Traffic jams are one of the first things John Gardiner recalls about Wallaceburg, Ont., in the 1980s, when roughly 9,000 manufacturing jobs supported a town of 11,000 people. "The town rocked 24 hours a day because of the shift work," said Gardiner, an author and former journalist. That changed dramatically after the Canada-U.S. Free Trade Agreement took effect in 1989, culminating in the 1999 closure of Libbey Canada Glass Co., a century-old manufacturer that had earned Wallaceburg the nickname Glasstown. The Ohio-based parent company shifted production to the U.S. and Mexico, throwing about 500 people out of work, many of whom had been at Libbey for more than 30 years. A list of 18 closures compiled by the Wallaceburg District Museum put published job losses at around 1,500, but locals like Gardiner peg the number higher. "In its day, Wallaceburg was the manufacturing hub of Southwestern Ontario. All of that is pretty much gone now," he said.
Economic gains and human costs
Free trade with the U.S. is almost universally viewed by economists as a win for the Canadian economy. Canada's merchandise exports to the U.S. grew more than fivefold to $547.4 billion by 2024 from $101.6 billion in 1989, according to Global Affairs Canada. By the early 2000s, the U.S. accounted for 87 per cent of Canada's global merchandise exports, up from 60 per cent in the early 1980s. Daniel Trefler, chair in Competitiveness and Prosperity at the Rotman School of Management, calculated that the free trade agreement boosted total Canadian manufacturing productivity by 13.8 per cent. "That is equivalent to Canada receiving — for free — a bond that pays $20 billion a year," he said. However, the agreement also reduced total manufacturing employment by five per cent, or 100,000 jobs, according to a 2004 paper Trefler published in the American Economic Review. Most of these lost jobs were concentrated in import-competing industries exposed to deep tariff concessions, with one in eight jobs disappearing. "This number points to the very large transition costs of moving out of low-end, heavily protected industries," he wrote.
Communities left behind
Wallaceburg was not alone. In Huntingdon, Que., about an hour's drive southwest of Montreal, the textile sector once thrived. A series of shutdowns after the Free Trade Agreement came into effect threw hundreds out of work. Cleyn & Tinker, a Canadian wool manufacturer, shut down five plants in Quebec in spring 2004, shifting operations to Burlington, N.C. That December, Huntingdon Mills Canada Ltd., a sports textile maker, closed, and the mayor estimated the local economy would lose $25 million. Ottawa put together a multi-million rescue package that included funds relief on the cost of raw materials and incentives to shift into higher-value products. Despite the fallout, Canadians ultimately adjusted to the upheaval, according to Peter Morrow, a professor of economics at the University of Toronto. "There was definitely a shock, a cost in the short run, but people adjusted to that cost in a way that wasn't detectable 16 years down the road," he said.
Painful memories as CUSMA review approaches
Now, with a July 1 review of the Canada-U.S.-Mexico Agreement (CUSMA) set to launch and the current U.S. administration pressing to revamp trade terms, there is a sense that the price Canadians already paid for access to the U.S. market is being exacted again. Dan Ciuriak, an international trade economist and consultant, said "the pain that we bore to join that world is going to be compounded by a new pain from undoing it." Derek Burney, who was prime minister Brian Mulroney's chief of staff during the Free Trade Agreement negotiations, called the notion of paying an entry fee to extend the agreement "absurd." He noted that the current U.S. administration has floated demands targeting Canada's supply management system and rules of origin for autos. "Mutual benefit is the central part of any trade agreement. Both sides have to come away as winners, otherwise there's no point," Burney said. "Trump has no interest in that aspect of a trade agreement, for him it's my way or no way."
New shocks hit Canadian manufacturers
In Sainte-Croix, Que., South Shore Furniture shut down in April, letting around 125 employees go. The family company established in 1940 blamed a 77 per cent sales plunge on U.S. tariffs and "massive dumping" of imported products. Bestar Inc. announced its closure the same week. Unifor, Canada's largest private sector union, said U.S. trade measures were redirecting global flows and turning Canada into a "fallback market" for low-cost imports. Daniel Cloutier, a Unifor director in Quebec, said in a statement: "When companies shut down one after another, it's not a coincidence. It's the result of an extremely challenging economic environment." Carlo Dade, director of the centre for international policy at the University of Calgary's school of public policy, said the U.S. now feels like the landlord, forcing Canada and Mexico to renegotiate a growing list of terms. "What we're seeing now is that the costs aren't that severe. Of course, if you're in Fort McMurray, you can say that with confidence. If you're in Windsor, you're freaking out — with good reason," he said.
Wallaceburg's lingering scars
Gardiner said the manufacturing jobs paid well and feelings of abandonment ran deep as they disappeared. "Nobody paid any attention while the town was gutted," he said. Even a success story like St. Clair Tool & Die, which employed more than 500 people in Wallaceburg before free trade, retained only a head office rebranded as St. Clair Technologies and fewer than 20 employees by 2016. Most of the office and manufacturing jobs had shifted to Arizona and Sonora, Mexico. Gardiner said Wallaceburg is still adjusting, recently tapping grants to hire an economic development expert who helped bring a few new businesses. While proud of the resilience, he understands what's at stake for communities across Canada. "Wallaceburg was very unique," he said. "You can't imagine how many jobs we lost here. It's a much different place these days."
