Efficiency and Community: The National Policy and National Unity

0 JOURNAL OF CANADIAN STUDIES .-.-~~--. '~ . . . Editor Associate Editors Editorial Assistants Editorial Board RALPH HEINTZMAN DAVID CAMERON JOHN WADLAND ARLENE DAVIS MARGARET PEARCE WALLACE CLEMENT MARGARET LAURENCE HARVEY McCUE JACQUES MONET, S.J. W.L.MORTON W.F.W. NEVILLE JAMES E. PAGE MICHAEL PETERMAN GORDON ROPER DONALD V. SMILEY DENIS SMITH PHILIP STRATFORD T.H.B. SYMONS W.E. TAYLOR CLARA THOMAS MELVILLE H. WATKINS ALAN WILSON REVUE D'ETUDES CANADIENNES Directeur Directeurs adjoints Assistantes Comite de redaction Efficiency and Community: the National Policy and National Unity When the so-called "Tokyo round" of the General Agreement on Tariffs and Trade was approaching its conclusion in Geneva (of all places!) last spring, the timing could not have been improved upon, as far as Canadians were concerned, for poignancy and symbolism. The Canadian delegates to the Multilateral Trade Negotiations were helping to draft an agreement which took another large step toward dismantling the basis of Canada's traditional policy of economic and national development, a policy adopted precisely one hundred years earlier. On 14 March, 1879, Finance Minister Leonard Tilley brought down the first budget of Journal ofCanadian Studies Vol. 14, No. 3 (Automne 1979 Fall) a new Conservative federal government, announcing the terms of a bold new tariff policy scheduled to go into effect the following day. The Conservative party had recovered from the disgrace of the Pacific Scandal and the humiliating defeat of 1874, and had ridden to a landslide victory in the recent elections on the platform of a ''National Policy,'' a protectionist tariff policy to spur the development of Canadian industry, then in the grip of the economic depression of the 1870s. The details of the new policy had been hammered out between Christmas and March in negotiations between Tilley and representatives of Canadian manufacturers (a process described by Ben Forster), but its roots went back to at least the beginning of the decade if not well beyond Confederation. Sir John A. Macdonald had begun to speak privately of a "National Policy" in 1872 in an apparent effort to steal some of the nationalist thunder of Canada First, but the exact meaning of the term emerged only slowly over the following years in response to the economic difficulties of the country and the political course of the Liberal government. There is a well-known story that the Conservative financial critic, Charles Tupper, had come into the House on 25 February 1876 ready to condemn Liberal Finance Minister Cartwright's tariff increase , only to find that the tariff had not been raised after all and that he was forced to shift feet rapidly enough to argue that it should have been. The following day a delegation of Montreal manufacturers descended on John A. Macdonald to lobby in favour of a protective tariff, and two weeks later he introduced the first of a series of resolutions urging the need for a tariff sufficiently high to aid ''the struggling manufacturers and industries as well as the agricultural production of the country." In the summers of 1876, 1877, and 1878, Macdonald took his so-called National Policy to the people of Ontario in a succession of political picnics which exploited his charm to the full, confirmed his return to political favour, and finally sealed the fate of Alexander Mackenzie's honest but lacklustre administration. From the beginning Macdonald made it clear that the National Policy was to be based on two fundamental principles: first, moderate and reasonable protection, and second, ''the principle of permanency.'' The national tariff policy was not to be a temporary expedient but a permanent feature of the country's economic structure, the stability of which would be a source of encouragement to industrialists and to the economic development they alone could provide. In this, unlike some of his other hopes, he was not to be disappointed . Despite the Commercial Union movement (described by Gary Pennanen), the reciprocity elections of 1891 and 1911, and Mackenzie King's brief flirtatation with continental free trade in 1947-8, the National Policy of tariff protection remained a permanent feature of 2 Canadian economic policy until the GATT negotiations began to chip away at it in the last two decades. The results...