howing strong economic growth, solid domestic demand, and a favourable investment climate, Canada has flourished since the implementation of free trade agreements 18 years ago, according to a new report by RBC Economics.

The report will be presented at the Canadian American Business Council’s North American Competitiveness Policy Forum in Toronto on November 8.

“Canada is the envy of many other nations,” said RBC chief economist Craig Wright. “Few countries have provided as shining an example of how to adapt and prosper in a post-freer trade world than Canada.”

According to the report, despite the fear-mongering that took place during the adoption of the 1989 Canada-U.S. Free Trade Agreement and 1994 North American Free Trade Agreement, the reality is that the Canadian economy has thrived, and the most exaggerated fears have failed to arrive.

The report, entitled “Canada’s free(r) trade lessons to the world,” addresses eight myths that were promoted at the time and have since been dispelled in economic terms. One example was the fear that production would shift south once trade barriers such as tariffs, export restraints and import quotas were removed, and that exports would disappear. In fact, the opposite has occurred. Canada’s economy has outperformed the U.S. economy 50 per cent of the time over the past 18 years, and both countries have grown their goods and services output at similar long-run rates. Exports blossomed, while the two countries’ manufacturing sectors also shared similar experiences.

The fear of a massive wave of permanent job losses with the implementation of the FTA and in the U.S. with NAFTA, is another myth the report addresses.

“While some industries have gained and others have lost, the net picture is overwhelmingly positive for both Canada and the U.S.,” said Wright. “There has been an unprecedented wave of job creation, and unemployment stands at record lows on both sides of the border. In fact, a skilled labour shortage has emerged, driving wages up for consumers and challenging business competitiveness.”