Is Canada worth saving? Is democracy worth saving. These are the two
fundamental questions we must address now - before it is too late.

Canadian values are disappearing rapidly as we lose our independence and
our sovereignty. The country is being dismantled after more than a century
of nation-building. Our east-west transportation and communication links
are being replaced with north-south; many of our national institutions (the
CBC, the Canada Pension Plan, Environment Canada) are weakened; people are
feeling insecure.

We are losing control of our most important industries. As we give up
domestic ownership of our assets, we lose the most exciting and challenging
jobs which too often move to the new corporate headquarters outside Canada
- and young people who want those jobs must follow. It's part of the brain
drain.

In effect, Canada has become a victim of globalization. We are told this
process is both inevitable and good. It is only inevitable if we let it
happen. It is only good for two to five percent of the world's richest and
most powerful people. It is bad for the vast majority.

What we are not told is that there was more globalization 100 years ago
than there is now. This led to the stock market bubble of 1928, the crash
of 1929, the Great Depression and then World War II. We appear determined
to repeat the cycle.

It is important to remember that in the 19th and 20th centuries
globalization meant corporatization and colonization. The European
Imperial powers controlled much of the world. They pillaged the resources
of their colonies and exploited their labour. Today the world is headed in
that same direction. The current version of globalization is being
advertised as the road to Nirvana. In my opinion, it is the highway to
poverty, homelessness and disease for tens of millions of its inhabitants.

I should make a distinction between those areas where global cooperation is
both good and essential, and those areas where it is harmful. We must
cooperate globally to protect our oceans and stop using them as sewage
disposal systems. We have to protect the world's fish and shellfish stocks
and make them sustainable. Only global cooperation can do this.

We must also act cooperatively to protect the ozone layer and prevent
global warming. This is
not something any one country can do on its own. International cooperation
is essential. It is
also required to protect endangered species, fight international crime and
in other areas of mutual
concern.

- 2 -

What we have to stop is the relentless drive on the part of multinational
corporations and international banks - centred largely in the five big
powers - to take over governance of the world for their own benefit.

The Canada - U.S. Free Trade Agreement

The globalization process, which was not new, got a rocket-assisted boost
with the Canada-U.S. Free Trade Agreement (FTA). Canadians were led to
believe that this was a trade agreement. That's what the newspapers said.
I must admit that I was naive enough to believe them. Then, two or three
years later, I read it and found, to my dismay, that it was primarily an
investment agreement. Sure it called for reductions in tariffs, but this
was already happening under the General Agreement on Tariffs and Trade
(GATT). The most important parts of the FTA were about investment. The
Americans wanted our industries and resources - especially energy and
water. They also wanted our land. Instead of Canada being open for
business again, as Prime Minister Brian Mulroney proudly boasted, it was up
for sale.

Mr. Mulroney allowed the Americans to insert a "national treatment" clause
which was a new concept in international law which gave U.S. investors the
same rights in Canada as Canadian citizens. I think this is wrong in
principle! Where is the value of citizenship if foreign investors have the
same rights?

In fact, the "national treatment" clause gave American investors the right
to invest in Canada without conditions and without limits. We can no
longer say "You are welcome if you invest in Thunder Bay, or Trois Riviere;
or if you hire mostly Canadians, or export part of your output, or leave
the technology behind when you pull out, or respect the environment." No
conditions can be imposed!

Similarly, they can invest without limits. We can no longer say "You can't
buy more than 50% of our forest industry" - because the treaty says they
can buy it all. And we can no longer say "You can't own more than 80% of
our oil and gas reserves" - because the treaty says they can own all our
reserves. The same rule applies to our best farmland.

With the FTA, Brian Mulroney accomplished two things: He virtually
guaranteed the demise of Canada as a nation state, and he allowed Ronald
Reagan to do, with one stroke of the pen, what American generals and
American armies had failed to do on more than one occasion - and that is to
conquer Canada. The conquest is still tentative, perhaps, for about two
more years. Then we will reach the point of no return after which
annexation by the United States will become inevitable.

I want to stress that I am not anti-American. Many thoughtful Americans
are strongly opposed to corporate globalization. I am, however, dead set
against the annexation of Canada by the U.S. - and the end of our country.

Several hundred years of experiment in popular democracy is coming to an
end because globalization is really a code word for corporate rule and
colonization. And, in Canada's case, due to our unique geographical
location alongside the United States, first we have economic and cultural
colonization and then annexation.

- 3 -

In reality, the "national treatment" clause is the foundation for an empire
every bit as bad, and in some respects even worse, than the evil empire
which was the Soviet Union.

NAFTA - The Final Straw?

