Deputy Prime Minister and Minister of Finance Chrystia Freeland holds a news conference before tabling the Fall Economic Statement in Ottawa, on Thursday, Nov. 3, 2022. Experts say the federal government’s proposed corporate share buyback tax is unlikely to encourage companies to spend more on growing their operations. THE CANADIAN PRESS/Justin Tang

Uzelman: The Freeland doctrine

A valuable contribution to Canada’s foreign policy?

~BW Uzelman

Deputy Prime Minister and Finance Minister, Chrystia Freeland made an address to the Brookings Institute in Washington, DC on October 7th. The subject matter quickly became known as The Freeland Doctrine – so named by Goldy Hyder, the President and CEO of the Canadian Business Council.

In the famous words of Francis Fukuyama, history has ended. This pronouncement was highlighted in his book after the fall of the Berlin wall in 1989, the collapse of the Soviet Union and the end of the Cold War. These events were followed by our somewhat naive conception that capitalist democracy had triumphed, Freeland says, and the West’s rights and opportunities, “could and should be universal”. The Freeland Doctrine is predicated on the disproval of the end of history.

“When Vladimir Putin ordered his tanks across the Ukrainian border in the early hours of February 24, he brought a brutal end to a three-decade-long era in geopolitics”, contends Freeland. She continues, the end of history is over, and we must design what replaces it. We share the world with authoritarian regimes. They are not about to disappear. They’re becoming richer and more powerful, Freeland says, and our belief that building economic ties would constrain the dictators was false.

Freeland favors an approach resting on three pillars, to take us to the new world. First, we should strengthen the connections between democracies, both militarily and economically. We should broaden NATO, expand trade deals with allies (“friend-shoring”, a term attributed to Janet Yellen), and prioritize government procurement with other democracies. Second, friend-shoring should be open to smaller democracies and those nations that share our values. Third, we should be wary of exposing vulnerabilities in our supply chains when trading with the autocrats.

The Freeland Doctrine has been welcomed, but it has also been criticized. Several writers have warned it will lead to unfree trade, and higher costs of goods. Roman Paris of the University of Ottawa worries it will be difficult to divide the world into competing camps, and not in Canada’s interest. Freeland only suggested our trade deals and government procurement be with our allies and compatible countries. As for the autocrats, Freeland suggests “we should continue to trade, but we should avoid strategic vulnerabilities in our supply chains and our economies more broadly.” That is only prudent policy.

We must consider the lessons of the two great upheavals of recent years. Supply chains were seriously disrupted by both the pandemic and Russia’s war on the Ukraine. During the pandemic, availability of many products was impaired due to the length of supply chains and strict lockdowns in and diplomatic tension with China. Similarly, after Russia terminated natural gas flows, Europe faces a serious energy shortage. It would be a grave error to ever again trust the supply of energy or strategic goods like medical, defense or technological products (such as 5G or computer chips) to autocratic nations.

Goldy Hyder regards the Freeland Doctrine as a “refreshingly serious prescription” for world problems. He adds, the real test is can Canada become “a reliable supplier of much-needed energy and critical minerals.” Hyder asks, “Can Canada expedite projects … while providing regulatory predictability to attract the capital to build much-needed infrastructure?” Hyder has nailed it. Freeland, not always.

She warned, “The curse of oil is real, and so is the dependence of many of the world’s democracies on the world’s petro-tyrants.” The first clause in the sentence is troubling for Western Canada; the second clause reveals the folly of the first. Yes, rapid decarbonization is vital, but oil will be required for some time. As long as that is so, we should not force allies to buy from the “petro-tyrants”.

Canadian industry has warned that the US Inflation Reduction Act (IRA) will shift investment south with massive subsidies for clean energy and transportation. Matt Poirier of the Canadian Manufacturers & Exporters says, “The US has turned on a shop vac to suck up incentive and we’re standing here with a dust buster.” But Freeland insists the IRA contains friend-shoring provisions, allowing US rebates for cars produced in North America, and she maintains the European Union, too, is using friend-shoring.

“What we can really commit to a world of friend-shoring is critical minerals and metals and energy,” pledged Freeland in July. That is laudable. The Fall Economic Statement features refundable tax credits and the $15 billion Canada Growth Fund for key green technologies. If Canada intends to develop clean industries, these incentives and more must be prioritized. Freeland also must ensure we friend-shore all of our clean energy, including LNG, to allies. Canada has spoken strongly, but has not yet delivered anything.

Bruce

Bruce W Uzelman

I grew up in Paradise Hill, a village in Northwestern Saskatchewan. I come from a large family. My parents instilled good values, but yet afforded us, my seven siblings and I, much freedom to do the things we wished to do. I spent my early years exploring the hills and forests and fields surrounding the village, a great way to come of age. My parents owned a successful general store. My siblings and I were required to help out in the business, no choices allowed there!

I attended the University of Saskatchewan in Saskatoon. I considered studying journalism at one point, but did not ultimately pursue that. However, I obtained a Bachelor of Arts, Advanced with majors in Economics and Political Science in 1982.

My career has consisted exclusively of small business, primarily restaurant and retail. I was originally based in Alberta, and then BC, first in Summerland, then Victoria and finally Kelowna (for over 20 years). I was married in Alberta, and we have two daughters, who have returned to Alberta as adults for career reasons, as did my now ex-wife. My daughters are successful, and now have families of their own.

I have maintained a healthy interest in politics throughout my adult years, and wish to put that and my research skills to work as a political columnist.

Contact: urbangeneral@shaw.ca

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