Trade Debate Stirs Voters In Canada Pact with the U.S. makes race tight for tomorrow's election

November 20, 1988, Sunday, ALL EDITIONS; NEWS; Pg. 4

By Al Gordon. Newsday Staff Correspondent

TORONTO - For Sam Gindin, the central issue in the Canadian election comes down to this: “The United States is not a model for us. We can build a better society here.”

Gindin is research director of the Canadian Auto Workers union, one of the groups most fiercely opposed to a pending U.S.-Canada trade agreement. If the already close relationship between the two countries gets any closer, Gindin contends, Canada will lose its separate identity.

Arguments such as his drive leaders of the business-oriented Canadian Alliance for Trade and Jobs up the proverbial wall. 

“We’ve been reducing tariffs for 40 years, and our economy gets stronger, our national identity gets stronger,” said Lorne Walls, spokesman for the pro-pact alliance.

Tomorrow, Canada’s 17 million voters get to render their own verdict. According to the latest polls, the contest is still up for grabs.

Officially, the election is a matter of choosing among the Progressive Conservative Party led by Prime Minister Brian Mulroney, the Liberal Party led by former Prime Minister John Turner and the New Democratic Party led by Ed Broadbent.

But as the seven-week campaign allowed under Canadian law has taken shape, the election has turned into a referendum on the trade agreement signed Jan. 2 by Mulroney and President Ronald Reagan and later approved by the U.S. Congress. But the measure has been blocked in Ottawa.

Turner, expected at the start of the campaign to be headed for a crushing defeat, has startled Canadians by seizing upon the trade issue to propel himself into a neck-and-neck race with Mulroney.

“This is the cause of my life,” Turner says repeatedly. Campaigning here last week, he called the treaty the “most one-sided deal the Americans have ever achieved in peacetime” and charged that Mulroney wants to be “governor of the 51st state.”

Mulroney, his expected landslide seemingly derailed, has shot back, telling supporters at a rally here: “The cause of my life is to build a nation.” The pact will mean “more jobs and more wealth for Canada.” He accused “the nervous nellies” who oppose the pact of dooming Canadians to the “poverty of protectionism.”

Broadbent, who at one time had visions of leading the New Democrats past the Liberals to become the main opposition party, has been reduced to a supporting player. He, too, is a foe of the treaty, but Turner has become the one identified with the issue. Broadbent’s party has been running a campaign on the theme “Who’s on your side?”, which is proving ineffective.

The debate has transcended mere questions about the fine print of the trade treaty or its impact. It has become, in the words of a Toronto Star editorial, “a referendum on what Canada will be.” Or, more precisely, on what English-speaking Canada will be. Experts note that 6 million French-Canadians, with a distinct language and culture, are less concerned about being submerged by the United States than their 19 million compatriots.

“The argument in the English Canadian provinces tends to be, ‘My God, they want to sell off Canada,’ “ said Daniel Latouche, a political science professor in Montreal. “The question in Quebec is, ‘Yes, but how much are they getting for it?’ “

The result of this future-of-Canada debate has been a political campaign with many of the features of the just-concluded American election: negative advertising, an obsession with political polls and the candidates’ relentless quest for TV sound bites.

But quite different from the U.S. race, this campaign has a clear issue that has stirred people’s passions.

“Most people are not prepared to debate economic theory,” said Ronald Wagenberg, a political scientist at the University of Windsor in Ontario, but “this has been an emotional kind of thing.” The question has become whether the trade pact is “a threat to the Canadian way of life,” Wagenberg said.

The free-trade issue is not without consequence in the United States, either.

Last year, according to the U.S. Commerce Department, the United States exported $ 61.8 billion in goods to Canada - more than to any other nation - and took in $ 73.7 billion in Canadian goods, second only to imports from Japan. Allowing for U.S. surpluses in services trade and income investment, the U.S.-Canada trade balance was nearly even, making this probably America’s most satisfactory trade partnership.

The treaty would remove during the next 10 years all remaining tariff barriers between the two nations (about 80 percent of existing trade is already tariff-free) and end other trade restraints. It would ease Canadian rules limiting U.S. investment here and would give U.S. financial companies and other service concerns nearly unfettered access to Canada. Canadians would get parallel access to the U.S. market.

The deal likely would mean, for example, that New Yorkers would pay lower prices for Quebec hydroelectric power and that New York money center banks and Wall Street investment houses could expand their operations in Canada.

Further, warns trade expert Robert Lawrence of Washington’s Brookings Institution, a collapse of the deal would increase protectionist sentiment in the United States by “strengthening the hand of those who think Uncle Sam has been Uncle Sucker; that we want free trade and foreigners don’t.”

The trade pact seems to be on everyone’s mind in Canada. Discussions of free trade can be overheard in restaurants and on the subways. “I’m for Turner. I’m not for free trade,” Judy McNiven of Toronto said while browsing at a shopping center here. Allan King, a department store worker, saw it the other way. “Without free trade, the economy of Canada will collapse.”

So sensitive is the subject that Canadian financial markets tumble every time support for the pact appears to erode, and foes seize on every pro-pact pronouncement in Washington as evidence it is not in Canada’s interest. Even a bland, one-paragraph comment on the pact by Reagan in a broader speech on trade was enough for Turner to charge that it was a back-door endorsement of the Conservatives.

“The lame duck is trying to rescue the dead duck,” Turner said.

