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Perceptions of Brexit in Canada: Transatlantic Relations and Domestic Politics

Perceptions of Brexit in Canada: Transatlantic Relations and Domestic Politics

Achim Hurrelmann (Carleton University)

While there has not been a broad debate about Brexit in the Canadian public sphere, the prospect of the UK’s withdrawal from the EU has generated considerable attention among Canadians. As a former part of the British Empire, Canada has retained close economic, political and cultural ties to the UK, and many Canadians view the UK as Canada’s most important partner in Europe.

Yet Canada-UK relations have, for more than forty years, been embedded in European integration. This was recently affirmed by the conclusion of the Canada-EU Comprehensive Economic and Trade Agreement (CETA) and Strategic Partnership Agreement (SPA). For Canada, Brexit means that its relations with the UK and its relations with the EU, which are currently firmly integrated, will have to be disentangled. This constitutes a challenge for Canadian foreign policy, and it also has the potential to reverberate in Canadian domestic politics.

Disentangling Canada-UK Relations from Canada-EU Relations

The foreign policy challenge that Brexit poses for Canada is most pronounced in the economic dimension of the relationship. To be sure, trade with Europe is much less significant for Canada than trade with the United States. Yet given the aggressive and unpredictable trade policies pursued by US President Donald Trump, attempts at reducing Canada’s economic dependency on the US have assumed a new urgency. Especially in the light of CETA, Europe is a primary target for Canadian trade diversification strategies. Canada and Europe also have strong investment relations, with the EU accounting for roughly one quarter of Canada’s inward and outward foreign direct investment.

Brexit represents a complication in Canada’s efforts to forge closer transatlantic economic ties. At present, Canada’s trade and investment relationship with Europe is primarily channeled through the UK. The UK is the destination for roughly 40% of Canadian exports to the EU and accounts for around 50% of EU-bound foreign direct investment. If the UK leaves the EU customs union and single market, as the British government has proposed, CETA will cease to apply to the UK, and a new Canada-UK economic agreement will need to be negotiated. Canadian policy makers and businesses will also watch closely how the EU and the UK restructure their economic relationship, since this will affect Canadian companies that have invested in the UK to serve the EU market.

In non-economic domains of the Canada-Europe relationship, the challenge of Brexit is less immediate, but nevertheless important in the longer term. Canada-EU relations on non-economic issues are now governed by the SPA. This agreement was concluded alongside CETA at the insistence of the EU, while the Canadian government initially saw little need for complementing the economic with a political agreement. The SPA establishes a framework for a broad range of thematic and geographic dialogues, on issues ranging from climate change to scientific cooperation; it has led to a greater institutionalization of political relations between Canada and the EU.

However, the SPA does not preclude transatlantic cooperation in other settings, either bilaterally between Canada and individual EU member states, or multilaterally in other regional institutions. In the field of security policy, for example, Canada cooperates with its European partners primarily through NATO, while cooperation with the EU’s Common Security and Defence Policy has only occurred on a smaller scale.

The institutional framework for non-economic cooperation is hence relatively flexible, and will be able to adapt to Brexit in incremental ways. These incremental changes could nevertheless be relevant for Canadian foreign policy. Canadian diplomats are concerned, most importantly, about losing the UK as an intermediary, and at times crucial ally, when dealing with EU institutions. (Support from the UK proved crucial, for instance, in convincing the European Commission to cut an unfavourable emissions classification of the Alberta oil sands from implementing legislation on the EU’s Fuel Quality Directive.) Brexit could also complicate transatlantic cooperation in a number of specific policy fields, such as the – historically contentious – issue of fisheries in the North Atlantic.

Brexit Reverberations in Canadian Domestic Politics

In addition to these foreign policy challenges, Brexit also has the potential to affect Canadian politics and identities in a broader and more fundamental way. This is the case because Europe, in spite of the increasingly diverse character of Canadian society, remains an important reference point for many Canadians’ perceptions of their own country – not least as a distinguishing factor from the US. In this context, one advantage of conducting a significant part of transatlantic relations through the multilateral institutions of the EU (as well as NATO) has been that potentially divisive debates within Canada about the relative importance of British and French traditions could be kept in abeyance.

With the UK as an EU member, Canada-EU relations have also been an area of consensus between the foreign policy philosophies of Canada’s two main political parties, the Liberals and the Conservatives. While the Liberals ground their international policies in the concept of liberal internationalism – emphasizing multilateral institutions and respect for international law – the Conservatives are guided by a deep attachment to British traditions, and have in recent decades been strong supporters of trade liberalization. For both philosophies, good relations with the EU, as a multilateral trading power that includes the UK, are equally attractive.

Brexit has the potential to undermine this domestic consensus. This becomes evident in the ways in which leading politicians have responded to Brexit. Most Canadian policy makers accept, of course, that Canada needs to have economic and political relations with both the EU27 and the post-Brexit UK. However, they set different priorities.

