Canadian Globalization

Canada in the Global Village: Balancing the Costs and Benefits of Globalization

Canadian scholar Marshall McLuhan once said that the world is becoming more and more like a “global village,” each nation part of an increasingly interconnected society that stretches across national boundaries (6). Although he was talking about the role of new media in this change, he also was probably talking about the growing economic links that come with globalization. Globalization is a process that offers both the opportunity for a better world and the risk of destroying local communities, regional cultures, and entire natural environments. Over the last century, globalization has become a major issue in politics, environmental studies, and economics, touching every corner of earth as corporations spread. But Globalization is a broad term that does not necessarily mean one single thing. It usually describes the increasing interconnectedness of economies, political institutions, and individuals as the result of communication, transportation, and goods provided by multinational corporations. As Justin Ervin and Zachary Smith define it, “Globalization can now be seen as a process that ‘shrinks’ the world as human interaction ‘thickens’” (4). The effects of globalization are neither good nor bad; there are costs and benefits as with most things in life. What is certain is that no nation on earth has not yet felt the effects of globalization.
One nation that has been particularly involved in and affected by globalization is Canada. Canada is a nation often overshadowed by its economically dominant southern neighbor, the United States. As the world continues to globalize, Canada’s role in this expansion is becoming increasingly important, and whether it will accept globalization entirely or continue to resist is a major point of debate. Canada has both embraced and rejected globalization: many of its corporations embrace it as a means of expanding, but many of Canada’s people fear the effects of globalization on local culture, the economy, and the environment. For Canada, globalization has brought both economic prosperity and a series of cultural and environmental problems.
In an address to the Richard Ivey School of Business at the University of Western Ontario, Wayne G. Wouters, Clerk of the Privy council and Secretary to the Cabinet, there are five dimensions to globalization. First, “global capital markets now truly operate 24/7” and “perturbations in one country or sector may now be felt both near and far.” Globalization has made business both quick in time and geographically broad. Second, there are now “global supply chains” where products are made and shipped all across the globe. What started out as “outsourcing” in the 1980s became “off-shoring” in the 1990s, and now is called the “global supply chain.” Third, there is the “globalization of information,” an interconnected network of media and communication. Fourth, globalization raises environmental concerns. Last, there is what Wouters calls the “globalization of insecurity,” the idea that the future is even more uncertain in a world where everything is connected and nothing is stable for long. These dimensions highlight that globalization is seen in Canada as both a force for good and a problem.
Throughout its history Canada has had strong ties to Europe and later to the United States. As part of the British Empire it was an important source of natural resources such as timber and ores. In recent decades, the Canadian oil industry has become increasingly important as well. Canada has the third largest oil reserves in the world after Saudi Arabia and Venezuela (Lewis and Moor). Other industries such as technology, chemicals, and manufacturing continue to make Canada a major player in the world economy. But what does the continued growth of Canadian industry and its own involvement with globalization do to its regional cultures? How is Canadian identity affected by the spread of products and ideas from multinational corporations? How can Canada embrace globalization without sacrificing its natural and national resources? All of these questions are important when we look at the role of Canada on the global stage. Most importantly, it must be rightly remembered that the effects of globalization on Canada are not entirely beneficial or entirely damaging, demonstrating that globalization is both an agent of positive change and potential dangers.
As a European colony founded mainly for trade, you might say that Canada has always been global. It has attracted people from all over the world . It was only in the 1920s that the US finally replaced Britain as the “leading provider of foreign investment in Canada” (Azzi). As David Lewis and Karl Moor note, tariffs and high taxes kept Canada relatively isolated as far as international trade goes until after World War II. In 1947 the General Agreement on Tariffs and Trade (GATT) opened up the Canadian economy by reducing tariffs and taxes on imports and exports. According to Azzi and also to Ervin and Smith (19), this led directly to the growth of Canada’s international presence as a major worldwide economy. Later actions such as the Free Trade Agreement (FTA) with the US in 1989 led to more economic success (Azzi). This contributed to the fact that in 2012 Canada had $481.7 billion in exports, the eleventh most of any country, although most of these exports are bought by the United States.
