By Douglas P. Welbanks
“An economist's guess is liable to be as good as anybody else's.”
Just saw a notice today on CBC that Sears is heading back to court to liquidate all of its remaining stores. Another Canadian casualty since Canada joined the free trade era during the 1990s. I use the term free trade era as countries around the world attempted to reduce tariffs and duties in the spirit of promoting trade rather than adopt protectionist policies to safeguard or favour their own country’s production of goods.
The results of dropping national economic defences to foreign countries such as China and Mexico proved to be harmful to many industries that culminated, among other things, in the insolvency of major U.S. automobile manufacturers in 200810 and followed by mammoth bailouts by both American and Canadian governments.
Of course numerous other Canadian industries faced extinction without such generous financial aid. Among the most famous are the ghosts of Welland: Union Carbide-Welland Industries-Energex Tubesite-Lakeside Steel-John Deere-Powerblades Industries-Welded Tube of Canada-Universal Resource Recovery-Atlas Steel-ASW Steel-Henniges and Automotive Sealing Systems Canada.
Eaton’s, a historical Canadian retail giant, nosedived into bankruptcy in 1999 due to what was referred to as a changing economic and retail environment in the 1990s. No doubt an inability to compete with foreign companies appeared on the list of deficiencies.
Now Sears, a founding member of this historical Canadian retail family, enters the final phase of court-ordered creditor protection with total liquidation close behind. Similar reasons appear on the headstone of this once mighty Canadian company as its casket is lowered into the graveyard of commercial failure.
Jobs, something very important to communities and families throughout Canada, slip into the undertaker’s grip to be embalmed and duly buried along with the corporate body that sustained life and health in these many communities for decades upon decades.
Experts estimate that according to Statistics Canada data, 540,000 manufacturing jobs have been lost in Canada since 2000.
Irony knows no bounds as a billionaire U.S. president, Donald Trump, declared war against free trade generally and NAFTA in particular after the 2016 election in the name of job protection, no matter what the effect might be upon other trading partners and close allies. Bombardier Inc. stands as an early victim of unprecedented American protectionist policies that threaten to levy 300 percent duties against the sale of Canadian aircraft in the United States.
Looks like the free trade era may be coming to an end and that the journey of vengeance may require, as Confucius once said, two graves. One for the United States and one for everyone else.