1969-05-29

[Stage Direction]
Fifth report of standing committee on Justice and Legal Affairs-Mr. Tolmie.


Hon. Donald S. Macdonald (President of the Privy Council):: Mr. Speaker, pursuant to Standing Order 60 (2), I would request that an order of the day be designated for the consideration of a ways and means motion so that the Minister of Finance (Mr. Benson) may make his budget statement on Tuesday next.



OFFICIAL LANGUAGES


Donald Stovel Macdonald: Mr. Speaker, on behalf of my colleague the hon. member for Chambly (Mr. Pilon) may I present the report of the striking committee formed to strike the membership of the special committee on the official languages bill.
1 should like to move:
That the special committee appointed on May 15, 1969, to consider Bill C-120, an act respecting the status of the official languages of Canada, be composed of the following members: Messrs. Allmand, Anderson, Cantin, Corbin, Fortin, Lewis, McQuaid, Ricard, Roberts, Stanbury, Sulatycky and Yewchuk.


[Stage Direction]
Motion agreed to.


Hon. Jean Marchand (Minister of Regional Economic Expansion):: Mr. Speaker, I wish to make a statement with regard to the National Capital Region. I believe it is of interest to all
Canadians that in recent months the National Capital Commission has put before the government certain recommendations to guide the long-range development of Canada's Capital Region. While study is still in progress with regard to many aspects of this important work, the government has accepted certain measures within the long-range concept which I would like to announce at this time.
The area of consideration which has received the most urgent attention is development of central Hull. Improvement of this area, which is in the Quebec portion of the National Capital Region, about a mile from these parliament buildings, opens an important new phase in the progress of Canada's Capital Region. This is essential if our Capital Region is to grow as the focus of Canadian identity and a symbol of which all Canadians can be proud.
The government will accelerate achievement of this goal by developing Hull into a major government employment centre. Apart from the construction of several buildings, which are already programmed as established needs, the government undertakes to provide assistance in the construction of infrastructural works as an essential prerequisite to large-scale development that can be expected over the next 25 years.
[DOT] (2:10 p.m.)
This federal assistance is part of a wider development program under which action will be taken to eliminate air and water pollution throughout the whole Capital Region.

All of this will involve the federal government co-operating with other levels of government in renewing sewer, water and transportation systems necessary to make the capital core an integrated metropolitan area on both sides of the Ottawa River.
Before I deal more specifically with the decisions taken, I wish to emphasize the underlying objectives. It is our firm belief that the capital of a country has an indispensable role to perform which sets it quite apart from other metropolitan areas. This is doubly true in a federal state such as Canada, where patriotism has the strongest of roots in diverse regions and cultures. The substance of Canadian identity is in its wide variety of
Development of National Capital historic ties. A true devotion to Canada is difficult to conceive without the strong loyalties, which are everywhere apparent, to the various regions and cultures from which we spring. On the other hand, a true loyalty to our native culture or region is enhanced by the recognition that our diversity has been able to flourish under the protection of a great federation.
Canada occupies half of the world's most developed continent. This has been achieved because of a healthy diversity, not in spite of it. There is an underlying Canadian wisdom which has always prevailed in times of stress. This wisdom argues in favour of mutual understanding, accommodation and justice. It argues for a diversity which is not aggressive or divisive and for a unity that does not demand conformity. The basic understanding and respect which have made Canada possible must never, however, be taken for granted.
In a Canada where languages, cultures and geography breed deep loyalties, the common meeting ground, the capital region, must be a strong and true reflection of the country. It must be one of the major elements contributing to national pride. In it each Canadian must find his personal identity strengthened and his perspective broadened by tangible expressions of mutual respect and trust.
It was this recognition by the Canadian premiers at the Federal-Provincial Constitutional Conference in February, 1969, which led to unanimous adoption of the resolution, declaring that the core of the Canadian capital region should include Hull, Quebec, as well as Ottawa, Ontario.
While talks continue with the governments concerned with a view to the eventual establishment of a revised form of government for the capital region, more specific talks have taken place with the Province of Quebec with a view to co-operative efforts to overcome the glaring disparities which exist between the sister cities at the core of the capital region. We are pleased to see that, for its part, the Quebec government has recently announced plans for construction in Hull that will help bring relief to the city and to the economy of western Quebec. The federal government's program will add greatly to this progress while serving urgent and important federal accommodation needs.
The long-term development program for Hull is designed to produce a major federal presence in the Quebec portion of the capital region over the next 25 years. It is also expected to be the generator of considerable 
DEBATES	May 29, 1969
private investment which has generally avoided the area in the past because of the lack of basic services and adequate transportation.
The government proposes to direct about 25 per cent of its new accommodation construction to the core of Hull in the years ahead. This allocation of construction to the Quebec portion of the capital region does not affect buildings already programmed for location in Ottawa; for example, among others, the headquarters for the External Affairs and Transport Departments.
The first of the buildings to be located in a concentrated section of central Hull will be the headquarters of the following three departments: Manpower and Immigration, Fisheries and Forestry, and Consumer and Corporate Affairs. With further departments added as accommodation becomes necessary this employment centre in the core of Hull is expected to provide 4.5 million square feet of accommodation for some 36,000 public service employees.
The initial requirement for making the development possible is land for the building sites.

At this very moment, the National Capital Commission is filing an expropriation document that will give the Crown title to 15 acres in an irregular area generally south of Victoria Street, west of Laurier and Notre-Dame Streets, north of the E. B. Eddy property and east of rue Principale.
The federal government also recognizes the need in the city of Hull for a sewage treatment plant, main trunk sewers and an adequate water distribution grid. It accepts the principle of collaboration with other levels of government to ensure the provision of these municipal services.
In the area of transportation, as in the field of municipal services, the success of the program will require parallel action in cooperation with the other levels of government. An improved system of transportation is required to eliminate the Ottawa river as a barrier between parts of an integrated capital core.
, concept of an expanded capital core is linked to broader regional development goals which foresee a doubling of the population of the capital by 1995. This will mean an increase averaging 9,000 families a year during the next 25 years.
This growth will not only be in numbers. The very nature of the urban environment
May 29. 1969

will be transformed. This poses a challenge and an opportunity to create a unique capital area. While I have already mentioned the symbolic impact that the capital region must have, it is important that it also be a thriving metropolitan area. Both of these functions transcend particular local and provincial definitions. Regional disparities have no place within a capital region whose preponderant economic support is the federal government presence. However, without early action to break the vicious circle of declining prospects for the Quebec portion of the capital region, these disparities may well result in serious social and economic problems.
This government is confident that the action it is initiating today will, with the support of all Canadians, create a capital in which all can find identification and response; one which will reflect the multi-national fact of Canadian life; one which is a strong, continuing and visible expression of the Canadian experience.


Some hon. Members:: Hear, hear.


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I was wondering whether the government house leader was a little confused when he set this day aside, not for a motion sponsored by the New Democratic party but for a speech on this subject by the Minister of Regional Economic Expansion. I do not think the minister's announcement required this justification. We all approve of the idea that Hull be incorporated in the national capital region, but I hope the length of this announcement is not an indication of what may become a practice on the part of the government.
All Canadians will support the development of the national capital as a symbol of our great country. We all want to have a national capital which is in every way worthy of Canada and we will all approve the incorporation of the City of Hull in the national capital region.
I feel the minister oversimplified one problem when speaking about assisting the City of Hull with sewers and other services. I hope he will not make the mistake of believing this will eliminate all the pollution which this government is creating.
We are all proud of our country. I hope the ministers responsible will exercise good sense when planning in this connection, and that the government will make decisions regarding
Development of National Capital projects and not simply get involved in happenings. In other words I hope the government will not decide to erect a building at a cost of $9 million and wind up paying $45 million. I hope there will be the planning the minister spoke about.
After hearing so rfluch from the other side of the house regarding the practising of economies, rigid controls, cut-backs and control over the number of government employees, I must say I find it surprising to hear of plans for new buildings. I just think it is a little surprising, Mr. Speaker, that we have so much talk about control of government operations and yet so little evidence of it. Let there be no question about it. We want a properly developed, properly planned national capital, of which we will be proud, and which incorporates Hull in this conception. But we want a national capital that is sensibly planned and thought through.
[DOT] (2:20 p.m.)
Finally, Mr. Speaker, may I express the hope that the government, in thinking in terms of a national capital and in planning its operations, will keep in mind also that this is a great federal country, will not overdo a tendency that is sometimes evident of going in for too much centralization, and will bear in mind what role it might be able to play in contributing to national unity by considering the minimum degree of centralization that is consistent with efficiency. I congratulate the minister on his announcement. We approve of the project and, as I say, we approve of the very terse announcement he has made here this afternoon.


Mr. Barry Mather (Surrey):: Mr. Speaker, we welcome the announcement by the minister of the important steps which are planned to make the Hull area a central part of the national capital of our country. Since the national capital is paid for by Canadians in every part of Canada there is a great deal of interest in it across the country. It should be a national capital that truly reflects our federal system. I think what the minister has indicated with respect to the plans of the government for Hull is in direct line with the aspirations of many Canadians.
Aside from the cultural plans for the Hull area I was particularly interested to hear of the more down-to-earth ones concerning the pollution situation. If we take care of this problem we will be setting an example for the rest of Canada. I commend the government for what it has announced and again I
9206	COMMONS
Development oj National Capital would urge, as our party has done for some time, that consideration be given to the establishment of a parliamentary committee to deal with matters affecting the national capital.
fTranslation]


Mr. Andre Fortin (Lolbiniere):: Mr. Speaker, the cities of Ottawa and Hull have always been like day and night. One was prosperous, and the other, neglected; one was looked after, the other, forgotten. Several undertakings had been made, but no legislation had been passed.
Today, Mr. Speaker, the statement of the Minister of Regional Economic Expansion (Mr. Marchand) made us all happy, and he was kind enough to hand us a copy in good French. He proposes to reduce the economic disparities and, at the same time, make the federal capital the image of a bicultural and bilingual Canada, as we want to see it in the future.
Mr. Speaker, we are happy that the minister is seeking, through the means he set forth a moment ago, to remove the inequalities between Ottawa and Hull, in order that justice be done on both sides of the Ottawa river.
I believe that all the population will be grateful, economically speaking.
I have listened with interest to the minister's speech, and more than three or four pages of his statement were devoted to the way he sees the federal capital.
He also told us what he thinks of Canada, confederation, etc. but he never gave us hope that the federal capital would really, from a linguistic viewpoint, reflect Canada such as we want to see it, as it has often been repeated during the debate on the official languages bill.
Mr. Speaker, there is something which puzzles me. Recently, I put several questions on the order paper to secure from all departments information on bilingualism, on the linguistic ability of civil servants.
However, Mr. Speaker, more than 18 departments did not care to answer those questions and I confess that I am very disappointed by that attitude.
Therefore, I ask myself the following question: To put up buildings is an excellent thing, and we commend the minister for it, yet if those buildings contribute to anglicize further the people of Hull, it will be an indirect means of making of the federal capital an ivory tower for Anglo-Saxons. I would

DEBATES	May 29, 1969
like to tell the minister that we are concerned about that, and we would like to get the assurance from him that the federal capital, of which he speaks so eloquently, will truly implement economic justice on both sides of the river, so as to abolish disparities. The national capital must actually reflect the wishes of the people of Quebec as well as those of Ontario, and represent Canada such as we want to see it.
Mr. Speaker, we have no guarantee, under the minister's plan, that as a result there will be respect for the French Fact in the federal capital; region and that we will have a truly bilingual capital. We are happy, nevertheless, that something will be done in the economic field. However, in the linguistic and cultural fields, we can only remain perplexed and continue to hope and to wait.



