Continental Drift And Military Complexities

By David South

The Canadian Peace Report, Summer 1993

A cornerstone of the Conservative government since 1984 has been the Free Trade Agreement (FTA) between the United States and Canada, soon to be followed by a North American version (NAFTA), which adds Mexico. 

Peace researchers differ over how much the deals could further militarize Canada’s economy. 

Under the Canada-US deal, articles 907, 1308 and 2003 immunize trade that fosters “national security” from charges of unfair subsidies. A free trade tribunal could deem subsidies to farmers or toilet-seat manufacturers as unfair competition - but not subsidies to weapons manufacturers. Articles 1018 and 2102 of NAFTA maintain the exemptions. 

CPA membership coordinator Gary Kaye argues that FTA, and NAFTA even more so, bind Canadian governments at all levels to military regional development. The United States has relied on investment in military industries as a regional development tool more than any other Western country, he says. 

“The Canadian government can invest in any military-related pursuit without fearing the U.S. or Mexico will say it is an unfair subsidy,” Kaye says. 

Ken Epps, a researcher with Project Ploughshares in Waterloo, Ont., agrees one reason the government insists on buying $5.8 billion helicopters in the face of overwhelming public opposition is that it’s a regional development program protected under the FTA. 

“Any other [subsidy] program of that size could well be protested by the Americans. The whole thing has been set up with new plants being built in different parts of Canada to build parts for the helicopters.”

But Epps disagrees that the trade agreements will integrate Canada much further into the U.S. war machine. De facto free trade in arms has existed since Canada and the U.S. signed the Defence Production Sharing Agreement in 1959, he points out, following the scrapping of Canada’s Avro Arrow jet plane. There-after Canada specialized in making military components rather than complete systems.

Epps and others say Ottawa’s high-tech hardware binge - including the 50 high-ticket EH-101 helicopters - and the Canadian military industries’ desire to sell to booming Pacific Rim and Middle East markets would exist even without the trade agreements. Epps sees the U.S. favouring its own defence industry at the expense of Canadian suppliers, which will increase Canadian businesses’ desire for foreign sales. 

Retired U.S. admiral Eugene Carroll, director of the Washington-based Center for Defense Information, says every nation is interested in boosting its own national prestige throught the military, and Western industrialized countries are looking to sustain exports by selling weapons to the Third World. 

“That’s just plain old profit-driven commercial activity,” says Carroll. “I don’t think trade agreements extend control onto military-related activities.”

Kaye, however, stresses that NAFTA will ensure the bilaterial agreements between Canada and the United States on military trade will continue untouched. “Under those agreements, we are committed to balance military imports and exports with the United States. 1992 figures show a $4-billion deficit; therefore we will be buying much more in the way of arms than anyone could imagine would be needed for Canada’s direct security.”

Many peace groups are worried about the implications. 

“NAFTA reveals an agenda for the military and the transnational corporations that binds the Canadian economy more to the U.S. military machine,” Marion Frank wrote for the Peace Alliance in Action Canada Network’s Action Dossier (Dec. 1992), drawing on a position reached by the CPA Steering Committee last fall.

“Under NAFTA, as under FTA, the only areas where government subsidies are allowed are in the military and energy sectors … Wide-ranging expansion of ‘intellectual property rights’ in NAFTA increases monopoly product protection for the transnationals here in Canada, and aids in the privatization of high-tech capacity, all of which ties us more closely to the U.S. military-industrial complex …

“In the U.S., trade strategy is linked to security strategy,” Frank adds, “The military tells U.S. industry what equipment to plan for and buy in order to meet U.S. strategic objectives. As we become more integrated into the North American [trading] bloc, our ability to develop our own strategies will disappear.”

Recommendations from the Peace Alliance-facilitated Citizens’ Inquiry into Peace and Security would be difficult to implement under NAFTA, contends Darrell Rankin of the Ottawa Disarmament Coalition. “Canada could no longer help developing countries by giving them better access to the Canadian market through preferrential tariffs.” Assisting military factories to produce civilian goods would be prohibited - but grants to develop weapons would not.

