Canadian Trade Policy in the Age of American Dominance and British Decline, 1943-1947

Abstract

"Canadian trade with both the United Kingdom and the United States is of a complementary nature, and is a classic example of a basically sound division of labour," the Rowell-Sirois Commission wrote in 1940. It continued: "Canada's position is similar to that of a small man sitting in a big poker game. He must play for the full stakes, but with only a fraction of the capital resources of his two substantial opponents; if he wins, his profits in relation to his capital are very large, and if he loses, he may be cleaned out."1 In the 1930's, this economic equation had not worked very well for Canada. Buffeted by an unfavorable international economic climate, Canada in 1938 possessed a standard of living lower than that of Great Britain; it went without saying that the American standard of living was an unattainable height for most Canadians.2 The small man in the poker game had been nearly cleaned out, a fact which few Canadian officials or economists dared forget in the years that followed.