ORAL QUESTION PERIOD


Robert Lorne Stanfield: Mr. Speaker, I have a question which I feel ought to be directed to the Prime Minister arising out of the forecast in the budget papers that farm cash receipts from the sale of wheat will be lower again this year and in view of the statement of the Canadian Federation of Agriculture yesterday that the income position of the prairie grain farmer is clearly disastrous. Would the Prime Minister advise the house what the timetable of the government is with regard to a decision and an announcement of measures of assistance in this area.


Hon. H. A. Olson (Minister of Agriculture):: Well, Mr. Speaker, this question has been asked in the house a number of times, as the Leader of the Opposition knows. He also knows we have been receiving representations regularly up to and including yesterday. I have nothing further to add to what I said yesterday.


Robert Lorne Stanfield: I have a supplementary question, Mr. Speaker, either for the Prime Minister or the Minister of Agriculture. It is in respect of the so-called income maintenance program for grain producers promised by the Prime Minister during the election campaign. Will there be an announcement of
May 29, 1969

the details of this program before summer, if not when, and what is the target date with regard to the implementation of this program promised a year ago?


Horace Andrew (Bud) Olson: Mr. Speaker, as the hon. gentleman knows representations have been made to the government concerningi a number of different programs. We have been discussing not only with the representatives of the producer groups but indeed with some of the provincial ministers of agriculture the details of administering several of these programs. There is something less than agreement on how they should be administered at this point in time.


Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I fully appreciate that matters cannot be disclosed in advance, but can the minister tell the house whether or not western farmers can look for something to be announced by the government next Tuesday night?


Mr. Speaker:: Order, please.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have a supplementary for the Minister of Agriculture. In light of the statement which appeared under a headline on the front page of the Edmonton Journal of Monday regarding the very serious conditions in agriculture in northern Alberta, including abnormally large foreclosure actions and repossessions of machinery, will the minister not consider recommending to the government that the federal government alone or in collaboration with the provincial government take steps to try to stop this particular type of action and see what can be done to help the people of the pioneer and homestead groups of this developing land receive some form of badly needed assistance.


Horace Andrew (Bud) Olson: Mr. Speaker, in replying specifically to the question, we announced some time ago, and indeed we are following this policy in respect of the Farm Credit Corporation, that if any farmer made application setting out reasons indicating that it was difficult or impossible for him to make payments on Farm Credit Corporation loans, this would be taken into account and that there could be deferment. In so far as the other part of the question is concerned, regarding action involving other financial institutions, I believe that the Minister of Consumer and Corporate Affairs in consultation or consort with some provincial minister has this under consideration at the present time.
Inquiries of the Ministry


Gerald William Baldwin: God help the farmers.


Robert Lorne Stanfield: Mr. Speaker, I take it from the answer the Minister of Agriculture gave that he does not approve of the program promised by the Prime Minister, and that in addition the provincial departments of agriculture with whom he has been consulting do not approve?


Horace Andrew (Bud) Olson: No, Mr. Speaker, the Leader of the Opposition cannot make that assumption.



WHEAT-INQUIRY AS TO INTRODUCTION OF TWO PRICE SYSTEM

Mr. J. H. Horner (Crowfoot):: Mr. Speaker, my supplementary question is directed to the Minister of Industry, Trade and Commerce who speaks in this house for the Canadian Wheat Board. It arises from a statement made yesterday by the Canadian Wheat Board to the Agriculture Committee in which it was said that the two price system would not damage our marketing of wheat in international markets and, if it had the job of administration, the wheat board could quite easily do so. Can we expect an early statement from the minister to the effect that the two price system will be put into effect in respect of Canadian farmers?


Hon. Jean-Luc Pepin (Minister of Industry. Trade and Commerce):: Mr. Speaker, this will be part of the over-all review now taking place.


John (Jack) Henry Horner: Mr. Speaker, the Minister of Industry, Trade and Commerce said that the whole question of a two price system was under review. Can he indicate to the house and to the country when this review will be completed and when we can expect an announcement in this regard?


Jean-Luc Pepin: I would answer the usual way; in due course.


John (Jack) Henry Horner: In light of the budgetary papers which forecast a downward trend in cash receipts to farmers, and in view of the serious positions in which farmers find themselves today, can the minister give us some better idea as to when this review will end?


Mr. Speaker:: Order, please.


Jean-Luc Pepin: Some are in favour of a two price system and others are not.
May 29, 1969

Inquiries of the Ministry INCREASED OIL SEED ACREAGE


Mr. George Muir (Lisgar):: Mr. Speaker, in view of the fact there has been a tremendous increase in the planting of oil seed crops this year in order to reduce the large increase in wheat production, will the Minister of Agriculture consider using the machinery he now has in order to protect this important oil seed industry?


Horace Andrew (Bud) Olson: Mr. Speaker, I am not quite sure what the hon. member means by "protect". I know of the decision to plant additional acreage in oil seed crops. If this in fact results in crops substantially in excess of market demands I can only say these are decisions made by the producers themselves.


George Robson Muir: I am disappointed that the minister does not know what I mean by "protect".


Mr. Speaker:: Order, please. There should not be debate. The hon. member should ask his supplementary question, if he has one.


George Robson Muir: I will rephrase my question, Mr. Speaker. The minister is quite aware of the fact that oil seeds are coming into this country at a price under the cost of our production. The one way to protect them is by seeing that oil seeds cannot be brought into this country-


Mr. Speaker:: Order, please.



WHEAT-QUOTA FOR WESTERN FARMERS- RAIL FACILITIES

Mr. S. J. Korchinski (Mackenzie):: My supplementary question is to the Prime Minister, Mr. Speaker, and it arises from the statement of Mr. McNamara to the Agricultural Committee when he suggested that this year quotas will be equalized at five bushels. This quota is so low it is unprecedented even during the history of Liberal government. Has the Prime Minister any special move or action in mind which his government intends to take in order to maintain or live up to the promise he made during the election campaign that 1,300 million bushels of wheat would be sold in a three year period?


Mr. Speaker:: Order, please. The question asked by the hon. member is argumentative.


Stanley James Korchinski: May I rephrase my question, Mr. Speaker? I should like to ask the Prime Minister whether there is any possibility of obtaining more than a five bushel quota,
(Mr. Pepin ]
in view of the fact that in many areas there has been a low grade of wheat resulting in a return of only $1 per bushel? Will there be special consideration given to these areas?


Leslie Gordon Benjamin: should like to direct my question to the Minister of Industry, Trade and Commerce. Can he advise the house whether these shipping points on four bushel or higher quotas are no longer to receive railway equipment for grain loading, and that those points on units of one and two bushel quotas are to receive greater attention in the over-all picture?


Jean-Luc Pepin: Mr. Speaker, we have said on a number of occasions that efforts are being made in respect of equalization to help those who are presently on very low quotas.



CANADA DEVELOPMENT CORPORATION


Mr. David Lewis (York South):: Mr. Speaker, I should like to ask the right hon. Prime Minister whether, in view of some newspaper reports which appeared this morning, the government intends to bring forward a bill to establish the Canada Development Corporation during this session?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I believe the house leader will be talking with leaders of other parties in order to indicate that there are only seven government legislative days left. There is some considerable doubt as to whether we will be able to proceed with everything now in the works. Therefore I should not like to forecast the possibility of the introduction of new legislation until we settle these matters.


David Lewis: Mr. Speaker, in view of the Prime Minister's answer may I ask him whether the Canada Development Corporation still has some priority in the government's mind and whether, if we do not have the bill presented this session, he will indicate when parliament may expect its introduction?


Pierre Elliott Trudeau: This does have priority in the government's mind, Mr. Speaker. I believe this question will be coming up during the debate this afternoon, and that members on the government side may have occasion to allude to it, if the opposition so decides.
May 29, 1969	COMMONS



PROSPECTIVE DATE OF SUMMER RECESS

Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I should like to ask the Prime Minister whether the answer he gave a moment ago means that it is the government's intention that the house will adjourn on June 27 even though certain important business may not have been concluded?


Pierre Elliott Trudeau: Yes, Mr. Speaker, we will do all we can to adhere to that timetable. We realize, of course, that we cannot do the impossible, but this is still our intention. We still hope to adjourn at the end of June. We also hope the opposition parties will co-operate with us in pressing a lot of important legislation through the house by then, in spite of the time that was lost by opposition folly.



NATIONAL DEFENCE


Hon. J. A. MacLean (Malpeque):: Mr. Speaker, in view of the fact the Minister of National Defence will by now have placed before the NATO ministers the proposals of the government as to the reduction of Canada's role in NATO, will the Prime Minister state to the house what the proposed reduction involves?


Pierre Elliott Trudeau: Mr. Speaker, the minister indicated he would discuss this with the house when he returned on Monday. This is still the government's plan.


John Angus MacLean: Mr. Speaker, in view of the uncertainty that exists not only in the minds of the general public but among the members of the forces, will the Prime Minister give an indication as to whether or not it is true that the government intends to replace the air and mechanized brigades in Germany by a 4,000 man mobile force?


Mr. Speaker:: Order, please. I suggest to the hon. member that it is not in order to ask simply whether a statement is true or inaccurate.


John Angus MacLean: Perhaps I might rephrase my question, Mr. Speaker. Let me ask the Prime Minister whether the reduction proposed will be as extreme as those speculated in the press?
DEBATES	9209
Inquiries of the Ministry


Pierre Elliott Trudeau: Mr. Speaker, it is difficult to know what might seem extreme in the minds of opposition members. I remember that when we announced the planned phased reduction, we were told it did not mean anything at all. Hon. members opposite will soon see if this means anything.



NATO-POSSIBLE CANADIAN INELIGIBILITY TO PARTICIPATE IN NUCLEAR PLANNING

Mr. Ray Perrault (Burnaby-Seymour):: supplementary question, Mr. Speaker. Can the Prime Minister tell the house whether Canada's intended NATO plans will make this nation ineligible for membership in NATO's nuclear planning group?


Hon. Mitchell Sharp (Secretary of Stale for External Affairs):: Mr. Speaker, may I be permitted to answer this question? This allegation, made by others as well as the gentleman to whom the hon. member refers, is completely unfounded. NATO ministers in December, 1966, established two permanent nuclear planning and policymaking bodies. The first is called the nuclear defence affairs committee. It is a sub-committee of the defence planning committee. Membership is open to any interested country, whether it is nuclear or not. At present it has 12 members, Canada being one of them.