More recently, Canada prospered through the 1990s and early 2000s. Then, after a 12 year surplus, Canada struggled in 2008 when the world economy started to decline. But Canadian banks came out of the crisis pretty well. In fact, according to the CIA Factbook, Canadian banks “emerged from the financial crises of 2008-09 among the strongest in the world.” Canada also has one of the world’s largest economies, valued at $1.5 trillion dollars annually. A recent report by Mark Carney, the Governor of the Bank of Canada, notes that globalization has been a generally positive force for Canada. He says that “hundreds of millions of people have already been lifted out of poverty, with the real potential for hundreds of millions more to share their destiny.” Carney points to Canada’s current participation in globalization as part of the nation’s second longest expansion, which he compares to the Roman Empire and the Industrial Revolution. Carney sees the trends toward better growth, such as the doubling of the Canadian labor force by 2050, as signs that Canada will prosper at home and abroad. Canada remains a powerhouse on the international stage.
Stephen Azzi calls Canada “one of the most globally integrated countries in the world.” It belongs to 14 international organizations, “second only to the US, which is a member of 15” (Azzi). This has led to prosperity and increased influence on the world stage. Globalization provides many benefits for Canada as a whole. For example, Canada enjoys the second highest standard of living in the G-8, and the eighth highest standard of living overall (CIA Factbook). Canadians enjoy access to products from around the world, travel frequently, and foreign trade has increased the overall prosperity of Canada.
This is especially true for its businesses. Canadian corporations are becoming more and more international over the last three decades, as recent studies have shown. In one The Russell Reynolds Associates conducted a survey to see how Canadian companies were adapting to the new global economy. The results showed in the report, “A World of Experience: The Globalization of Canadian Corporate Leadership,” suggests that Canadian companies are getting significantly more global at both the top and bottom of their levels. The Reynolds study took CEOs from Canada’s 100 largest corporations. It then measured how much international experience each of these executives had. According to the results the percentage of Canadian CEOs with international work experience rapidly increased between 1987 and 2007. What is even more interesting is that more and more Canadian CEOs are getting their international experience in countries other than the United States and Europe. This is a sure sign that Canadian companies are moving forward with a global perspective in mind. They are led by executives who understand that the world is interconnected now by “webs of global supply” (Reynolds).

From Russell Reynolds and Associates Study 1987-2007

The Reynolds Report suggested that the benefits of participating in global markets are many. Their study also shows the importance of being able to trade internationally, since Canada is actively trying to become more global economically. It is especially important for Canada to look to the United States, one of the world’s most globalized economies. There has been a good deal of government action on both sides that have further globalized Canada. For example, the Canada-United States Free Trade Agreement (FTA) was ratified in 1988, causing Canada’s business scene to change. New markets opened up and more trade connections were expanded than ever before. Afterwards the passage of the North American Free Trade Agreement (NAFTA) and the establishment of the World Trade Organization in 1995 (WTO) built Canada’s role even further. According to Stephen Azzi, Canada’s role in the WTO has made it an important part of other large international financial organizations such as the International Monetary Fund (IMF) and the World Bank.
One of the main questions about globalization in Canada is how it strengthens the country’s connection with the United States. As the United States became one of the forefronters of globalization, Canada was also close behind. The expansion of the Canadian and global economies and the growth of emerging markets in developing nations improved trade and lowered investment barriers so that Canadian money could flow across the globe. Business was booming. Canadian firms began selling their products to other countries and creating “global supply chains and contracts.” Canadian companies also got access to lower-cost raw materials and cheaper labor. Even when foreign firms entered Canada’s markets which increased the competition faced by domestic firms: “By 2007, Canada’s foreign imports and exports equaled 62 percent of its GDP, compared with only 43 percent in 1987.” When Canadian firms started selling their companies and products to globally recongnized and international countries, the competetion increased making others more dependent on Canada. The entire Canadian economy grew as a result. A recent CBS News report at the Summit of the Americas, “What is Globalization?” (March 30, 2006) discussed the debate over what globalization means in different places. Canada was an early supporter of trade and investment liberalization and remains so today. More than 40 per cent of the country 's economy depends directly on trade. The Canadian government thinks expanding trade and international investment is vital to the economy, but not everyone agrees. The definition of globalization from an anti-globalization group known as Anti-Marketing says globalization is "the process of exploiting economically weak countries by connecting the economies of the world, forcing dependence on (and ultimately subservience to) the western capitalist machine." However, the report did not say that globalization did not have its fair share of problems. It pointed to problems of higher unemployment, lowered health care and decreased safety standards. It also pointed to the lower environmental protection standards, less effective government as corporations have more power, and less protection for developing industries and countries.
