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North American Studies
Kevin Spooner

Week 11: John Molson and Tim Horton – Globalization and Canadian Foreign Economic Relations: Beer + Donuts = Canada? March 27, 2013 Outline  John Molson and Time Horton: Lives of two Canadian Icons  Canada and the United States, and trade o Background to Canada-US Trade Relations o The Free Trade Agreement (FTA) o The North American Free Trade Agreement (NAFTA)  The Continental Future of Donuts and Beer John Molson (1763-1836)  Born in England into money  Orphaned at a young age  All father’s money and estate passed down to him  At the age 18 decided to immigrate to Canada  1786 had officially opened the brewery business in Montreal  Brief return to England to litigate the last of his father’s assets and also to buy equipment and supplies (barley) to bring back and turn into beer  In first year of operation, produced 4000 gallons of beer  Within 5 years of being in Montreal he had expanded the brewery – 30,000 gallons per year  In 1801 marries Sarah Vaughn – had been living together and had 3 sons while in a common law relationship  Quickly decides that to be a good company he had to diversify his holdings – get involved in other economic activities  He buys a lumberyard, launches Canada’s first steamboat, operated a large hotel, invested heavily in Canada’s first railway (from Montreal into the United States), banking  In 1828, retires his active role in the brewery and leaves it for his sons to take over  After he dies, 2 sons buy out their 3 brother  1.5 million bottles of beer a day by the mid-20 century  Company continued to diversify its holdings – hockey, furniture, Beaver Lumber, chemical products  Molson had an oil painting of himself hung in the board room at Molson company and in his will left that as long as the company stayed in the hands of family members, that oil painting was to hang there Tim Horton (1930-1974)  Born in Ontario  Growing up wanted to be a fighter pilot – second wish was hockey player  Started playing in small communities, then went south to Toronto o Nickname “Tim the Terrible”  With the Leafs until 1969 season  Then traded to the new York rangers, also played for penguins and buffalo sabers  Voted to NHL all-star team three times  Inducted into the hockey hall of fame  Played 1400 regular season games o 1600 minutes in penalties  Early on was known with his association with donuts  1964, launched Tim Donut ltd. with two partner o First store in Ottawa street in Hamilton o Dozen donuts = 69 cents, cup of coffee for a dime o Bought out his two original partners o Partners with another man Joyce – ex police officer who had already opened two Tim Horton’s franchises  February 1974 o Playing for the sabers, they lost o Horton was driving his sports car home along the QEW, 160kmh o Loses control, leaves the highway and he is killed  His business partner continues to build up the business but a year later tries to buy out the whole business from Horton’s widow for 1 million dollars and a Cadillac  Joyce then had total ownership over it Canada, the US and Trade  73 percent of all of Canada’s exports go to the United States  63 percent of all of our imports come from the United States  US has consistently invested capital into Canada o Resulted in high levels of US ownership of Canadian companies  In 2011, US foreign direct investment in Canada amounted to almost 1/3 of a billion dollars  What complicates this relationship in the asymmetry in these two countries o Difference in size  Relationship between free trade and sovereignty is also problematic, but fundamental to Canada’s relationship with US  Free Trade = goods, services, capital and (labour) should be able to cross borders without government interferences  Should not be tariffs on these goods  Chief Canadian argument against free trade with the US is that greater economic integration would ultimately lead to a loss in political sovereignty  Another argument = even if we have free trade, the American congress is so powerful politically, congress will pass legislation on the American side with loopholes that will affect Canada negatively  Free trade supporters argue that free trade does something fundamentally important – guarantees us access to the US market  Canada essentially survives off of trade – highly dependent on international trade  Supporters also say that there is a degree of business efficiency – allows businesses to produce larger volumes of goods, so their per unit costs go down and they are therefore more competitive GATT – General Agreement on Tariffs and Trade  Canada is one of the original signatories to GATT  GATT was a global approach to try and liberalize trade by reducing trade barriers  Created after ww2, to encourage nations to not introduce tariffs  G
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