Why Is Restructuring So Important To The FTA In Canada?

with a structural shift in taxation policy, with personal tax as a percentage of GDP increasing from 4.7 to 8.9% over the same period.

In the election of 1988 was played out on the principle of free trade. The electorate, despite voting a nearly two thirds majority in favour of rejecting free trade policy, split their vote between the NDP and Liberal parties. The incumbent Conservatives receiving 40% of the vote, quickly passed the Free Trade Agreement (FTA) in 1989 with Ronald Reagan. Tariffs would be categorically reduced between the two nations, massively expanding the exchange of goods between the two countries. Labour activism, which had been so prominent in the environment of economic nationalism in the early Trudeau era, was devastated. High unemployment massively decreased

100,000 manufacturing jobs were lost to the FTA in the early 90’s,a burden which fell disproportionately onto poor working class women, centred mostly in Quebec. Restructuring meant a relocation of jobs from native industry towards a growing service economy, with the frictional unemployment of this time increasing poverty rates by 17.8% by 1995. Fiscal policy during the Mulroney years mirrored the United States in its gradual reduction on social spending and the continuing transfer of taxation from business income to the incomes of Canadians. Fearful that higher regulation would result in further capital flight, the Mulroney conservatives found capitulation an easier pill to swallow. Canada’s trade relationship with the United States understandably increased, rising to 73.5% of total export in 1989 to 80.8% a decade later. Increased integration being a far cry from the Macdonald commission's conclusion that the state instrument was capable