Free Trade

An Act to implement the Free Trade Agreement between Canada and the United States of America

Date:             1988
Bills:              C-130 and C-2
Sponsor:       Hon. Lowell Murray (ON)
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Summary:
It was derisively called the Royal Commission on Everything when it started, but by the time Donald S. MacDonald filed his final report in 1985, Canada's future was forever changed.  Free trade with the United States was a keystone recommendation, and Prime Minister Brian Mulroney adopted its goals with enthusiasm.    

High level negotiations between the two countries were completed in the fall of 1987, and both nations submitted what then became an international treaty to federal legislators for ratification.  In Canada, the government introduced Bill C-130 in the House of Commons on May 24, 1988.  Despite the government's solid Progressive Conservative majority, the bill did not proceed smoothly.  Liberals and the NDP vigorously opposed it, forcing 29 days of debate, 10 days of hearings and over 50 recorded votes.  

In the meantime, six weeks before the bill left the House of Commons, Liberal leader John Turner took the unusual step of announcing that Liberals would block the free trade bill when it got to the Senate.  Mr. Turner explained that, although the Senate had yielded to the elected House of Commons in the past, this bill was too important to be passed without consulting the Canadian public by having an election on the issue.  He was roundly criticized by NDP leader Ed Broadbent who branded the move as "undemocratic".  Mr. Broadbent himself was accused of "making a mockery of Parliament" when he and other opposition members forced continued debates in the Commons.  

Finally, after a raucus day of flag waving, desk pounding and anthem singing by opposition MPs, Bill C-130 was passed (177 to 64) on August 30, 1988.

The bill was immediately sent to the Senate, arriving the very next day.  In launching debate on Bill C-130, Senator Murray reminded senators that two committee reports advocating free trade (1978 and 1982) had previously been adopted by the Senate as a whole.  Nevertheless, on September 15, 1988, all Liberal senators (and one independent) abstained from voting on the motion to adopt the bill in principle.

Two weeks later, on October 1, 1988, a federal election was called. For seven weeks, the free trade issue became the centre of debate from one end of the country to the other.  It was the second time in history that an election had been fought on this issue – the Laurier Liberals had gone down to defeat in 1911 valiantly defending their support for free trade.  This time however, in an ironic twist of fate, mid-campaign polls showed the Liberals leading, but by election day (November 21), the Progressive Conservatives had prevailed.  

With 169 seats to the Liberals' 83, Mr. Mulroney formed his second majority government and moved quickly to re-introduce the free trade bill (now called Bill C-2) in the Commons.  It reached the Senate on December 27 where it was dealt with expeditiously, receiving Royal Assent just three days later.

Impact:
Mr. Turner's announcement that the Senate would block Bill C-130 prompted outcries from both the public and many senators.  Senator Murray (ON), for example, was quick to denounce the move.  "If the Liberal majority in this place accepts partisan political direction even before the bill has arrived here, the deliberative role of acting as a chamber of sober second thought is a dead letter," he asserted on Setember 7. (Debates, page 4278)  But two weeks later, Senator MacEachen claimed that this argument "was based on a fiction" because the Prime Minister had himself stated he would likely call an election by the end of that week. (Debates, page 4394)  Once that had happened, Senator MacEachen (NS) declared, without hesitation, "of course we intend to acquiesce to the results of the election and to the majority decision of the House of Commons." (Debates, page 39).  Perhaps an independent senator, Michael Pitfield (ON) summed up the arguments best of all:

     The idea that a majority, just because it is a majority, is entitled to
     pass without full discussion what legislation it pleases, regardless
     of the extent of the changes involved or of the intensity of the oppo-
     sition to them — the idea, in fact, that majority edicts are the same
     things as laws — is wholly alien to the spirit of our Constitution.
     (Debates, page 4440)

As to the Free Trade Agreement (FTA) itself, both positive and negative consequences have flowed from its implementation.  As Trefler puts it, long-term benefits tend to outweigh short-term disbenefits.  In essence, consumers tend to gain in the long run while displaced workers tend to lose in the short run.  A brief review of 15 years' experience with the FTA and its successor, the North American Free Trade Agreement (NAFTA), concluded that "… lessons from our own experience and elsewhere is that the world keeps moving, and that continued adaptability, as well as taking greater account of the complementarity of policies in various areas, is the name of the game."