A PRAIRIE PORT
Winnipeg Sails NAFTA Seas
by Chris Webb
Gazing across the prairie near the Winnipeg airport is a surreal lesson in space and distance. The glowing horizon appears infinitely far, yet melded with sky, city, and earth. Its location recalls Winnipeg poet Robert Kroetsch: “This is a prairie road / This is the shortest distance / Between nowhere and nowhere.”
Once described as “tonic for anyone who sweeps across the prairies,” the Winnipeg airport epitomized the unique style of prairie modernism that sought a unity of function and form. It was built in the wake of the Massey Commission — which led to the founding of the Canada Council for the Arts — as part of a coordinated approach to architecture and public art. Walking into the airport was supposed to feel like walking into an art gallery. This carefully designed atmosphere of light and space was intended to serve as a unifying cultural institution. However, this abstract nationalism was lost on many, not least the bottom line of business. Declining airport budgets and massive restructuring in the airport industry, including the privatization of Air Canada, have forced airports to seek alternate revenue streams, meaning less space for public art.
The demise of this old airport is representative of larger changes taking place in the Manitoba and world economy. Economic responsibility in times of crisis means maximizing bottom lines not doling out dollars to artists. What will replace the Winnipeg airport is a physical manifestation of neoliberal ideology at work, and guaranteed there won’t be a sculpture budget.
Port Winnipeg: All Aboard Foreign Investors
Winnipeg is soon to become the veritable heart of a vast continental circulatory system pumped by continental trade deals and foreign investment. In April 2009, the Conservative government announced the creation of CentrePort Canada as part of their Economic Action Plan to safely see Canada through hard economic times. CentrePort is an inland port that will utilize the new James Armstrong Richardson International Airport and the surrounding infrastructure to import, export, process, store, and distribute goods to and from European, Asian and North American markets. Prime Minister Stephen Harper has described the port as “an ambitious, far-sighted initiative — a massive transport, trade, manufacturing, distribution, warehousing, and logistic centre.” With the Province and Ottawa setting aside $212 million for construction costs; 20,000-acres of land; and $3.5 million to market CentrePort, this bold project is an economic priority at all levels of government.
The plan includes an Arctic Bridge, which will connect investors to European markets by daily cargo-flights between Winnipeg and Krasnoyarsk in Russia and an ocean link between the port of Churchill and Murmansk, Russia. Access to Asian markets will also be streamlined by linking Manitoba’s inland port to the Asia-Pacific Gateway trade route, using ports in Vancouver and Prince Rupert. Using the Arctic as a trade corridor not only reasserts Canada’s sovereignty over this region, but it lays the foundation for the development of the Arctic and its great resources. Las Vegas-based Arctic Oil & Gas claims the Arctic Ocean holds “potentially vast” petroleum resources of 400 billion barrels.
The project builds on Winnipeg’s strategic location at the geographic centre of North America and access to the International Mid-Continent Trade and Transportation Corridor—a sprawling 2,500-mile network of highways and railways that links major commercial centres from the Arctic port of Churchill all the way to the Port of Lázaro árdenas, Mexico. According to the North American Super Corridor Coalition (NASCO), which calls the City of Winnipeg and the Province of Manitoba members, this asphalt and steel network connects 71 million people and supports a large part of the $1 trillion trade between NAFTA allies. Manitoba’s Emerson border alone processes $14.4 billion in trade traffic annually, and is the top-ranked border crossing in western Canada.
These super corridors of North American capitalism will link inland ports in Mexico, Texas and now Winnipeg. Winnipeg’s inland port was given a huge boost by the appointment of former Premier Gary Doer to Canadian Ambassador in Washington. Doer has praised NAFTA saying, “most Canadian are unified on the benefits of NAFTA trade . . . and the advantages offered to people living in the U.S., Mexico, and Canada.” Doer opened the 2009 NASCO meeting by saying, “Strengthening the mid-continent corridor to the north and south of us will further support our eastwest routes and help us continue to grow as a North American trade and transportation hub that features one of the most successful inland ports on the prairies.” His firm support for NAFTA and greater Canadian-U.S. economic integration will earn him many fans in Washington and undoubtedly strengthen the role of CentrePort.
But CentrePort is different from the standard job creation infrastructure projects that define recession period budgets. It builds upon the already strong trade ties between Manitoba and the U.S. with a commitment to global interdependence “that will make the inland port attractive to international business and investments,” says Doer. CentrePort will streamline this flow of goods while utilizing its international connections to draw foreign investors looking to break into the NAFTA market.
