S. to adopt the state capitalism model and, better yet, unite into one country. If the status quo continues, the U.S. will face increasing adversity in the competition for resources and a poorer and defenseless Canada could be exploited by China and Russia

Francis provides a barrage of detail in support of her argument.

Space allows for only a few examples:

Canadian productivity is less than that of the U.S. Canada's economy is fragile because it is based on resources and branch plants. It has allowed too many foreigners to buy too many of its head offices and great multinational corporations.

Furthermore, our smartest citizens move to the U.S. When our federal and provincial governments are not squabbling, they are pandering to Quebec separatists, aboriginals and environmentalists. Our investment in the development and defence of northern Canada is appallingly inadequate.

Unlike our political class, she is not afraid to say "Dutch disease." She points out that our booming resource sector has driven up the value of our dollar and damaged our manufacturing sector.

Francis does not deny that the U.S. has its flaws:

Americans' belief in their national exceptionalism is self-delusional. Pro-military boosterism and flag-waving is financially damaging. America's health-care system is expensive and inefficient. The right wing's unreasonable dogma that governments are bad undermines the establishment of Chinese-style state corporations.

Some of Francis's complaints about Canada have merit. However, it does not follow that the only solution is a merger with the U.S. (leaving aside her incorrect definition of a nation).

She might well have titled her book "Non-Sequitur of the Century."

In spite of the problems documented by Francis, the World Economic Forum Human Capital Report for 2013 places Canada at a respectable number 10 out of 122 as against the U.S. at number 16. The Human Capital Report is a measure of how well countries develop the talents, skills and capabilities of their citizens. It is considered the key indicator to a country's future.

The World Economic Forum, the OECD and the Conference Board of Canada all agree that Canada's productivity could be improved if business spent more on research and development.

Unfortunately, branch plants rarely give priority to research and development.

Canada is, by any measure, a rich, productive country. It is absurd to suggest that its only option is annexation by its neighbour. It has no problems that could not be solved if our politicians had the courage to put the interests of their citizens before the interests of transnational corporations.

Not surprisingly, Francis does not like the word "annexation." She says that after the Canadian federal government is dissolved, the ex-Canadians would be paid for their assets and "must occupy a special place setting at the board of directors' table."

While she does not explain what she means by the "board of directors' table," she does go into detail about how ex-Canadians would be paid.

Francis calculates that every ex-Canadian, on a sliding scale based on years lived in the country, should be paid a share of the total net value of ex-Canada. Fifty years would get you about $600,000 with which you could buy health insurance and retire to the sunshine of Florida.

Pierre Elliott Trudeau said that living next to the U.S. was like sleeping with an elephant: "No matter how friendly and even-tempered the beast is, you are affected by every twitch and grunt."

A sleepless night is certainly no fun but, on balance, it's better than being swallowed up by the elephant.

 

Winnipegger John K. Collins is a retired union negotiator.

Republished from the Winnipeg Free Press print edition January 4, 2014 A1

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