Which Way, Canada?

By Brown, Donna | Management Review, December 1991 | Go to article overview

Which Way, Canada?


Brown, Donna, Management Review


Which Way, Canada?

Canada, just north of the border, has long been considered a safe haven for U.S. investments. And, in addition to its tradition of stability, "Canada is one of the three or four wealthiest nations in the world," says Thomas D'Aquino, president and chief executive of Canada's Business Council on National Issues. Yet, your average U.S. citizen may be able to identify the maple leaf as Canada's national symbol, but probably would be hard pressed to come up with the name of this country's prime minister or its 10 provinces. In fact, most Americans probably pay very little attention to the political and economic challenges that Canada faces. That is, until recently.

In 1990, when Quebec's cries for sovereignty became so loud that Americans could hear them stateside, the illusion of a perfect, peaceful Canada finally began to crack. In fact, Quebec's dreams of sovereignty simply may be one of the most visible symptoms of a much larger, nationwide problem. Canada is in a recession that makes even the United States' pale by comparison; Ottawa has racked up a severe national debt, and is loggerheads with most of Canada's provinces.

Tensions are running so high that some experts claim that a sovereign Quebec may cause other dissatisfied provinces to bolt. "If Quebec gains complete sovereignty, Canada could end up divided into four different countries," says Benjamin Weiner, the founder and president of Probe, a Connecticut-based management consulting firm that specializes in political analysis.

Almost everyone outside of Canada - and even many Canadians - would be shocked by such a turn of events. According to D'Aquino, Canada was ranked as the top country globally in terms of quality of life in a recent United Nations poll. And Canada has the world's most sought-after passport. "Canada is one of the most promising countries in the world," says economist Kimon Valaskakis, chairman of the consulting firm Isogroup. "It's sitting on an enormous bed of resources, and has a population of only 26 million, with relatively little strife." How has a country with so much going for it gotten so deep into trouble?

Part of the answer lies in simple geography. Given Canada's sparse population, its enormous size is daunting when it comes to forging national culture or consensus. To make matters worse, Canada has been plagued with a difficult political process. Amending the constitution requires the approval of all 10 of Canada's premiers (the powerful heads of Canada's provinces), and as the disastrous results of Meech Lake in the summer of 1990 proved, this is all but an impossibility.

The personality clashes and ideological differences can make the Canadian government seem "a bit like Mideast politics," says Charles McMillan, professor of international business at York University in Toronto.

Much of the current imbroglio still stems from the Meech Lake Accord. Although Quebec already had its own judicial system and income tax, the rest of Canada had never officially recognized much of its power. To appease Quebec and persuade the province to join the rest of Canada in signing the constitution, Prime Minister Brian Mulroney had lined up support for a set of constitutional changes, including recognition of Quebec as a "distinct society," an act that would have formalized Quebec's right to "preserve and promote" its culture.

THE MEECH LAKE FIASCO

But in the three years since Mulroney had first brokered the deal by getting all 10 premiers to agree in principle to the accord, several new premiers had been elected, with new political agendas. As a result, two of the premiers balked, and the deal fell apart.

Unfortunately for Mulroney, the ramifications of Meech Lake went far beyond the "distinct society" clause. "In the three-year period it took for Mulroney to build up a consensus, Meech Lake became a lightning rod for unhappiness, including the performance of the federal government," says McMillan. …

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