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The Mulroney government


Montreal city in 19th
Montreal city in 19th

The Mulroney government advocated a different approach to Canada’s economic problems. It advocated turning away from government intervention, which it argued had been unable to defeat persistent unemployment and inflation. Mulroney’s government reduced public management of the economy, even in areas where state ownership had been seen as vital. Railroads were closed or sold, and the publicly owned airline and oil companies were sold to private investors. Spending on Canadian cultural programs, including the CBC, was cut back, and taxes on corporations were reduced. Mulroney’s government also reduced its investment in developing depressed regions, a Trudeau priority that it condemned as expensive, wasteful, and ineffective. The cuts hit hard in Atlantic Canada, particularly in Newfoundland and Labrador. The end of the 1980s saw the collapse of Newfoundland and Labrador’s cod fishery, which had been the mainstay of the province’s economy since the 16th century. Both overfishing and changes in ocean climate were blamed for the decline in the cod population. A moratorium on fishing was imposed in 1992 along with a temporary program of assistance to fishery workers.

Mulroney’s economic agenda was capped in 1987 with the negotiation of a Canadian-American free trade treaty. Canada and the United States were already intimately linked economically, and each was the other’s largest trading partner. Free trade was strongly supported by business but denounced by others as an avenue for greater American domination of the Canadian economy. Approval of the free trade agreement, delayed in the Canadian parliament, became the foremost issue during the 1988 election. The Progressive Conservatives won the election, and in 1994 free trade was expanded to include Mexico under the North American Free Trade Agreement (NAFTA). Early results seemed to confirm predictions that Canadian productivity and exports would benefit; in 1995, for example, exports of goods grew by 16 percent and imports by 11 percent. It remained uncertain to what extent the treaty would prohibit Canada from implementing social programs that could be interpreted as subsidies to commerce and, therefore, as interferences with free trade. "Canada" © Emmanuel BUCHOT, Encarta, Wikipedia.

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