Canada needs to fully open its economy and drop
restrictions on foreign ownership in all business sectors
including banking, financial services and telecommunications,
Preston Manning and Mike Harris say in a new policy paper
released today by independent research organizations The Fraser
Institute and the Montreal Economic Institute.
The two also call for eliminating Canada's supply boards and
agricultural subsidies, establishing a customs union and common
external tariff with the United States, and reforming Canada's
approach to foreign aid.
The recommendations are laid out in
International Leadership by a Canada Strong and Free
, a policy paper in which Manning and Harris argue that Canada should redefine its international position by becoming the
world's leading proponent of free trade.
"If Canadians want this country to have a leadership role on the
international stage, we need to be champions of free trade and a
role model for the benefits of open markets and wealth creation.
We must drop investment restrictions, build on our relationship
with the U.S. and change the way we define and deliver foreign
aid," Manning said.
"The market does a much better job of picking winners than
government. To allow the market to do its job, governments should
stop protecting the losers and eliminate business subsidies,
ownership restrictions, and supply management programs. That will
encourage investments to shift to areas of greater promise,
leading to a more productive and wealthier Canada," Harris said.
International Leadership by a Canada Strong and Free
is the fifth in the Canada Strong and Free series written by
Manning, former leader of the federal opposition and of the
Reform Party of Canada, and Harris, former premier of Ontario.
Both men are now senior fellows with The Fraser Institute.
Canada lost ground as an international leader in the last decade
as a result of ill-considered choices, Manning and Harris write.
Canada's foreign policy failed to reflect the full range and
depth of Canadian values and interests. The country's
contribution to international peacekeeping became more rhetorical
than substantive, and gratuitous anti-Americanism by some
Canadian leaders eroded relations with Canada's closest neighbour
and largest trading partner.
"Whatever else Canada's foreign policy for the 21st century
entails, it needs to work. If we are to lead and inspire others,
our actions must accomplish something. Talk is not enough,"
In their new paper, Manning and Harris argue that Canada can be
effective as a middle power by focusing our foreign policy on
promoting free trade, deepening our influence and relationship
with the U.S., and finding ways to deliver effective aid to
nations in need. When it comes to promoting free trade, they say
Canada can't rely on rhetoric, but instead needs to open its
borders. They recommend:
• Eliminating supply management and business subsidies; dropping
ownership restrictions in transportation, telecommunications, and
financial services; and allowing Canadian firms to become more
productive and competitive in international markets.
• Pursuing a customs union and common external tariff with the
United States, and using this process to lower remaining tariffs
and reduce cross-border transaction costs.
On Canada's relationship with the United States, Manning and
Harris point out that Canada's place in the world depends heavily
on our ability to gain and exert influence in Washington, while
the ability of our national government to advance the security
and prosperity of all Canadians depends critically on working
jointly with Americans.
"The inescapable factor is proximity. Like it or not, Canada lies
squarely within the U.S. security and economic perimeter. We may
be more comfortable with the economic aspects of proximity, but
we must accept that in the present climate, security is top of
mind for the U.S.," Manning said. "In order to protect our
economic interests and maintain access to one of the world's
largest markets, we must reach joint agreements that would render
the border invisible to commerce."
Manning and Harris, while commending the federal government's
recent strengthening of Canada's military and defence
• Canada and the US work together to create a more open and
secure common border for the movement of people and goods.
• Canada's federal government revisit the decision not to
participate in the Ballistic Missile Defence program and not to
broaden the mandate of NORAD.
• Canada pursue the creation of a customs union involving a
common external tariff, a joint approach to the treatment of
third-country goods, a fully integrated energy market, a common
approach to trade remedies, and an integrated government
On the issue of foreign aid, Manning and Harris write that Canada
should direct foreign aid at supporting policies and institutions
with a proven track record of increasing prosperity and improving
• Using the Tools of Wealth Creation approach as a centerpiece of
development aid that could equip poor people with resources to
pull themselves out of poverty. This approach includes broadening
the distribution of property rights, providing access to capital,
developing human capital, and providing access to technology and
• Reforming CIDA (Canadian International Development Agency) and
refocusing it on the Tools of Wealth Creation approach.
• Untying Canada's food aid from the requirement that it be
• Re-aligning Canada's aid and peacekeeping efforts to focus on
Africa, and increasing aid allocations to both conflict-prone
nations and post-conflict situations.
"The same weakness that crept into other areas of our foreign
policy in the past decade and a half-mistaking rhetoric and
activity for results-has infected our government's approach to
foreign aid as well," Manning said.
"These policies will boost Canada's actions internationally while
here at home, providing more jobs with higher incomes, improving
personal security, and re-establishing Canadians' pride in this
country as an international leader," Harris said.