Mr. Speaker:: Order, please. I had serious doubts about the question as asked by the hon. member. I took into account that I had ruled him out of order yesterday on a related question and allowed the new question today. But I have the impression that the minister is now making a statement of a nature that ought to be made on motions.



NATO-POSSIBILITY OF OTHER NATIONS REDUCING FORCES

Hon. Martial Asselin (Charlevoix):: Mr. Speaker, I wish to direct a supplementary question to the Prime Minister.
In view of the government policy to reduce the size of its military contribution to NATO, I would like to know whether there are any indications to the effect that other NATO allied member countries are going to follow suit?


Pierre Elliott Trudeau: Mr. Speaker, I am not aware of that. Upon his return, the Minister of National Defence will undoubtedly tell us whether other NATO
9210	COMMONS
Inquiries of the Ministry member countries think along the same lines as we do.


Martial Asselin: Mr. Speaker, can the Prime Minister indicate whether the Minister of National Defence will, before introducing his plan to reduce our contribution to NATO, consult with each member country, in order to learn their opinion about Canada's decision?


Pierre Elliott Trudeau: Mr. Speaker, the purpose of the Brussels talks is precisely to get the ministers of the NATO member countries together to discuss that problem.
{English]



GOVERNMENT ADMINISTRATION


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I had hoped to be able to question the Minister of Transport, but he is not here so I am going to ask the Prime Minister to elucidate on his reply of yesterday with regard to the changes in the secretariat of the Privy Council. I ask whether these new assistant secretaries who are dealing with planning and operational matters in the Privy Council office will be available for examination before respective standing committees of the house, in view of the fact that they seem to be taking over functions of deputy ministers and other directors of departments.



HIGHWAY SAFETY


Barry Mather: Mr. Speaker, may I direct a question to the attention of the Minister of Consumer and Corporate Affairs.
I ask whether, in view of the results of tests on tires in the United States, recently released by the United States government, in which it was found that 18 per cent of the tires tested failed to meet safety requirements, the minister would consult with his colleague the Minister of Transport in order to assure us that Canadian consumers will have safety in respect of tires.


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: Mr. Speaker, this question should properly be directed to the Minister of Transport, whose ministerial responsibility includes this area. The Minister of Transport will be in the house tomorrow. I will, of course, as always, consult with him when it is a question involving consumers.

DEBATES	May 29, 1969



AGRICULTURE


Mr. Henry Latulippe (Compton):: Mr. Speaker, I have a question for the Minister of Agriculture.
In view of the increasing and general discontent among Quebec farmers about the quotas on industrial milk, would the minister indicate whether his department intends to review its policy, so that all dairy producers may take advantage of the subsidies, and so that the penalty for production in excess of quotas may be eliminated?


Mr. Speaker:: I take the liberty of pointing out to the hon. member that this question was asked yesterday.



POST OFFICE DEPARTMENT


Mr. Heaih Macquarrie (Hillsborough):: Mr. Speaker, I should like to direct a question to the Postmaster General. It is in reference to a developing fiasco like unto that concerning passports. Can the minister advise what is now the status of three-digit zones in Toronto and other large centres, in the light of the recently announced freeze on this system and the study of yet another zoning plan?


Mr. Speaker:: Here again I have the impression that this question was asked yesterday.



NATIONAL ARTS CENTRE


Mr. Donald Maclnnis (Cape Breton-Easf Richmond):: Mr. Speaker, my question is for the Secretary of State. I ask him whether prior to the opening of the $46 million Arts Centre it will be necessary to call for exterminators to get rid of the rats.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order, please. I have some doubts whether this is a question which qualifies for consideration by the house at this time.


An hon. Member:: The place is overrun with them.
May 29, 1969



INDUSTRY


Mr. A. D. Hales (Wellington):: Mr. Speaker, I should like to direct my question to the Minister of Industry, Trade and Commerce. It is in connection with the United States-Canada car pact. Could the minister advise the house whether the letters of intent, or agreement, signed by the Canadian car manufacturers have been withdrawn or cancelled?


Jean-Luc Pepin: Mr. Speaker, if I know what the "letters of intent" referred to are, they were valid for a period of time and that period of time is now exhausted. We are now working on the basis of a less formal system.


Alfred Dryden Hales: A supplementary question, Mr. Speaker. Would the minister, under motions, give the house an up-to-date report on the review of the pact?


Jean-Luc Pepin: Yes, Mr. Speaker.


Jean-Luc Pepin: Mr. Speaker, may I ask the hon. member for Wellington what he had in mind when he said "review"? It would be useful for me to know in preparing an answer.


Mr. Speaker:: Order, please. We are now dealing with the question of the hon. member for St. John's East. The minister and the hon. member for Wellington might have a conference outside the house.



WATER RESOURCES


Mr. James A. McGrath (St. John's East):: Mr. Speaker, I would like to direct my question to the Prime Minister. In view of the fact that the Premier of Newfoundland said yesterday in St. John's that the federal government was consulted and approved of the opening of the phosphorus plant at Placentia Bay, will the government now fully accept its responsibility and justly compensate the fishermen of Placentia Bay who have been deprived of an income as a consequence of the pollution of that part of Newfoundland?


Mr. Speaker:: Order, please. I have some doubts as to the form of the question. But I 29180-583j
Inquiries of the Ministry believe the intent is clear enough, and perhaps the minister should be allowed to reply.


Pierre Elliott Trudeau: Mr. Speaker, this question has been debated, or discussed, in various ways with the Minister of Fisheries. I am sure he will answer any such question when he is in the house.


James Aloysius McGrath: On a point of order, Mr. Speaker, I am referring to a very strong statement made yesterday by the Premier of the province of Newfoundland in which he made a very serious charge, that in fact the government of Canada was responsible for the pollution of Placentia Bay. I think the Prime Minister owes the country, and certainly the fishermen of Newfoundland, an explanation.


Mr. Speaker:: The hon. member for Comox-Alberni.


James Aloysius McGrath: May I call it ten o'clock?


Mr. Speaker:: Not now. The hon. member for Comox-Alberni.


Malcolm MacInnis: The Prime Minister wants to call it ten o'clock.


Pierre Elliott Trudeau: Surely. I would love to.


James Aloysius McGrath: See you at ten o'clock.


Mr. Speaker:: Order, please.


James Aloysius McGrath: Make sure you are there, too.



STRAWBERRIES-MAINTENANCE OF IMPORT DUTIES

Mr. Thomas S. Barnett (Comox-Alberni):: Mr. Speaker, I have a question for the Minister of Agriculture. It is related to a question asked yesterday of the Minister of National Revenue by the hon. member for Fraser Valley West. I ask the minister whether he can inform the house what steps he has taken to meet the request of the B.C. Federation of Agriculture, made some three weeks ago, for the retention of import duties on strawberries during the 1969 season.


Horace Andrew (Bud) Olson: Mr. Speaker, I will have to take that question as notice. I was unaware that the hon. member for Fraser Valley West addressed that question to me yesterday.
92X2	COMMONS
Inquiries of the Ministry [Translation]



NATIONAL CAPITAL


Mr. Roch La Salle (Joliette):: Mr. Speaker, I should like to put a question to the Minister of Regional Economic Expansion.
As I am quite pleased with the minister's statement concerning the national capital, could he tell us whether the Quebec government is aware of the statement he has made today and also if the agreements with Quebec in this connection have been officially accepted?


Jean Marchand: Mr. Speaker, the Quebec government is fully aware of this and has even been given this morning the general outline of our intentions.
fEnglish]



NATIONAL DEFENCE


Mr.  R. Gordon L. Fairweather@Fundy-Roy-al: Mr. Speaker, I have a question for the Secretary of State for External Affairs. Will Canada support the proposal of the United States that Japan and seven other countries be admitted to the Geneva disarmament conference when it reconvenes?


Mitchell William Sharp: Mr. Speaker, I cannot answer that question directly. I would have to make some more inquiries; but I can say that Canada does support an enlargement of this committee.



HEALTH AND WELFARE


Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I would like to direct a question to the Minister of National Health and Welfare. In vew of the fears expressed by the National Communicable Disease Centre in the United States that German measles will attain epidemic proportions this year, and the resulting program of massive immunization, will the minister assure the house that his department is also preparing for an epidemic and reveal what steps are being taken?


Hon. John C. Munro (Minister of National Health and Welfare):: I can assure the hon. member that the department is assessing all

DEBATES	May 29, 1969
the potentials of such an epidemic as far as Canada is concerned, and that if we find there is grave danger in this area we shall take the proper action.



EXTERNAL AFFAIRS


Mr. Andrew Brewin (Greenwood):: My question is for the Secretary of State for External Affairs, Mr. Speaker. I want to ask him whether he was expressing government policy when he was reported as stating in Toronto yesterday that Canada's negotiations for diplomatic recognition of the People's Republic of China are based upon a one China as distinct from a two Chinas policy and, if so, whether this implies that should the negotiations be successful Canada would cease to recognize the Nationalist government at present installed in Taiwan-


Mr. Speaker:: Order, please. The hon. member will realize that the question as asked is not in proper form. He cannot ask the minister to indicate whether he was expressing government policy in a statement made outside the house.


Francis Andrew Brewin: Then I will rephrase the question and ask the minister directly whether the negotiations for the recognition of the People's Republic of China involve a one China as distinct from a two Chinas policy and, if so, whether this means that the nationalist government in Taiwan would not be recognized as the government of mainland China?


Mitchell William Sharp: I saw those reports in the paper. If I might be permitted to do so I should like to say that the quotes which appeared in that paper bear very little resemblance to what was said at the meeting, because it was a private meeting at which no reporters were present, and it is contrary to the rules of the Institute of International Affairs that any report should appear.
May I, now, answer the question which has been directly put to me? As I have said on a number of occasions, Canada has a one China policy, and since the nationalist government purports also to be the government of China we cannot recognize both Peking and Taiwan at the same time.


Leslie Gordon Benjamin: In
view of the statements made, I believe, by the ambassador for the government of Taiwan, may I ask whether the government of
May 29. 1969

Canada has received any notice, formal or otherwise, from the government of Taiwan to the effect that should Canada establish diplomatic relations with the mainland government the government of Taiwan would break off diplomatic relations with Canada?


Mitchell William Sharp: The ambassador of the republic
of China has indicated his disagreement with the policy which is being followed by the present government but he has given no notice of his future actions.


Robert Lorne Stanfield: I should like to ask the Secretary of State for External Affairs when he proposes to break off diplomatic relations with Taiwan, since he apparently does not recognize the present government of Taiwan as being the duly constituted government of Taiwan.


Mitchell William Sharp: We are now negotiating not only with regard to the recognition of Peking as the government of China, but to establish diplomatic relations. Until that event happens I do not think there is occasion for any other action.


