Free trade has failed to live up to its promises—study

December 28, 2007

OTTAWA— Twenty years after Canada signed the Free Trade Agreement its biggest boosters have grown wealthier but promises ofbetter jobs and rising living standards fell short, says a study released by the Canadian Centre for Policy Alternatives.

The Canada-US Free Trade Agreement was signed on January 2, 1988. The study examines what’s happened since: It takes a sample of 41 Canadian Council of Chief Executives (CCCE) member companies – the leading supporter of free trade – and finds they shrank their workforce by 19.6% while their revenues grew by 127%.

“Its promoters said free trade would create more and better jobs but that promise was clearly hollow,” says the study’s author, CCPA Executive Director Bruce Campbell. “There are fewer jobs today in the traded goods sector than there was before free trade.”

“And contrary to the CCCE promise of better public services and social programs under free trade, governments slashed programs by 26% -- more than six times deeper than the OECD average – largely at the urging of lobby groups like the CCCE.”

Among the study’s key findings, between 1987 and 2006:

  • The 41 companies’ combined revenue grew from $142 billion to $310 billion while they shrank their combined workforce by over 118,000.
  • The Big Three automakers shrank their Canadian workforce by over 50%--from 87,626 to 43,000. Their revenue grew by 70%, from $38.9 billion to $67.3 billion.
  • Despite the massive Alberta oil boom, the three major oil companies in the sample cut their combined workforce by almost one-third, from 22,500 to 15,428. Their revenues soared from $13.7 billion to $53.4 billion--a 290% rise.
  • Corporate profits are at a 40-year high, but Canadian workers’ wage share of the economy has fallen steadily.
  • Only the richest 5% of income earners saw rapid growth in their inflation-adjusted incomes from 1992-2004.

“This is hardly the new age of shared prosperity the Mulroney government forecast when the free trade deal was signed back in 1988,” says Campbell. “While large corporations and business elites have done spectacularly well, for a majority of Canadians the promise of prosperity has turned into an era of economic insecurity.”


20 Years Later: Has Free Trade Delivered on its Promise? is available on the CCPA web site:

For more information contact Kerri-Anne Finn, CCPA Communications Officer, at 613-563-1341 x306.