Apparently the BOC has decided that delinking is a myth. Or have they? The statement by the Governor included the curious justification for the interest rate cut via the suggestion that it would help insulate Canada from the deterioration south of the border. The elite in Canada really need to keep their story straight. For years we were told that Canada’s fortunes were inextricably tied to the fate of the US economy and that continentalism was not just the right ideology but the de facto status quo. Now we are being sold the tale that Canada is delinked from the US or that by some monetary magic Canada can insulate itself from the US.
Sorry, the appropriate image of Canada’s structural dependence is that we are a boat and the US is the Atlantic ocean. We rise and fall with the tide.
And while it is all fine and dandy to proffer a series of short term measures which might ease the macroeconomic pain, we might just want to open up the debate about industrial policy, long term macroeconomic management and the kind of distribution of income and assets we want to see for future generations. The CAW has produced a document which is a good start in this direction (sans any no strike clause that is).
Furthermore, we need to stop talking in liberal economic terms like free trade. What we have is a managed trade regime at three different spatial scales–just look at any trade deal, they are incredibly detailed. It has never been a question of free trade or autarky; it is a debate about the kind of managed trade regime we want. We already have manged trade and investment how could we manage it differently is the real question?