Robert Lorne Stanfield: If the present government of Taiwan is not the duly constituted government of Taiwan six months from now, how is it the view of the government that it is the fully constituted government of Taiwan today?


Mr. Speaker:: Order. I suggest to the Leader of the Opposition and to the minister that this is argumentative.


DIPLOMATIC EXCHANGE WITH THE VATICAN
James Aloysius McGrath: should like to address a question to the Secretary of State for External Affairs. Can the minister bring the house up to date as to the progress of the negotiations with the Vatican?


Mitchell William Sharp: Mr. Speaker, there is no further progress to report.


UNITED NATIONS
Mr. J. Edward Broadbent (Oshawa-Whil-by):: A supplementary question to the Secretary of State for External Affairs, Mr. Speaker. Does what he said mean that if Canada
Inquiries of the Ministry establishes diplomatic relations with the government of mainland China, Canada would also support a move by that country to take its seat-


Mr. Speaker:: Order. The question as asked is hypothetical.


John Edward Broadbent: I will rephrase the question, Mr. Speaker. Does the government intend to support the claim of the present government of mainland China for a seat in the United Nations?


Mitchell William Sharp: I have made it quite plain on a number of occasions that our policy with respect to membership of China in the United Nations would be consistent with the success we achieve in these negotiations with Peking.


HEALTH AND WELFARE
Mr. P. V. Noble (Grey-Simcoe):: I should like to direct this question to the Minister of National Health and Welfare. Does the government contemplate introducing legislation in respect of transplanting human organs or tissue?


John Carr Munro: Not at the moment, Mr. Speaker.


FINANCE
Mr. J. M. Forresiall (Dartmouth-Halifax East):: I am not sure to whom my question should be directed, but I will direct it to the Prime Minister. Since it is now some weeks since the Nova Scotia United Black Front submitted a particular request to the federal government for a special aid grant, can the Prime Minister advise the house where this request for funds now stands?


Pierre Elliott Trudeau: I am not sure of the group to which the hon. member is referring but I believe the subject deals with regional economic expansion, one which of course comes under another minister.


J. Michael Forrestall: Mr. Speaker, may I redirect my question to the Minister of Regional Economic
3214	COMMONS
Inquiries of the Ministry Expansion. In view of the fact that it is now some weeks since the United Black Front in Nova Scotia submitted a request to the federal government for a special grant in aid, can he indicate where the request stands and when the black community in Nova Scotia may expect a reply?


Jean Marchand: Mr. Speaker, I think this subject comes under the jurisdiction of the minister of health.


J. Michael Forrestall: Then may I direct my question to the minister of health, now that the Prime Minister has taken a whack at it and does not seem to know anything about it.


Mr. Speaker:: The hon. member for
Hillsborough.


J. Michael Forrestall: On a point of order, Mr. Speaker, if this matter falls within the minister's preview and he does not answer, what is the purpose of getting up and asking questions at all? May I direct my question to the minister of health. Can he advise the black community in Nova Scotia where their request stands?


John Carr Munro: Yes, Mr. Speaker. A meeting has been planned between myself and the Secretary of State to determine the matter finally, and we think we will have a decision within the next few days.


SOCIAL SECURITY
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of National Health and Welfare. In view of the ever-widening gap between the level of the consumer price index and the 2 per cent increases which are permitted annually to those on old age security pensions, is the government considering amending the act to permit these increases to reflect the full extent of the increases in the cost of living?


John Carr Munro: No, Mr. Speaker.


Stanley Howard Knowles: Ten
o'clock, Mr. Speaker.
IMr. Forrestall.]
DEBATES	May 29, 1969


REGIONAL DEVELOPMENT
Mr. John Lundrigan (Gander-Twillingale):: My question is for the Minister of Regional and Economic Expansion, Mr. Speaker. In view of the critical state of unemployment and the financial crisis in the Province of Newfoundland can the minister say whether a program of development and assistance will be announced before parliament rises for the summer recess?


Jean Marchand: I do not think so, Mr. Speaker.


John Howard Lundrigan: Can the minister give some indication as to whether such a program will be announced before practically everyone leaves Newfoundland for Toronto?
On a point of order, Mr. Speaker, this question has been asked in the house in one form or another for about six months and we continue to get the same kind of response. I consider that this is not in order or in accordance with the rules; the minister is either misleading the house or he is not giving the information necessary.


Mr. Speaker:: Order. The hon. member knows that the rules do not require a minister to answer a question. The hon. member has a right to ask a question but there is no obligation on the part of the minister to reply. Should he not be satisfied with the reply, the hon. member may under the rules give notice for the consideration of the matter at the time of adjournment. I suggest this is as far as he can go.


John Howard Lundrigan: Perhaps, Mr. Speaker, you clarified the point. I do not think the minister answered the question. Somebody has information which is not being given and it is causing a lot of concern in Newfoundland.
Ten o'clock.


HOUSING
Mr. Lincoln M. Alexander (Hamilton West):: I wish to direct a question, Mr. Speaker, to the minister in charge of housing. In view of the fact that the hon. gentleman has not so far indicated that urban renewal projects have been released from the "freeze" can he tell us when the freeze will be removed?
May 29, 1969	COMMONS


Hon. Robert K. Andras (Minister without Portfolio):: I am not able to give any specific date, but I can assure the hon. member that this matter is under intense examination and that I am devoting my attention to it right now.


LABOUR CONDITIONS
Robert Lorne Stanfield: I should like to direct a question to the Minister of Manpower and Immigration having to do with Operation Retrieval, in which I believe the hon. gentleman has considerable pride, and ask him whether he can explain why this operation has proved so inadequate that at the Massachusetts Institute of Technology it has failed to arrange for the placement in Canada of any of the Canadian students who are studying there.


Hon. Allan J. MacEachen (Minisler of Manpower and Immigration):: Mr. Speaker, the purpose of "Operation Retrieval" is to advise Canadian students in foreign universities of the opportunities available, and this we do. The decisions are ultimately made by the graduate students themselves.


Robert Lorne Stanfield: A supplementary question, Mr. Speaker. May I ask the minister whether the Operation Retrieval program is under review? I ask this question because it appears that the operation has failed to secure employment in Canada for any students at M.I.T. who wish to return to Canada to work.


Mr. Speaker:: Order, please.


POST OFFICE DEPARTMENT
Heath Nelson Macquarrie: Mr. Speaker, with reference to the question I put to the Postmaster General a few moments ago, Your Honour suggested it was asked yesterday. Actually the Postmaster General was not in the house yesterday. I have checked Hansard and there are no similar questions, in fact none since this important matter has come into contention. I am sure the Postmaster General is prepared to give an answer now.


Hon. Eric W. Kierans (Postmaster General and Minister of Communications):: Mr. Speaker, I have answered the question before. The zoning regions remain in effect. We are not considering expanding the zoning system at
DEBATES	9215
Inquiries of the Ministry this time to Vancouver and other communities until we have been able to examine an over-all recommendation for a national coding system which will make automation inside the Post Office much more feasible.


Heath Nelson Macquarrie: A supplementary question. Perhaps the minister would give consideration to advising his officials in the Toronto area, who have advised the public that there has been a freeze on the three digit zone?


Eric William Kierans: Mr. Speaker, the three digit zone remains and will be integrated into a national coding system if we take this decision.


IMMIGRATION
Mr. Donald Maclnnis (Cape Breton-East Richmond):: Mr. Speaker, I have a question for the Minister of Manpower and Immigration. Is the minister aware that last Friday an American criminal smuggled a tape recorder past the customs and immigration authorities in order to test the minister's policy announcement a few days earlier? Has the minister looked into this matter in order to find out what was the intention of this criminal? What did he intend to do with the tape recording if the minister's policy was not followed through and he was denied entry into Canada? What was the intention of that criminal?


Mr. Speaker:: Order, please.


Malcolm MacInnis: Mr. Speaker, with all due respect, we have a situation where criminals are being allowed into this country. A national newspaper has published a report that the customs' laws have been violated. A tape recorder was smuggled in with the specific intention of putting the minister's policy to the test. I think we are entitled to know what the minister intends to do in a situation where our laws have been violated by an American criminal so as to test the minister's policy. What was the intention of that criminal should the minister's policy not stand up to his test?


Mr. Speaker:: Order. The hon. member can ask what was the minister's intention, but he certainly cannot ask the minister what this individual's intentions were. I cannot see how this qualifies as a question at this time.


Malcolm MacInnis: Well, I would be satisfied with the minister's intention in this respect.

May 29. 1969
Business of the House Hon. Allan J. MacEachen (Minister of Manpower and Immigration): Mr. Speaker, the intention was to prove that the immigration officers were carrying out the policy of the government.



BUSINESS OF THE HOUSE


Gerald William Baldwin: Mr. Speaker, may I be allowed to ask the government house leader what is the business of the house for the balance of this week and for next week, indeed, as far ahead as his eye can see?


Donald Stovel Macdonald: Mr. Speaker, as the house knows, today will be an opposition day under the auspices of the New Democratic party.
Tomorrow we will return to item No. 75 to complete the debate on second reading of the bill with regard to the National Housing Act. That will be followed immediately by the second bill to amend the National Housing Act, which is item 82 on the order paper.
Assuming that those two matters are completed by Friday afternoon, the house will then turn to the income tax bill. The debate on that bill, which it is anticipated may run for several days in view of the fact that it will be considered in committee of the whole, will be interrupted on Tuesday evening at eight o'clock for the purpose of a budget speech by my hon. friend the Minister of Finance. Later in the week we would hope to reach the Canada Telesat bill.
I confirm that the debate following the budget speech will commence a week from next Monday, and I hope run for several days at that time.


Gerald William Baldwin: A supplementary question. Would the minister consider discussing, through the Canadian variety of the usual channels, the business for the balance of this part of the session so that possibly in the not too distant future the minister might be able to make a statement on motions and let the house know what the government's intentions are?


Donald Stovel Macdonald: Mr. Speaker, that is a very helpful suggestion. Perhaps I can meet with the other house leaders, either later today, depending on mutual convenience, or perhaps tomorrow morning, to try

to work out the business for the balance of the month of June.


James Aloysius McGrath: Mr. Speaker, a supplementary question. May I make a further helpful suggestion to the house leader by asking him to bring forward government order 68, dealing with the fifth report of the Standing Committee on Transport and Communications, the substance of which deals with the very serious problems of transportation in the Atlantic provinces?


Donald Stovel Macdonald: Mr. Speaker, it is pretty clear that if the hon. member and his colleagues had not wasted a sitting day of the house on this matter previously this session, we would be one day closer to dealing with the important legislation still remaining.


James Aloysius McGrath: A further supplementary question. Surely the government house leader knows of our genuine interest in this subject and that we are prepared to bring the matter to a vote if he brings it forward.



