Why Canada and the U.S. Should Merge, Eh?

[OttoVonBismarck]

Why Canada and the U.S. Should Merge, Eh?
It's past time for the two countries to eliminate their border

By DIANE FRANCIS
Dec. 6, 2013 5:51 p.m. ET
When Americans think about Canada—and that doesn't happen often—they usually think of us as the nice, predictable guy next door who never plays his stereo too loud. Even Rob Ford, Toronto's ranting, crack-smoking mayor, has barely dented our squeaky-clean image.

But Americans shouldn't just think more about Canada. They should consider building on the two countries' free-trade deal and forming a more perfect North American union. It is past time for the U.S. and Canada to eliminate their border—either by creating a customs and monetary union or, more radically, by merging outright into a single nation-state or a European Union-style partnership.

Such a merger makes perfect sense. No two countries on Earth are as socially and economically integrated as the U.S. and Canada. They share geography, values and a gigantic border. Their populations study, travel and do business together and intermarry in great numbers. If they were corporations (or European states), they would have merged a long time ago. And each has what the other needs: The U.S. has capital, manpower, technology and the world's strongest military; Canada has vast reserves of undeveloped resources.

Of course, even the most mild-mannered Canadian may sputter at the prospect of being swallowed up by the U.S., and Americans may wonder about the wisdom of absorbing their huge neighbor. But it needn't be so radical. Nobody is proposing that Canada become the 51st state.

Like modern businesses, modern nations must constantly recalibrate their economic and political models. The smartest people in a room prevail until a smarter group comes along. And unless winners adapt, they eventually lose out, in economic and political life as in nature. Today's U.S. or Canada could become tomorrow's Portugal or Greece. In the competitive and interconnected world of the 21st century, countries that stand still will be left behind.

The two North American neighbors increasingly find themselves staring down the barrel of state capitalism, as practiced above all by China, whose state-owned enterprises and sovereign-wealth funds have made a concerted effort to capture markets and resources. In October, the International Monetary Fund's World Economic Outlook database forecast that by 2018, China's economy will be bigger than that of the U.S.—and Asian economies will be bigger than those of the U.S., Canada, Germany, Britain, Italy, France and Russia combined.

If Canada and the U.S. were to join forces, the tables might well be turned. The North American neighbors would become an even more formidable superpower, with an economy larger than the European Union's and a land mass bigger than South America's. The new union would top the world in energy, minerals, water, arable land and technology, and all of it would be protected by the U.S. military. Size matters.

Canadians have traditionally bristled at the thought of falling under the sway of the U.S., but without a deeper cross-border partnership, we face some grim existential challenges. With its small, aging population and relatively small economy, Canada lacks the resources to develop and defend its gigantic piece of real estate. Through a series of aggressive buyout attempts and transactions, China has targeted Canada's resources and empty landmass. In 2007, Russia used a small submarine to symbolically plant its flag on the ocean floor beneath the North Pole and underscore its claim to a large swath of the resource-rich Arctic, and Russian President Vladimir Putin has been pushing the U.N. to affirm his claims to the region.

The U.S. faces serious challenges of its own. It must create millions of jobs for its relatively young population, and even as its political system grows more sclerotic, it must compete for markets, resources and Arctic access with the aggressive practitioners of state capitalism.

Truth be told, the merger of the U.S. and Canada is already well under way. As many as one in 10 Canadians (more than 3 million people) live full- or part-time in the U.S., and an estimated
1 million Americans live in Canada. As of 2010, U.S. enterprises controlled about 10% of Canada's assets, 17% of its revenues and 13% of its corporate profits, according to Statistics Canada. Canadians bought more goods and services from Americans than did the 340 million people living in the European Union—a population 10 times as large.

A still deeper integration could drive major economic growth. Canada's hinterland is largely without infrastructure or development, even though it contains enormous untapped natural resources. Political disputes have also stranded some of the world's most promising hydroelectric and tidal power prospects in the Canadian provinces of Quebec, British Columbia, Manitoba, Newfoundland and Nova Scotia.

Despite the powerful logic of a U.S.-Canada merger, the obstacles remain daunting. Both countries are divided politically and heavily regionalized. To execute so audacious a move would require a level of statesmanship now lacking in both countries.

But remember, the Europeans pulled off something far more dramatic, uniting populations that shared no language and had slaughtered one another for centuries. Other recent examples of deeper integration include the Eastern Caribbean Economic and Monetary Union and the Economic Community of West African States. They all did it by opening their borders to trade and travel—while at the same time leaving governments intact.

