Canadian Agenda

At the Summits held in this decade, Canada's agenda has diverged in two respects. First, during the 1980-1983 period, Canada's domestic policy agenda was deliberately and openly dirigiste, interventionist on foreign investment and energy policy, protectionist and mercantilist in trade policy (e.g., automobiles, textiles and shoes) and fiscally expansive through uncontrolled federal spending.

Whatever direct impact these measures have had on Canada s diplomatic efforts among G-7 countries may be open to interpretation. What is clearer is the impact on the domestic economy, particularly fiscal policy and the huge build-up of national indebtedness, from an estimated $254.4 billion in 1975 to $852.4 billion in 1985 and 5950 billion in 1986.⁽⁷⁾

Since 1984, the Mulroney government has implemented two fundamental changes in the national policy agenda. First, for the first time since 1945, the federal government introduced a coordinated and frontal attack on federal spending. Spending increases on non- discretionary programs have been limited to about 2 per cent per annum; discretionary spending has actually declined. Even with what some critics call draconian measures, it will still take until 1990 before the rate of growth of federal debt falls below the rate of national economic growth.

The second broad change in national policy has been to make Canada's relations with the US the fundamental leitmotif of foreign policy. During the earlier period, Canada had attempted in a variety of ways to put distance between domestic policy and US relations on energy policy, on foreign investment, on military spending, on East-West relations and on North-South issues. In the domestic political context, the federal government of Prime Minister Trudeau enjoyed some political success with this approach. However, as the domestic economic performance deteriorated, and as domestic regional tensions mounted, public opinion gradually shifted to a recognition of the upper limits of this strategy. Moreover, in the international context both Prime Minister Thatcher and Prime Minister Nakasone made closer relations with the US as a cornerstone of their governments, thus exacerbating the tensions both in personalities and in policies at the Williamsburg and Versailles Summits.

The Mulroney government's domestic economic agenda, and the resulting economic performance, place Canada much closer to the broader consensus position of the Summit countries on macroeconomic issues. Indeed, this was not an inconsiderable context in Canada's (and Italy's) admission to the G-7 Economic Club at the Tokyo Summit, and an important influence on Canada s ability to advance such issues as agricultural subsidies (at Tokyo and Venice), debt relief for middle range Third World countries (at Bonn) and Canada's position on South Africa at the 1987 Venice Summit.