GOVERNMENT ORDERS


David Lewis: That this house condemns the failure of the government to provide policies to prevent further takeovers of Canadian resources, industry and financial institutions by foreign corporations, thus increasing the danger of foreign domination of Canada's economy and culture to the point where Canada's political independence is threatened.
[DOT] (3:10 p.m.)
He said: Mr. Speaker, I inscribed this motion on the order paper on my own behalf and on behalf of my colleagues because in our view the question of the foreign domination of our economy and the erosion of Canada's cultural development and political independence by foreigners is one of the two major problems facing the future of our country. One of those problems is the question of national unity, the other is Canadian economic, cultural and political independence. It is also our contention that these two aspects of our country's existence are inextricably intertwined, that you cannot have cultural or political independence without economic selfreliance and, of course, your economic selfreliance is threatened if your political
May 29, 1969	COMMONS
independence is in any way affected by foreign domination.
The other reason we have placed this notice of motion on the order paper and before the house at this time is that as one watches the performance of the federal government during the present session and looks at the performance of other Liberal governments in preceding sessions one cannot help concluding that this government, as previous Liberal governments have been, is totally committed to the concept of unrestricted continentalism and to the idea that there is nothing wrong with permitting Canada to become an economic and political satellite of its powerful neighbour to the south.
The Prime Minister has said on a number of occasions, as is his habit, that he does not like nationalism. I am not quoting him when I say that but I do not think I am being unfair to him. He has said he does not like economic nationalists, but to my knowledge at least he has never defined what he means by those terms. I wish to make it clear at the outset that I am not speaking of a sterile, negative kind of nationalism that beats its breast and wants to build a wall around the nation of which we are proud citizens. I am speaking of a creative pride and of a determination to build in our society, Canada, our own system of values; I am speaking of our determination to establish our own goals and to have the collective freedom to work toward those goals without interference and without having our freedoms eroded from outside. That is what I am talking about.
I want to make it clear that I am not talking about anti-Americanism; I am talking about pro-Canadianism, and not against any nation or any people, large or small, powerful or weak.
In January, 1967, I had occasion to write an article on the general subject of Canadian nationalism for one of Canada's national magazines, Maclean's. May I quote a sentence or two from that article. I said in part:
By all means, let us maintain a close relationship and friendship with the United States. Any other course would be silly.
I said in the article what I emphasize today:
But a friendship grounded in equality and selfrespect is honourable and constructive; a relationship based on the timidity of a satellite is humiliating and sterile.
The way we have permitted our economy to be gobbled up by multi-national corporations at an ever increasing rate has changed 29180-584
DEBATES	9217
Foreign Control of Canadian Industries us from a self-respecting friend to a satellite of the powerful country to the south. Having watched the development of Canada with a great deal of anxiety and pain in my lifetime,
I have not been able to escape the conclusion that in developing Canada's nationhood we have also brought on a tragedy. I quote again from the article:
But Canada's tragedy is that no sooner had we begun to emerge from our sense of inferiority toward the haughty mother across the sea than we acquired an even more virulent inferiority toward the rich uncle across the border. The materialist goals of the establishment encouraged economic integration with the United States, and political leadership bowed to what it called the inevitable.
It was not inevitable then, Mr. Speaker, and it is not inevitable now. I continue to quote:
It was inevitable only because of the premise that economic goals must be shaped mainly by private enterprise and that what is good for it is good for the nation-
That premise, as history shows, is wrong, vicious and untenable. There is surely no argument about the alarming extent of foreign ownership of Canada's economy. The Watkins report confirmed that between 60 per cent and 80 per cent of our manufacturing, petroleum, natural gas, mining and smelting, and other industries are owned by multinational corporations which almost entirely have their headquarters in the United States. Indeed, the report states:
No other country seems prepared to tolerate so high a degree of foreign ownership as exists in Canada.
The process continues unabated. News of further proposed takeovers has appeared in recent weeks. A couple of months ago we read of an attempt by a United States corporation to take over a Quebec-based life insurance company. If that takeover was stopped, and I am not sure that it has been, it was stopped by action of the Quebec government. Then, too, we have learned of an attempt by a United States corporation to take over a Nova Scotia-based life insurance company. As a matter of fact that company is seeking to bring a bill before parliament at the present time. We read of the Phillip Morris attempt to take over Canadian Breweries and, most alarming of all, just a few days ago we read of the takeover of Royal Securities Corporation Limited by a large United States company. Royal Securities Corporation is important in the Canadian underwriting and money market operation. To put it in one sentence, Mr. Speaker, what we have seen is that multi-national corporations, which are mostly
May 29, 1969
9218	COMMONS DEBATES
Foreign Control of Canadian Industries
United States based and own many of our Canadian raw resources and secondary manufacturing industries, are now expanding their activities into the financial market. Attempts are being made to take over Canadian life insurance companies and, God knows, we have few enough of those in this country. These foreign companies seek to take over Canadian corporations involved in our money market.
I remind hon. members that the Watkins report warned us that we have but 10 years, or at most 15 years, to reverse this trend. After that, as the report said, "it will be too late". Indeed, Mr. Speaker, as one sees the extent to which Canada's economy is controlled by foreign corporations one cannot help feeling that even now it will be a tremendously difficult task to reverse this trend and to give the shaping of Canada's destiny back to the people of Canada. It will take a tremendous amount of effort, a great deal of leadership and much more intensive application than the government has begun to show if we are to begin the trend that will lead to the repatriation of Canada's economy. Yet even now nothing is being done nor even foretold about this matter, and nothing has been done for the last number of years.
[DOT] (3:20 p.m.)
The Watkins report lies gathering dust, even though the Hon. Walter Gordon was the Minister of Finance responsible for appointing the committee that produced that report. You will no doubt recall what he said when he presented it to the house. I am not quoting but I think I am accurate when I say that when he laid the report on the table he made perfectly clear to parliament that it was not government policy. He said he was not tabling it as a document having the support of the government or even as a document that the government had considered. He was merely laying it on the table for the information of members of parliament and the people of Canada. It now lies somewhere gathering dust. No one has said that anything proposed in the Watkins report will be acted upon by this government.
When the Canada Development Corporation was first suggested in 1963 and, later, in the Watkins report, it was held out as one of the instruments by which it would be possible to extend Canadian ownership in the Canadian economy through public and private investment, but the Canada Development Corporation has been conceived anew and aborted every year for six years, including this year.

I asked the Prime Minister (Mr. Trudeau) earlier this afternoon what the government's intention was with regard to the C.D.C. and I received an evasive and unsatisfactory answer.
This is why takeovers are occurring. What happens is that the appropriate minister, usually the Minister of Finance (Mr. Benson), expresses concern-this for consumption by the Canadian people, but I can almost see him simultaneously throwing an inviting and reassuring wink to his powerful United States friends indicating that they need not pay too much attention to his words. I am not exaggerating, Mr. Speaker. Every time a minister, including the Prime Minister whose remarks I will refer to in a moment, has anything to say, the emphasis is on the need for United States capital and the openness of our door. There is never any emphasis or determination to reverse the process and start it in another direction. This is why I am thoroughly justified in saying that the expression of concern is a crocodile tear merely for our benefit, while at the same time the powerful United States corporations are assured they need not worry about this government, as indeed they need not.
Indeed, despite its occasional Walter Gordon, and very occasional he is, the Liberal party has always been committed and is now more than ever committed to a slavish con-tinentalism. It suits the wishes of the most powerful of Canada's private economic establishment, but it relentlessly erodes Canada's self-reliance as a nation. When we look at our economy we see what we are prevented from doing, even if this government had the imagination to try to do these things. Because of the situation I have described, interest rates in Canada must be higher than those in the United States. Why? In order to attract United States capital to take over Canada's economy, with the result that interest rates in Canada have reached an usurious level.
The price structure in this country is out of our control, as we are told over and over again, because we are so tied to the United States economy that we cannot do very much about it. The integration of the Canadian economy with the United States economy and the control of our economy by large multinational corporations makes it impossible for this or any other government, unless it has the conviction and courage to deal with the matter in a forthright way, to do very much about the price structure in Canada. The cost of living continues to rise. Our monetary policies are stultified because of a pegged
May 29, 1969	COMMONS
exchange rate. Again, this is as a result of our tie-up with the United States.
Our export trade is mostly in one basket. Our total economic position in the export market is entirely dependent on the United States. We have not attempted in any serious way to extend our export trade in other parts of the world.


An hon. Member:: Nonsense!


David Lewis: My hon. friend in his ignorance says, "nonsense". Perhaps he will eventually learn something and then understand what he is talking about, although having heard him on several occasions I am not at all sanguine about that.
The laws and policies of our powerful neighbour often control and always influence the policies of important corporations in this country. The author of the Watkins report made a speech in Montreal in January of this year. Professor Watkins said at that time:
Not only have we largely lost the capacity to create economic growth in Canada, the capacity of the Canadian government independently to create jobs and control inflation is negligible.
This is all as a result of the continentalism which we have permitted to come about in this country. The other day the Prime Minister was interviewed by a member of the New York Times. I will not quote the Prime Minister but paraphrase accurately. I can almost see the Prime Minister shrugging his shoulders when he stated that the problem of economic domination is world wide and is almost inevitable. He pointed to the United States influence not only in Canada but also in Europe, to the Japanese influence in the Far East and to the Soviet influence in the satellites which border that country.
When the Prime Minister made that sweeping statement he certainly failed to appreciate the fact that in most other countries of the world, Canada being one of the very few exceptions, there are laws on the statute books limiting the extent of equity foreign investment and controlling that investment. As pointed out in the Watkins report, this is true in Japan, the United Kingdom, France, Sweden and Denmark. As far as I know it is true in most western countries. Whether they are unitary or federal they use their power to limit foreign investment. The Minister of Finance should not try to hide behind the constitution in this sphere. The fact is the minister and his colleagues have made no attempt to devise laws within our federal constitution or to seek the assistance of the 29180-5842
DEBATES	9219
Foreign Control of Canadian Industries provinces to devise laws that might be concurrent in both jurisdictions.
I repeat that when the Prime Minister made the statement to which I referred, he failed to appreciate the fact that almost every other country in the western world has established limits on the extent to which that country will permit its economy to be gobbled up by powerful multi-national corporations. In Canada there are no such limits. They are free to come in and bite, eat and digest the Canadian economy without hindrance. When the Prime Minister referred to the influence and attempts by the Soviet Union to control the economies as well as the minds of its satellite countries he forgot, though I am sure he is well aware, it is precisely because of those attempts that there was trouble in Hungary in 1956, in Czechoslovakia in 1968 and is why Yugoslavia left the Soviet orbit in 1948. It is why we have the constant and continuing hostility toward Soviet control in those countries which, one of these days, will result in very important developments in the communist world.
[DOT] (3:30 p.m.)
It is of course true that the powerful economic empires, particularly those with headquarters in the United States, are pressing everywhere in the world and seeking to establish themselves everywhere as part of the present corporate policy of conglomerates and monopolisitic tendencies involving the building of oligopolies, the control of markets, the creation of demand, and the diversification of their investments. All of these things are pushing these large international corporations to seek entry into every part of the world. But, as I have said, in Canada alone do these corporations not even have to push. They just walk in and the Minister of Finance, if he does not stretch out his hand in welcome, certainly uses his forefinger to invite them to come in. It is this situation which is beginning to worry the majority of the people of Canada. Slowly, Mr. Speaker, the truth about the foreign control of the economy and the political influence which that exerts on Canada is beginning to emerge.
The other day, as I am sure hon. members know, the Hon. Walter Gordon made a speech to grade 13 students at West Humber collegiate in Toronto. I hope he had a more receptive audience than he ever had in his own party when he was a member of the Liberal government. I point out that Mr. Gordon said he would, and he did, give three illustrations
9220	COMMONS
Foreign Control of Canadian Industries of the way in which economic control influences and, although he did not use as strong a word as this, bamboozles governments of countries in which that economic control exists and is applied from the outside. I quote from Mr. Gordon's speech as reported in the Toronto Star of May 22. In giving the first illustration he said:
Soon after Mr. (Lester) Pearson's first government was formed In 1963, a number of rather mild proposals were put forward . .. There was an immediate outcry including strong protests from the U.S. State Department. It was claimed that Canada was proposing to change the rules of the game, something that was reprehensible.
This, of course, was just plain nonsense.
Then he went on to say:
In 1963 the Pearson government believed that ever increasing foreign control over the Canadian economy was not in Canada's best interest. But taking action to counteract this trend encountered angry protests from the U.S. State Department, protests that were taken seriously by the government, a clear indication that our political independence had been eroded.
Those words are Mr. Gordon's, not mine, Mr. Speaker. Then he went on to give the second illustration:
Two years later, the Pearson government was considering legislation which would have given Canadian magazines a better chance to compete with the Canadian edition of Time-[DOT]
He did not make any reference to Reader's Digest. A little later he said:
At that point the U.S. State Department went into action. Its representatives urged on behalf of the whole U.S. administration that nothing should be done which would in any way upset or annoy the late Mr. Henry Luce, the proprietor of Time.
It was submitted that Mr. Luce had great power in the United States through his magazines. Time, Life and Fortune, and that if he were irritated, the results could be most damaging both to Canada and to the U.S. administration.
Listen to this paragraph in Mr. Gordon's speech, and may I say here, Mr. Speaker, that whatever I may have thought of some of Mr. Gordon's policies my acquaintanceship with him convinced me that he was a man of great integrity and total truth, and therefore I take what he says without the slightest hesitation as being the absolute and unqualified truth.
The Canadian government concluded, quite rightly in my opinion-
Even he bowed down to the pressure.
-that there was considerable validity to these assertions respecting the influence of Mr. Luce and, accordingly, the Canadian edition of Time magazine was exempted from the proposed legislation.