True North Maquiladora
To fully integrate CentrePort into global trade systems, and thus align it with competitive global business, the area has been designated as the first Foreign Trade Zone (FTZ) in Canada. Given various names (Investment Promotion Zones, Export Processing Zones, Free Trade Zones .etc), these zones are godsends for foreign investors looking to avoid costly taxes and tariffs. Scattered throughout the developing world, and notorious for evading labour and environmental regulations, FTZs are the most multinational of multinational operations. Companies operating within the CentrePort FTZ can defer duty and GST payments on imported goods that are not sold in Canada and are exempt from duty payments on exported merchandise.
Canada has also gone a step further than other nations and now offers the benefits of FTZs anywhere in the country. The government’s Canada Tax and Duty Advantages: Enjoy the Benefits of Canada’s Foreign Trade Zones states: “Canada’s FTZ-equivalent programs offer your company the vitally important advantage of geographic flexibility.” The report boasts that, “Canada will have the lowest statutory corporate income tax rate in the G7 by 2012, and the lowest overall tax rate on new business investment by 2010.” However, a report by the Canadian Centre for Policy Alternatives claims that federal and provincial corporate tax cuts will deprive the Canadian Government of $4-6 billion in annual tax revenue. When an American corporation repatriates profits from Canada to the U.S., it pays the thirty-five percent. American federal corporate tax rate minus a credit for taxes already paid in Canada. Given a Canadian corporate tax rate below thirty-five percent, American corporations will have to pay the rate difference back to Washington. CentrePort combines business incentives with transportation infrastructure capable of delivering goods to almost any area of the globe.
In 2007 there were 2,700 FTZs in existence in 100 countries. In the U.S. alone, FTZs handle around $170 billion in merchandise annually. Their phenomenal proliferation lies at the heart of economic globalization and they have fundamentally changed the international division of labour and revolutionized production. So why is Canada so late in adopting these policies? As CentrePort CEO Diane Gray says, Canada “[was] not speaking the language of international investors.” This fact was recognized by the Canada Airport’s Council, which criticized past governments for failing to offer adequate incentives to international finance through their lukewarm Export Distribution Centre model. The council insists, “New policy and programs are necessary to improve Canada’s competitiveness . . . and meet the needs of globalized businesses.” With the development of CentrePort and the inclusion of FTZ as part of the Economic Action Plan, Canada is well on its way to aligning itself with the economic practices of other NAFTA allies. In Mexico, over one million workers are employed in FTZs, and the U.S. has over 200 FTZs in fifty states.
It may be unique, but the development of an FTZ in Manitoba should not surprise us. Following Blair style social democracy, Gary Doer has led the provincial NDP down the hard road of economic neo-liberalism. A solid feature of neo-liberal policy has been the orientation of state activity away from social services and towards active support for business growth. The ascension of Greg Selinger to the party helm is hardly surprising given his track record of overseeing a decade of ‘fiscal austerity’ as Finance Minister. This ideological commitment to lower taxes and balanced budgets fits perfectly with the economic incentives offered to business in Canada’s first FTZ.
A Prairie Metropolis?
The spatial restructuring of North American trade routes can be traced back to the great continental land charters: Hudson’s Bay Charter, the Louisiana Purchase, the Dominion land Act etc. In essence, NAFTA, the Mid-Continent Trade and Transportation Corridor, and now CentrePort Canada are a continuation of this age-old relationship between trade, politics, and land. It was this relationship that initially made Winnipeg the centre of the fur trade that drove the westward colonialism. Centuries later, Winnipeg was at the centre of the East-West trade, earning it the moniker “Chicago of the North.” It remains to be seen whether CentrePort will resurrect Winnipeg as a continental trade capital and revive neighbourhoods like the North End that once thrived on the manufacturing and railway industry. But if the track record of NAFTA is any indication this will not be a priority. Winnipeg suffers from some of the worst poverty rates in the country, with Aboriginal and newcomer groups hit particularly hard. Outsourcing and the demise of the local manufacturing industry have had a lasting impact on Winnipeg’s working-class neighbourhoods. Economic renewal for these communities will mean more than attracting foreign investors.
Economist Joseph Schumpeter hit the nail on the head when he called capitalism “creative destruction.” In today’s economy, it is hardly surprising that old utopian cultural institutions like the Winnipeg airport are buried to make way for a streamlined, efficient global trade centre. It is unlikely that this centre will revitalize those Winnipeg neighbourhoods originally gutted by the free trade policies it promotes. Many years ago these neighbourhoods were centres of resistance to these pacts between government and big business. We must ensure that they will be so again.
Article posted with permission from Canadian Dimension.
Published here in Winnipeg, Canadians Dimension is a magazine which shows there is an alternative to the corporate agenda and the dictates of the global market; that the dream of a better society is still alive.