Canada’s imperialist project

Capital and power in Canadian foreign policy


Canada has been active indeed on the world stage of late, but hardly as the force for good many Canadians imagine their country to be. Since June 2009, Canada has supported a coup in Honduras; three Salvadoran activists who were organizing against Canadian mining company Pacific Rim Mining Corporation have been assassinated; one activist in Mexico has been assassinated for opposing yet another Canadian mining company, Blackfire Exploration; Foreign Affairs and International Trade has refused to advance a law to impose human rights standards on Canadian companies operating abroad; and Canada has taken a lead role in the free-market-oriented reconstruction of Haiti after the devastating earthquake in January, which follows Canada’s participation in the 2004 coup against Jean-Bertrand Aristide and the imposition of an aggressive neo-liberal regime on the country. At the same time, of course, the Canadian military has been participating in the ongoing occupation of Afghanistan, propping up a profoundly corrupt regime whose members include warlords with atrocious human rights records.

I could offer many more examples of Canada’s retrograde behaviour around the world. But these cases should suffice in challenging the notion that Canada is a benign force on the international stage or that its bad behaviour is restricted to a few isolated cases. What we see instead is a systemic pattern of self-interested, violent and destructive behaviour that cries out for a deeper analysis.

To make sense of Canada’s increasingly aggressive foreign policy and to comprehend the wreckage that Canada and its business interests are leaving in their wake as they stampede through the Third World, it’s important to grasp the significant transformations Canadian capitalism has undergone over the last 20 years of neo-liberal entrenchment. Canada, we must finally recognize, is an imperialist power; members of its ruling class think and act like imperialists. Support for coups and violent conflicts with local communities aren’t accidents, nor should the Left expect a change in policy without serious popular mobilization.

A mere middle power?

Many Canadians who take for granted that the United States is an imperial power are still reluctant to describe Canada in the same way. The U.S. is indeed the global superpower, and has a long history of invasions and support for reactionary regimes abroad to protect its own interests. Given the prominent role it has played in international affairs since the Second World War, its actions draw a great deal of scrutiny and criticism. But imperialism isn’t the sole domain of superpowers. No one would claim that Britain was the only imperialist nation when it was imposing its empire around the globe a century ago, even if it was the most powerful such force.

Rather, imperialism is about relations of power and domination in which countries (usually) of the Global North systematically drain the wealth and resources of the South via economic, political and military means. It’s driven by the contradictory dynamics of capitalist accumulation — particularly the overaccumulation of capital, in which too many factories, big box stores, mines, etc. are created to be deployed profitably — that underlie the economy’s recessionary tendencies and create constant pressure on companies to expand geographically in search of new markets. Imperial relations, in other words, are embedded in the system of global capitalism. They transcend superpowers, however important the latter are in setting and enforcing the rules of the game.

So how does Canada fit into this picture?

Canada isn’t some mere middle power riding the coattails of our superpower neighbour. That view of Canada was never really accurate, even before the dawn of the neo-liberal age. Canada has always had a self-interest to promote; Canadian capital has always had a controversial presence in the Third World, whether in banking in the Caribbean, manufacturing in apartheid South Africa or mining in General Suharto’s Indonesia. But the neo-liberal era, with heightened competition among multinational corporations and the aggressive market liberalization imposed on the Third World by the North (including Canada) has seen an unprecedented international expansion of Canadian capital.

The best measure for assessing the degree of Canadian capital’s penetration of third world markets is foreign direct investment. Foreign direct investment is cross-border investment (usually by multinational corporations) that represents at least 10 per cent of equity in the targeted asset, whether it be a factory, mine or newly privatized utility. It’s an important indicator of foreign penetration of national economies because 10 per cent equity typically gives the investor some degree of managerial control. Often, though, the equity stake is much higher than 10 per cent. Foreign direct investment has been a driving force behind neo-liberal globalization. It has increased significantly in the last 20 years, more rapidly in fact than the world economy as a whole. As many observers point out, foreign direct investment is one of the principal ways by which capital from the North has gained economic power and influence in the South during the neo-liberal period.