DEBATES	May 29, 1969
There is another example of direct political intervention. Then Mr. Gordon referred, as a third example, to the famous case of Citibank of New York taking control of the Mercantile Bank of Canada, at which point the government did dig in its heels to some extent, although even in that case a concession was made.
I suggest there simply cannot be any valid argument against the proposition that if a country's economy is controlled by a powerful neighbour then its political independence is threatened, if not actually eroded.
The late John Foster Dulles, speaking about an Asian country, and I am sure this statement is well known to a good many members of this house, once said:
There are two ways of conquering a foreign nation. One is to gain control of its people by force of arms. The other is to gain control of its economy by financial means.
That was true of the Asian nation. It is true of Canada. It is true of every nation in the world. Everyone in this house has read the statement which George Ball included in his book, to the effect that sooner or later Canada would be so economically controlled by American corporations that political union and political solidarity would be inevitable.
Who can doubt these facts when you look at the present situation in Canada? The Watkins report makes clear, as I said, that from 60 per cent to 80 per cent of our manufacturing, petroleum, natural gas, mining and smelting industries are American owned. It makes clear that of 414 corporations in Canada with assets over $25 million, more than half of those total assets are owned by American corporations.
I want to say, Mr. Speaker, that these economic developments have also reached into our labour movement for historical reasons, in that the largest part of the trade union movement in Canada consists of branches of international unions. However, I have been glad to note that in the last number of years large sections of the labour movement in Canada have demanded and gained Canadian autonomy for their membership, and the right to elect their own leaders and pursue their own policies in Canada. But I regret to say there are still sections of Canada's labour movement where this is not true. There are still sections which are still too much under the direction of their headquarters in another country. I urge my friends in the labour movement, as I urge the government in the other sphere of our economy, to broaden and
May 29. 1969	COMMONS
extend the autonomy of the Canadian membership in international unions so that we can build a genuine Canadianism.
In my opinion, from what I have read, Canadians are becoming increasingly aware of the threats which I have tried to describe. A poll taken by the Toronto Star a year ago found that 60 per cent of those interviewed were anxious about the future of Canada because of outside economic control. If I may, Mr. Speaker, I warn the Canadian people through this parliament that the trend which I have described and which everyone regrets will not be reversed if the economy is left to the control of private corporations. To them a buck is a buck and they will not permit considerations of nationhood to stand in the way of any development even if it moves in the direction of greater and greater control from the outside.
We must have massive public investment to redress the balance. This is why the Canada Development Corporation is of such importance. We must have it as soon as possible. As a first step we must immediately implement the recommendations in the Watkins report. The fact is that those whom we invited to this country as guests are in the process of taking over our house and we not only let them but help them to do so.
[DOT] (3:40 p.m.)
I started by saying, and I end in the same way, that there are two major problems facing the future of our country, among many other important problems. One is the problem of national unity. The other is the problem of Canada's economic and political independence. I say that no viable Canada is possible without national unity. This is why we in our party supported the official languages bill and support any other effort which is made and which we hope will be successful to cement the relationship between English and French speaking Canadians. No viable Canada is possible without equality across the country. This is the reason we support every attempt to remove regional disparity. But I end by saying with all the strength I can that no meaningful Canada is possible at all without economic self-reliance, without political independence, and without a creative and positive Canadian nationalism that inspires common goals and a deep-seated belief in the future of this great country.


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, I have just listened to the very interesting dissertation of the hon. member
DEBATES	9221
Foreign Control of Canadian Industries for York South (Mr. Lewis), loaded with all the usual fine phrases and the hypocrisy of the New Democratic party. Here is a party whose main financial support comes from international trade unions. But do they refuse this support? No, they do not refuse it. They take the support and then say, "You fellows should really be more Canada oriented". It somehow reminds me of a story I once heard of a university student who after accepting a scholarship from a wealthy individual went to university under the scholarship and when he got out of university criticized him as much as he possibly could. In my opinion this is hypocrisy, Mr. Speaker.
The problem of foreign ownership is a deep-rooted problem in Canada as it is in many other countries. It is a problem which does not have any easy solution. I did not hear a single proposal with regard to a solution from my hon. friend this afternoon. Would he like us to become a closed society? Would he like us to make it a criminal offence for people to take control of Canadian companies? He has not indicated what he would propose. I am sure he would also like us to move like this on the trade unions.


Mr. Howard (Skeena):: You did not listen.


Edgar John Benson: I do not believe Canada is an economic satellite of the United States. I am sure it is not a political satellite. This government, no later than in the past few months, in decisions it has made has indicated we are not a political satellite of the United States or of any other country, nor do we intend to be. We have an independent foreign policy.


An hon. Member:: The government sure showed it in Biafra.


Edgar John Benson: It was very interesting, of course, to hear my hon. friend say he was against free enterprise and against the profit motive, except in the legal profession, and that perhaps the economy must not be left to the control of private companies. Is he saying what we need is a closed economy, perhaps like Cuba, Russia, West Germany or Poland? I am sure that these economies have not produced the greatest possible benefits for their citizens.
The motion before the house appears to call for the government to prevent takeovers of Canadian firms by foreign corporations. No one has said how we should prevent this. Nevertheless this is what the motion says we should do. I assume that the current proposal for the takeover of Royal Securities is what
9222	COMMONS
Foreign Control of Canadian Industries has given rise to the motion, along with other take-overs, but the motion goes farther than this. Looked at literally the motion seems to call for a policy which would clearly scare off foreign investment from Canada, discourage it and keep it out. Yet Canada's continuing requirement for foreign investment to provide new jobs for our growing labour force is obvious and is recognized in all parts of the house and in all parts of the country. Indeed, this was recognized in Saskatchewan under the government led by the present leader of the New Democratic party. No government welcomed foreign capital more than it did.
By 1970 we expect the numbers of our young people in tire important 20 to 24 years old age group will have increased by 33 per cent-in five years. This rapidly growing number of young adults will want homes, schools and the other requirements of modern living. Our capital requirement in recent years has been in the order of a net annual inflow of a billion dollars. Above all, these Canadians entering the labour market will want jobs, and a policy of scaring off foreign investment would quite clearly be a policy of scaring off jobs.


David Lewis: Mr. Speaker, if the minister would permit a question I should like to ask quite politely whether the billion dollars he is talking about is the net capital inflow, because it is not,, is it? The net capital inflow is just about half that.


Edgar John Benson: The net capital inflow is usually around $1 billion. It varies from year to year.


David Lewis: It was not that amount in 1968.


Edgar John Benson: The year 1968 was a very good one because of the actions of this government.
Too often critics argue only on one side of the issue and forget that capital flows more than one way. Canadian investment abroad is considerable and our most recent statistics display a fairly impressive record. In 1965, the latest year for which most published data is available, foreigners owned $35.2 billion worth of assets in Canada. But what is often overlooked is that in the same year Canadians owned foreign assets totalling $13 billion. Of this amount, private, direct and portfolio investment came to $5.6 billion, more than double the figure of a decade earlier. Over the past three decades the rate of growth of Canadian investments abroad has in fact been faster than the rate of growth of foreign investments in Canada.

DEBATES	May 29, 1969


Francis Andrew Brewin: So what!