Michael Adams, who heads a polling firm here, said opposition to the treaty is “large and significant” but a plurality of the public has opted for a middle course. “They neither want it canceled nor adopted as is,” Adams said. “They would like it renegotiated.”

So overriding is the free-trade issue that all other subjects have been put aside in the campaign. The Conservatives are proposing a national sales tax, and it is only a minor issue. Child care and abortion figured to be important; they have barely been discussed.

A turning point for treaty opponents came in June when Marjorie Bowker, 72, a retired provincial judge in Edmonton, Alberta, produced an issue paper critical of the accord. She argued that the pact would imperil Canada’s economic independence.

“The people were hungering for information,” she said in an interview, “and I put it in language people could understand.”

The media also were captivated by the idea of an outspoken grandmother who, investing her time and $ 1,000 or so for copying charges, was taking on a $ 5-million pro-treaty ad campaign by big business.

Meanwhile, legislation to implement the pact passed Canada’s House of Commons, where Mulroney’s Conservatives hold a commanding 70 percent of the seats. Ordinarily, under Canada’s parliamentary form of government, that would be it: The ruling party, by definition, has the votes to enact its legislation.

But Canada’s parliament has a second house, the Senate, an appointive body that traditionally plays only a pro-forma role in reviewing legislation. Because the Liberals held power for about 16 years before Mulroney’s election in 1984, their appointees hold a Senate majority. Turner took the extraordinary step of threatening to use that majority to block the pact unless Mulroney took the issue to the public.

In Canada, elections are not regularly scheduled. The government is required to call for elections no later than five years after the last one; the custom is to do so every four years, usually when the government sees its standing rising in the polls.

In October, with an apparent commanding lead, Mulroney picked up Turner’s gauntlet and called for elections. Once the prime minister dissolves the parliament and calls elections, the trade bill - like all other uncompleted legislation - died.

The Conservatives say the pact will generate at least 250,000 jobs and add more than 2 percent to Canada’s gross national product. But economics is only part of the issue. The key is what Richard O’Hagan, a senior vice president of the Bank of Montreal and a one-time aide to former Liberal Prime Minister Pierre Trudeau, calls “the uniquely Canadian” worry about being submerged by the United States.

Michael Aho, a trade expert at the Council of Foreign Relations in New York City, said that Canadians “think they have, dare I call it, a kinder, gentler society, and they’re worried about being taken over by Wall Street.”

Canada has a more extensive array of social welfare programs than America does. The fear of the antitreaty forces is that pressures to be economically competitive with American industry will imperil funding for these programs.

There is also a more generalized fear that Canada will lose its willingness to cushion the adverse effects of the free market. The concern is that Canada will either be absorbed by the United States or, just as bad, become like the United States.

That such matters have enormous emotional power was driven home on Oct. 25, when the three candidates met for a debate in Ottawa, with 6 million Canadians watching on TV.

“I happen to believe you’ve sold us out,” Turner charged.

“You do not have a monopoly on patriotism,” Mulroney retorted.

But the Liberal pressed on, saying the free-trade treaty “will reduce us, I’m sure, to an economic colony of the United States.”

“Be serious, be serious,” was Mulroney’s reply.

The debate’s effect was electrifying. Turner leaped from last to first in the polls. His campaign put the exchange on the air as the centerpiece of its advertising. He also has sought to drive home the social welfare issue by repeatedly campaigning at nursing homes and housing projects, as he did here last week.

Mulroney, who had been attempting a Canadian version of the above-the-fray “Rose Garden strategy” beloved by U.S. incumbents, belatedly retooled his tactics. His rallies now are resplendent with literal and verbal flag-waving. The Tories’ TV ads attack Turner’s credibility. The ads are intended to play on Turner’s background as a lawyer for multinational corporations in Toronto, the implication being to question his sincerity in opposing free trade.

By U.S. standards, all three candidates are relatively slick performers who generate excitement - with the added wrinkle of being slick in two languages. Mulroney, 49, is the most dynamic orator. Turner, 59, is not as sparkling in his speeches but has strengthened his hand through regular news conferences. Broadbent, 52, is the most low-key, coming across as the likable college professor he once was.

Forecasting the outcome of a close Canadian election is fraught with peril, experts say, because of the complexities of the parliamentary system. There are, in effect, 295 campaigns going on, one in each House of Commons district.

Although the campaign focuses on the national parties and their leaders, Canadians don’t vote for the prime minister, balloting instead for the parties’ local parliamentary candidates. Mulroney, Turner and Broadbent are on the ballot only in their districts.

Two polls released yesterday by the Gallup and Southam News-Angus Reed organizations showed the Conservatives had regained the lead with more than 40 percent of the vote. That should add up to at least a narrow majority for Mulroney.

Both polls, however, were taken before the parties’ flurry of campaign activity this weekend. Also, the pollsters reported that a high percentage of voters say they might change their minds.

Offsetting the momentum shift is what analysts think may be a possible Liberal rebound in Quebec.

Even if the Conservatives fall short of a majority, if they still win the most seats, the Canadian system would allow Mulroney to try to organize a minority government. But such an arrangement would fall the moment it lost a major vote, such as on free trade.

That would give Turner an option to try to form his own minority regime, which would require the formal or informal backing of the New Democrats, also an unstable arrangement.

A Conservative majority is the only election outcome, Canadian political experts say, that could lead to adoption of the free-trade pact. And the possibility remains that the vote will be inconclusive, leaving the prospect that sometime next year the Canadians will be back out on the campaign trail, with the pact in limbo until then.

Copyright 1988, Newsday Inc.