COVER

ONE CITY'S DAILY DEBATE

SHERRI AIKENHEAD April 6 1987
COVER

ONE CITY'S DAILY DEBATE

SHERRI AIKENHEAD April 6 1987

ONE CITY'S DAILY DEBATE

Pounding wooden desk, his fist John on a Anderson cluttered bellows so loudly that two secretaries in the front office cannot help but overhear his angry words. Owner of a small steel distributorship in St. Thomas, Ont., Anderson, 34, contends that a free trade deal between

Canada and the United States would cripple his business. “If they open up the borders, it’s only a matter of time before Canadian industry ends up being controlled by the Americans,” said Anderson. “You might just as well change the flags and the national anthem.” But just two blocks away, entrepreneur Donald Wearn, who started a specialized tool-and-die business last October, says that he would benefit from better access to the huge American market if a trade agreement wiped out tariffs on the graphite he imports to make his product, electrodes.

“We’re penalized to the point where I can’t pursue certain areas because I can’t offer a competitive price,” said Wearn. But he added: “The issue is difficult. The things that might benefit me might bother

the guy across the street.”

Torn: The debate that has divided St. Thomas, 30 km south of London, Ont., is being echoed across Canada as the deadline nears for Ottawa and Washington to conclude a wide-ranging trade agreement. Although debates in Parliament and the news media have captured most attention, the national soul-searching about whether Canada should strike such a deal with the United States is much wider. Indeed, across kitchen tables, in factories and in offices, many Canadians have been prompted to assess their own economic situation and hopes for the future. Just as Anderson and Wearn differ sharply on how a comprehensive trade agreement might affect them, other Canadians are torn over who would benefit and who would lose if the current trade talks succeed.

Emotional: Many others voice concern about wider questions: what kind of society they want to live in and

whether Canada’s distinct identity might be compromised by linking its economy even more tightly to that of the United States. The discussions have provoked some emotional divisions. Said Bob Kymlicka, a political scientist at the University of Western Ontario in nearby London: “The unhealthy aspect of this is the division within Canada itself.”

The debate has been thrown into sharp relief in St. Thomas (pop. 29,000), a quiet city located on Kettle Creek—a name known nationally because a local company produces a widely distributed line of clothes under the Kettle Creek Canvas label. Business leaders acknowledge that the 70,000 residents of St. Thomas and surrounding Elgin County are deeply divided over the potential losses and gains of a free trade accord. In fact, the city is so split that Robert Hammersley, general manager of the St. Thomas Chamber of Commerce, says that his organization is reluctant to take a firm stand. “If you walked down the street and asked people if they’ve heard the words ‘free trade,’ you’d get 100-per-cent response,” he said. “But while half of those people stand to gain from a deal, the other half don’t.”

Indeed, in many ways St. Thomas reflects national divisions on the issue. Said Rick Mateer, an administrator at nearby Fanshawe College and past president of the chamber of commerce:

“We are a microcosm. We have enough of an industrial base that it leads to many fears and causes some people to be in favor of a free trade pact, some people to be against it.”

Changes: St. Thomas has long been identified with the auto industry—key to the booming economy of southern Ontario. On the western edge of the city, a sprawling Ford assembly plant that opened in 1967 employs more than 3,500 workers. And as many as 1,000 more work for other auto-related businesses. Although Ford is the city’s main employer now, St. Thomas has gone through many economic changes since it was first settled in 1803 by Col. Thomas Talbot —after whom the city and its main street, Talbot, are named. Originally an agricultural centre, St.

Thomas still services some 2,000 tobacco, corn, hog and dairy farmers who work the land of Elgin County—some of the most fertile in the nation. It became an important regional railway centre at the turn of the century, and until last year the American Conrail line used St. Thomas as a maintenance centre midway between Fort Erie, Ont., and Detroit.

As a result, the products of Canada-U.S.trade have flowed through St.

Thomas for generations, and its citizens have long been familiar with cheap American goods.

Recounted Hammersley:

“In the 1920s my grandfather operated a fish market here and bought American oysters fresh off the boxcar.”

Firm: For Donald Wearn’s Alldon Industries Ltd., which employs 13 machinists, do-

ing business with the Americans is not simple. The firm, he said, is penalized both when it exports electrodes—used in jet engines—to the United States, and when it imports materials from south of the border. Three times a month, Wearn ships a $57,000 order of electrodes to the United States, paying a 3.8-per-cent tariff at the American border. “That comes right out of my profits,” he complained. Likewise, when Wearn purchases such raw materials as graphite, he is charged a 17-per-cent duty by Canadian customs. “We’re re-

A free trade accord, says James Wakefield, a member of the St.

cipients of double jeopardy,” he said.

Thomas Economic Development Corp. and a manager at a local auto-parts firm, would benefit small manufacturers like Wearn. “I’m a firm believer in free enterprise and free trade,” Wakefield declared. “Supply and demand should create the price. The moment you allow the government to interfere, you put the system out of balance.”

In other parts of Canada, there are widespread differences about what a free trade accord would mean—and what it should include. Hog farmer Graham Warwick, president of the Elgin County Federation of Agriculture, told a public forum on the issue in London last week that farmers as a whole would not benefit from such an agreement. Egg, dairy and chicken farmers, he warned, would suffer dramatically if current Canadian laws that protect local markets for local farmers were weakened and

were and Ontario producers forced to compete directly with American farmers. “Free trade is like heaven,” said Warwick. “Everyone wants to get there but nobody wants to die doing it.”

Fear: Similarly, Dusty Miller, secretary treasurer of Local 1520 of the Canadian Auto Workers union, which represents 3,400 workers at the Ford plant just outside St. Thomas, vehemently opposes including the Canada-U.S. Auto Pact in trade negotiations. Miller, who took part in the same forum, warned that, if American-owned companies were not forced to comply with the minimum Canadian content requirements set out in the 1965 Auto Pact, they would be more likely to scale down Canadian operations and move jobs to the United States, where wages are lower. “What I fear the most is what I’m not being told,” declared Miller. “All we’ve heard from the government is that there will be thousands of jobs created. But we have no idea where or who will be displaced.” Ghost: In February

St. Thomas Mayor Janet Golding, along with the mayors of three other Ontario cities that depend heavily on auto making, expressed her concerns about the Auto Pact to the House of Commons’ committee on international trade. During the 1982 downturn in the auto industry, Golding recalls, Ford laid off workers in

St. Thomas, and unemployment soared to 13 per cent. The layoffs plunged the city (which now has an unemployment rate estimated at just four per cent) into deep recession, forcing more than 100 local businesses to close. “If the Auto Pact is bargained away at the table, this city more than any will feel the impact,” said Golding. Added Miller: “Within five years of an agreement St. Thomas could be nothing more than a ghost town.”

Before that happens, John Anderson, for one, said that he is prepared to sell his St. Thomas firm, and two others he owns in southern Ontario, and move to the United States. The boisterous father of three predicted that he would feel the repercussions of a trade deal as soon as tariffs started to come down, because cheaper American steel products would flood his market. “I might just as well pack up and join them—the erosion would be so fast,” Anderson said bitterly. “I’m down here where I can feel their breath on my neck—and it is hot.” Still, the debate in St. Thomas—and the country as a whole—has shown that what Anderson perceives as a threat is for others a long-awaited opportunity.

SHERRI AIKENHEAD

in St. Thomas