Edgar John Benson: Most of this investment has found outlet in the United States. On a per capita basis Canadians invest better than one and one half times as much in the United States as Americans invest in Canada.
Taken literally the motion calls for policies which are not to a large degree within the legislative jurisdiction of the federal government unless one uses the Criminal Code, and perhaps that is what my hon. friend who claims to defend the rights of individuals wants us to do. In a narrow sense the government could, I suppose, seek authority from parliament for restrictive legislation dealing with all corporations under federal jurisdiction, but this would still leave a wide area where only the provincial governments can act and would simply, I think, encourage the incorporation of provincial corporations.
Because the federal government is only one of the governments in Canada which have responsibility in this area and because we must in all actions affecting foreign investment take account of the continuing need for foreign investment, this government's policy has been to proceed by way of a carefully designed series of detailed measures appropriate to the different sectors of the economy and to different types of economic activity. Let me list some of the particular actions which have been taken over the years to ensure a degree of control by Canadians in certain key areas of economic activity. Canadian governments have, of course, long discouraged foreign ownership or control of certain key sectors and industries such as railways in the post-confederation period, air lines, bus lines, radio stations in the 1920's and 1930's, television stations and insurance companies in the 1950's and newspapers, companies in the 1960's.
[DOT] (3:50 p.m.)
Looking at the past few years, it will be recalled that in 1964 several acts were amended in order to retain the Canadian ownership and control of federally incorporated insurance, trust and loan companies, by limiting the proportion of total shares which might be held by all non-residents to 25 per cent, while limiting the proportion held by any one non-resident to 10 per cent. So the takeover of federally incorporated insurance companies is difficult, indeed almost impossible, owing to actions taken by the government.
May 29, 1969	COMMONS
In 1965 Canadian Arms wishing to advertise to Canadians in a foreign owned Canadian periodical or newspaper were forbidden to charge the cost of their advertising as a business expense for tax purposes. In practical terms this precluded the takeover of Canadian publications by foreigners because competing for Canadian advertising would be too difficult.
Guiding principles of good corporate behaviour were issued to foreign owned firms operating in Canada by the Minister of Industry.
As for banking, the revisions of the Bank Acts announced in 1964 and introduced in 1965 extended to banks the limitations on ownership previously applied to other financial institutions, namely, that the proportion of shares which might be held by non-residents was limited to 25 per cent, and the proportion held by any one non-resident was held to 10 per cent. In addition, any one resident, that is, a person resident in Canada, was limited to a 10 per cent holding. This was to make the legislation non-discriminatory and to make sure that control was not held by a very few people. If more than 25 per cent of the shares of a bank were held by one non-resident or resident shareholder, the total liabilities of the bank were limited to 20 times its authorized capital.
More recently the government has had the benefit of the Watkins report to assist it in the formulation of the wide variety of measures and actions which have an impact on foreign investment. To my mind the analysis of the costs and benefits to Canada of foreign investment set out in the Watkins report was very helpful. I would commend to all members that they read the sections of the Watkins report which deal with the benefits of foreign ownership. This was clearly brought out. It also referred to problems of foreign investments in Canada, which were also clearly brought out. Although I personally disagree with some of the specific means proposed, at least in the terms in which they were formulated in the Watkins report, there were some very practical suggestions as to policies which we might implement. Indeed, we have started to take steps to implement some of these policies, which I will mention very shortly.
One of the recommendations of that report was that there should be much more disclosure of the financial affairs of all large corporations in Canada, and that Canada should be
DEBATES	9223
Foreign Control of Canadian Industries a country in which large private foreign controlled corporations are unable to operate with a degree of secrecy which is incompatible with our national interest. These matters are dealt with, in so far as the federal parliament can deal with them, in the bill to amend the Canada Corporations Act which had first reading in the house last Thursday, May 22. Private companies, both domestic and foreign, of "economic significance", defined as companies with either assets or gross annual revenues greater than $3 million, are by this legislation to be required to disclose their financial position in some detail. Companies with more than one distinct class of business will be required to report the proportion of gross sales or revenues for each class, and the extent to which each class affected the company's profit or less. Whereas the Watkins report had recommended that only foreign private companies be required to make these disclosures, the new legislation applies to both foreign and domestic companies and is, therefore, non-discriminatory.
Members who have studied the bill to amend the Canada Corporations Act will have noted it contains detailed provisions relating to takeovers. Of course, the prime purpose of these provisions is to protect the interest of shareholders, but they are relevant to the subject of this motion.
I think the injection of foreign capital and foreign management into a resource firm or manufacturing firm that is going under may enable it to survive and grow in our country. I am sure all hon. members can think of examples where this was the case.
The Watkins group also endorsed the notion of a special development corporation. In this context I can assure the house that we fully intend to proceed with the establishment of the Canada Development Corporation. I believe it is too late to deal with it during the current session mainly because the business of the session has not moved in the way it should have moved. In my opinion too much time was spent on prolonged argument about the omnibus Criminal Code bill and more recently, because of a split in the Tory party, on the bill in respect of official languages.


Mr. Crouse:: What was that last statement?


Edgar John Benson: Mr. Speaker, this measure will be introduced when we can give it the time and attention it deserves.


Lloyd Roseville Crouse: Mr. Speaker, what was the last statement made by the minister?
9224	COMMONS DEBATES	May 29, 1969
Foreign Control of Canadian Industries


Edgar John Benson: If my hon. friend would listen he would hear.


Lloyd Roseville Crouse: I was listening but you were mumbling through your teeth so that I could not hear.


Mr. Speaker:: Order, please. The minister has the floor and the hon. member will have an opportunity to make a speech later in the debate.


Edgar John Benson: As hon. members are aware, I am concentrating my attention on budget preparations and on the white paper on taxation which I hope to get out some time in the coming summer. I had hoped to get it out by the end of June, but as I have indicated this will be impossible. This may make it impossible to bring the Canada Development Corporation bill before the house prior to the end of this session and certainly, because of the limited number of government days we have left, before the end of June. I think it will be impossible to deal with the Canada Development Corporation before the summer recess.
I can assure the house that there will be an opportunity for a thorough and profitable debate on this measure, and that those interested in the motion now before the house will have an opportunity to offer some comments in a practical context. I hope that when this corporation is established it will have a role in regard to proposed takeovers of Canadian enterprises. It will be a matter for the directors of the corporation to decide in a particular case whether they wish to invest in a particular corporation.


David Lewis: Who will be the directors?


Edgar John Benson: In any such case their judgment will have to take into account the very wide range of complex facts that relate to a particular firm's position and to the Canadian interest in maintaining the Canadian identity of the firm in question. It is not our intention to have the Canada Development Corporation invest in businesses which do not provide a growth potential in order to call them Canadian. I think members should realize that the Canadian government is the biggest partner in every business in Canada. We collect in conjunction with the provinces 50 per cent of the profits of corporations and we get our 50 per cent of those profits in cash, whereas businesses often have to invest their 50 per cent in inventory and other means of expansion. We are vitally involved in every corporation that operates in this country.
I have quite deliberately, by treating the motion in broad terms, endeavoured to make

clear that we do recognize, as did the Watkins task force, that there are real problems but also real benefits arising from the decisions of foreign corporations to enter into economic activity in Canada. As for the proposed takeover of the financial firm which has, I assume, triggered this discussion, I should like to say only two things. The first is that I did comment on this matter on Tuesday and indicated then that I would make a statement at a later date. That remains my intention. Clearly the implications of the takeover of a financial intermediary such as Royal Securities by a foreign firm are bound to be considered very carefully because they are of real significance in Canada. It is for this reason I do not propose to make a more definitive statement now when it would be premature, and certainly not until we have had adequate time to consider the implications of the views and actions both of the stock exchanges and of the other governments which have a responsibility in this area.
In closing, Mr. Speaker, I should like to say that I believe, as does the hon. member for York South, in national unity and the right to determine our own future, and that this is of vital importance to all the people of Canada, including every member of this assembly. I also believe that Canada can control its own future but that there is a problem existing in respect of foreign ownership. I believe we have to continue to look at the situation as it develops and determine what course of action can be taken in order to deal with this problem.
[DOT] (4:00 p.m.)
However, I would like to point out once again the jurisdictional difficulty in Canada, compared with a unitary state, in dealing with a problem of this kind. I am sure you could not get unanimity among the provinces as to any particular action with regard to dealing with foreign investment in our country. I would like to compliment Professor Watkins on the preparation of his report, which I think in general is a very good report. However, some of the ideas in it just will not work in my opinion and therefore they will not be adopted.


David Lewis: Why don't you compliment him by adopting the report?


Edgar John Benson: We have started to adopt some of the ideas in the report, as my hon. friend would learn if he took the trouble to read the legislation introduced into the house last Thursday.
May 29, 1969	COMMONS


Lloyd Roseville Crouse: Mr. Speaker-


Mr. Speaker:: Order, please. I believe the hon. member for South Shore has risen for the purpose of asking a question.


Lloyd Roseville Crouse: Yes, Mr. Speaker. I wonder whether the minister would have the courtesy now to answer my question when I requested that he repeat the statement he made in reference to my party.


Edgar John Benson: Mr. Speaker, I spoke for quite a long time, and if my hon. friend had been listening he would have heard what I said. In any case, he can read it in Hansard.


Lloyd Roseville Crouse: I repeat, Mr. Speaker, that I was listening very carefully, but the minister was mumbling in his teeth at the time and I could not hear what he said. I asked him if he would have the courtesy to repeat his statement. It was an allegation against our party which was unfounded. We have not participated in any action which delayed the work of the house. As a matter of fact, the government itself has delayed the work of the house in this session, as we have seen, with the introduction of two measures covering the Fisheries Improvement Loans Act. This has delayed the work of the house. I ask the minister to repeat his statement.


Mr. Speaker:: Order, please. The hon. member for Perth.


Hon. J. W. Monteith (Perih):: Mr. Speaker, I do not propose to get into the dogfight which appears to be developing between the Minister of Finance (Mr. Benson) and the New Democratic party other than to suggest that I think it is safe to say the minister spoke in his usual arrogant manner.


Lloyd Roseville Crouse: Hear, hear.


