Horton Journal of Canadian History ~ Papers
The Canadian History of Corporate Rule
We, in Canada, live in a democracy. Eight corporate groups own forty per cent of our media. Seventy per cent of global trade is under the control of just five hundred corporations and multinational banks. Our government representatives do not often listen to the voice of their constituents, and even if they did, the agenda of corporate business comes before the national law. Women are still paid less than their male counterparts for the same job. People of color struggle to find employment to start with. Brand names make you popular and advertisements for these brand names and other "must have" products consume one fourth of television broadcasting. Of course, that is if you are not counting all of the product shots in the shows and movies themselves. Our government defines this as a democracy, others say that we live under corporate rule. ("Community Newspaper")
Canada began as a land of freedom. The native peoples who lived here did not own the land or the animals they used for food. They traded to obtain goods that they did not have. This was not free trade, or even fair trade, just trade of one product for another. They did not have capital and they did not make any profit; they had what they needed. This situation changed with the arrival of the European population. The Europeans quickly established settlements and soon after, the first of Canadas corporations started to appear. The Hudsons Bay Company (HBC) arrived in Canada around 1670. This company was given much power in The New World as they were the only company granted the right to do business in what was referred to as "Ruperts Land". Because of this, and the contact that the HBC had with the native people, the HBC became Canadas leading trade and, later on, manufacturing company. ("Hudsons Bay Company")
Another of Canadas first companies was the Canadian Pacific Railway Company. The government of the time sunk thousands of dollars into the development of the railway, despite the objections of many government officials. Many felt that the project was too expensive. However, manufacturers of goods, such as the HBC, felt that it was necessary for the transportation of their products. The necessity to transport soldiers to battle also pushed the construction of the railway forward.
One of the first major supporters of free trade was Sir Wilfrid Laurier, who was Prime Minister from 1896-1911. Free trade, at this point, bore little resemblance to the model of free trade that is now used. During Lauriers time, free trade simply meant that tariffs were removed, allowing goods to more easily travel between countries. Though Canada, at this time, is not likely to be described as a state of corporate rule, this was the beginning. We can see that companies, even early on, were influencing and beginning to control the decisions of our government. This demonstrates how society was driven by profit on every level, corporate and otherwise. (Bennett, Sean.)
From this time, Canada continued to grow and develop. Many more companies were formed and the public became increasingly influenced by their advertisement campaigns. Throughout the First and Second World Wars, many companies flourished through the production and sale of arms and other supplies needed on the battlefield. After the Second World War, which ended in 1945, a conference was held in Bretton Woods by the economic organizations of twenty-three of the worlds most developed countries, including Canada. The purpose of the conference was to develop world trade and to rebuild after the damage caused by the war. (Clark, Tony.)
From the Bretton Woods conference two major organizations and one agreement were formed: the International Monetary Fund (IMF), the World Bank (WB) and the General Agreement on Tariffs and Trade (GATT). The IMF was formed to monitor and regulate the financial aspects of world trade. The goal of the WB, formerly known as the International Bank for Reconstruction and Development (IBRD), was to finance, through loans, the reconstruction of Europe, as it had been affected harshly by the war, as well as to finance the development of poorer nations. During this conference, there was also a push to establish an International Trade Organization (ITO), however, this failed and left behind a scaled down version of the ITO called GATT. GATT dealt, for the most part, with removal of tariffs, and was the first official free trade organization in Canadian history. (Albert, Michael.)
With the support of Canada, the IMF has had devastating effects on developing nations such as Mexico and Costa Rica. The IMF granted loans to the governments of these counties with the full knowledge that these countries would not have the resources to re-pay the loan. These governments accepted with little or no discussion with the citizens, who would soon be affected by the deal. When countries could not repay a loan, the IMF forced them into Structural Adjustment Programs (SAP). Through these, a country is forced to lower wages while increasing the amount of goods leaving the country. They are told to plant monocultures of coffee or sugar for export, and therefore produce less food for their people. The poverty level rises and so does the level of child and sweatshop labor.
Free trade was taken to a new level in 1995. During what is known as the "Uruguay Round", GATT became the World Trade Organization (WTO). The WTO describes itself as being "the only international organization dealing with the global rules of trade between nations." ("World Trade Organization") As it turns out, the most pressing rule they wanted to enforce was that there be absolutely no barriers to trade and profit. The WTO expanded the meaning of free trade to include goods, services and intellectual property, and they started to look at non-tariff barriers to trade. This meant that things such as water could now be traded. It also meant that a barrier to trade could be anything from an environmental or labour law to the minimum wage. Today the WTO has expanded to include 135 nations and has its head office in Geneva. This group meets every two years to discuss how to further break down the barriers to trade. (Sorgatz, Rex.)
