Canada is an independent political unit, or as independent as a small country can be in a postmodern, globalized world.
It does not have an independent economy: its economy is a region in the Euro-American economy. Accordingly, in so far as economics is a derivative of the circumstances of a nation and the policies adopted to cope with circumstances, economics in Canada is a distinctive derivative of a region in the Euro-American economy, which is not to say a derivative of economics itself in France, Britain or the United States.
A measure of its derivation is the number of Canadian economists who have migrated to the United States. We can start with the economic historian Norman Gras, who challenged F.J. Turner's Frontier Hypothesis by asking the question, frontier of what? Gras, born in Toronto, graduated from the University of Western Ontario, but ended his career in 1950 at Harvard. William Ashley is a lame example. He migrated from Britain to the University of Toronto, staying only four years before moving to Harvard in 1892. Jacob Viner was born in Montreal in 1892, took his first degree at McGill, but spent the rest of his life at Chicago, Stanford, Yale, and Princeton. Of course there is J.K. Galbraith, born at Iona Station in Ontario in 1931, he received his first degree at the Ontario Agricultural College and spent the rest of his life in the United States. Harry Johnson perhaps never really left Canada, but his career was in the United States and the United Kingdom. Other examples would include Craufurd Goodwin at Duke University, and perhaps Randall Wright, a graduate of the University of Manitoba, who in 2012 was a leading light at the Wisconsin School of Business. No doubt still other examples could be given, William H. Lazonick, who finished at Harvard, and Dan Usher, who finished at Chicago (Groenewegen, 2000, 81), but this is enough to give substance to Harold Innis' comment, “Canada becomes a headless nation with its brains scattered over other countries” (Innis, 1946, xi).
Canada is not a derivative of Euro-American civilization: it is a part of it. Its economics is not a derivative of economics in Europe or the United States: its economics is derivative of that part of Euro-American civilization that is Canada. Of course, there has been contrary opinion. Melville Watkins referred to Harry Johnson's work as derivative, alleging Johnson had not escaped “the dilemma of the colonial intellectual” (Watkins, 1978, S89). Watkins is to be forgiven. He was responding to an equally tendentious debating point.
Referring to a number of Western Marxist, Canadian nationalists, Daniel Drache, Stephen Hymer, James Laxer, Abraham Rotstein, and Melville Watkins, Johnson wrote,
[T]he temptation of Canadian academics with either insufficient academic competence by standards or a taste for easy popularity among the masses to take the easy route of imitating and regurgitating the unscholarly [sic] and rabble-rousing pseudointellectual [sic] outpourings of their opposite numbers in foreign countries... It would be extremely difficult to discern from the shallow and frequently near-psychotic writings of some Canadians employed in otherwise reputable economics departments, on such subjects as American investment in Canada and the destruction of pollution of the environment, that serious Canadian economic scholars have achieved world-wide professional recognition for their contributions to the economics of resource utilization and the multinational corporation.
(Cited in Moggridge, 2008, 332)
Johnson is also to be forgiven. Watkins had said some damning things about Johnson and his friends (Watkins, 1970).
Further, with respect to the “derivative” nature of things, the first economic regime in Canada was an incidence of the feudal Custom of Paris. Canada's First National Policy of tariffs and a fiat currency, announced by the Prime Minister in 1878, was a copy of practice in the United States. The Second National Policy, unannounced but in place by 1896, was manifestation of the New Imperialism as it took shape in Britain's global band of railways and steamships.
The Third National Policy, written into a 1944 Government White Paper and Green Book, presented a Canadian version of British Keynesian policy. Finally, the Fourth National Policy, control of inflation, free trade with the United States, and the neo-conservative downsizing of government, mimicked policy in the United States. Harold Innis would have referred to this as “wholesale borrowing.” On this showing, Canada itself has been simply a derivative of France, Britain, and the United States.Evidently, authoritative assertions of the derivative nature of economics in Canada are easy to find. The only full length history of economics in Canada concluded to a “common North American discourse” (Neill, 1991). Writing at the close of the first 25 years of the Canadian Economics Association, Anthony Scott asserted: “It is... difficult to show that the Canadian economics profession is not merely a pocket of the larger profession” (Scott, 1992, 36).
It is difficult to show, but it can be shown there is a characteristic of “Canadian economics” that makes it distinct. In his intellectual biography of Harry Johnson, Donald Moggridge stated: “There was a certain nihilism in Harry's work” (Moggridge, 2008, 150). As Richard Lipsey put it, “Harry's work on pure trade in the 1950s [his most original contribution according to W. Max Cordon (1984)]... consisted of a series of case studies [often of a small, open economy] in which an extremely ingenious and subtle mind found exceptions to virtually all of the qualitative ‘laws' of international Economics with which he was presented” (Lipsey, 1978, S37). But Lipsey insisted Johnson's contribution to economics was not “nihilistic” (ibid.). It was not a rejection of neoclassical theory, it was a qualification.