|Canada can’t escape foreign domination
September 5, 1999
So far, the death of Eaton’s has elicited sadness for the passing of a national and family tradition, and castigation for founder Timothy Eaton’s inept grandchildren, who ran the department store chain into the ground. Isn’t that the way it always is? A man builds an empire, his sons enjoy it, and his grandsons squander it.
At least shoppers won’t lose. Like a hermit crab, another owner will come along to occupy the Eaton’s shell. The damage to our sense of nationhood, though, will be more serious. This might sound a tad melodramatic, but remember that Eaton’s is just two years younger than Canada itself. Nobody can remember a time without Eaton’s or its catalogue. Though it didn’t rank with Harrod’s or Macy’s for prestige, the Eaton name said “Canada” just as the others stood for… do I have to say it?
Whether you’re sympathetic, apoplectic or apathetic toward the demise of Eaton’s, Canada is undoubtedly the poorer for its loss. The department store chain was a genuine national institution in a country where few exist. Eventually, hermit crabs from the United States will move in, and another part of Canada’s history will vanish. In fact, could the fate of Eaton’s represents Canada’s in microcosm?
Because of its geography, sparse population and small industrial base, running a Canadian-based business has always been an expensive, taxing proposition. The solution, say neo-conservative theologians, is continental free trade: the great invisible hand of the market place will maximize profits and ensure the lowest prices for consumers, and generate the most jobs.
In their world, what’s happening to Eaton’s is of little or no consequence. If Wal-Mart, J.C. Penny, or some other store moves in, so what? In the larger scheme of things, the nationality of ownership is irrelevant, so long as goods get to market. Such complacent determinism, though, has one gut-wrenching flaw. Taken to its logical extreme, an entire country—Canada, say—could become entirely foreign-owned, at which point the concept of nation becomes a polite fiction.
Of course, Canada has its own capitalists doing to the U.S. what the U.S. is doing to it, but this mutual exploitation is hardly reciprocal. Even Canada’s grand acquisitors —Jimmy Pattison, Conrad Black and the Bronfman family, for example—have their corporate headquarters in the U.S.
Losing out to foreign interests has been a fact of Canada’s history long before it became a country. From 1682 until 1821, Montreal-based fur traders established the North West Company, which competed against the established British-run Hudson’s Bay Company, especially from 1780 on.
Whereas HBC management was stuffy, distant and hidebound, NWC leaders like Simon McTavish were aggressive, dynamic and innovative, as Peter C. Newman wrote in Caesars of the Wilderness, the second volume of his superb three-part history of the HBC.
Administratively, these Scots and French-Canadians were outstanding, but no amount of managerial skill, dedicated voyageurs, or supply of beavers could overcome the financial hardship of maintaining a 2,000-mile supply line west from Montreal to Athabaska country. Turnaround time for harvesting pelts and selling them in Europe was two years. In contrast, the HBC, which traded out of Hudson’s Bay, had lower operating costs, and quick access to Europe. The NWC tried to compete with HBC on its terms and lost.
After years of bitter war with the HBC, the NWC partners who traded directly with the Natives desperately wanted peace. In 1821, the NWC merged with the HBC, but this is putting it charitably—it surrendered, as a result of which the HBC was able to expand its reach to the Pacific.
“The North West Company, that defiant alliance of voyageurs and Highlanders whose authority had established Canada’s first indigenous national enterprise vanished almost overnight,” wrote Newman. “Instead of spawning dynasties, the NWC partners left their few heirs deep in debt and the capricious castles at the foot of Mount Royal turned out to be only monuments to their self-indulgence. They had set down the matrix of a country and had been its uncrowned rulers but were brought down by overextending their reach.”
After World War II, Canada emerged from Britain’s shadow to be genuinely independent, but it quickly assumed another submissive position. Clarence Decatur (C.D.) Howe, Prime Minister Louis St. Laurent’s Massachusetts-born “minister of everything,” helped open up Canada to unfettered U.S. investment and development. Howe didn’t care who built Canada, just so long as someone did. The sorry, dependent state of our national (sic) economy is the direct result of Howe’s continentalism.
Canada is gradually vanishing, like a giant Cheshire beaver. In addition to Eaton’s self-destruction, our two national airlines might be merged under partial U.S. control. Economists burble about our “global competitiveness” yet we can’t even compete in our own country.
As I was rummaging through old files I came upon a May 8, 1993, clipping from the Edmonton Journal that put the problem into perspective. After a record-shattering export trade of $157.5 billion in 1992, University of Toronto management professor Joseph D’Cruz is quoted as saying: “This increase in exports is going to mask the competitiveness problem. People are going to say ‘I’m alright, Jack.’”
Last week, an Angus Reid poll reported that Canadians feel more secure in their jobs that at any other time in the 1990s, and that national unemployment rates are near decade lows. If we don’t look beyond such temporary prosperity, Canada, like the NWC, will not be able to afford to exist.