Bill Morneau came to London with a ready non-answer regarding Britain’s possible departure from the European Union. It was a matter, Canada’s Finance Minister said again and again on Friday, for the British people to decide.
The debate over a potential “Brexit” from the EU has already taken over talk shows, newspaper headlines and pub conversations here, three months before a decisive referendum set for June 23. Quirkily, Canada – and its painstakingly-negotiated-but-not-yet-signed trade agreement with the EU – has been thrust to the centre of the argument, with both the pro- and anti-EU camps holding the country up as an example of what the United Kingdom might expect the day after a vote to break with Brussels.
With all that at stake, Mr. Morneau clearly hoped to say as little on the topic as possible during a one-day stop here. His mission in London was to explain the Liberal government’s new budget to economists and prospective investors, not to get involved in the U.K.’s most heated political debate since the Iraq war.
“I think that the British people will make a decision that’s their decision to make,” he told a breakfast briefing for London-based bankers and economists hosted by the Canadian High Commission.
That wasn’t nearly good enough for some of those who had gathered to hear Mr. Morneau speak. Not with opinion polls so tight – the most recent “poll of polls” (taking into account the results of the six most recent surveys) shows 51 per cent intend to vote “Remain” on June 23, versus 49 per cent who say they will vote Leave – and both sides are doing all they can to accumulate endorsements from business leaders and foreign governments.
The Leave side, informally headed by London Mayor Boris Johnson, has pointed to Canada’s deal with the EU as proof that a country can have a good trading relationship with the EU without having to deal with all the bureaucracy, and the sacrifices of sovereignty, that come with being partly governed from Brussels.
The proposed free-trade pact between Canada and the EU, known as the Comprehensive Economic and Trade Agreement, would eliminate 98 per cent of tariff barriers and is considered the most extensive such deal between the EU and any non-member state.
“I think we can strike a deal as the Canadians have done based on trade and getting rid of tariffs. It’s a very, very bright future I see,” Mr. Johnson said last month in one of his first stump speeches after publicly breaking with Prime Minister David Cameron and declaring that he would support the pro-Brexit side.
Meanwhile, the Remain camp has taken to pointing out that the Canada-EU deal still has not been ratified by Brussels – after more than six-and-a-half years of negotiations – and that also it falls well short of the benefits of full membership. Services are one sector not covered by the proposed agreement, and tariffs remain in several industries that are crucial to the British economy, such as automobiles and beef.
“I don’t want us to be Canada. I want us to be Great Britain,” Chancellor George Osborne retorted shortly after Mr. Johnson raised Canada as an example.
Mr. Morneau’s careful remarks on Friday – he told reporters afterward that he wanted “to be respectful of the British people” – were unlikely to make many headlines here, although his refusal to take a stand clearly worried some on the Remain side who were hoping that Canada would add its voice to those that have voiced concern about the potential impacts of a “Brexit.”
On Friday, Mr. Morneau was asked three times to take a stand on the coming referendum, and was gently scolded when he refused.
“I was a little disappointed in your answer on the coming referendum,” Anthony Cary, a former British high commissioner to Canada, told Mr. Morneau during a question-and-answer session following the Finance Minister’s speech. He asked Mr. Morneau to clarify whether he agreed that it was in Canada’s interest to see Britain inside a strong EU.
Mr. Morneau again ducked the question, as well as a barbed follow-up from a businessman who asked the minister to confirm that Britain, if it were to leave the EU, would revert to a higher tariff relationship with Canada.
“The fact that you respect our internal decision-making has not prevented other world leaders, such as President [Barack] Obama, from making absolutely clear that, in their view – from Washington, and I’m really disappointed that it’s not shared from Ottawa – the best outcome of this debate would be for U.K. to remain in the EU,” the frustrated businessman said. “I don’t see why that’s a difficult thing for the Canadian government to say.”
But Mr. Morneau was not willing to be drawn into the debate. He praised the trade deal Canada has negotiated with the EU as an “excellent agreement,” but he demurred when asked whether Britain should draw any lessons from how long it has taken Ottawa and Brussels to get this close to a deal.
Asked what kind of economic impact a British exit from the EU might have on the Canada-Britain trading relationship, he said only that “our relationship with the U.K. is strong, it has been strong, it will be strong.”
Explaining his caution, he said Canada had “a lot of experience in our country with referendums. That is something that we always think about when we think about [referendums in] other countries.”
Other governments have not been as careful. U.S. President Barack Obama, who has already spoken in favour of Britain staying in the EU, is expected to make an even louder intervention when he arrives here later this month on an official visit.
Meanwhile, former Bank of Canada governor Mark Carney – who now heads the Bank of England – ignited a political firestorm last month when he told a House of Commons committee that the possibility of a Brexit was “the biggest domestic risk to financial stability” the U.K. currently faces.
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