National Policy - Assessment

Assessment

The assessment of the National Policy is mixed. In general, economists argue that it increased prices and lowered Canada's efficiency and ability to compete in the world. By not becoming merged into the larger, more efficient American economy, Canada built too many monopolistic firms, and too many small inefficient factories with high prices for consumers. The overall impact was not large because the policy applied only to the manufacturing sector, which played a relatively small role, compared to agriculture, fishing, transportation, mining, lumbering and services, which were not affected by the National Policy. Historians tend to see the policy in a more positive light, viewing it as a necessary expense to create a unified nation independent of the United States.

In the years right after the policy was introduced, Canada experienced the same type of economic boom that many other nations experienced, as well as the construction of a manufacturing base and the development of the nation, which is generally what the Tories and economic nationalists use to justify the policy. However, Canada also suffered a net population outflow, as more people emigrated out of Canada (usually for the United States), than arrived as immigrants.

Eden and Molot (1993) argue that there have been three national policies in Canada: the "National Policy" of defensive expansionism, 1867–1940; compensatory liberalism, 1941–81; and market liberalism, starting in 1982. The defensive expansion phase relied on the tariff, railway construction, and land settlement to build the country. The second national policy combined a commitment to the GATT system, Keynesian macroeconomic policies, and the construction of a domestic social welfare net. Current national policy relies on Canada-US free trade and NAFTA free trade, market-based policies, and fiscal restraint. They argue for a fourth policy called "strategic integration." It would consist of free trade, both external and internal; the building of a national telecommunications infrastructure based on the development and diffusion of information technologies; and human capital development.