Opinion surveys about an outright merger are scant, but as far back as 1964, a poll showed support from 49% of Canadians. In 2007, the World Values Survey Association, a research network of thousands of social scientists, found that about 77% of Americans and 41% of Canadians said they would opt for political union if it meant a better quality of life. In 2011, another poll by Harris/Decima showed that 65% of Canadians backed greater integration with the U.S. and supported a plan to eliminate the border by blending U.S. and Canadian customs, immigration, security and law enforcement efforts.

Those who oppose such a merger are on the wrong side of history. When the North American Free Trade Agreement passed in 1987, the U.S. and Canada (along with Mexico) began a mutually beneficial process of integration that now needs strengthening. Untended, the border has become clogged, damaging trade and tourism. And the wolves are at the door. Just this year China, Inc. picked off a large Canadian oil company and a large American food processor and exporter, without promising either country any reciprocal buyout privileges in China.

Serious discussion of a merger should be a top priority for both the U.S. and Canada. The continental neighbors need one another more now than ever before, and the status quo grows less viable by the day.

—Ms. Francis, a dual Canadian-American citizen, is the author of "Merger of the Century: Why Canada and America Should Become One Country," published by HarperCollins.

I'm posting this mainly because of the strange proportion of Canadians here. From what I can tell I mostly agree with the article, which appears to have been given an eye-catching title that has nothing to do with the article itself (and if the author's book is similar I guess you could say the same about it.) The author seems to acknowledge that a true political union is both undesirable and wouldn't happen, but I'm all for more trade and closer integration of economic activity. I don't see any real benefit to a combined currency though, unless there is some benefit on the Canadian side I'm not seeing.

But really I think what the author advocates mostly already happens. We already do much of what she's advocating. Her painting a closer union as a way to magically weaken China makes no sense, as I think our current relationship in no way makes us more or less vulnerable to China nor is it particularly frightening to me when China buys an American pork producer or invests in Canadian natural resources.

But I would be happy to see the border more easily crossed, it's stupid how long it takes these days (least the last time I drove it) and as I understand it border communities on both sides regularly deal with a lot of headache because of the traffic backups. I'd be fine with going back to pre-9/11 style no-passport wave-through crossings and would probably be fine with no real border controls at all on the land borders. Although I suspect the American pharmaceuticals lobby would be opposed to it as it would make getting Canadian pharmaceuticals essentially zero-effort for Americans living near the border.

I would also be fine for cross-border employment to be a bit saner. I've known of a lot of situations where a company in the United States is working with a company in Canada, and the company in Canada does stuff like corporate training. Well, when one of the Canadian corporate trainers needs to fly into Chicago for a week to do a training session there's more paper work and short term visas etc because they are "working" in the United States. I tend to think as long as your paycheck is paid by a Canadian company you should be able to do actual work in the United States without any kind of visa requirement and vice-versa.

[Neil]

Obviously they could never be united, but there could be some work with visas and stuff.

[grumbler]

I've heard reports that try to justify the new border restrictions with Canada based on Canada being too Porous when it comes to allowing in outsiders, but have never seen any actual evidence.  I suspect those reports were written with the idea that more border controls = need for more guards = more bureaucratic "win" for the ICE bureaucrats.

Agree that we should return sanity to the border and restore the traditional wave-through system, or, better yet, just open the border completely.

[Zanza]

Making everyday life easier for their citizens by cutting paperwork like visas or work permits certainly sounds sensible.

[Malthus]

Making everyday life easier for their citizens by cutting paperwork like visas or work permits certainly sounds sensible.

Yeah, I'm not really seeing a downside here.

[Queequeg]

It would pretty much wreck the GOP's footing, so I'm all for it. 

[Neil]

It would pretty much wreck the GOP's footing, so I'm all for it.

Except even the Democrats are far too right-wing to pass muster in Canada.  Canadians have no desire to be stripped of proper health care, nor be exposed to the hordes of weapons that everyone in the US is packing.  The border is there to protect us.

[Queequeg]

Uh, how is that a bad thing?  We'd push through single payer and almost completely destroy any remaining political influence the South has on this country.  You'd be saving us.

[OttoVonBismarck]

It would pretty much wreck the GOP's footing, so I'm all for it.

You obviously didn't actually read the article. 

Except even the Democrats are far too right-wing to pass muster in Canada.  Canadians have no desire to be stripped of proper health care, nor be exposed to the hordes of weapons that everyone in the US is packing.  The border is there to protect us.

