Opinion: Canadian economy has a Target on its back

Target, noun: A person, object, or place selected as the aim of an attack.
— Oxford American Dictionary

One hundred thirty three stores. Twenty million square feet. One thousand six hundred employees, whose 16-week severance pay adds up to less than the $61 million package reportedly given to former CEO Gregg Steinhafel to walk away last May.

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There’s nothing comic about Target’s implosion in Canada, but you’ll be excused any bitter laughter over an American firm that inexplicably chose to enter a big-box market already dominated by U.S. behemoth Wal-Mart. Yet mockery is better placed on a succession of Canadian leaders, from both the Liberal and Conservative parties, who waltzed us into a branch-plant economy in the first place.

A brief history lesson: In January 2005, American billionaire Jerry Zucker purchased Hudson’s Bay Company and its subsidiary Canadian properties, including Zellers. Shortly after, Saudi prince Alwaleed bin Talal purchased Fairmont Hotels and Resorts, which includes Chateau Laurier, Royal York and Banff Springs, for $4.5 billion. The buy-ups were big news at the time.

In 2011, Target acquired 222 Zellers stores from Hudson’s Bay Company for a cool $1.8 billion.  

Ottawa puts few restrictions on the repatriation of capital or profit by foreign investors. As a result, Canada attracts a high level of foreign investment, and the global business press pitches our nation as a great low-tax berth for big money.

When I interviewed Mel Hurtig in a Vancouver coffee shop in 2008, the former publisher and nationalist was well into his second decade of warning Canadians of the sell-off of their retail operations, industry, resources and culture. No other developed country in the world would dream of allowing the degree of foreign ownership and foreign control that we have, he told me.

“There are 36 different sectors of the Canadian economy that are majority foreign owned and controlled. How many of them are there in the United States?”

“Zero?” I hesitantly replied.

“Zero. Did you think the Americans would ever allow their chemical industry, their rubber industry, their computer industry, their petroleum industry, etc. to be majority foreign owned? I mean what a laugh!”

Bitter laughter, needless to say. Hurtig was among a few high profile but unheralded Canadians who saw the writing on the wall back in the early ‘90s.

These Cassandras insisted an alphabet soup of cooked transnational trade agreements would wreak havoc with national sovereignty.

In 2005 alone, more than $22.3 billion of foreign-controlled corporate profits left the country. Hurtig relayed this figure and other troubling information in his most recent book The Truth About Canada. In his research, he did something quite novel by citing a reliable source that our business press seemed loathe to consult: Statistics Canada.

(Ironically, the federal bureau was itself not immune to the dynamic outlined by the author. In 2011, Statistics Canada contracted out census hardware and software applications to the Canadian subsidiary of Lockheed Martin, a major U.S. defense contractor.)

When Brian Mulroney came to office in 1985, the Tories drastically reduced the mandate of the Foreign Federal Investment Review Agency and tellingly renamed it Investment Canada. Between that date and my interview with Hurtig, more than 13,000 Canadian companies had been taken over by foreign buyers. Only two takeovers had been blocked, said the author. Most of the takeovers in Canada were signed, sealed and delivered with our own money by Canadian bankers.

The North American Free Trade Agreement (NAFTA) — globalization’s Arc of the Covenant — was signed off by Mulroney and U.S. president Ronald Reagan in 1988. It came into force in 1994, and Jean Chrétien stopped making noises about renegotiating NAFTA once the Liberal leader got into office.

Throughout this period of time, the federal Near Death Party was holding seances with the identity politics crowd, instead of spooking the electorate about dirty deals done dirt cheap.

This all explains, in part, why Canada is a now place where a retail vacuum can be created, entered, and left at will by foreign investors. And now the most invasive trade agreement to date, The Trans-Pacific Partnership (TPP), is ready for “fast tracking” by the leaders of member nations. This document is engineered to further ensure that investment trumps sovereignty and capital trumps labour, the world over.

Target, indeed.

geoffolson.com
 

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