Canada Concerned At U.S. Penetration

Press, Volume XCIX, Issue 29361, 14 November 1960, Page 13

Canada Concerned At U.S. Penetration

[By

BRUCE HUTCHISON

4n the “Christian Science Monitor”)

I The Canadian Government's concern about American penetration in the economic and cultural activities of this country, is indicated clearly by its appointment of a royal commission to study the future of the magazine and periodical press. This commission, headed by Mr Grattan O’Leary, an eminent Canadian journalist, will consider warnings of magazine publishers that they are gravely threatened by American competition and deserve protection like that enjoyed by most manufacturing industries. But it is obvious from the statement of Prime Minister John G. Diefenbaker, in announcing the royal commission, that the Government’s concern does not end with the magazine field. Anti-monopoly Policy “While the freedom of the press must always be maintained inviolate,” Mr Diefenbaker said, “no nation can allow the financial and commercial aspects of publishing operations to extend to a point where its own press and publications become monopolistic in nature, or where its national and business publications are eliminated by unfair competition from • other countries.” I Even more significant, to those who have been watching the deI velopment of government policy, was Mr Diefenbaker’s remark that 1 the approach to the problem of I magazines was in line with action taken earlier to ensure that CanaI dian life insurance companies are not lost to Canadians through foreign purchase and to guarantee Canadian participation in northern mining development. Mr Diefenbaker added that his Government intended to take further action in other fields to maintain a strong Canadianism, but he did not elaborate his plans. It is clear, however, that the Government has been working on other plans for several months and is expected to announce them to the next session of Parliament, this autumn or early next year. Tax Incentives It is assumed generally that the Government will take no steps to penalise American investment in Canada but will use tax incentives to make American com- ' panies what Mr Diefenbaker has called “good corporate citizens” of Canada. Already the Diefenbaker Government has passed through Parliament various laws aimed at this objective. For example, it has compelled insurance companies to appoint a Majority of Canadians to their boards of directors. New legisla- '■ tion covering oil leases in the Yukon and the North-west Territories requires that holders must j be Canadian citizens or companies i either listed on Canadian stock exchanges or containing a 50 per cent. Canadian interest. ; Introducing this legislation, Mr Diefenbaker plainly indicated the thinking behind it. “We say,” he told Parliament, ! “that foreign investment in Canada must fully regard Canadian ‘ industry, Canadian interests, and Canada’s economic destiny. . . , 1 We have the right to ask that 1 full account be taken of the in- 1 terests of Canadians in the poli- 1 cies which are followed in the 1 direction and use of that capital. < Guarded Statement ' “We ask in general that companies investing in Canada— ! United States companies—should 1 not regard Canada as an exten- ’ sion of the United States market; 1 that these companies should be incorporated as Canadian com- ! panies, making available equity 1 stock to Canadians.” ■ This was a guarded statement, ’ but much can properly be read 1 between its lines. Many Canadians 1 believe that companies operating : here as subsidiaries of American 1 industries do regard Canada as 1 only an extension of the American market. Another point f ot widespread 1 complaint is that these subsid- j iaries do not offer any, or enough, 1 stock to Canadian investors. It i also is said that foreign exports ’ of the subsidiaries are restricted i in favour of home factories in i the United States. i

All these complaints and many others undoubtedly are in the Government’s thinking as it prepares for the next session of Parliament and also for the next election within two years, perhaps within one. Electoral Appeal

Most interpreters of the Ottawa scene believe the Government is laying the foundation for an electoral appeal based on a stronger Canadianism and on the nation’s growing alarm about American penetration, economic and cultural.

This alarm is reflected in the speeches of both the Conservative Government and the Liberal Opposition, in the press and throughout the nation. It appears certain to colour, if it does not dominate, the next election. After it has built up great expectations of a stronger Canadian policy (as in the case of the magazine industry, for instance) the Government will surprise the people if it does not soon announce specific measures and represent itself as the only reliable safeguard of a vigorous independent Canadianism.