Why the U.S. and Canada should merge

  • Article by: J. DANA STUSTER , Foreign Policy.
  • Updated: October 9, 2013 - 5:02 PM

Obstacles are enormous, but so are the reasons for uniting.

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Imagine, if you will, a moment in the not-too-distant future: A decades-long effort by Chinese companies to infiltrate Canadian banking and drilling firms has succeeded in securing Canada’s oil and natural gas fields for pillage. At least some money from these deals trickles into Ottawa’s coffers, which is more than the government can say for its oil in the Arctic, where Canada has been muscled out of its claims by extraction companies with the backing of the Russian government. A network of Chinese ports has secured the sea lines along the Northwest Passage, circumscribing Canadian sovereignty, and Canada’s military, enfeebled after years of reliance on the United States, is powerless to resist. Canada effectively lapses into a vassal state, reliant on neocolonial patriarchs in Beijing and Moscow.

This dystopian scenario isn’t the plot of an episode of “The Twilight Zone” or some modish alternate-history, sci-fi story — it’s the threat laid out by Diane Francis, a veteran business reporter and current editor at large of Canada’s National Post, in her newly released book, “Merger of the Century: Why Canada and America Should Become One Country.”

While she frames the book as a “thought experiment,” she believes a U.S.-Canadian union is essential to both countries’ futures — that facing economic infringement, “a merger makes good business sense.” She’s thought it through, down to the last dollar each Canadian should be compensated for their natural resources in a U.S. buyout.

“The Russians have thrown down the gauntlet in the Arctic. . . . And the Chinese have targeted our resources, along with everyone else’s,” Francis told Foreign Policy by phone from Canada. They’re “the wolves at the door,” Francis says; she frames the situation in terms of “prey and predator” in the book.

“They’re gaming the system,” she said. “And I think they’re brilliant. I think they’re doing a great job feeding their population, frankly, and educating them, but we understand that they have an objective.” Their goal is to break into the biggest, wealthiest markets: the United States and the European Union. “Canada is . . . peripheral to the United States, as Turkey is to the EU, and you’ll notice that the Chinese start to do business not in the EU, but in the periphery — Bulgaria, Turkey. They just landed a big contract for their avionics, their air-traffic controls. They’re building bridges; they’re building roads.”

Canada, she says, “is a back-door entry into the main markets that they really want to get into but are somewhat prevented from.”

For now, the United States and Canada are “nations in distress,” falling prey to dangerous investments while their military and diplomatic power slips relative to the rest of the world’s. “Without dramatic change,” she writes, “Canada will remain . . . somewhat sleepy and vulnerable. The United States will continue to go broke buying foreign oil and cheap goods from Asia, then guarding countries that could and should pay for their own protection and, while they are at it, ‘buy American.’ ”

“There has to be some kind of strategy,” she said

Francis was born in Chicago and holds dual citizenship — but she’s not some American agent provocateur. She acknowledges there is a certain paranoia about American intentions north of the border. “I think it’s a function of being the little guy next to the big guy and always having to worry,” she says.

But there are real benefits to the merger, especially for Canada. By erasing the border, Canada would gain a military with a stake in protecting its resources from foreign incursions, and the investment capital and people to develop oil, natural gas and other mining projects in the country’s undeveloped north. The United States, for its part, would have access to an estimated 13 percent of the world’s remaining undiscovered oil reserves and 30 percent of its undiscovered natural gas. “The most obvious synergy,” she writes, “would be matching Canada’s undeveloped resource potential with America’s money, markets and workers.”

In particular, Francis, who is a director for Aurizon Mines Ltd., which operates a gold mine in Quebec, wants to see the United States invest in infrastructure in Canada’s far north, which currently lacks the roads, ports and pipelines necessary to make resource extraction possible. “That kind of a Marshall Plan with infrastructure and so on — that would create millions of jobs, both sides of the border,” she says. “The Americans should just roll up their sleeves and get on with it, because they’ve got the capital and they’ve got the market for the stuff. At the very least, there’s got to be some kind of a joint venture, economically, and I say, ‘Let’s pick our partners.’ “

It’s a perspective that smacks of protectionism — though Francis objects to the word. “It’s protectiveness,” she stresses. “I think that investing should only be done with one test in mind, and that’s reciprocity. If the Chinese can buy Smithfield Foods, then the Americans can buy the Chinese company that wants to buy Smithfield — but we can’t. It’s all one-way, and that’s what they’re doing and they’re doing that everywhere. It’s like, ‘Heads, I win. Tails, you lose.’ ”

In the book, she describes a “new cold war . . . being fought on economic grounds.”

Francis imagines a half-dozen ways a merger could take place — how the United States might buy out Canada, Louisiana Purchase-style, or set up resource funds to pay dividends to Canadian citizens. Politically, Canada’s provinces might seek entry as U.S. states — or perhaps as a commonwealth if Quebec wished to preserve a government of its own. They could form a federal union, ala unified Germany, create an overarching council (the Swiss model), or establish a coordinating government (the European Union model).

Francis never coins a name for her potential superstate. If Canada’s provinces became U.S. states, then they would simply be absorbed into the United States of America. But as for the other models, who knows? Canamerica reads too much like a question, while Ameri-Canada sounds slightly better.

What would a united Ameri-Canada look like? In terms of acreage, it would be the largest country in world — surpassing Russia, even all of South America, in size. Its economy would be larger than the EU’s. Since each country is the other’s largest trading partner, trade deficits would shrink. Canadian oversight at the Fed would bring stability to American banking. With all its energy needs met domestically, Ameri-Canada would be a lucrative petrostate, exporting oil to the developing world.

For all the benefits — energy self-sufficiency, secure borders, a cross-border maple syrup pipeline if we’re lucky — the merger would not be without consequences. Francis bets that the long-term economic incentives would outweigh the baggage Canada brings with it.

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