When we signed the North American Free Trade Agreement (NAFTA), we really
gave the store away. We granted U.S. and Mexican investors greater rights
in Canada than Canadian citizens enjoy. Chapter 11, the disputes
settlement chapter, allows foreign investors to sue if our governments -
federal, provincial or municipal - pass any laws or regulations that affect
their corporate profits or potential profits. And we are being sued.

The first suit was the celebrated Ethyl case. When the Canadian parliament
passed a law prohibiting the importation into Canada, or the distribution
within Canada, of MMT, a manganese-based gasoline additive, the U.S. Ethyl
Corporation sued the government of Canada.

Because our lawyers said we would likely lose the case, the government
settled out of court for $20 million in legal costs. Far worse, it also
agreed to repeal the law. So who is running Canada when a foreign
corporation can dictate to the Canadian parliament?

Equally bad, the settlement agreement required two Canadian cabinet
ministers to read statements to the effect that MMT was not harmful either
to the environment or to health at the very moment that the latest
scientific evidence suggested that it may indeed be injurious to the
health, especially of children.

The Ethyl case is the only one that has been settled but there are others
pending. The Sun Belt Water Corporation of California is suing for
$1.5-$10.5 billion because we won't let it sell our water. Pope & Talbot
Inc., a U.S. forest company with a large Canadian operation, is suing for
$500 million because it claims it was not treated fairly in the allocation
of quotas for lumber shipments to the U.S. (Why are quotas necessary if
free trade really means free trade?), and United Parcel Service (UPS) is
suing for about $200 million because it claims Canada Post is subsidizing
its courier service. These suits are just the tip of an iceberg that would
sink any Titanic.

The WTO is Anti-Democratic

The World Trade Organization is another threat to our democratic
traditions. It has ruled that the auto pact with the U.S. is illegal. It
has ruled that the European Union has to accept U.S. and Canadian beef that
has been raised on bovine growth hormones. It said that the U.S. could not
ban tuna caught in nets that drown sea turtles. (In every case involving
an environmental issue, the WTO has ruled against the environment.)

Now the WTO has ruled that our drug patents are too short and that, in
effect, we have to change our laws to correspond with U.S. laws. In
addition to this affront to our sovereignty, this ruling, if it stands,
means that we will have to pay untold millions more for drugs at a time
when our health care system is already in crisis from inadequate funding.

- 4 -

What Kind of Democracy?

The decline of democracy in the U.S. has reached the point where Lewis
Lapham, editor of Harper's magazine, says the U.S. has two governments -
the permanent government and the provisional government.

The permanent government comprises: (a) the Fortune 500 list of the largest
American corporations, (b) the largest law firms in Washington that do
their legal work for them, (c) the largest public relation firms in
Washington that do their advertising and public relations and, (d) the top
public servants both civil and military. These groups make up the
permanent government which really runs the country.

Then there is the provisional government - "politicians for hire". Every
few years there is a charade called an election which picks a political
actor to go on stage and read the scripts written by the permanent
government. As some actors read scripts with less improvization than
others, the permanent government checks them out in advance and decides who
they want. Then they put up the money to get them elected.

George Bush is the perfect stereotype. Listen to him on "free trade" and
foreign policy and you will know he is the actor of choice. No one else
need apply. Why did Elizabeth Dole drop out of the Republican race?
Because she was not the choice of the permanent government and didn't
have
the funds to continue. George Bush had the inside track and was given $68
million just to win the primary - the corporate choice to lead the free
world though, as comedian Rick Mercer demonstrated, he didn't even know the
name of Canada's prime minister.

There Are Strings Attached

The evolution of the system has led to a government that is little more
than a big bully enforcer for giant American corporations. If Time Warner
wants a bigger slice of Canadian magazine advertising revenue, it says to
Washington "go get 'em." The U.S. government goes to the WTO, which
doesn't know the difference between Maclean's and Time magazines, and gets
a ruling forcing us to accept U.S. split-run magazines. This is the most
blatant form of dumping imaginable - and, if the shoe were on the other
foot, the U.S. wouldn't tolerate it for a minute.

The net result is that Canadian taxpayers will have to provide subsidies of
$100 to $150 million a year to keep the Canadian magazine industry alive.

If Dole and Chichita want a bigger share of the European market for
bananas, they tell the U.S. government "go get 'em." And again the
government goes to the WTO. It doesn't matter that the U.S. doesn't even
grow bananas. Their giant corporations want to dominate world markets.
They want the European Union to drop any preference for its old colonies,
primarily Caribbean producers, small independent operators - usually women.
Then the giants can put them out of business, buy their land, hire them
for a few weeks a year as casual labour and leave them as unemployed
indigents for the balance of the year.

