Canada: What we can learn about open markets from wine and wheat

(TheGlobeandMail) - Canadian history is filled with tales of protected industries destined for oblivion because of free trade, foreign threats or lost subsidies. But the worst-case scenario rarely plays out as predicted.

Consider two prominent examples from the past quarter-century: the advent of free trade for Ontario’s wine industry and the end of the subsidized freight rates for Western grain farmers. In both cases, disaster was predicted. Yet both sectors adapted and emerged stronger.

There is a lesson here for other Canadian industries that remain shielded from the full impact of the competitive pressures other businesses face every day. Think about broadcasting, wireless, banks and vast swaths of Canadian agriculture.

The conventional wisdom is that these sectors are so vulnerable, or so special, that they need the protection of Big Brother. There may also be a touch of collective economic inferiority – a sense that these sectors aren’t innovative enough to make it on their own. But the experience of the grain and wine industries shows that open markets are not a death sentence.