8. Politics
• Brian Mulroney (Progressive Conservative) won the
federal election in 1984 after Pierre Trudeau retired.
• He faced a massive federal debt created in the
1970s – retired from office in 1993 disgraced after
NAFTA deal and creation of the GST, which
decimated the party.
• Jean Chretien (Liberal) became PM in 1993 (until
2003) and worked on ending the practice of running
annual deficits.
• By 1998, his gov’t managed to produce a budget
surplus (taking in more money than it spends).
9. New Political Parties
In the 1990s, Chretien faced increased regional
tensions, as Western Discontent increased, and
Quebec separatism came to a head:
1.) The Bloc Quebecois
• In 1993, led by Lucien Bouchard, became the official
party of opposition. It was a separatist party
seeking to achieve Quebec sovereignty.
2.) The Reform Party
• Rose out of the union of the Alliance Party (Western
Canada) and the dying Progressive Conservatives in
1993.
10. • Became the the official opposition after the 1997
federal election.
• The RP rose out of WD, as the Western provinces
felt that their concerns were being ignored by the
federal gov’t.
• They wanted to reform the constitution to more
fairly represent the Western provs.
• They opposed bilingualism or any special status for
Quebec, sought to cut social spending, and restrict
immigration.
11. Economy
• In the 1980s, Mulroney followed a policy of neo-
conservatism.
• Involved a reduction of gov’t interference in the
econ and an increase reliance on the market forces
of supply and demand.
• Mulroney cut back family allowances and old age
pensions from the wealthy.
• He also favoured business interests as part of his
debt-reduction strategy – he believed that
strengthening the private sector would help reduce
the deficit.
12. • In spite of his efforts, the annual deficit and the total
national debt continued to grow throughout the
Mulroney era.
• The Canadian econ shifted from the production of
consumer goods to the service industries – requiring a
higher skilled workforce and fewer in numbers.
• As a result of these changes and debt reduction
strategies, the Canada experienced rising
unemployment in the early 1990s and an increased gap
between the rich and poor.
• The number of Canadians living under the poverty line
(spending more than 55% of income on food, clothing,
and shelter) increased as well.
13. Free Trade
• PM Mulroney’s most significant contribution to the
Can econ was the implementation of free trade
agreements with the US and Mexico.
• Free trade – a system of trading between countries
without barriers such as tariffs (taxes) or quotas
(limits on certain goods).
• Mulroney believed that free trade would benefit
Can businesses by increasing investment and trade.
1.) Free Trade Agreement (FTA)
• Signed in 1989 with the US
14. 2.) North American Free Trade Agreement (NAFTA)
• In 1994, Mexico joined.
Pros:
• Helped to improve the Can econ by increasing trade
with the US
• By leading to an increase in US investment
Cons:
• Can jobs lost due to relocation
• Can companies moved to the US or Mexico
• Can companies sold to US companies
• Overall not successful in the early 1990s due to a
continuing global recession.