This study provides important empirical background to the continuing debate on Canadian industrial policy and trade. The analysis is based on primary data derived from a unique survey of individual firms, both Canadian and foreign-owned, conducted early in the 1981-1982 recession. The main purpose of the study is to assess whether recent changes in tariffs, exchange rates, wage rates, and other factors in Canada and the world economy suggest the need for any significant modification in the earlier analyses and conclusions. The study presents prior evidence on costs, specialization, and trade; assesses current costs and productivity, and presents new information on how increased exports and specialization would affect cost performance and international competitiveness; examines non-production costs and other non-cost influences on specialization and export performance; and suggests strategies for the private sector to consider in order to survive in the changing trade environment of the 1980s.

The papers collected in this document cover the following topics: the debate over free trade, the Free Trade Agreement for Canada and the United States, the costs of free trade for Canada, why Canadian artists oppose the Agreement, an exploration of the pros and cons of the Agreement, and the history of free trade between the two countries.

The chief concern for the Canadian economy today is the expected impact of the economic crisis in the United States and worldwide. [...] The third part describes and evaluates the key policy challenges facing the United States, as highlighted in the 2008, election and the Canadian interests at stake in the policy positions advanced by Obama. [...] After 2004, the Canadian GDP growth rate seems less tied to the United States than before 2000, mainly as a result of the climbing Canadian dollar, softer US demand for Canadian products, and the growing cost of commerce crossing the border in terms of time lost. [...] The decline of Canada-US trade as a share of Canadian GDP (from 65% in 2000 to 40% in 2007) should not be read simply as proof of the diversification of the Canadian economy from trade with the United States. [...] The decline in manufacturing exports-first as a result of the rising value of the Canadian dollar and now as a sign of the onset of a US recession-may point to the start of slower GDP growth in Canada (C-DFAIT, 2008).