Canada is now one of the world’s major foreign direct invest­ors. By 2007, the cumulative stock of Canadian direct investment had reached $514.5 billion, and Canadian investors were active in 150 different countries. Over the last several years Canada has consistently ranked in the top 10 of the world’s biggest foreign investor nations in absolute terms. Among G8 nations, Canada has the fourth highest ratio of outward direct investment stock to gross domestic product. But it’s not just the growth of Canadian direct investment that’s important here: the global distribution of these investments has changed in important ways in the last couple of decades, expressing shifting preoccupations of Canadian capital.

As third world economies were being pried open by the International Monetary Fund and World Bank in the 1980s and ’90s, Canadian investors began to exploit the cheap labour, natural resources and sale of public assets in the region at an unprecedented rate. In the early 1950s, the Third World received approximately 10 per cent of total Canadian direct investment stock, but this has increased sharply since the early 1990s; by 2007 it received over 27 per cent. Canadian investment in the U.S. similarly reflects the overall shift in investment destination: from 1990 to 2007, the share of Canadian direct investment in the U.S. fell from 60 per cent of total Canadian direct investment worldwide to 44 per cent, even though Canadian assets in the U.S. tripled in absolute terms. In 2007, among G8 countries Canada had the second highest level of direct investment in third world countries as a proportion of gross domestic product. At the same time, income from direct investment in the Third World as a proportion of total investment income earned abroad has risen significantly, from just under 25 per cent for the years 1973-79 to over 45 per cent for 2000-07. In 2007, total after-tax income from Canadian direct investment in the South reached $18 billion.

Canadian investment is particularly strong in banking and mining, and Canada’s mining industry is the largest in the world. But Canadian companies are also prominent in sweatshop manufacturing, hydroelectric development and telecommunications, among other industries.

This dramatic growth of Canadian investment in the Third World has had serious repercussions for the communities where the investment is undertaken. Across industries and across regions, Canadian companies, often with the diplomatic and financial support of the Canadian state, are actively displacing indigenous and subsistence communities, undermining unions and engaging in ecological destruction. As a result, they face stiff resistance wherever they go. Conflict with local communities is a common feature of Canadian investment in the Global South, and has become increasingly well documented.

The necessary violence of imperialism

Canadian foreign and military policy developments over the past 20 years have been shaped by the rapid growth of Canadian capital’s presence in the Global South and the ensuing conflicts with local communities and anti-neo-liberal governments. Canada’s ruling elites have a clear stake in ensuring that the Third World remains a safe place to do business. Their aim is to ensure — to use the language of Foreign Affairs and International Trade (DFAIT) and the Canadian International Development Agency (CIDA) — “stability” “predictability” and “transparency” for Canadian investors. Not surprisingly, imposing liberalized market relations (which constitute “stability” “predictability” and “transparency”) and exploiting the South have become a central goal of Canadian foreign policy, as evidenced in policy documents coming out of DFAIT and CIDA. This in turn entails a more aggressive attitude towards any country or organization deemed to be threatening Canada’s financial interests or the sanctity of liberalized free markets more generally.

The aggressive pursuit of one-sided trade and investment agreements that lock in corporate rights over and above the human and environmental rights of local communities is a good example. This has been most advanced in Latin America and the Caribbean, where Canadian direct investment in the South is the strongest. Canada has 10 bilateral investment treaties and free trade agreements with six countries in the region.

Another weapon in the Canadian foreign policy tool kit is aid financing. Canadian aid policy has little to do with altruism towards the world’s poorest. Canada still imposes structural adjustment measures as a condition of receiving its aid. In line with Canada’s investment patterns, furthermore, Stephen Harper’s Conservative government has shifted Canadian aid priorities away from Africa towards Latin America, where Canada has been funding such things as the neo-liberal reorganization of mining sectors (as in Peru) or the rewriting of mining codes to strengthen foreign investor rights (as in Colombia).

