Some Canadians Critical Of “U.S. Domination”

Press, Volume XCIII, Issue 27987, 6 June 1956, Page 10

Some Canadians Critical Of “U.S. Domination”

(From a Reuter Correspondent)

OTTAWA.

Opposition criticism that Canada is becoming subject to financial domination by the United States has led the Liberal Government to explain its own attitude to the country by means of important speeches from the two Cabinet Ministers principally involved.

Mr C. D. Howe, the Minister of Trade and Commerce, chose for his platform the city of Hamilton where the Leader of the Opposition, Mr George Drew, started this debate. For it was at Hamilton that Mr Drew declared that Canadians would not be “hewers of wood, drawers of water and diggers of holes” for any foreign country, however friendly. The governing passage in Mr Howe’s speech was: “I share the desire of Canadians to be free from dependence on large scale imports of capital. As a member of the Canadian Government, I do all I can to help maintain favourable conditions for Canadian investors in the hope that one day we shall be able to look after all our capital requirements, if we choose to do so. The plain truth is, however, that Canadians have not generated enough savings to supply all the capital required for Canadian development in the post war years. They have preferred to invest their savings in traditional fashion—Canadians are inclined to be cautious.

“Let us face the facts. Had it not been for the enterprise and capital from the United States, which has been so freely at our disposal, our development would have been slower and some of the spectacular projects of which we are so proud . . . would still be far in the future.” Opposition criticism has emphasised the complete domination of American capital in the field of petroleum and its increasing share in the entire mining and manufacturing industries. Mr Howe remarked that American capital and experience is to be “welcomed, no spurned” in the early stages of development.

On one point, however. Mr Howe found hilmself in some disagreement with the American Ambassador (Mr Douglas Stuart), whose farewell speech touched off the debate on domination of Canada by United States capital. Mr Stuart had minimised the importance of the fact that many American concerns do not offer stock in their Canadian subsidiaries by emphasising that “the stock of many of the principal United States corporations having Canadian operations are listed on a stock exchange and Canadians can freely purchase an equity in such companies.”

Mr Howe, on the contrary, suggested that “in their own interest” companies with wholly-owned Canadian subsidiaries “would do well to invite Canadian participation through stock ownership in the Canadian subsidiary.”

In the upshot, this means that the mounting pressure for increasing “Canadianisation” of American subsidiaries will have some sympathy from the Federal Government, although not necesarily its backing. “Scathing Denunciation”

Mr Lester Pearson, the Minister for External Affairs, who is usually regarded as remote from the cut-and-

thrust of domestic politics, delivered a scathing denunciation of the critics in an important speech before the Canadian club of Montreal. Caustically remarking that “hewers of wood” are nowadays skilled workers earning from 15 to 20 dollars a day, he described the, suggestion that Canadians were doing rough work for American overlords as “humiliating.”

“We should be careful,” Mr Pearson said, “not to discourage (American) participation by ill-considered and unfriendly talk: we can’t kill the goose, but she may decide to lay her golden eggs somewhere else.” For several years. Mr Pearson said, Canadian savings had not equalled Canadian investment: “The deficiency has been made up by ah inflow of capital from abroad, mainly from across the border. In 1955 this amounted to more than 600 million dollars but a our total capital investment wfcs 6000 millions. Unless we wish to invest more ourselves, especially in speculative developments, as I hope we shall do, this caoital investment by our neighbour, far from being unnecessary and dangerous is of essential importance.” Deploring such phrases as “new colonialism” and “Banana Republic,” used by the Conservative Opposition, as unworthy, Mr Pearson declared that

“this is no time for political or economic jingoism.” The present furore over CanadianAmerican financial relations may still have repercussions in the next federal election campaign. In spite of hotheads on his side of the House of Commons, the Conservative leader, Mr George Drew, is likely to continue to adopt the policy of demanding greater processing of Canadian materials at home rather than direct opposition to American financial penetration. However, the Socialist leader, Mr M. J. Coldwell, is likely to press hard the issue of American financial domination.

Conservatives and Socialists are uniting in opposition to present plans for the building of the trans-Canada pipeline, though for different reasons. On this immediate and tangible issue, the two principal opposition parties have common ground and are attacking the Government for making this Canadian project dependent upon American capital and upon the consent of the United States Federal Power Commission to export natural gas to the United States middle west.

Criticism was exacerbated when it became known that an alternative Canadian plan received no official consideration from the Government. In these circumstances, American domination of the Canadian petroleum field bids fair to be the liveliest issue at the next general election here.