Diane: Undoing MacDonald’s National Policy was going to be the most difficult of the two task before him, it was easier to start with FIRA. It was a simple matter for Mulroney, to use his majority in the House of Commons – remember what we said about majority governments – to neuter FIRA and rename it Investment Canada. He might as well have closed it down. Mulroney, after castrating the agency, proclaimed that “Canada was open for business” and for Mulroney, what was good for business was good for the country.

Johnny: But which country???

Diane: The Americans were happy to oblige a fool that would sell out his country to the highest bidder and the wholesale auction of Canada’s resource and manufacturing sector began in earnest. The Canadian business community of course, was all for it. There was a quick profit to be made selling anything that they could lay their hands on. And when these were gone, to go after the national treasures such as the national health system, the railroads – but that is another story.

Johnny: Yes. That will have to wait for another time, and speaking of time, it is rapidly running out, perhaps you can quickly summarize how Mulroney undid MacDonald’s National Policy?

Diane: Doing away with The National Policy was going to prove slightly more difficult than doing away with FIRA, after all, The National Policy had stood Canada in good stead for more than one hundred years, FIRA just over a decade, but not to difficult for a determined man.

Johnny: I assume you would have had to be a very determined man to get rid of a national policy put in place by Canada’s first Prime Minister no less?

Diane: It was, in retrospect, surprisingly easy. In his quest to do away with The National Policy, Mulroney still had his chorus of supporters ready to drown out any opposition, not only his MPs, his patronage appointments and other sycophants but also the business community and the media.

Johnny: The media. Wouldn’t it have been neutral in such a crucial debate?

Diane: No. The Canadian media, even then, except for the public broadcaster and a few user supported stations was owned by less than a handful of business conglomerates who were only too eager to encourage Canadians to swallow the poison that was free trade Mulroney style.

Free trade as envisioned by Mulroney and his supporters would remove all the protection for “the mining, the manufacturing and other interest of the Dominion” that MacDonald’s National Policy and subsequent government had so effectively used to shelter industries that were crucial to the country’s prosperity and security.

I am repeating myself here but it bears repeating. The mouse was to be afforded no protection from being trampled by the elephant.

Johnny: How could Canadians have been so gullible?

Diane: I don’t know. I must admit in writing Freddy the Freeloading Country, I started losing much of my admiration for Canadians. To be fooled once by Mulroney’s argument that killing FIRA was good for business and good for the country is one thing but when he used almost the same argument to sell free trade with the U.S. well, you know the old saying, “fool me once shame on you, fool me twice shame on me”.

Johnny: Yes.

Diane: They accepted this self-serving argument a second time, even after a respected politician, former Finance Minister, former Prime Minister, businessman, lawyer, the Right Honourable John Turner who, in a televised debate when Mulroney was seeking a second mandate, warned Canadians in a voice almost breaking with emotion that Mulroney was in his own words “my opponent is in league with foreign interests to sell out the country"; in so many words Mulroney’s promotion of free trade with the Americans was, in Turner’s opinion, nothing short of treason.

Johnny: He was accusing Mulroney of being a traitor???

Diane: In so many words. Here was a man that knew what he was talking about. If you didn’t believe him, you were a fool.

Johnny: If I remember correctly, John Turner was not the only high profile public figure that came out against the deal?

Diane: There was Simon Reisman appointed by Mulroney as his chief negotiator, walking away from the deal, complaining that what the Americans wanted in return for so-called free-trade – what Canadians considered free trade and what the Americans considered free trade would turn out to be two very different things – was bad for Canada.

Johnny: Why did the Chief negotiator for the Free Trade Agreement, appointed by Mulroney, the man who negotiated the highly successful AutoPact quit the talks?

Diane: Mulroney had promised Canadians that he would walk away from any deals that was not good for the country. As the deadline neared for completing the negotiations, it was clear to Simon Reisman that the Americans wanted too much and  were willing to give too little in return, and he walked out of the negotiations. Simon Reisman for all his gutter talk during the negotiations was an honourable man.

Johnny: What did Mulroney do when his chief negotiator walked out claiming the deal was a bad one?

Diane: He sent his Minister for International Trade, Pat Carney, to give the people he loved and admired what they wanted the most, a continental energy policy. A policy that would confirm their right to set the price and depletion rate of Canada’s oil and gas even when that oil and gas was sold to Canadians.

Johnny: Was this the reason Reisman walked out, because he was not willing to hand over control of Canada’s energy sector to a foreign country?

Diane: We are not sure. After the deal was done he returned for the official signing ceremony. Perhaps it was surrendering control of the oil and gas industry. I don’ know.

Mulroney had always maintained that a free trade agreement was absolutely necessary to protect Canadian exporters from American protectionism and this would be accomplished via a binding dispute-resolution mechanism that would be part of any free trade agreement.

Perhaps Reisman walked out when he realised that the Americans would never grant a binding dispute-resolution mechanism, the number one reason for entering into the trade talks in the first place.

Johnny: When Reisman walked out and Mulroney sent in Carney to complete the negotiations, did she get a … what was it again … a binding dispute-resolution mechanism?

Diane: No. The Americans may have agreed to allow Canada to continue protecting some of its so-called cultural industries, the definition of which, culture being what it is, would prove impossible to define in terms of trade, therefore impossible to defend.

Johnny: Mulroney signed the deal anyway?

Diane: Yes. For Mulroney doing the deal is what counted, content was secondary. He lived for the adrenaline rush of last minute negotiations where he would step in and save the day. He could not be a hero if there was no deal. Remind you of another deal he let go to the wire but failed to pull off, where he “rolled the dice”?

Johnny: The Meech Lake Accord. Let’s not get into that poker game, unless, of course, it has bearing on your theory of why Canada broke up?

Diane: It doesn’t. At least not in my theory as to the cause of The Fracture.

Johnny: Getting back to the first free trade agreement signed between Canada and the United States. I believe, it is the view of most economists, that this deal was almost as one-sided as when the Indians sold the Island of Manhattan to the Dutch for 24 nineteenth-century U.S. dollars.

Diane: No kidding, Johnny! Without the binding dispute-resolution mechanism Canada was giving the Americans just about everything they wanted and getting nothing of value in return. Not only was it one-sided in the extreme, but it set in motion events that would eventually destroy most of what past for Canadian culture, the last remnants of that culture we can still find in the country of Quebec. He sold out the gas and oil sector, Canadian culture, everything almost simultaneously and got basically nothing in return.

To paraphrase Paul Gross’s character Tom McLaughlin in the Canadian drama H2O about the sale of water to the United States he “made stealing the country’s resources legal”. There was no free trade, the most damming evidence being the never ending softwood lumber dispute and other protectionist measures and tactics adopted by the U.S. after the so-called free trade deals, FTA and NAFTA were signed.

Johnny: That is quite a statement, I’ve never known you to put much value on culture and as far as your arguments against free trade, I find it most unusual coming from a free-market economist like yourself.

Diane: To answer your second observation first. Free trade between equal partners trading in good faith is not a bad thing, but the so called FTA which set the standard for the subsequent NAFTA, the North American Free Trade Agreement, and other one-sided trade agreement was bad for Canada coming after the sell-off of Canada’s resource and manufacturing sector.

It allowed the new foreign owners to set the price for these commodities. The buyer was telling the seller – which in Canada’s case was usually one of the same – what price it was willing to pay and the seller had no choice but to agree to the buyer’s terms.

Under The National Policy, Canada would have levied charges at the border in response to this rip-off, but of course, The National Policy, one of MacDonald’s many gifts to the nation, was no more.

Johnny: Do you have a specific example of how much this “buyer’s market” was costing the country?