Chile vote is a blow to corporate Canada and Trudeau

Celebration after constitution vote

With Chileans voting overwhelming to rewrite the country’s Pinochet era constitution it’s a good moment to reflect on Ottawa’s support for his coup against Salvador Allende. It’s also worth looking at Canadian companies’ opposition to the popular uprising that lead to the referendum on reforming the dictatorship’s neoliberal constitution.

On Sunday nearly 8 in 10 Chileans voted to rewrite the country’s Augusto Pinochet era constitution. The vote was the culmination of months of antigovernment protests that began against a hike in transit fares last October and morphed into a broader challenge to economic inequality and other injustices. The dictatorship’s constitution entrenches pro-capitalist policies and was widely seen as contributing to the country’s large economic divide.

The Pierre Trudeau government was hostile to Allende’s elected government and predisposed to supporting Pinochet’s dictatorship. Days after the September 11 1973 coup against Allende, Andrew Ross, Canada’s ambassador to Chile cabled External Affairs: “Reprisals and searches have created panic atmosphere affecting particularly expatriates including the riffraff of the Latin American Left to whom Allende gave asylum … the country has been on a prolonged political binge under the elected Allende government and the junta has assumed the probably thankless task of sobering Chile up.” Thousands were incarcerated, tortured and killed in “sobering Chile up”.

Within three weeks of the coup, Canada recognized Pinochet’s military junta. Diplomatic support for Pinochet led to economic assistance. Just after the coup Canada voted for a $22 million Inter American Development Bank loan “rushed through the bank with embarrassing haste.” Ottawa immediately endorsed sending $95 million from the International Monetary Fund to Chile and supported renegotiating the country’s debt held by the Paris Club. After refusing to provide credits to the elected government, on October 2nd, 1973, Export Development Canada announced it was granting $5 million in credit to Chile’s central bank to purchase six Twin Otter aircraft from De Havilland, which could carry troops to and from short makeshift strips.

By 1978, Canadian support for the coup d’etat was significant. It included:

  • Support for $810 million in multilateral loans with Canada’s share amounting to about $40 million.
  • Five EDC facilities worth between $15 and $30 million.
  • Two Canadian debt re-schedulings for Chile, equivalent to additional loans of approximately $5 million.
  • Twenty loans by Canadian chartered banks worth more than $100 million, including a 1977 loan by Toronto Dominion to DINA (Pinochet’s secret police) to purchase equipment.
  • Direct investments by Canadian companies valued at nearly $1 billion.

Prominent Canadian capitalists such as Peter Munk and Conrad Black were supporters of Pinochet.

When the recent protests began against billionaire president Sebastián Piñera in October, Trudeau supported the embattled right-wing leader. Two weeks into massive demonstrations against Piñera’s government, the PM held a phone conversation with the Chilean president who had a 14% approval rating. According to Amnesty International, 19 people had already died and dozens more were seriously injured in protests. A couple thousand were also arrested by a government that declared martial law and sent the army onto the streets for the first time since Pinochet. A Canadian Press story on the conversation noted, “a summary from the Prime Minister’s Office of Trudeau’s phone call with Pinera made no direct mention of the ongoing turmoil in Chile, a thriving country with which Canada has negotiated a free trade agreement.”

Rather than express concern about state-backed repression in Chile, the Prime Minister criticized “election irregularities in Bolivia” during his October conversation with Piñera. The false claims of “election irregularities” were then being used to justify ousting leftist indigenous president Evo Morales.

Amidst the massive demonstrations against Piñera in October, Trudeau also discussed Venezuela. In another phone conversation with Piñera two months ago Trudeau again raised “the situation in Venezuela”, according to the official readout, as he did in February 2018 and previously.

Chile is the top destination for Canadian investment in Latin America at over $20 billion. Over 50% of Chile’s large mining industry is Canadian owned and Canadian firms are major players in the country’s infrastructure. Scotiabank is one of the country’s biggest banks.

A number of stories highlighted Scotiabank’s concerns about the protests against inequality that ultimately lead to Sunday’s constitutional referendum. The Financial Post noted, “Scotiabank’s strategic foray into Latin America hits a snag with Chile unrest” and “Riots, state of emergency in Chile force Scotiabank to postpone investor day.” The CEO of the world’s 40th largest bank blamed the protests on an “intelligence breakdown” with people outside Chile “that came in with an intention of creating havoc.” In a January story titled “Why Brian Porter is doubling down on Scotiabank’s Latin American expansion”, he told the Financial Post that Twitter accounts tied to Russia sparked the unrest against Piñera!

Canadian companies, with Ottawa’s support, have led a number of environmentally and socially destructive projects in Chile. In the mid 2000s Toronto-based Brookfield Asset Management led a consortium, with US $700 million invested by the Canadian Pension Plan and British Columbia Investment Management Corporation, pushing to build a massive power line and dams in Chile’s Patagonia region, one of the planet’s greatest environmental treasures. “This kind of project could never be implemented in a full-fledged democracy,” explained Juan Pablo Orrego, a prominent Chilean environmentalist, to the Georgia Straight. “Our country is still under a constitutional, political, and financial checkmate to democracy which was put in place during the [Pinochet] military dictatorship and empowers the private sector.”

Sunday’s referendum is a blow to Canadian corporations operating in Chile and the Trudeau government’s alliance with right-wing governments in the Hemisphere.


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