We will see in the next chapter that NAFTA′s rules arguably have a more constraining supraconstitutional impact on Canadian governments than do those of the WTO. But before looking at the way that NAFTA and the WTO have reconstituted the Canadian state, we need to understand what kinds of continental and global governance they have established.

The very desire to negotiate the broad sets of economic rules contained in NAFTA established the first prerequisite for a formalization of the United States′s relationship with its two neighbours, because it indicated thewillof all three countries′ economic and media elites to...

When a country signs a treaty it partlyinternationalizesthe state′s legal order to the extent that domestic laws are harmonized with the norms embodied in the accord. Before the advent of the new global trade order, even hundreds of international organizations (IOs) did not constitute a significant constitutional challenge to the conventional nation state, whose legal sovereignty was not compromised. If a state strongly disagreed with an IO′s mandate, it could abrogate its commitment - as the United States and Britain did by withdrawing from UNESCO because they considered that its policies responded too much to Third World concerns....

The Fathers of Confederation intended to create a classic federal system with sovereign powers carefully allocated to either the provincial or the federal level in mainly exclusive, watertight compartments. But alarmed by the carnage of the American Civil War, which seemed to demonstrate the folly of a constitution endowing its constituent states with excessive autonomy, colonial leaders asked Westminster to endow the proposed dominion government with many instruments that, in the interests of constructing a coherent political system, empowered it to intrude in and prevail over the affairs of the federated colonies and any future provincial accessions.

The earliest external...

The city is the level of government least linked in the public′s consciousness to globalization. Whether as institutions or as locations, cities are simply taken for granted, visible more to tourists as collections of monuments than to citizens as political entities. We know that buying a pair of Nike sports shoes may involve us with the exploitation of child labour in India, but we have a hard time seeing the connection between traffic problems in our neighbourhood and the ″G″ word, which describes those great issues of international integration championed over the last two decades, for better or worse, by...

By contrast, what made the Mulroney-Chrétien epochpostmodernwas its scepticism that states can be rationally and purposefully run to achieve any specific ends. Neoconservatism exploited this systemic doubt about politics, insisting that, because government was more likely to present the problem than offer the solution, it had no business in the boardrooms of the nation. Social conservatives, whose moral agenda remained politically marginal outside Alberta, were not so sure about the nation′s bedrooms, in whose activities they took a major interest because of their principled opposition to liberal positions on the ′family issues′ concerning life′s beginning (abortion), middle (same-sex...

A state bank to manage the state currency was a twentieth-century invention. After decades of experimentation with letting the Canadian dollar ′float′ rather than having it convertible into gold at a fixed rate, Canada followed Britain in definitively abandoning the gold standard in 1931. From sizzling in the frying pan (under the gold standard, Canada had suffered from fluctuations of world commodity prices and international capital flows), it found itself badly burned by the fire (New York′s financial markets controlled its interest rates, and the now-floating exchange rate determined the value of its dollar). It was in large part to...

Banks have been central, too, in Canadian history as one of its great success stories, tracing their roots to the financing needs of a staple-exporting economy and the policies of the nascent state. Granted charters by colonial administrators, commercial banks made fortunes for their owners by issuing bank notes and providing short-term credit for the relatively low-risk needs of the timber and wheat trade or for merchants importing necessities for settlers. The ′chartered′ banks remained averse to assuming the long-term risks involved in taking equity shares in manufacturing, unlike banks, for example, in Germany. They had also been shielded by...

As complex and fragmented as Canada′s phone system was for the bulk of the twentieth century, it was a phenomenal success, both socially and economically. By the time that Keynesianism reached its apogee, 98 per cent of Canadians had telephones, the second-highest degree of universality after Sweden.⁴ The social policy goal of achieving universal, affordable access had produced significant economies of scale, despite the large investments needed for installing wires over huge distances. The costs for residential users were among the lowest in the world.⁵

Phone companies were big employers. As large corporations in a leading industry, they invested in...

The grand rationale in the 1980s for solving the Canadian economy′s two related problems – sluggish productivity growth and inadequate efficiency – was to subject it as a whole to the disciplines of international competition. Forced to be more efficient or go under, national firms that survived the tough test would have opportunities to expand into foreign markets to which the new rules would give them greater access. While not a fully proactive approach, using trade policy in lieu of an industrial strategy was more than a merely negative, reactive approach.¹ It was a non-invasive, but covert way to precipitate...

