Canada was catching up to the United States both socially and economically, thus removing the traditional tag of “poor cousins” to the North. Since, the real wages of the people rose; it improved the living standards dramatically. This “golden age” post-World War II ran up to defy its own internal contradictions and limits. The fine tuning of Keynesian welfare state which was defined by rising standards of living, strong profits and investments in capitalist countries had begun to disintegrate. Michal Kalecki, an economist from Poland, predicted that just as Keynesian welfare state era was consolidated, the free market capitalism would also experience a situation of ‘full-employment”. Also, workers were empowered by the income security and long-run employment. This had led to increasing conflict in maintaining of low cost workforce by capitalist employers. This, in turn, leads to the formation of an interventionist state which brought with it strict regulations and substantially rising taxes. The geographic scope of the capitalism was curtailed by the movement of national liberation throughout the world. Consequently, the underlying engine of the expansion in post-war Canada—business investment—had slowed eventually.
Despite correcting market distortions, neoliberalism has not been successful in creating the global economy which is efficient and stable. Consistent with the trend throughout the world, Canada has experienced the harsh effects of neoliberalism. This has also highlighted the weaknesses in the capitalist system of Canada. There have been three historical moments of neoliberal practices and principles in Canada which best describe the varied impact of neoliberalism. These three key moments (which led to the evolution of a resource dependent, business dominated and unequal society) in the trajectory of Canada are discussed as follows:
Firstly, there was a dramatic shift in the impact of monetary policy in the mid-1980s. The emergence of high rate of interest and the abandonment of full employment level was considered as the prime goal of the macroeconomic policy of Canada (Friedman, 2002). This change in the monetary policy is a common feature of neoliberalism which was applied everywhere, even in Canada. Secondly, in 1989, free-trade was implemented between United States and Canada. This was followed by the inclusion of Mexico into the NAFTA (North American Free Trade Agreement) free trade zone. NAFTA has increasingly impacted the economy of Canada by providing free deals of trade around the world (Robinson, 1998). Thirdly, just after the turn in the century, beginning in 2002, Canadian economy witnessed a dramatic rise in the country’s dependency on the extraction of resources and exports especially petroleum. The resource-driven structure has had huge implications on the labour market, trade between countries, and on the environment. This restructuring occurred based on the foundation of FTA (Free Trade Agreement).
The problem of Neoliberalism as the dominant force in Canada has more to do with the abrasion of democracy for the participation of people and less to do with the persuasion of mass.