In a globalized society, people don't matter - only corporations do. Small
independent operators and family farms are doomed by globalization.
5 -

Aggressive Agribusiness

One of the coziest arrangements has been between the U.S. government and
Monsanto Corporation - now in the process of changing its name due to a bad
image. Monsanto is the company that gave us Agent Orange, the
allegedly-safe defoliant used in the Vietnam War which has been proven
unsafe and has now claimed thousands of casualties.

Monsanto is also one of the companies developing terminator seeds. These
are seeds that will grow a crop but cannot be replanted because they are
genetically altered to be sterile. This is one of the most frightening
developments in modern history. There are about one-and-a-half billion
subsistence farmers worldwide who depend on planting the seeds of plants
they grow in order to stay alive and feed their families. Attempts to
corner world seed markets and sell only genetically-altered seed would
impoverish millions of people.

When I learned that the U.S. Department of Agriculture had assisted
Monsanto in the development of such a patently evil product I wondered how
this could be possible in a democracy. Then I learned that one of
Monsanto's key directors was one of President Clinton's key fund raisers
and the light went on. Another case of putting profits far ahead of people
and nature.

It is a matter of national shame that the Canadian government has been
aiding and abetting the U.S. in promoting the interests of this destructive
company including its increased control of Canadian agriculture. In other
words, Ottawa is helping to drive Canadian farmers out of business. An
estimated 25,000 western farmers - some say this estimate is too low - will
go bankrupt this year. Twenty-five thousand families with no homes to live
in and no jobs to go to.

Another problem facing rural communities is that Canada is competing with
countries where farmers are more highly subsidized. In fact, our farmers
are the lowest subsidized producers in all the 29 Organization for Economic
Cooperation and Development countries (OECD), except New Zealand. This
situation is the result of naive but dangerous theorists in Canada's
permanent government who talk of globalization, rationalization and market
forces without understanding the consequences.

Globalization in agriculture means three or four giant agribusinesses are
determined to monopolize the world food supply with their
genetically-altered species and make us all dependent on them for our food.
As we capitulate, and let our farmers go under, these aggressive
corporations are buying up some of our best agricultural land.

National Fire Sale

At the same time, many of our best companies are being bought out. The
giant of the Canadian forest industry, MacMillan Bloedel, was sold without
a murmur of dissent. And on the other side of the continent, the Le Groupe
Forex. Club Monaco was sold, also Tim Hortons. Even Canada's famous
Canadarm, in which taxpayers had invested millions, was sold to an American
company.

Thirteen thousand Canadian companies have been sold to foreigners in the
last decade or so - more than 10,000 to Americans. And the pace is
quickening. In a stunning admission to the National Post in early March,
Industry Minister John Manley predicted the end of federal
- 6 -

restrictions that prevent foreigners from buying Canadian airlines,
communications companies and even banks.

This means that Air Canada will be bought by an American airline; ownership
of both Shaw and Rogers cable companies will move south of the border; Bell
Canada (with CTV in tow) will be bought by AT&T, and all the Canadian banks
will be bought by international banks the size of Citibank or Chase
Manhattan - and it won't matter whether our banks have been allowed to
merge or not. There will be nothing left of Canada but an empty shell.

Nothing is Sacred

Nothing is sacred; even Laura Secord Inc. has been bought by Americans.
This brave woman, who led her cow through the American lines to warn
General Isaac Brock of the imminent attack, was a reminder that we won the
war of 1812-14. Now we are losing this silent war without a shot being
fired. And the kind of corporate-controlled government that allows this to
happen is a cruel joke. Canada and the world are being re-engineered
without the consent of the citizens who are having their birthright sold
out from under their feet. There is no longer any pretense of popular
democracy.

Corporations Rule the World

The substitution of corporate rule for democracy is being imposed around
the world. Countries have to sign treaties that give transnational
corporations the right to cherry-pick their industries and assets. If a
country has a business that begins to cut into market share, the
transnationals can buy it, make it part of their empire, shut it down or
move it to Malaysia, for example.

If they do move the business to Malaysia, the same international treaty
will say that the cheap goods produced there must be admitted to the losing
country duty free. Furthermore, It would be pointless for the displaced
workers to buy the idle machinery and attempt to carry on because they
couldn't compete with the cheap foreign labour. Under the rules of
globalization, no country - other than the big five (or six) - can hope to
achieve anything like self-sufficiency.

