Today & Tomorrow

The surest way for a U.S. visitor in Canada to start an argument is to ask a Canadian: "Why don't you come into a customs union with us?" A customs union, or some kind of economic union between the two countries, has been mooted off & on for 99 years.* Now ERP and Canada's increasingly close economic ties with the U.S. have made it a very live issue.

Traditionally, most Canadians have opposed outright union with the U.S., whether economic or political. More recently they have favored a close working agreement which they call "economic integration." By this, they mean: 1) letting each country produce the things it can produce best and selling them in a combined market; 2) cutting tariffs selectively, here & there--but not wholesale.

Mutual Aid. ERP, as one Ottawa official admitted last week, might just as well be called a "Canadian Recovery Program." ERP's European beneficiaries will use ERP dollars to pay for the vast food stocks and limited manufactured goods they buy from Canada. (Prairie farmers will supply half the wheat for ERP shipments to Europe.) Last year the Dominion had a deficit of $743 million in its trading accounts in U.S. currency. This year, as a result of the import restrictions, it will be less. ERP, with at least $500 million earmarked for Canada, will wipe out the 1948 deficit.

Many a Canadian who has watched U.S. investment grow to control a third of Canadian industry worries lest ERP speed up this process. Neither Washington nor Ottawa foresees ERP investment in industry; indeed, both contend that ERP will not reduce Canadian economic independence a whit.

On the contrary, Ottawa expects ERP to help keep Canada's economy from outright U.S. control. It will preserve the traditional three-cornered pattern of Canadian commerce (buying in the U.S. and selling to Europe). If ERP puts Europe on its feet, the benefit to Canada will be permanent. If ERP fails, the preservation will be temporary, and Canada will have to cut its economic cloth to a new pattern.

The Great Wall. Looking beyond the five Marshall Plan years, many Canadians see economic integration with the U.S. as a snowballing process. Said one last week: "The snowball is rolling down the hill and no one's going to stop it now." Nevertheless, these Canadians draw a sharp line between "integration" and "union."

To them, "customs union" means tearing down the tariff wall along the border and erecting a uniform wall around North America. Because the U.S. has 18 times as much economic power as the Dominion, Canadians realize that it would be a U.S. wall. It would probably shut off the Dominion from 'its time-honored British sources of supply. It would kill imperial preference.

Not all Canadians are against that. Some big industrialists, sure that they could compete in it successfully, cast covetous eyes on a combined market of 156 million. Best examples: makers of fine papers, furniture, alloy metals. The Maritimes, where many believe that confederation was a mistake, have a friendlier feeling for the U.S. than for Ontario. Said Nova Scotia's Industry Minister Harold Connolly: "Complete economic unity between Canada and the U.S. is inevitable."

Most economists believe that a customs union would help the farmers now, with high prices prevailing in the U.S. for all they can produce, but would hurt them when surpluses glut the market. For every industry benefited, another (e.g., garment and textiles) would probably go bust.

Gunning for Butter. "Economic union" is worse in Canadian eyes than simple customs union because it would embrace more. Crop acreages, in an emergency, would be determined for the whole continent--and determined in Washington. Long-banned margarine would probably be allowed to compete with butter. But worst of all, to sovereignty-conscious Canadians, economic union looks like a short cut to political union.

Political union, however much Canadians might play with the idea of customs union, is unthinkable today, and for a generation to come. Though in every phase of its existence, cultural, social and economic, Canada has been penetrated by powerful U.S. influences, Canadians see all the difference in the world between influence and control. Though many Canadians are linked to the U.S. by blood or marriage, most still want Canada to keep its separate identity. They are proud of their lusty young nation's role in the war. As a "middle power," they have set out to play as great a part in keeping the peace.

With all of this French Canadians agree. No matter how much they berate Ottawa, they hold out for Canadian sovereignty to save themselves from being engulfed, as were the French in Louisiana. Said one Quebecker: "After all, in the wars of 1775 and 1812 it was French-Canadian militia who fought for this country against the Americans."

* In 1849, after Britain adopted free trade, Montreal Tories burned the Legislature building and more than 1,000 prominent citizens signed a manifesto urging the annexation of Canada by the U.S.

This file is automatically generated by a robot program, so reader's discretion is required.