Last February, Science for Peace brought together labour, peace and other activist groups to make the connection between free trade and defence production and the weapons trade. “Both agreements are bound to cause in Canada what exists in the U.S.: a poweful military-industrial complex,” says S4P’s Terry Gardner. “It represents the loss of control of the institutions of government.”

Then prime minister Mulroney’s “unquestioning support” of the U.S. in the Gulf War “removed political roadblocks to Canada’s involvement” in U.S.-Mexico talks, recalls John Dillon of the Ecumenical Coalition for Economic Justice. Despite widespread Mexican opposition to the war, he adds, President Salinas increased oil production and exports to the U.S. during the build-up to it. 

The Ottawa Disarmament Coalition calls NAFTA “a vehicle for militarism without brakes.” It would create legal inducements for companies seeking government contracts to couch their bids in national security terms, a coalition brief to an Ontario cabinet committee on NAFTA argues. 

NAFTA would also hinder conversion of military to civilian industries and environmental protection above “generally agreed” standards, the coalition said.

The Ontario committee on NAFTA, which held public hearings in the spring, received briefs from: Northwatch (Brennain Lloyd, Sudbury), Voice of Women for Peace (Ann Emmett and Elizabeth Davies, Oshawa), Oshawa Peace Council (Doug Wilson), Ottawa Disarmament Coalition (Rankin), the CPA (Kaye), Science for Peace (David Parnas), Michael Polanyi, Allan MacIssac (Toronto Disarmament Network) and Veterans Against Nuclear Arms (Toronto). 

While recommending that Ontario oppose NAFTA, the committee’s report did not directly mention peace concerns. 

Abuse of resources

“The U.S. needs our resources and us to put together components for their military,” says J.J. Verigin of the Doukhobour peace and disarmament committee in B.C. He criticizes “any agreement that locks us more into a country wired to massive consumption and abuse of resources at the expense of Canadians and other countries.”

In the United States, the Women’s International League for Peace and Freedom opposes NAFTA as a stage in “the neoliberal economics of intervention” that particularly victimize women (Peace and Freedom, July/August 1992). 

At CUSO’s national office, Marc Allain wants to end the notion that NAFTA is about improving the living standards of people in developing countries. “What we’re seeing is quite the contrary,” says Allain. “Low wages, no health and safety - we’re already seeing in Mexico job losses as they move to the maquiladoras (Mexico’s free trade industrial zones).”

(In a trade advisory, Ottawa tells Canadian companies that the defence market in Mexico, a notorious human rights violator, “is not readily identified … Commercial/industrial security, however, is an expanding market.”)

Allain says CUSO is working with the Ecumenical Coalition for Economic Justice to produce education kits on NAFTA and distribute them to unions and community groups. 

Will the megacity mean mega-privatization?

By David South

Annex Gleaner (Toronto, Canada), March 1997

As the provincial government tries to shoehorn six municipalities into one megacity, opponents of the plan worry that one of the results of amalgamation will be widespread privatization of public services.

References to contracting out and tendering municipal services in order to achieve savings run through the provincial government’s much-maligned report supporting a megacity, produced by consultants KPMG.

Many observers feel the new city will have no choice, while others argue privatization won’t be nearly as extensive as some fear. Still others think it is far from a foregone conclusion that a future amalgamated council will push privatization.

“Who knows if the council will have an interest in privatization?” says a senior bureaucrat at the City of Toronto, who did not want to go on record. “People are running around saying they will privatize everything, but who knows what the political make-up will be of the new council? They are assuming there will always be savings to be had from privatization – that doesn’t automatically follow. The financial pressures on the megacity can’t be avoided by privatization.”

Among the six current Metro municipalities, it is Etobicoke that has most fully embraced contracting out. The City of Etobicoke’s experiments with contracting out – 60 per cent of public works contracts are performed by private-sector companies – calls into question the estimates of substantial savings being bandied about by the provincial government.

According to the senior bureaucrat in charge of running that city, acting city manager and commissioner of public works Tom Denes. contracting out isn’t the tax-saving nirvana some believe.

“I think we are finding in contracting out,” says Denes, “that the higher the skills of the workforce, the less sense it makes to contract out. For example, it would be very expensive to contract out water treatment.”

