The Canadian Century. Brian Lee Crowley
vocabulary as Captain Boycott’s name became in Ireland’s. And it was just as uncomplimentary a reference.44
The lesson that Laurier learned from disasters such as these was that Canada could not look to any power, whether Britain or the US, to protect the interests of Canada. We would always be sacrificed whenever it was convenient. Canada had to look to its own interests, while claiming from Britain increasing jurisdiction over its foreign relations. Beyond that, however, it had to seek to bind the more powerful nations to agreed and enforceable rules of behaviour that limit their ability to win their point through sheer brute force.
Moreover, Laurier understood that regardless of what Canada owed to Britain for its endowment of institutions and a culture of liberty, the rising power, and the one on Canada’s doorstep, was America.
The fact that Britain was now a free trade nation, plus the extra cost of transatlantic shipping for Canadian exporters, plus the failure of British politician Joseph Chamberlain’s scheme to create a free trade zone behind high tariff walls within the Empire, meant that Britain’s role as the major trading partner for Canada was fated to fade with time.
America was on its way up in the world, and within North America was the obvious trade and commercial partner to step into the void being created by Britain’s long goodbye.
During most of Laurier’s long period in office, however, America was in no mood to bind its power through the kind of long-term commitments Canada needed if it was to reduce its vulnerability to American unilateralism. For Canada to invest in the US–Canada trading relationship required some certainty about Canadian access to American markets and some rules about how the US would treat exports from Canada.
This was a period of Republican dominance, and the Republican Party was the party of the Northern industrial interests that favoured high tariffs and considered Canada a direct commercial threat on their doorstep. Americans were in an ebullient mood, mirroring no doubt that of their president, Teddy Roosevelt. Roosevelt had been a hero of the Spanish-American War, which in 1898 led to a large expansion of US overseas possessions and power. He took over and completed the construction of the Panama Canal. He won the Nobel Peace Prize for brokering a peace settlement between the Russians and the Japanese. In 1901, he famously summed up the principles that he thought should guide American foreign policy thus: “Speak softly and carry a big stick, and you will go far.”45
When Roosevelt had been the vice-presidential candidate on the William McKinley ticket, both he and McKinley—who was later assassinated, making Roosevelt president—stumped for prosperity at home behind high tariff barriers. These were truly unprepossessing partners for a Canadian government seeking freer entry to American markets and a taming of US power to damage Canada, by binding the US through enforceable trade agreements.
On the other hand, excessive and heedless use of power by American governments has traditionally exacted its own costs on that country. While powerful, America always somehow comes to realize that even it is not omnipotent and that even superpowers need friends and allies. William Taft, who succeeded Roosevelt as Republican candidate and president in 1908, was a Northerner and a protectionist; yet he and Congress proved to be on the lookout for ways to improve relations with the rest of the world. After having had his advances constantly rebuffed for a decade, Laurier suddenly found Canada’s interest solicited in what we would call today an American charm offensive. Laurier lost no time in grasping the opportunity to put in place such a vital piece of his plan, binding the American colossus and subjecting its power to the rule of law, at least in its trade relations with Canada. But the chance slipped through his fingers—and ours. And thereby hangs a tale.
4. Free trade
Free trade deserves its own separate treatment as a central part of Laurier’s plan. While the object of his efforts to negotiate free trade was the United States, free trade on a broad scale was, in his view, an end in itself. The fourth piece of Laurier’s plan was therefore to move the country by degrees toward the regime of full free trade he so admired in Britain. Laurier believed that free and open trade was the cornerstone of economic prosperity and entrepreneurship and that government’s role included working to throw open foreign markets to Canadian products while not obstructing the entry of products from abroad.
There was, of course, the tariff. We’ve already seen how Laurier dealt with the Canadian tariff. America,46 emerging as the only rival to Britain as our chief trading partner—in 1896, these two markets purchased more than 90 per cent of Canadian exports—was a relatively high-protection economy. Only Britain, workshop of the world, levied no tariffs at all and posed no barriers to Britons buying and selling as they pleased.
For Laurier and his cabinet colleagues, British free trade was the ideal but politically unattainable in the face of the powerful manufacturing interests that had grown up behind the tariff curtain of Sir John A. Macdonald’s National Policy.47 In 1911, Laurier stoutly defended in the House of Commons his government’s commitment to finding new markets for the country’s burgeoning production: “Our policy has been, is and will be . . . to seek markets wherever markets are to be found.”48
However much his eyes may have been fixed on markets wherever they were to be found, those same eyes could see clearly that the market that really mattered for the future was the United States. So the next major step in freeing Canadians’ access to foreign markets was securing more favourable terms for the entry of Canadian products into the US market. That effort was crowned with success in 1911 when, after protracted negotiations, his finance minister, Fielding, returned triumphantly from Washington with a new reciprocity agreement with the Americans, one that seemed to set extremely favourable terms for Canada. The Liberals were ecstatic and the Tories despondent, convinced that the old fox Laurier, with his “sunny ways,” had dished them yet again.49
To the surprise of almost everyone at the time, the outcome of the 1911 election was the rejection of reciprocity by the voters, for a complex tangle of reasons that need not detain us too long. In English Canada, an aggressive British imperialist movement called for the Empire to be made a kind of free trade zone complete with tariffs to keep out goods from elsewhere, including the US. In French Canada, by contrast, Henri Bourassa, and the nationalist movement into which he had breathed such life, abandoned the Liberals for being insufficiently ardent defenders of an independent Canadian policy in the face of growing imperialist sentiment. Even though the reciprocity agreement with the US continued protection for Canadian manufacturers, Central Canadian industry feared the thin edge of a tariff-busting wedge.50 And of course the Americans, with the tin ear so typical of their sensitivity to Canadian concerns, gave Laurier’s opponents lots of ammunition. Champ Clark, the speaker-designate of the House of Representatives, announced in Congress that “‘I hope to see the day when the American flag will float over every square foot of the British North American possessions clear to the North Pole.’”51 Reciprocity went down to defeat.
In our time, the anti-American protectionist crowd has so come to dominate the discussion of Canada–US relations in many universities and much of the media that many Canadians seem somehow to feel that Laurier’s abortive attempt to establish free—or at least freer—trade with the US was an aberration in our history, one happily seen off by a vigilant Canadian electorate when given the chance in the federal election of 1911.52
One searches in vain for any justification for this view in the historical record.53 Instead, it was the rejection of improved trade relations with the US that was the anomaly.
In fact, it would not be too much to say that Canada’s development, indeed its very existence as a nation, owes a very great deal to the evolution of trade relations with both Britain and the United States, as well as the associated development of the tariff. Laurier knew this all too well, having lived through the difficulties created for the Dominion and its predecessors by the machinations of its two chief trading partners.
Britain had not always been a free-trading nation. When the Corn Laws were abrogated in 1846, and Britain put protectionism behind it, the consequences for the United Province of Canada (the union of Upper and Lower Canada created in 1841) were severe. It was Canadian grain,