Editorial: Fleeing Canada’s “economic mess”

In a brilliant coup which startled this country’s financial district s, one of Canada’s top developers, Robert Campeau, single- handedly gained control of Allied Stores Corp., a huge U.S. store chain. At a cost of nearly $5 billion(C), this represents the largest- ever takeover of U.S. assets by Canadian interests.

A bold move indeed, and one that should at least temporarily still the oft heard cries about those big bad Yankees always coming up here and buying up control of our natural resources.

But it is the rationale behind this reversal which concerns us. For entrepreneur Campeau, who is not a stupid man, is quoted as saying it is because he thinks Canada is in an economic mess and going bankrupt with its deficits. And, he says, this country is going too far to the left for his liking. He would rather invest money in the United States than in Canada, preferring the American way of conducting business. He finds the establishment here both stuffy and closed-minded. Canada was “left in a mess” by former Prime Minister Pierre Trudeau. And Mr Campeau has sin ce become disenchanted with the Mulroney administration and Canadian politics in general, giving him further impetus to look south of the border for greener fields.

Perhaps, too, he had his sharp eyes focused on those U.S. elections, foreseeing ominous ramifications for Canada in that voting which has now placed control of both houses in the U.S. Congress firmly in Democrat hands.

Recent assurances by Prime Minister Mulroney notwithstanding, that Democratic triumph would seem to be all but putting the kiss of death on this country’s bid for any free(r) trade agreement with the Americans, now that a strong new protectionist mood in that country is almost sure to hold sway. Indeed the very day after the election, Senate majority leader Robert Byrd (who has never shown any particular friendship towards Canada) was pledging aggressive trade legislation to deal with what he called the “national embarrassment” of the huge U.S. trade deficits, adding that “the working people of this country have been mugged in international competition.”

Frankly, we have been somewhat surprised that Mr Mulroney would make such a big political issue of his so-called free trade negotiations. As we see it, this has been pretty much of a no-win situation for Canada from day one. After all, the name of the game in any trading situation is to sell more than you buy. And fact is, we have been enjoying a very favorable balance of trade with our big neighbor who, in turn, is suffering huge trade deficits not only with us but worldwide.

It is simply inconceivable that Uncle Sam, hurting as he is, would ever agree to any new move to widen his deficit. Corollary — wouldn’t Canada, then, have to give, not get? So why rock the boat?