Laissez-Faire Gone Mad

All of this change is justified in the name of laissez-faire economics
which insists that governments are bad and markets are good.
Government-owned services must be privatized. Even basic services like
health and education are on the block. Alas, for-profit providers of these
services are not accountable to sovereign citizens. They are only
accountable to "sovereign" shareholders.

This is all in accord with the ideas of Nobel laureate Milton Friedman and
his colleagues at the University of Chicago. At first, the Friedman system
(ideology) was called monetarism, but when that wasn't technically
accurate, it was renamed neo-classical monetarism - and, more recently -
just neo-classical economics. It should have been called retro-classical
rather than neo-classical because it is not new. It is the same old
pre-depression boom-bust system.

- 7 -

Neo-Classical Economics - A Dismal Failure

Mainline economists won't admit it, but their 25-year experiment with
neo-classical economics has been a monumental flop. If you compare the
data for the years 1949-1973 with the period 1974-1998 - the twenty-five
years since Friedmanism was adopted by central banks - you will see the
dismal results. In Canada, the average increase in GDP dropped 43% from
4.9% to 2.8 percent. Unemployment increased by 90% from an average of
4.74% to almost 9 percent. All of this resulted in a monumental 2,289%
increase in federal debt.

The increase in debt was not primarily due to overspending as the right
insists. It was primarily due to the slow growth of the economy and debt
compounding at high interest rates due to monetarist policies. Compound
interest was the real culprit.

The data for Australia, and even the United States, are almost as bad. But
world figures are the most shocking. From 1950 to 1973, the average
compound growth rate of per capita GDP was 2.9 percent. From 1973 to 1995,
it was down to a disastrous 1.1% - more than a 50% reduction.

So, when you see pictures of undernourished children, or read about the
millions who cannot afford to go to school, or even see the homeless people
in Montreal and Toronto, there is cause for these tragedies. They are due
in large part to bad economic theory and bad economic management.

You have to ask where the writers who talk about "the unquestioned benefits
of globalization" get their information. Based on the data, one is forced
to conclude they write fiction instead of fact. Or they are looking only
at corporate profits and ignoring all else.

People are the Victims

The cold statistics can be translated into the heart-wrenching experiences
of many Canadians.

If you are a doctor or a nurse, you are likely to find yourself so
overworked and stressed out that you are unable to provide the quality of
care you want to give.

The same can be said for many teachers whose workload has been increased to
the point where they have felt obliged to reduce or eliminate participation
in extra-curricula activities like drama or sports.

If you are a student, you may graduate with as much or more debt as the
mortgage on your parents' first house.

If you are mentally challenged, you may be forced to live on the street,
and ultimately die on the street, because the market has no place for you.

And, no matter who you are, if you lack skills, you may be unemployed from
time-to-time because a globalized market system is not designed for full
employment (four percent). Demand management, as practiced in the early
post-war years is a neo-classical "no no". Consequently, no one is secure.
Your company may be bought and downsized leaving you with few options
after long years of faithful service. This is just part of the price of
globalization.
- 8 -

Is There Any Hope?

There is hope but it will require a revolution of the intellect followed by
a revolution at the ballot box.

First, and immediately, we have to abrogate the FTA and NAFTA in order to
get rid of the "national treatment" clause that is killing Canada.

This does not mean turning the clock back ten years on trade! Canada can
compete in trade. We have proven that. But we cannot compete in
investment - we just don't have money on the same scale as the elephant
which is the reason we are losing control of our country.

So, we must try to replace the FTA and NAFTA with new fair trade agreements
and, if that is not possible, rely on the General Agreement on Tariffs and
Trade which served us so well for so long.

Once we are rid of the "national treatment" clause, we must start screening
foreign investment again and stop the sale of our best industries and with
it stop much of the brain drain.

Then, we must refuse to sign any more treaties, such as the FTAA (Free
Trade Agreement of the Americas) that will extend the "national treatment"
clause to the tip of South America. And, at the same time, we must take
health care, education, agriculture and intellectual property off the table
for the WTO negotiations. To give up our sovereignty in these important
areas would reduce all Canadian governments to a state of impotence. This
must not be allowed to happen! Canada should say "No!" to any extention of
WTO jurisdiction and influence until we can gauge the damage already done.

The Domestic Front

Once we have battened down the hatches on the investment front, we can turn
our attention to the domestic front. Here I speak from the perspective of
someone my age.

In 1938, there were no jobs in Canada. None. Then the war came along in
1939 and soon everyone was working - serving in the armed forces, building
factories or making munitions.

You might ask how this was financially possible? The Bank of Canada (B of
C) made it possible. The Bank of Canada started printing money and making
it available to the Government of Canada at near zero cost. It printed
money to buy Government of Canada bonds. The government paid the B of C
interest on the bonds; and the Bank paid the interest back to the
government by way of dividends. The net cost of the money was near zero.

