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Former Prime Minister Brian Mulroney addresses the Albany Club at a special dinner marking the end of year-long celebrations to recognize the 200th anniversary of the birth of Sir John A. Macdonald, in Toronto, on Thursday, Nov. 5, 2015. THE CANADIAN PRESS/Chris YoungThe Canadian Press

Former prime minister Brian Mulroney says the European Union has become a "monument to peace, civility and achievement" that could eventually collapse if Britain votes to leave in a referendum.

Mr. Mulroney used a keynote speech to the Canada-United Kingdom Chamber of Commerce on Friday to speak about the "towering achievements" of a united Europe and the need for Britain to remain an influential member of the group of 28 countries.

Recent polls are mixed and suggest the outcome of the June 23 referendum is uncertain, with a significant number of potential voters undecided.

"The question for Britain is clear enough, but the consequences are much less certain," Mr. Mulroney said in prepared remarks to the London audience. "In simple English, this is what the referendum is all about: ongoing privileged membership in a powerful, influential and prosperous bloc or the uncertainty that comes from an EU that could eventually collapse or be significantly weakened by the profound impact of a UK departure."

Mr. Mulroney, whose Progressive Conservative government negotiated the North American Free Trade Agreement and before that the Canada-U.S. free-trade pact, said Europe is being buffeted along emotional and nationalist lines – driven by slow growth and the massive influx of refugees from the Middle East.

Politicians in Britain and on the European continent are playing to these fears, and some in Britain are using the country's exit from the EU as a solution to a better future, Mr. Mulroney said while warning of the consequences of a Leave vote.

"When it comes to trade and investment, you know what you have today in terms of market access as a member of the EU, but you do not really know what terms you would be able to negotiate should you leave, nor do you know how long it would take," he said. "A Leave vote would obviously open the door to a protracted negotiation and a prolonged period of adjustment triggering a degree of uncertainty that could make investors nervous."

Mr. Mulroney said Canadians are watching the referendum closely, since Britain is Canada's third-largest export market at $16-billion in 2015. Two-way investment exceeds $120-billion.

A big concern to Canada is the outcome of the Canada-EU free-trade pact, as Britain has been one of the strongest supporters, but it could also harm Britain if the deal is adopted by EU legislatures, Mr. Mulroney noted.

"If Britain were to leave the EU, I suspect that British businesses may not automatically benefit from the market access advantages [of the Canada-EU deal]. They could actually be at a disadvantage vis-à-vis competitors from the EU. That is not scare-mongering. It is a simple fact," Mr. Mulroney said.

Geopolitically, Mr. Mulroney suggested the biggest winner from a Leave vote could be Russian President Vladimir Putin, since Britain has helped lead the sanctions and containment policy over Russia's incursions into Ukraine.