One of the issues that arose during the celebrations surrounding Canada Day 2009 was the question, does the “staples theory” still apply to 21st century Canada?
The staples thesis is a political economy theory on Canadian development first proposed by W.A. Mackintosh and later expanded by perhaps Canada’s foremost economist, Harold Innis, in the 1920s.
For some years, this theory was seized upon by those on the political left who used it to buttress their argument that Canada developed a ‘commodity mentality’ of sending raw resources abroad instead of building a modern Canadian economy. One of the best local examples of this is the sending of raw gypsum from Hants County to the United States to be made into wallboard and imported back to Canada.
Perhaps because the ‘staples theory’ was emphasized by the Left, it faded from contemporary view. However, one wonders, given our productivity gap, the lack of industrial research, the sale of so many of our basic industries such as International Nickel and what was left of Nortel to foreign corporations, if it is time to ‘dust-off’ the staples theory?
Why was Nortel allowed to wither and die?
Why did the Government of Canada permit Nortel to basically wither and die on the vine and permit its entrails to be sold to a Finnish company? The loss of Nortel should be compared to the death of the Avro Arrow by the Diefenbaker government, which also killed off a burgeoning Canadian aerospace industry.
The Canadian and Ontario governments have invested billions to save the auto industry and given the size and employment numbers in that industry, they had no alternative. But did they insist that General Motors and Chrysler undertake a greater percentage of their industrial research in Canada?
At one time Nortel was the Canadian leader in industrial research; why would the Government of Canada permit the loss of this research? Now the Harper government, after ignoring the warnings, desires to sell off Atomic Energy of Canada (AECL), an industry where Canadian researchers led the world in developing peaceful uses of atomic energy.
It would appear our politicians were to busy playing political tag to give much of a hoot about the future of Nortel and AECL. Perhaps Mr. Harper, a little less time on producing mean-spirited television commercials and more time on the issues of innovation and productivity might just improve your standing in the polls.
Yes, we know the economy is in a perilous state, but stop for a moment and think of the difficult tasks facing the Government of Canada in 1944 when we knew the war would be ending soon and steps had to be taken to turn a war-time economy into a peace-time one. That government and that Parliament planned for change, but what sort of planning is being done today to prepare for the end of the current recession?
Locked into the staples theory or not?
The question facing Canada today is quite simple; do we wish to remain locked into the staples theory, which means a continuation of being a provider of raw materials to an industrialized, innovative and productive world?
After all, it was the fur trade followed by the fishery, lumber, wheat, minerals and now electricity, oil and natural gas to the rest of the world that gave rise to the staples theory. We shipped our staples abroad and then import the finished product back to Canada.
According to Innis and others, it was the staples concept that also brought about the development of the ‘hinterland’ upon which the ‘heartland’ depended for the search for ‘staples’. In Innis’s day we knew which was the heartland thanks to Macdonald’s national tariff. Today, where is the ‘heartland’?
The staples theory had its place in the evolution of Canada. Basically, it was the staples theory that opened up the Prairie provinces while lumber was an important industry in many provinces, including Nova Scotia. Canadian wheat was sold around the world and came back as crackers. Today oil and natural gas are the staples that are opening up new frontiers from the Arctic to the North Atlantic.
Where are the new innovators?
Do we wish to revert to a staples economy, which may lead to “peace, order and good government,” but also to a lower standard of living, more foreign ownership and a rekindling of ‘the brain drain’ as there will be very little industrial research being conducted in a staples economy Canada?
True, the exporting of staples has been an asset in sustaining our past economic growth as a nation. But as Tennyson told us, “The old order changeth, yielding place to new.”
Where are our innovators? Are they all working for RIM? Where are the innovations for the post-petroleum age?
Are our children - and more importantly our grandchildren - going to be able to be Canadian innovators, continue to be shackled by staples or, like so many Canadians, move to countries like the U.S., Japan, Finland and China, which encourage innovation and productivity?
Most importantly, where are our political leaders? The silence of the Liberals and the NDP on these issues is particularly deafening!
Those countries that have become innovators have had political leadership that not only encouraged innovation, they demanded it. One of the best examples of this was Japan in the 1950s and ‘60s. Today it is China, South Korea and Finland.
In Canada we get more mean-spirited commercials, more political rhetoric, but no innovative or productive leadership from any one of our political leaders.