The government spent the money into circulation and it wound up in the
private banks where it became what the economists called "high-powered
money." In effect, it became the monetary base which allowed the banks to
expand their lending and create money to build factories and lend to people
to buy war bonds.

The system, in a word, was one where the money-creation function was shared
between the Government of Canada, through the B of C, and the private
banks. It was the system that got us out of the Great Depression, helped
finance World War II, helped build the post-war
- 9 -

infrastructure including the St. Lawrence Seaway, the Trans-Canada Highway
and our big airports while helping to lay the foundation for our social
security network. It was the system that gave us the best 25 years of the
century!

In 1974, the Bank of Canada owned more than 20% of federal government debt
- the equivalent of an interest-free loan. But that is the year our
central bank adopted the ideas of Milton Friedman and began to give back to
the private banks their virtual monopoly to "print" money.

The result is that today the B of C only owns about 4% of federal
government debt and the shortfall has to be borrowed from the market,
including the private banks, at high interest rates. In effect, taxpayers
are subsidizing the private banks by $4-$5 billion a year. There is
insufficient space to discuss monetary theory here but anyone who is
interested can read books on the subject including one or two of mine such
as Surviving the Global Financial Crisis, or Stop: Think, the latest one.

The Bottom Line

The bottom line is that a system where private banks print nearly all of
the money is not a stable system (44 recessions and depressions in 200
years) and is not one that will provide full employment for Canada or the
world. There is simply not enough money in the hands of rank and file
consumers.

So, we have to learn the lessons of history and revert to the system we had
in effect from 1939 to 1974. Access to significant amounts of
publicly-created, zero cost (debt free) money is the only way governments
can meet the conflicting demands of increased expenditures for health care,
education, environmental concerns, research and development, the arts and
other legitimate areas of public concern while permitting lower taxes at
the same time. There is no other way to reconcile the claims of left and
right.

The War for Independence

The next federal election will decide Canada's fate. If any party - or
combination of parties - that supports the FTA and NAFTA forms the next
government, Canada is dead. And I mean all of Canada, including Quebec.
After 400 years, the French language and culture will be on an
irreversible slide to extinction.

Our only hope is a genuine alliance of patriotic Liberals, Conservatives,
Reformers, NDPers, Bloc Quebecois, and even people too cheesed off to vote,
getting together in one powerful movement to turn the ship of state around
before it is too late. An independent Canada is best for us, the United
States and the world. If we really believe that, we all have to enlist in
Canada's war for independence and make it happen.

GLOBALIZATION IS KILLING CANADA

An address by
Hon. Paul Hellyer
May, 2000

Is Canada, including Quebec with its distinct language and culture, worth
saving? Is democracy worth saving? These are the two fundamental
questions we must address now - before it is too late.

Canadian values are disappearing rapidly as we lose our independence and
our sovereignty. The country is being dismantled after more than a century
of nation-building. Our east-west transportation and communication links
are being replaced with north-south; many of our national institutions (the
CBC, the Canada Pension Plan, Environment Canada) are weakened; people are
feeling insecure.

We are losing control of our most important industries. As we give up
domestic ownership of our assets, we lose the most exciting and challenging
jobs which too often move to the new corporate headquarters outside Canada
- and young people who want those jobs must follow. It's part of the brain
drain.

In effect, Canada has become a victim of globalization. We are told this
process is both inevitable and good. It is only inevitable if we let it
happen. It is only good for two to five percent of the world's richest and
most powerful people. It is bad for the vast majority.

What we are not told is that there was more globalization 100 years ago
than there is now. This led to the stock market bubble of 1928, the crash
of 1929, the Great Depression and then World War II. We appear determined
to repeat the cycle.

It is important to remember that in the 19th and 20th centuries
globalization meant corporatization and colonization. The European
Imperial powers controlled much of the world. They pillaged the resources
of their colonies and exploited their labour. Today the world is headed in
that same direction. The current version of globalization is being
advertised as the road to Nirvana. In my opinion, it is the highway to
poverty, homelessness and disease for tens of millions of its inhabitants.

I should make a distinction between those areas where global cooperation is
both good and essential, and those areas where it is harmful. We must
cooperate globally to protect our oceans and stop using them as sewage
disposal systems. We have to protect the world's fish and shellfish stocks
and make them sustainable. Only global cooperation can do this.

We must also act cooperatively to protect the ozone layer and prevent
global warming. This is
not something any one country can do on its own. International cooperation
is essential. It is
also required to protect endangered species, fight international crime and
in other areas of mutual
concern.