Denes says the city’s pride and joy is its privatized garbage collection handled by Waste Management Inc. and BFI. The WMI contract is worth $6 million a year, down from the $7.5 million a year it was costing to publicly run garbage collection. The price is fixed for five years, when it must be negotiated again. While the city made $1.9 million selling its old trucks, councillors set up a $4 million fund so Etobicoke could go back to collecting garbage itself if private companies tried to gouge the city.

Denes, who has been meeting with counterparts at other cities and the provincial government, believes the new Toronto will be divided up into several districts which private garbage collectors will have to compete for.

“Based on what I know, if you were to divide the city up into waste contracts, it would be at least four areas,” claims Denes. “No company can handle the whole city. You just can’t find a company that could handle a megacity. It would become a monopoly.”

Denes thinks the likely suspects for contracting out would be any manual labour work and the TTC. He thinks a megacity would be mistaken to contract out skilled work like surveying, arguing that skilled workers would use their desirability to their advantage and charge high consulting fees.

“The US cities have all gone through these exercises. They are in fact contracting services back in,” says Denes.

While the Tories have been slipperier than a scoop of ice cream about their specific privatization plans, one thing is clear: An essential element of the Tory economic vision is a greater role for the private sector in delivering public services. The $100,000 KPMG report plays to this, making it clear contracting out is a key means to saving money in the new megacity. The report claims between $28 million and $43 million per year could be saved from contracting out computer operations and some management; between $38.5 million and $68 million by contracting out fraud investigations; between $29.6 million and $54.5 million by contracting out road and electrical maintenance, snow removal and data collection; between $21 million and $39.4 million by contracting out garbage pick-up and processing.

The report also offers this proviso: “There is no such thing as automatic, cost-free savings from organizational change. The implementation process must be tightly managed to produce the savings suggested here.”

Ron Moreau is the administrator for Local 43 of the Metro Toronto Civic Employees Union, which represents over 3,000 public works workers and ambulance drivers at Metro.

“How will the megacity and municipalities cope with pressure from the public to hold the line on taxes? Where will councils find the difference between spending and revenues?” asks Moreau. “The level of service will suffer. When you contract out, public policy is held hostage by private enterpise.”

Moreau threatens that labour will play hardball with the new city. Most of the contracts for Moreau’s members run out on Dec. 31 of this year.

“Assuming the government doesn’t tamper with the labour legislation on our books, the unions can be organized into two large locals, one clerical/technical, the other outside workers. They would have effective bargaining clout.”

One major player looking for government contracts in a megacity will be Laidlaw Inc. While the company recently sold its garbage collection operations to an American firm, USA Waste, it still has interests in operating school buses and ambulances. Laidlaw is a heavy contributor to the Ontario Progressive Conservative Party, according to records kept by the Commission on Election Financing. Laidlaw has also made an influential new friend: in January, it hired former Metro chief administrative officer Bob Richards as its vice-president.

Ward 13 city councillor John Adams is definitely in the privatization-if-necessary-but-not-necessarily-privatization camp. “I don’t see everything being contracted out, but more stuff being put out for competitive bids.”

Adams thinks contracting out could be a good tactic to help modernize garbage collection, for example. He points to the City of Toronto’s deal with WMI to collect garbage at apartment buildings. In that deal, costs were reduced by $2.5 million over a five-year contract, and the crews on trucks were reduced from two to one. Instead of an extra crew member, closed-circuit television cameras were installed on trucks to speed up pick-up. Adams points out the crews are still unionized, but instead of CUPE it is the Teamsters.

“The way we pick up garbage from households is back-breakingly stupid. I think we need to rethink how we do it, to use machines more than people’s backs.”

But Adams doesn’t believe a megacity is a money-saver. “There will be a leveling up of wages. How long will two firefighters work side-by-side for different salaries? You can bet the union will negotiate an increase at the first opportunity.”

Adams thinks a megacity will be more prone to the slick lobbying efforts of companies like Laidlaw because councillors will be dependent on political parties to get elected. “The provincial government will contract out municipal government to Laidlaw,” he says sarcastically.

"Will the megacity mean mega-privatization?": March 1997.

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