Globalization can also provide easier communications due to improved technologies. This allows Canadian corporations to set up manufacturing plants in newly industrializing economies like China, India or Latin America where costs of production are lower. Although this often lowers the prices of goods, this also causes local Canadians to lose their jobs, resulting in discontentment, resentment, and loss in confidence in the Canadian government. Labor groups also dislike this effect of globalization. Often strikes and riots will be organized as the economy further suffers as companies continue to export jobs overseas. This problem is one that is both social and economic as local workers blame their economic problems on the outsourcing of labor.
Worldwide communication also affects daily life in Canada. Canada is extremely well-connected to the rest of the world. According to Azzi, “the average Canadian spends more than 500 minutes per year on international telephone calls.” This communication goes beyond technology such as phones and internet. Canadians are also avid travelers. Canada has the forth most airports in the world (CIA Factbook). This increases the exchange of goods and ideas, making Canada a real hub.
Of course, globalization has not met with universal acceptance. In his article “Globalization is Killing Canada: Fight for Your Freedom,” Paul Hellyer, Canada’s former Deputy Prime Minister, makes an argument against globalization. Hellyer sees globalization as part of the reason why Canadian values are disappearing and Canadian independence is being threatened. Hellyer even sees globalization as a threat to Canada’s sovereignty, saying that “Canadian values are disappearing rapidly as we lose our independence and our sovereignty.” He believes Canada is losing control of its most important industries and losing its most exciting and challenging jobs as companies move their headquarters to other parts of the world. Hellyer claims Canada has become a victim of globalization, a process that is good for two to five percent of the world’s richest and most powerful people. It is bad for the vast majority. Global cooperation is essential for protecting oceans, ozone global warming but the relentless drive on the part of multinational corporations and international banks to take over governance of the world for their own benefit has to stop before it 's too late. Mr. Hellyer details the history of Canadian globalization and sees that foreign companies are increasingly more powerful within Canada. He specifically points to NAFTA as a treaty that “granted US and Mexican investors greater rights in Canada than Canadian citizens enjoy.” Hellyer sees this as very problematic, and his title gives out his position on the matter.
Even if he does think that it is “killing Canada,” Hellyer does not write off globalization entirely. In fact, he sees many positive things can come out of international cooperation. For example, he sees a need for countries to cooperate in order to restore the environment to its former glory. But Hellyer sees international corporations as more of a threat. He certainly fears the environmental effects of globalization, but he also seems to see that corporations might be the most appropriate way to repair the environment.
Stephen Azzi sees similar problems, noting that the two major problems with globalization for Canada are an increased reliance on foreign economies and a greater dependence on the US. Azzi states that early attempts to broaden global trade ended up strengthening American commerical interests but not other nations. It is seen as a problem by many Canadians, and many “viewed multilateral trade agreements as a way of offsetting the influence of the US.” This problem is hard to ignore. Three quarters of all Canadian exports go to the United States (CIA Factbook).
The resistance to globalization became most vocal in the 1960s and 70s. Nationalist movements in Canada saw globalization as a threat to national identity. There were protests by Canadians who were afraid that globalization might erase their local cultures and destroy the environment. The government took some actions to promote Canadian identity. One was the Canadian government establishing “content quotas for radio and television” and benefits for Canadian publications (Azzi). This was to promote Canadian media instead of being overwhelmed by American and British television, film, and publications. But this had little overall effect. Even when Prime Minister Pierre Trudeau tried to promote the Foreign Investment Review Agency in 1974 and the “Third Option” program to reduce economic and social dependence on the United States, there was little change. Canada stayed watching American programs and buying American products.