Public statements by Prime Minister Justin Trudeau, the leader of the Liberal Party, suggest that he sees Canada more closely aligned with the EU27 than with the post-Brexit UK. In a speech to the European Parliament in Strasbourg in February 2017, Trudeau went out of his way to praise the EU as an exceptional economic and political partner. As the New York Times remarked in reporting on the speech, he “did not once mention Britain, the Commonwealth […] or the United States”, a fact that the paper’s correspondent interpreted as “a subtle indication, perhaps, of the reshaping of the trans-Atlantic order, and the world itself, by the political events of 2016”. By contrast, as reported in the Irish Times, Trudeau used a press conference during a visit to Ireland in June 2017 to accuse the UK (and the US) of “turning inward or at least turning in a different direction” than Canada, which he described as being “exciting and open to the world in a positive, progressive way”. All of this suggests that Brexit, along with the Trump Presidency, has made Canada’s current government more, rather than less, appreciative of the importance of the EU as a like-minded partner on a broad range of policy files, well beyond CETA.

By contrast, the leader of the Conservative Party, Andrew Scheer, was an early advocate of Brexit. In an op-ed in the National Post published three days before the British referendum, Scheer (who was a candidate for the party leadership at the time) lamented that “British political traditions” were being undermined in their mother country. “The supremacy of Parliament”, he wrote, “is increasingly being replaced by the dictates of EU bureaucrats in Brussels. The consequence is less self-determination, less local decision making and less economic dynamism.” After the referendum, Scheer made a Canada-UK trade agreement one of his foreign policy priorities and even travelled to the UK with the explicit purpose of promoting the idea. Given that no meaningful force in Canadian or British politics opposes such an agreement, these statements should primarily be seen as symbolic politics, intended to demonstrate to his own base a particular closeness to “our cousins across the pond, who […] are in a moment of generational change and newfound independence”, as Scheer put it in his keynote address to a conservative gathering in February 2018. By contrast, since becoming party leader, he has not made any meaningful statements on Canada-EU relations.

The positions taken by Trudeau and Scheer suggest that Brexit could result in a domestic politicization of Canada’s transatlantic relationship(s), which would pit two models of Canada-Europe relations against each other. The first, which we can call EU-Europe, embraces the EU as a beacon of multilateralism and enlightened/progressive values, and hence a partner for far-reaching economic and political cooperation, while the UK is presented as an important economic partner, but with less stellar political credentials. The second, UK-Europe, is based on a perception of the UK as Canada’s oldest and closest political and economic ally, tied to Canada by the Westminister system, the monarchy and perhaps a reinvigorated Commonwealth, whereas the EU is presented as a bureaucratic Moloch that one can surely do business with, but whose regulatory overreach makes it unattractive as a political partner. Such a competitive relationship between two “Europes”, if it were to fully develop, would be more than a partisan feud between the Liberals and the Conservatives; it would also have repercussions for Canada’s linguistic communities. EU-Europe would likely have more appeal for French Canadians, while UK-Europe would be embraced especially in English Canada.

The implications of Brexit have thus far not been thoroughly discussed in Canadian politics. Therefore, it is by no means certain that the politicization tendencies just described will develop larger political significance. There are a number of factors that might prevent a full-scale confrontation between EU-Europe and UK-Europe in Canadian public discourse. The Canadian government faces economic and political pressures to cooperate with both the EU27 and the post-Brexit UK. These pressures are amplified by US President Donald Trump’s recent attacks on Canada and certain multilateral institutions (such as the G7) that Canada, the EU and the UK are all eager to protect. In addition, Liberals and Conservatives must appeal to voter groups with sympathies for both models of the transatlantic relationship. Nevertheless, the statements quoted above show that the potential for a politicization of Canada’s transatlantic relationship clearly exists. Such a development should be viewed with concern; it would not only create domestic political conflict within Canada, but would also undermine the longer-term stability and predictability of Canada’s relations with both the EU and the UK.

What lessons does the Canadian case hold for the Brexit negotiators within Europe? It is obvious that the political confrontation between competing conceptions of the Canada-Europe relationship would be less likely – or at least less divisive – if an amicable EU-UK relationship developed after Brexit. It would also be beneficial if EU and UK negotiators explicitly devised institutional openings for Canada (and other external partners) to opt into selected provisions of their post-Brexit relationship, so that Canada’s relations to the EU and to the UK are not perceived as mutually exclusive. At a pragmatic level, EU and UK diplomats in Canada must acknowledge that various Canadian stakeholders have different sympathies and priorities when it comes to the future of transatlantic relations, with which they will have to engage. More generally, while Europeans have thus far understood Brexit primarily as an internal political challenge, it is important to also address its external dimension.

Achim Hurrelmann is Associate Professor of Political Science at Carleton University in Ottawa, Canada. He serves as Co-Director of Carleton University’s Centre for European Studies (CES) and holds the Jean Monnet Chair, “Democracy in the European Union”.