A supposed commitment to human rights and democracy promotion has also served as a useful cover for advancing Canada’s financial interests abroad. American writer William Robinson has discussed the move towards “democracy promotion” in American foreign policy in Latin America since the 1980s, coinciding with the emergence of liberal democracy in countries previously ruled by U.S.-backed dictatorships. American aid funding, typically channelled through the National Endowment for Democracy (and implemented by the International Republican Institute and the National Democratic Institute) goes to parties and organizations sympathetic to U.S. interests. For Canada, democracy promotion has in practice meant funding right-wing “civil society” organizations like those that participated in the coups in Venezuela in 2002 and Haiti in 2004.

The Harper Tories, following suit, have plans for a new democracy promotion centre to better focus its activities in this regard. This comes, furthermore, as the Tories push the state-funded and supposedly non-partisan Rights & Democracy (aka the International Centre for Human Rights and Democratic Development) further to the right with their recent appointments to its board of directors. Rights & Democracy was not a progressive organization to begin with, having supported the right-wing opposition to Aristide in Haiti. Now it will be even more staunchly in the pro“‘imperialist camp, following the Tories’ appointment of Gérard Latulippe, the current resident director in Haiti for the National Democratic Institute, as its new president.

Security for capital

Like any good imperialist the Canadian state has put a premium on building up its war-fighting capacity in recent years. The Liberal government under Paul Martin (with its junior coalition partner the NDP) and the Harper Tories both committed billions of dollars of increased military spending in order to hire more soldiers and create a more efficient war machine with the capacity to deploy rapidly around the world. While the occupation of Afghanistan was used as the pretext for these spending increases, the reality is that the majority of new purchases won’t be obtained until after the military’s presence in Afghanistan has been scaled down considerably, suggesting the Canadian ruling class is thinking well beyond Afghanistan with respect to its military planning.

Since the end of the Cold War, military and political leaders have consistently stated that the world is more insecure and unstable than it was previously, while most of the potential threats to Canadian security, they suggest implicitly or explicitly, emanate from the Third World. It would be very short-sighted to think that the central place the South has taken in military thinking is merely coincidental to Canada’s economic interests. These interests are the main reason Canada is engaged in the Global South in the first place. There is zero risk of Canada being invaded by a southern country, and other supposed threats military planners sometimes refer to — terrorism, disease and an influx of refugees — are overblown and little more than racist tropes designed to promote fear of the areas and people we exploit.

The military interventions in Haiti and Afghanistan have demonstrated Canada’s willingness to employ dramatic levels of violence in order to be taken seriously by friend and foe alike, and, particularly in the case of Haiti, to promote the interests of Canadian capital. The Canada-as-peacekeeper myth — which was always a problematic narrative on a number of counts — can’t be sustained in the face of such violent military occupations, a fact which Canada’s ruling elite is happy to stress to both Canadians and the rest of the world.

The responsibility of the Canadian Left

Ecological destruction, violent conflict with local communities, support for unsavoury regimes such as the Lobo government in Honduras or Álvaro Uribe in Colombia, opposition to progressive governments such as Chavez’s in Venezuela, and military engagements — none of these things are accidental or the result of a misinformed policy. They’re the product of strategic decision-making by Canadian business and political leaders about how to best protect their interests abroad. And there’s no reason to think Canadian leaders will change their behaviour of their own accord. It’s simply not in their class interest. Our task on the Left, then, is to build a deeper anti-Canadian-imperialist consciousness, while fostering stronger bonds of solidarity with movements in the South struggling against imperialism in general and Canadian imperialism in particular. Only with these steps will it be possible to sustain the kind of movement that can challenge the destructive power of Canadian capital and the state abroad.

Todd Gordon is a socialist and activist based in Toronto. He is a co-author (with Jeffery Webber) of Blood of Extraction: Canadian Imperialism in Latin America.

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