More recently, Canadians have been involved in widespread opposition to globalization. At the 1999 World Trade Organization Summit in Seattle, many Canadians were involved in the protests. These protests turned violent, but led to international recognition that globalization had opponents even in a globalized country like Canada. At the 2001 Summit of the Americas in Quebec City there were similar protests. Canadian protesters felt that the country was falling into the hands of international corporations, particularly American ones. Instead of promoting regional cultures, these protesters felt that there was a “global monoculture . . . increasingly destroying local traditions” (Hellyer). That is the main threat to Canadian locals.
Globalization in the past century has led to the increased exposure of Canada to the world. This has sometimes brought globalization into the news as a cause of social problems, especially immigration. Chain migration takes place in Canada, bringing large numbers of foreign migrants into the country. Although migrants can make a positive contribution to Canada 's economy, they can, on the other hand, work against the Canadian society by increasing the social tension between Canadian locals and foreigner migrants. For example, in the city of Richmond in the Vancouver metropolitan area, there are large numbers of Asian migrants and social tension between groups. Migrants also complete with Canadians for the same jobs. But population movement is made even more intense by improved transportation. It is significantly easier in recent years for families to relocate and for goods to be shipped from various countries around the world. The major effect of this increased interconnectedness is that populations have become highly mobile. People are not constrained to remain in a single place for their entire life but rather are now able to move about, often following multinational corporations for whom they work. As Canada moves into the 21st century, it must continue to assess its place in a globalized world. As a major financial and industrial nation, it can lead the way toward finding a balance between the benefits of globalization and its costs. By encouraging businesses to develop responsibly Canada can limit the damage done to the environment, preserve local cultures, and prevent a globalized culture where the individual voice is squashed by big multinational business. Even though it will always be a strong economic partner of the United States, Canada must pave its own road going into the future ahead. Hopefully other countries can look to Canada to lead the way toward a global world that is prosperous and, more importantly, humane.

Works Cited
Azzi, Stephen. “Globalization.” The Canadian Encyclopedia. http://www.thecanadianencyclopedia.com/articles/globalization
“Canada.” CIA Factbook. https://www.cia.gov/library/publications/the-world- factbook/geos/ca.html
Carney, Mark. “The Implications of Globalization for the Economy and Public Policy.” Bank of Canada News. 18 February 2008. http://www.bankofcanada.ca/2008/02/speeches/implications-globalization-economy-public-policy/ Hellyer, Paul. “Globalization is Killing Canada: Fight for Your Freedom.” Ivey Business Journal. http://www.vivelecanada.ca/article/235929696-globalization-is-killing-canada- fight-for-your-freedom
“Indepth: Summit of the Americas: What is globalization?” CBC News Online March 30, 2006 http://www.cbc.ca/news/background/summitofamericas/globalization.html Lewis, David and Karl Moore. “The Origins of Globalization: A Canadian Perspective.” Ivey Business Journal May/June 2009. http://www.iveybusinessjournal.com/topics/the- organization/the-origins-of- globalization-a-canadian-perspective#.UTihmY5Ldm0
McLuhan, Marshall. Understanding Media. New York: Ginko Press, 1964.
Reynolds, Russell. “A World of Experience: The Globalization of Canadian Corporate Leadership.” http://www.russellreynolds.com/content/world-experience-globalization- canadian-corporate-leadership
Wouters, Wayne G. “Succeeding in a Globalized World: Canada’s Challenge and Opportunity.” Presentation to Richard Ivey School of Business, University of Western Ontario, London, Ontario. November 15, 2007.
http://www.pco-cp.gc.ca/index.asp?lang=eng&page=clerk-greffier&sub=archives&doc=20071115-eng.htm

Cited: McLuhan, Marshall. Understanding Media. New York: Ginko Press, 1964.