William Watson: Brexit—Britain opts for the Canadian model

I found it strange, watching ITV’s exceptionally good Brexit referendum coverage on C-SPAN, that none of the many commentators and politicians interviewed through a very long night saw the closeness of the vote as undermining the force or legitimacy of the outcome.

In Canada, we’ve had bitter debates, federal and provincial laws and resolutions, and even a Supreme Court opinion about what would constitute a clear majority in a secession referendum. And with good reason. It’s impossible to know exactly what will happen after a constitutional schism of that sort—that’s the problem!—but there’s little doubt it’s a big, consequential decision. In a 52-48 vote, if one person in 50 changes his mind, things can go the other way. There was lots of comment last night about how it had been a very rainy day in London, the heart of Remain support, and that had kept turnout low. Do you really want to make such a big decision based on some Londoners not wishing to get their feet wet?

And yet everyone I saw interviewed seemed to assume that even a very thin majority—and 52-48 qualifies as that—meant Britain would leave the EU, albeit not right away, as, unlike in our case, Union rules govern how a dissociation takes place, but in a couple of years.   

In helping lead the Leave side, former London mayor Boris Johnson argued: Not to worry, “We can be like Canada,” by which he didn’t mean “and not make the NHL playoffs, either,” which neither of the two countries did this year. The be-like-Canada argument is that Britain can control her own borders, taxes and public spending and still trade freely with the rest of the world—though her borders may change if Scotland, Wales and Northern Ireland should decide they like Europe more than they like England.

Free trade and democracy, too, is a very attractive model. It’s my own preferred model. I’ve never understood why countries should have to form unions in order to trade freely with each other. I do understand why they sometimes feel driven to do so—they want to commit/submit themselves to international or supra-national regimes precisely to keep their local democracy from doing illiberal things, such as, for example, instituting supply management in key sectors like dairy, poultry and now even that quintessentially Canadian comestible, maple syrup. Politicians can say to constituents petitioning for protection: “I’d love to help you, I really would, but EU or WTO or NAFTA rules prevent me from doing so.” The danger, of course, is that in time the international institution takes on less useful obligations and limits local democracy in ways that aren’t really necessary and that lead to resentments deep enough to allow Brexit votes to succeed.

In citing the Canadian example, Boris Johnson pointed to the Canada-European Union Trade Agreement (CETA), which suggests that stand-alone countries like ours can make deals with big, complicated federations. He didn’t mention that CETA took an exceedingly long time to negotiate, still hasn’t been implemented, and in several areas falls well short of recognizably free economic arrangements. In any case, the better parallel is the Canada-U.S. FTA, which many of us think was very good for Canada, but in which we were clearly the junior negotiating partner. Britain is bigger in relation to Europe than we were in relation to the United States, but not by a lot. The standard rule in trade deals is that the smaller partner stands to benefit more since it will be adjusting more. But that does give the larger partner leverage in the negotiations. Free trade with Europe is now more important to Britain than free trade with Britain is to Europe.  

For a Fraser Institute project I’m doing on the income tax I’ve been reading House of Commons debates from 1917, the year the tax was introduced here. It’s remarkable just how closely Canadian politicians followed British affairs and imitated British practice.

Now the tide may be flowing the other way.

In recent years the U.K. has changed its House of Lords into something much more like our Senate (of all things!). It will be interesting if what our parliamentarians used to refer to as the “Mother Country” now looks to us for guidance on trade and economic relations.