Chapter 6 & 7 Notes Economics of Canada: 1970’s, 80’s & 90’s (p

Post-War Prosperity Generous tax breaks and initiatives given to companies. Government Corporations auctioned off. Causes a boom in the economy What about social programs=UI, family allowances=protection from poverty

Rich Resources and New Industries Natural resources and minerals What was the most important development in Alberta? Discovery of oil in Leduc, Alberta Boom Towns Industry dominated by Ontario Environmental Impact?

Megaprojects: Using Falk, Counterpoints research: TRANS-CANADA HIGHWAY (St. John’s to Victoria ST. LAWRENCE SEAWAY (Great Lakes – Atlantic Ocean) TRANS-CANADA PIPELINE (Natural Gas-Alberta to industrial heartland

American Investment = A Continuing Issue Needed investment in Natural resources=US had the capital by 1967=88% of oil industry is foreign owned Branch plants=more than half of manufacturing owned by US Losing control of Economy?

Canadian Owners and Workers Canadian Companies: BC-H.R. MacMillan New Brunswick-K.C. Irving Ontario-E.P. Taylor and Bronfman family 1946-1948-Unions Grow=ask for five-day, forty-hour work week, paid vacations Non-industrial unions also rise = teachers, nurses etc

Limits of Prosperity Immigrants get worst jobs Women are discriminated and paid less than men for the same work Canada’s First Nations fared worst: Mercury poisoning from a pulp and paper mill contaminated the fish caught and eaten at a reserve in Ontario Highways, pipelines and boom towns disrupted hunting grounds

Trudeau’s Foreign Policy In 1968 Pierre Elliott Trudeau would become Prime Minster of Canada following on the heels of L.B. Pearson. He wanted to become less dependent on the U.S.A. He officially recognized the communist government of China contrary to American opinion and ordered nuclear missiles removed from Canadian NATO forces in Europe. He dismantled BOMARC missile bases in Canada and ordered the defence budget cut. He reduced Canada’s NATO contingent in Europe by half.

Trudeau’s Foreign Policy Trudeau also recognized the split between development in poorer countries and richer countries and part of his mission was to improve their economic status. C.I.D.A., the Canadian International Development Agency, was formed to assist developing countries. Canada used “tied-aid”, whereby countries receiving aid agreed to buy Canadian goods, as an improvement strategy.

PIE GRAPH: CIDA Tied Aid Distribution

Economic Challenges Problem of Inflation 1973 Oil embargo by OPEC (Organization of Petroleum Exporting Countries) War between Israel and neighboring countries-Canada and Western countries support Israelis-Arabs refuse to sell oil Price jumps 400% Dollar falls=unemployment at highest level since the Depression wages increase, but so do prices

Regionalism “Regional Disparity” – some regions in Canada making more money than others Natural Resource industries hardest hit Resentment towards Ontario causes feeling of “western alienation” Oil crisis was a perfect example: federal government freezes prices and taxes petroleum exported from western Canada money saved was used to subsidize the cost of imported oil in the East

Regionalism cont`d Trudeau increased transfer payments for provinces from federal government to be used in social services National Energy Program (NEP): reduce consumption of oil, protect Canadians against rising oil prices, and to make Canada self-sufficient in oil Exploration in arctic and Newfoundland Consumers: switch from oil to gas Alberta is upset 1984 NEP dismantled, but West is bitter

Brian Mulroney Eighteenth Prime Minister of Canada from September 17, 1984, to June 25, 1993. Leader of the Progressive Conservative Party of Canada from 1983 to 1993.

The Mulroney Era: Closer Ties with the United States A change in government saw the Conservatives led by Prime Minister Brian Mulroney work to improve Canada’s relationship with the U.S.A. Canada, as a NORAD partner, was asked to be part of the American Star Wars defence plan that would put military defence satellites into space. Mulroney, after much controversy, said no but left the door open for Canadian companies to bid on contracts in the project.

The Mulroney Era: Closer Ties with the United States Mulroney dismantled Trudeau’s FIRA, the Foreign Investment Review Agency, designed to monitor unsuitable investment in Canada by foreign companies. Mulroney replaced FIRA with Investment Canada, an agency designed to encourage suitable investment in Canada. Mulroney and the Conservatives inititated NAFTA, the North American Free Trade Agreement, with the U.S.A. to remove tariffs on goods crossing the Canadian-U.S. border.

The Mulroney Era: Closer Ties with the United States It was hoped that Canada would attract more business from south of the border and have access to the larger American market. Canadian businesses feared the potential competition from bigger, more multi-national American businesses. Some feared that Canadian businesses would move farther south into Mexico where labour was cheaper and anti-pollution laws are less stringent.

Debt Crisis By 1984, Trudeau has left behind a $160 billion debt Mulroney trimmed social programs to lower debt, but also lowered taxes and Free Trade with America Cancelled the NEP Introduced the GST His idea was not to take care of people, so they would work. Recession in 1990s, debt increases Jean Chrétien in 1993 = $466 billion debt Injected more money on public works to create jobs Interest rates shoot up! Start cutting social spending (Martin – finance minister)=education, health-care, welfare

Advances in Science and Technology On July 21, 1969, the first manned moon landing by the U.S.A. occurred. The ozone layer was discovered in 1976. In 1969 ARPANET was created, it provided the foundation for the development of the Internet. Spar Arrowspace, a Canadian company, would develop the Canadarm for the U.S, space missions.

SPAR Aerospace Canadarm

Canada as a Middle Power Canada joined La Francophonie, an organization of French speaking countries, many former colonies of France. Canada also participated in the Colombo Plan, a plan to assist developing countries. Canada invited overseas students to study in Canada and sent experts overseas to give technical assistance.

Canada as a Middle Power In 1972 SALT 1 (Strategic Arms Limitation Talks) was signed which reduce the number of nuclear weapons between the U.S.A. and the U.S.S.R. In 1979, the U.S.S.R. sent troops into Afghanistan and NATO did the same. SALT talks were suspended and many western nations boycotted the 1980 Olympic Summer Games in Moscow in protest.

SALT II Talks: President Carter and Leonid Brezhnev Sign Treaty

Canada as a Middle Power The U.S.A. increased its defence spending and a Korean passenger jet was shot down over the U.S.S.R. after it wandered into Russian air space. U.S. forces invaded Grenada and deposed a pro-Soviet government.

Canada as a Middle Power Prime Minister Trudeau went on a world tour endeavouring to engage world leaders in a campaign to mediate between the superpowers. In February of 1984, after his famous walk in the snow, Trudeau decided to leave politics.