I don't think it's really that simple. American Democrats are farther left than Canadian conservatives on a lot of issues, especially the more liberal wing of the party. Blue Dogs and old school Southern Democrats wouldn't find a political home in Canada but they are mostly dying off here as well. The Liberal Party and the Democratic party both reflect realities of the countries in which they operate, but I don't think the average American Democratic voter would have any issue pulling the lever for the Liberal Party and would be a lot more inclined to vote Liberal than Conservative, and there are a lot of independents and Republicans in America who would vote for the Conservative Party. In fact I think if the GOP was less Tea Party and more like the Canadian Conservative Party the GOP would be the majority part with most of the independents identifying with them.

The health care issue is a historical quirk more than anything else. Same as it is in Britain, if LBJ had pushed for an NHS style system or FDR had, then neither party today would be arguing to completely dismantle it. Note how careful even guys like Rick Perry are to say they don't advocate actually undoing Medicare or Social Security. When Canada and the UK passed single payer healthcare it was a much smaller issue. FDR most likely could have done the same, but because of the wage controls he had put in employers had started footing health care costs as a way to attract employees so the need wasn't there.  Back then healthcare was a much smaller part of the economy, almost no one had a regular relationship with a doctor and many expensive chronic conditions or debilitating diseases were handled a lot more cheaply. (Cancer is a lot cheaper to deal with in 1930s technology than in 2013.)

If America ever has sweeping healthcare reform it will be in the German model, where you have universal coverage but multiple payers and private options. Obamacare in a sense is just a really poorly implemented version of that, actually.

[Grey Fox]

I think it would destroy both the Democrats & GOP.

[The Brain]

I don't think the US is ready to surrender yet.

[CountDeMoney]

I'm all for expanding the U.S. National Park Service.  "The Yukon National Park & Wildlife Preserve" sounds nice. 

[Neil]

Uh, how is that a bad thing?  We'd push through single payer and almost completely destroy any remaining political influence the South has on this country.  You'd be saving us.

That's not what would happen though.  The Democrats are just as dependent on the money from the health care industry as the Republicans.  You'd be spreading their poison to us.

[Neil]

It would pretty much wreck the GOP's footing, so I'm all for it.

You obviously didn't actually read the article. 

Except even the Democrats are far too right-wing to pass muster in Canada.  Canadians have no desire to be stripped of proper health care, nor be exposed to the hordes of weapons that everyone in the US is packing.  The border is there to protect us.

I don't think it's really that simple. American Democrats are farther left than Canadian conservatives on a lot of issues, especially the more liberal wing of the party. Blue Dogs and old school Southern Democrats wouldn't find a political home in Canada but they are mostly dying off here as well. The Liberal Party and the Democratic party both reflect realities of the countries in which they operate, but I don't think the average American Democratic voter would have any issue pulling the lever for the Liberal Party and would be a lot more inclined to vote Liberal than Conservative, and there are a lot of independents and Republicans in America who would vote for the Conservative Party. In fact I think if the GOP was less Tea Party and more like the Canadian Conservative Party the GOP would be the majority part with most of the independents identifying with them.

The health care issue is a historical quirk more than anything else. Same as it is in Britain, if LBJ had pushed for an NHS style system or FDR had, then neither party today would be arguing to completely dismantle it. Note how careful even guys like Rick Perry are to say they don't advocate actually undoing Medicare or Social Security. When Canada and the UK passed single payer healthcare it was a much smaller issue. FDR most likely could have done the same, but because of the wage controls he had put in employers had started footing health care costs as a way to attract employees so the need wasn't there.  Back then healthcare was a much smaller part of the economy, almost no one had a regular relationship with a doctor and many expensive chronic conditions or debilitating diseases were handled a lot more cheaply. (Cancer is a lot cheaper to deal with in 1930s technology than in 2013.)

If America ever has sweeping healthcare reform it will be in the German model, where you have universal coverage but multiple payers and private options. Obamacare in a sense is just a really poorly implemented version of that, actually.

I think that there are some differences between how they approach things.  Because Canada doesn't have huge urban populations of people who are trapped as an underclass due to their ancestors being slaves, you don't see the same kind of identity politics on a national level in Canada.  I guess it's difficult to say how things compare, since a lot of the things that the Democrats support are things that are already done in Canada.  I suppose taxation and regulation are things where the Conservatives would definitely be more like Republicans than Democrats, although obviously not as bad as the modern Republicans.  I think that the CPC is sort of in a 1970s progressive Republican space.

[MadImmortalMan]

I'm skeptical of Canada's ability to pull the US one way or another too much. They only have 10% of the population the US has.

But hey--they can't be made into a single nation-state. And the US already has a method for incorporating new states. They just have to apply.