At the same time that GATT became the WTO, another free trade agreement was in the works. The North American Free Trade Agreement (NAFTA) was signed on December 17th, 1992, and was effective as of January 1st, 1994. NAFTA was signed by Canada, the United States and Mexico. It stood on the same principles as the WTO: profit before anything else. The one huge difference between NAFTA and any other trade agreement or organization in the past, is Chapter 11. Chapter 11 of NAFTA, in the most basic terms, allows a corporation to sue a nation for having a trade barrier in place. This means that Canada can be sued by a US corporation for having an environmental law in place that forces factories to place filters on their smokestacks. In effect, Chapter 11 gives more power to a corporation of another country than it does to the Canadian government in deciding Canadas national laws.
When a corporation decides to sue a nation using NAFTA, the trial is not taken to a legal court as many of us think of it. The case is taken in front of a trade tribunal made up of three trade lawyers. This tribunal is not required to take into consideration the environmental, health or human rights implications of their decision, but only the matters relating to international trade and the profit of the company involved. This type of lawsuit has been filed against all three of the nations who signed the agreement. The lawsuits include a corporation named Metalclad suing the Mexican government for refusing to allow the corporation to build a toxic waste dump, and Ethyl Corporation suing the Canadian government for banning the carcinogenic gas additive MMT. Of the many Chapter 11 cases that have been tried, not one has been ruled in favour of the government. The corporation always wins. As can be expected, governments are now becoming reluctant to put environmental or labour laws in place with the looming danger of lawsuits. ("Public Citizens, Global Trade Watch")
Canada also has free trade agreements with individual countries. These agreements are not as large scale as the others that have been mentioned. Many of the worlds industrialized countries have small, personalized trade agreements between themselves and another country that they regularly do business with. Canada signed this type of agreement with Chile in 1996, and recently, with Costa Rica in 2001. ("Foreign Trade Information System")
Though NAFTA is still in effect today, we must not be fooled into thinking that it is the latest development in the world of free trade. The most revolutionary free trade agreement yet is now being developed. The Free Trade Area of the Americas (FTAA) is due to be signed by the year 2005, although some governments, including Canada, wish to have this in place by the year 2003. The FTAA will be modeled after the existing NAFTA and will be WTO compliant. It will be signed by all of the nations in the Americas, with the exception of Cuba. There are nine negotiating groups and none of them include environmental or human rights concerns. We do not know what to expect from this agreement, as the text of the document has not yet been released. However, from what the government has told us, and the impact that NAFTA has already had, it seems that we can expect to be confronted with more of what we are already dealing with. ("Free Trade Area of the Americas", "Global Action Against Capitalism")
Canada has evolved to a point where our attitudes about profit and wealth allow us to overlook our treatment of not only the people in our own country, but also the people in other nations. A wonderful example of this is present in looking at the effect that Talisman Energy Inc., a Canadian oil company, is having on the war in Sudan. There were concerns brought forth by groups such as World Vision, Steelworkers Humanity Fund and United Church of Canada that the presence of Talisman in Sudan may be contributing to the war in this area. In 1999, as a result of these concerns, the Canadian government sent a team of specialists to Sudan to evaluate the situation and how the company affects it. The findings were that the company was indeed agitating the war and that it would be in the best interest of the people of Sudan and the peace process if the company did not operate in the area until after the war had ended. However, our Canadian oil company remains in Sudan against the recommendations of many professionals, all in the name of profit. Corporate responsibility has become just something that is scoffed at in Canada. (Regehr, Ernie.)
Will our country, at some point in the future, look at the damage that has been, and continues to be, caused by the struggle towards profit, and decide to pull our country back towards true democracy? Or will it continue to be blinded by the dollar signs and allow our nation, however glorious and free, to drift further toward corporate rule? Because trade negotiation happen in absolute secrecy, we have no way of knowing for sure. But for the time being, the fast moving corporate take-over shows no signs of slowing, despite the mounting public resistance evident by the thick clouds of tear gas.
Albert, Michael. "The WTO, IMF, World Bank, and Activism". http://www.zmag.org/ZMag/articles/jan2000albert.htm
Bennett, Sean. "The Laurier Era, 1896-1911". http://www.angelfire.com/ns/horcanhist12/chapter18.htm
Clark, Tony. "Mechanisms of Corporate Rule". http://www.apc.org.nz/pirm/mechcorp.htm
"Community News". http://www.communitynews.ca/
"Foreign Trade Information System". http://www.sice.oas.org/tradee.asp
"Free Trade Area of the Americas". http://www.ftaa-alca.org/alca_e.asp
"Global Action Against Capitalism". http://www.infoshop.org/octo/ftaa.html
"Hudsons Bay Company". http://www.tbc.gov.bc.ca/culture/schoolnet/helmcken/people/hbc.html
"Public Citizens, Global Trade Watch". http://www.citizen.org/pctrade/nafta/naftapg.html
Regehr, Ernie. "Corporate Responsibility and the War in Sudan". http://www.ploughshares.ca/content/MONITOR/monm00a.html
Sorgatz, Rex. "So, What is the WTO, Anyhow?".
"World Trade Organization". http://www.wto.org
Back to Main Page