Canadians Would Be Better Off As Americans

March 1st, 2020 | JH

I recently re-read the Diane Francis book, Merger of the Century. It was published in 2013 and had a lot of great insights and topics within its easy-to-read 345 pages. She outlines the case for a US/Canada merger and why it makes the most sense for both countries. At the time this book was published, Canada was riding high on the peak of the latest commodity boom. Oil was one year from its precipitous decline and Stephen Harper was slaying the national deficit that was incurred in order to soften the blows of the Great Recession in 2009. Confidence was high and business was happy. The United States was far gloomier in attitude as Obama’s second term turned him into a lame duck president and the mighty U.S. economy chugged along at a snail’s pace.

Francis advocated rationally for a merger between the countries and outlined a reasonable case for doing so, but the book didn’t make the impact that it deserved to at the time. Now that the tables have turned and Canada is sucking up the scraps from America’s table once more, the urgency for a union of nations is a lot stronger from a Canadian perspective. A few reasons stand out.

Immigration: Trudeau’s Liberals are attempting to massively ratchet up immigration in order to counter our demographic decline. Canada hasn’t had a replacement level fertility rate since the early '70s, which puts us on a Japanese or European-style crash course for economic decline. The difference is of course that Canada isn’t Japan or Europe and will have a lot more trouble navigating economically due to our colony mindset and reliance on the boom and bust of natural resources.

By cranking up immigration the Liberals hope to create a younger and more dynamic society that naturally produces prosperity. Francis negates this line of thinking by suggesting the intention is unfortunately inverted.

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Immigrants move for prosperity and if they don’t find it… they leave.

On page 307, Francis states,“More to the point, Canada has had the highest per capita immigration rate among developed nations since 1986, but it has not built a northern tiger. That year, an ad hoc yearly target of 250,000 was established. Entry requirements were lowered to meet the annual quota and about 6.25 million people flooded into the country (1986-2013) usually lacking language, education, skills or professional credentials. By 2012, about 1.7 million of these new arrivals had moved elsewhere, and many others had become marginalized.”

Our demographic death spiral isn’t going to abate with immigration. With anti-prosperity Liberal policies in place it is unlikely that we’ll keep the immigrants in Canada. Instead this country will increasingly be a stepping-stone to greener pastures elsewhere, most notably… the United States.

Where does that leave us?

Declining economy: Canada doesn’t have a culture of enterprise like many other real countries have. There’s not much get-up-and-go and the can-do-spirit is sorely lacking. Francis traces this back to our colonial culture. We looked to Britain to provide our orders and consequently developed a culture of subservience.

Any time great ambition has been attempted, something has thwarted our ability to reach a conclusion. Laurier had great ambitions for free trade with America in 1911. This was supposed to coincide with an opening up of the north. A second railway was proposed in order to populate the upper provinces. It failed when he lost the election and World War 1 forced us into that foreign meat-grinder rather than using the men and resources for our own national development.

John Diefenbaker had similar ambitions in the 1950’s, but wasn’t in power long enough to effect change, before Trudeau arrived on the scene and turned our focus towards bilingualism and socialism.

Perhaps the biggest impediment is that we’re just not the type of people that can get things done. This is especially evident in the years since she published this book. Even our strategic advantages are unexploitable due to a fractured and divided national society. She compares us unfavourably with Australia in this regard and it’s easy to see that Canada will likely always be a branch-plant economy.

Commodity prices: One interesting prediction that came true in the book was the commodity crash. She cites the theory of super cycles in which commodity prices rise to great heights and peak and then crash. Boom and bust. 2003 was noted as being the start of the commodity boom and it is mentioned that they last about ten years before crashing for twenty.

The book was published in 2013. Nice call, Diane!

By merging with the United States, we wouldn’t be as vulnerable to commodity booms and busts. And yes, I know the hipsters in Canada like to pretend we are a diversified country and will point to things like tech or real estate or “services” as huge components of our economy. The problem with this is, fundamentally, it all flows back to natural resources.

"Our demographic death spiral isn’t going to abate with immigration."

Here’s an example…in Calgary we have tech companies, but how many of these tech companies have clients that consist of only oil and gas enterprises? We have “services”, but what happens when the six figure oil executives and their wives no longer have their six figure jobs? The providers of those services lose customers, etc., etc..

Some places like Toronto, for example, are less susceptible to this reality, but it is our reality, nonetheless. We are still drawers of water and hewers of wood. Canada is no greater than the sum of our natural resources and without that we’d be Eastern European-level prosperous faster than you can say Research in Motion.

We’re now looking at another fifteen years of malaise and decline, only prospering due to the crumbs that fall from America’s table. If we joined with them, it would open a new world of innovation and opportunity.

Reality: Francis seems to suggest that natural factors will inevitably lead to Canada and the US joining, but I suspect she’s too optimistic. Canada is an unlikely candidate for American absorption. We are too weirdly progressive, and we’ve got Quebec. Anti-Americanism is the blood of our culture and the resistance would be too much to overcome.

A more realistic narrative that could unfold would be for Alberta to press for statehood. The economic and cultural factors would be a lot more seamless and with the way things are developing in Alberta, the urgency for statehood will grow. This would likely lead to crises throughout Canada with British Columbia being cut off from eastern travel as the geographic constancy would be brutally interrupted. It would also set Canada back as its richest province took a massive chunk of its wealth and resources with it. Perhaps a currency collapse would follow and Quebec would be inspired to go independent, further spiralling the Canadian decline. After being shattered and impoverished, a helping hand could arrive from the United States and provide the statehoods that the remnants of Canada would now be ready to accept.

Sigh. One can dream.

In the meantime, check out Merger of the Century  by Diane Francis, it’s a great read.

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