This direct involvement in the economy by the Canadian state led neoconservatives in the mid-1980s to call for a radical reduction of what they claimed had become a gargantuan public sector that distorted capital markets, spoiled workers, wasted tax dollars, and interfered with the liberating forces of competition. The vast pension funds and mushrooming mutual funds took up the cause, demanding a privatization that would commodify economically viable chunks of the public domain and so make available profitable assets that they could include in their portfolios. Potential entrepreneurs manoeuvred to gain control. Merger-and-acquisition specialists and stock brokers salivated at the...

It was not Brian Mulroney′s arrival in office in 1984 that made federal intervention in the national market unacceptable. His first chief policy adviser, Charles Macmillan, believed that the secret of the Japanese economy′s great success in the previous decade lay in Tokyo′s dirigiste role in influencing private-sector strategic planning. By extension, Ottawa should also nourish a hands-on leadership role with industry. It was only after being in power for a year, when the Conservative prime minister seemed to be steering with no compass, that he was seduced by the radical policy agenda offered by Donald Macdonald in his royal...

However logical the provincial level might be for making industrial policy in such a vast, regionally diverse country as Canada, even the mighty subcentral government of Ontario had initially played a largely passive role in the formulation and execution of policies aimed at economic development. During the post-Second World War construction of the Fordist and Keynesian system, Queen′s Park restricted itself to massive infrastructural investments in building roads, extending free public schooling to the community-college level, and upgrading the electrification generated and distributed by its public utility, Ontario Hydro. As the 1960s unfolded, Ontario under Premier John Robarts became more...

By the end of the Diefenbaker-Pearson-Trudeau era, a complex but integrated web of federal and provincial policies provided substantial income security against disability, poverty, unemployment, and old age, as well as medical and hospital care for most procedures for the whole public. The mix of public-and private-service provision had proven both equitable and effective. Basic indicators of health showed the Canadian system to have produced better results at lower costs than the U.S. system. Life expectancy was 1.9 years longer in Canada, where the infant mortality rate ran 28 per cent below the American level. Canadian hospitals provided 55 per...

Before exploring NAFIA′s impact on the situation of Canadian workers, we need to understand the three principal areas – working conditions, industrial relations, and job creation – in which the state has addressed labour in order to regulate the unequal relationship between capital and labour.

Governments define for employers minimal levels for working conditions and create entitlements to such rights as pension schemes and advance notice before being laid off. Governments also protect the right to bargain by setting the framework within which employees negotiate their contracts with management. Finally, governments intervene in the marketplace when they establish policies aimed...

In Canada, the most recent indicator of the state′s civility is the capacity of federal, provincial, and municipal governments to monitor, regulate, and even reverse processes that damage the natural environment, whether on land, in the water, or in the air. In contrast with social or labour policy, which, after a halting evolution through the twentieth century, had reached its apogee in the Fordist state following the Second World War, environmental sustainability became a legitimate concern of Canadian governments only in the Trudeau era. While this policy field came into its own just when Keynesianism was starting to decline, its...

The state has been involved in promoting and controlling what we now call culture for as long as politicians have wielded coercive force to buttress their authority. Emperors learned how to put on gladiatorial spectacles in Rome′s colosseum - the second half of the famous ′bread and circuses′ formula for repressing dissent and generating acquiescence. When England was emerging from Rome′s spiritual monopoly, John Wycliffe was persecuted for translating the Bible from Latin into the vernacular. The church knew its authority would be threatened if the faithful could read – and so interpret – the scriptures for themselves. Later, absolute...

In the late 1930s, when the hitherto unthinkable threat to North America from Nazi Germany and imperial Japan was becoming thinkable, the elected leaders of the United States and Canada set the template for the way they would cope with common security threats. In a speech in Kingston, Ontario, on August 18, 1938, Franklin Delano Roosevelt declared that his country ′would not stand idly by′ if Canada were attacked. Two days later, William Lyon Mackenzie King responded with his own declaration from the sleepy town of Woodbridge, Ontario, to the effect that ′enemy forces should not be able to pursue...

By the time the British colonies had been federated into the Dominion of Canada, the survival question had shifted from the military to the socioeconomic plane. In a provocative thesis published in 1907 asThe Americanization of Canada, the brilliant American journalist Samuel Moffett argued that the long, open border between a rising imperial power and a benighted colony, most of whose scattered population spoke English, created an intricate web of dependence that must lead to Canada′s absorption by the more democratic, more virile, more prosperous, more technologically advanced United States. ′English-speaking Canadians protest that they will never become Americans,′...