Jay Waldo Monteith: He was so inclined to blame the opposition for all ailments in the house, whereas I am sure that if he gave serious consideration to his statement he would include many members of his own party as well. I hope my comments will be taken to be constructive; certainly this is what I am attempting to achieve.
We are being asked today to condemn the government for its failure "to provide policies to prevent further takeovers of Canadian resources, industry and financial institutions by foreign corporations." We are told as well by the motion that the government's inactivity greatly increases the danger of foreign
DEBATES	9225
Foreign Control of Canadian Industries domination of our economy and culture- indeed, increases it to the point at which Canada's political independence itself is threatened. It is rather difficult not to agree with a motion condemning this government for inactivity, for its gross failure to do things which will be significant in regard to our economic management, to condemn it for its astonishing inability to bring itself to do something positive to ensure that we will not all be robbed of our heritage by those twin dangers of inflation and government extravagance. The present government is one of the most notorious do-nothing governments of our times. It really should not surprise anyone that it is not doing anything about this situation or about any other.
Before we agree too readily with the terms of the motion before us, it seems to me we should examine it rather carefully. I think we must distinguish between the different kinds of activity of foreign corporations, in Canada. We must distinguish far more carefully in these matters than do the hon. member and his colleagues who have put forward the present motion. Not every United States dollar, French franc, German mark or Japanese yen that comes into this country is tainted. Not every investment by a foreigner demonstrating his faith in our country, despite the bunglings of the present government, involves trying to take us over politically and sell our sovereignty down the river. Indeed, many of them, perhaps even most of them, come from countries that are having quite enough trouble managing their own political affairs without trying to take on ours as well.
What my hon. friends to the left of me usually forget is that if we had not had foreign capital invested in this country we would not have even got the fur trade started in the 17th century. There was no capital here to begin with. If French and English, later German and Swiss, then American, and still later Japanese capital had not been invested in this country, most of us would not even be here. Indeed, if it had not been for the foreign investor in Canada, I rather doubt there would have been any kind of economic system in this country for the present government to mismanage for us.
It would be rather amusing, if it were not rather sad, that my hon. friends to the left have to thank a former minister of the government opposite for waking them up to some of the realities of the present-day world. I suggest that is one accomplishment of Mr. Walter Gordon that will not be recorded in
9226	COMMONS
Foreign Control of Canadian Industries too many Liberal textbooks. It was Mr. Gordon who documented for us just how far things have gone in certain sectors under the management of the present government and its Liberal predecessors.
The present motion was no doubt prompted by two recent events in addition to Mr. Gordon's shaking things up a little. The first was the takeover bid by the American giant, Philip Morris, which is seeking control of Canadian Breweries. Hon. members will recall the uproar we had in the house over that matter. But what are the facts of that case? Simply that Canadian control was lost some time ago to another international firm, the Rothmans tobacco group which is based in South Africa. The issue in regard to Canadian Breweries really concerns whether we prefer American or South African tobacconists to manage our largest brewing company.
The latest case involves Royal Securities Corporation of Montreal. The international giant, Merrill, Lynch, Pierce, Fenner and Smith, is trying to take over this very important, well established Canadian securities company. It looks, if we are to judge from the attitude of the Prime Minister (Mr. Trudeau) and the Minister of Finance, as though the American firm will be successful in this operation too, just as their compatriots have been successful in other areas.
The Prime Minister has told us that we are not in a position under the law to do anything because of constitutional and statutory considerations. We have had that kind of shillyshallying, that kind of do-nothing, pass the buck somewhere, anywhere, but don't do anything attitude for far too long now. Cannot the Prime Minister, and particularly his colleague responsible for the Department of Finance, see the importance of our financial institutions? Can they not make what seems to us the all-important differentiation between the activities of foreign corporations which are beneficial to this country in very positive ways, and those activities which do nothing but diminish our autonomy and do not even add to our economic wealth?
There are occasions when takeovers of going concerns are a very good thing. Takeovers often lead to a much more rational allocation of our social resources; waste and non-competitive product duplication are sometimes cut out, sales staffs are revitalized, management techniques greatly inspired, new working and expansion capital pumped into 
DEBATES	May 29, 1969
the firm and everybody, especially the consumer and the Canadian taxpayer, is better off. Takeovers are often a very healthy thing from the economic point of view and frequently incur no political, social or cultural costs in the bargain. It is time we realized this and set about making sure that our public policies encourage takeovers whenever the public interest can be served in such important ways as I have suggested.
[DOT] (4:10 p.m.)
But there are other occasions when takeovers serve no ' useful purpose. There are occasions when they do nothing more than reduce the amount of real competition in the system, when they perpetuate old and wasteful ways, and when they result in poorer rather than better service and wider choice for the consumer. The case seems to be especially important when the takeover means a Canadian company passes into foreign hands.
Let me suggest some standards. I know this government is seldom very interested in things like principles but they are useful. What is more, and what is most important in this case, they help to let the other fellow know where he stands.
First, I suggest that we should reaffirm our present rules relating to the ownership and control of the chartered banks, the broadcasting companies, and so on.
Second, we should define more widely than we have, but also with great care, those economic institutions and agencies whose control and operation we conceive to be critically significant for our sovereign control of the Canadian economy.
I am not at all clear that the so-called near banks should be included in this category; that question will take some careful study! But it does seem to me that the hands-off category may very well include the magic 15 agencies to which the Bank of Canada grants special privileges and concessions, such as Royal Securities Corporation Limited. These 15 agencies are part of a special money market that the Bank of Canada and the government, in their joint wisdom, thought necessary to create. The basic idea, as I understand it, was to provide a much wider buyers' market for short term Canadian issues and thereby perhaps keep prices down a little and give us more flexibility in managing the economy. In return for maintaining the necessary inventory, Royal and others seem to be effectively subsidized through the chartered banks by getting low-one might almost say cut-rate-interest rates for their daily bor-
May 29, 1969

rowings. The justification for such a subsidy of private firms is said to be the benefit that such firms provide the country through the special money market they support.
That is all very well,, Mr. Speaker. I am not at this time challenging the necessity and operation of such a system. But I am asserting the vital necessity of assuring ourselves that the control of such firms is always in Canadian hands.
The government has not done this in cases like Royal Securities and they still show no great willingness to see that it does not happen in the future. Indeed, they will not even assure us that they will stop what amounts to public subsidies going to this firm if it passes out of Canadian hands. I am sure we will be very deeply interested in the statement the minister is going to make a little later, and I really feel he should not delay any longer. What seems to be needed at this point is a special inquiry into these institutions, perhaps by a committee of this house or, if this seems inadvisable for various reasons, at the very least by a special study group, so that we can make a careful, considered judgment as to which and what kinds of economic and financial institutions have this critical role to play in the direction and functioning of the economy.
I have mentioned two principles, Mr. Speaker. I would like to deal with a third one. Takeovers by foreigners of Canadian corporations should meet a set of tests to demonstrate whether Canadians are likely to gain any real benefits from such a development. I have in mind tests like:
1.	Does the takeover and change in control mean Canada will get significant amounts of new capital to develop our economy and create more jobs for Canadians? If it just amounts to card shuffling by the money-changers, then I see no good reason why we should put up with it.
2.	If there is no new capital, is there any meaningful new technology to which we gain access? If so, what will be its impact on Canadian employment and productivity?
3.	Will modernization of management or its replacement accompany the takeover in such a way as to increase the company's contribution to this country's economy?
If the takeover bid fails to be persuasive on any of the earlier points, I would suggest that fourth, a distinct and assessable benefit to the Canadian taxpayer and consumer be demonstrated before such takeover is permitted.
Some of the critics of foreign corporations' activities in Canada are fond of devising all
Foreign Control of Canadian Industries kinds of economic gimmicks to deal with that foreign activity. Much of it, indeed most such gimmickry, is misconceived and miscarries in its objective. We must stop harassing foreign capital just because it is foreign; that is simply not good enough. We need foreign capital, foreign technology and foreign knowledge. We need them if we are ever going to deal with the economic inequalities and the continuing unemployment that continue to hamper the achievement of real social justice in Canada. I agree we must deal with foreign capital with our eyes wide open. But let us avoid the gimmickry, the jerry-built solutions, the cute but ineffective taxation dodges.
We should remember two things. First, for every foreigner that buys control of a Canadian company, there is one and often many more Canadians who voluntarily choose to sell, for example, a Canadian who was offered a better deal by the foreigner than he could get anywhere in this country. If we restrict the foreigner, we restrict the Canadian too.
Another point to remember is that ownership of the largest block of shares in a company is one thing but control is a political as well as an economic concept. No government needs to let foreigners control this country through the economy. All it needs is the good sense, pride in our country and the determination to maintain solid political control over a unified, growing and expanding country.
Unfortunately, Mr. Speaker, when I look at the performance of the gentlemen opposite, when I look at the sorry record of this government over the past six years, I lose all confidence in its ability or even its real desire to deal with our economic situation in a competent and responsible manner. I have no confidence that this government is even studying the situation very seriously. Indeed, I see every indication that in this area, as elsewhere, they are ready to play the game of constitutional pass the buck once again. It is one of the things they do best. Consequently, it seems to me that hon. members can have no alternative but to support the motion as proposed.


Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, the motion introduced by the hon. member for York South (Mr. Lewis) reads as follows:
That this house condemns the failure of the government to provide policies to prevent further financial institutions by foreign corporations, thus
9228	COMMON
Foreign Control of Canadian Industries increasing the danger of foreign domination of Canada's economy and culture to the point where Canada's political independence is threatened.
Mr. Speaker, this motion is far from being exaggerated, for Canadian political independence is more than threatened and we have noted that this government, like its predecessors, had to consult the Americans before applying any financial policy, in order to have their opinion. Our political independence is more than threatened at the present time. Indeed, we depend upon our neighbours to the south, not only from the economical standpoint but also from the political one.
I should like to corroborate this assertion by referring-unfortunately I do not have time here to go over all the statements made by hon. members or ministers who have spoken in this house-to a statement made in 1961 by Mr. James Coyne, during a lecture at Bishop's College. Mr. Coyne asked the followtakeovers of Canadian resources, industry and
ing question, and I quote:
[DOT] (4:20 p.m.)

The fundamental question which we must decide one way or the other for ourselves is whether we are prepared as a nation to finance and control our own development to such a degree that the Canadian interest in Canadian industry shall in future increase instead of continuing to decrease.

And a little further he said:

The economic integration of Canada by the U.S. has already begun. The question we must decide is: do we want an independent Canada?

I could quote other statements including one showing that the motion of the hon. member for York South (Mr. Lewis) is absolutely in order and does nothing else but confirm what others have already disclosed to the Canadian nation.
I would like also to quote here statements made by the former Minister of Finance and a publication that reads as follows: [English]
"How Can We Buy Back Canada?" asked the Toronto Daily Star editorial on June 12, 1963. "We cannot continue to stand idly by while our economy ... is increasingly dominated by non-Canadian interests. If the economic policies of Canadian industry are to be determined in New York, Detroit or Chicago, then the time cannot be too far distant when our political decisions, too, will be shaped elsewhere than in Ottawa. When that day comes, we will have lost our independence as a nation." But the Star has nothing to offer but words, words.

DEBATES	May 29, 196S
"We Must Buy Back Canada" said the title of an article by Finance Minister Walter Gordon in Weekend Magazine (Nov. 9, 1963), half a year before he entered the new Liberal cabinet. After rambling through a dozen vague proposals Mr. Gordon answers his own confusion: "But we must do still more if we are to bring back to Canada some of the billions of dollars of Canadian industry now controlled abroad."
And he winds up still farther off: "But buying back Canadian resources and Canadian companies should be one of our declared objectives for the future."

This motion intends to compel the government to take the necessary steps to prevent even greater control over the economy by foreign interests and to prevent also the political control which, in our opinion, is unfortunately still too great nowadays.
On certain points, we do not agree with the New Democratic party, but when the Minister of Finance (Mr. Benson) accuses for example the New Democratic party of accepting especially gifts from American big business for electoral purposes, I say that he is only avoiding the issue instead of refuting the argument put forth this afternoon.
It is all very well to accuse the New Democratic party of benefiting from American financial interests, but that does not solve the problem of the control of the Canadian economy, not by the N.D.P. but by the Americans, thanks to the two old political parties which have followed each other for the past hundred years.
Unfortunately, we have noticed during the last federal election that the Liberal party accused the other parties of having received American funds for election purposes while it had itself received millions for its election campaign. In my opinion, it should not accuse the New Democratic party of hypocrisy towards American companies now controlling the Canadian economy.
Our economic system, Mr. Speaker, reminds me of a good farmer who, owning a cow would ask his neighbour to finance it. His neighbour finances the cow. Instead of buying it or financing it, he rents it. All the farmer has to do is to milk the cow and take the milk to his neighbour as a reward for financing the cow.
[DOT] (4:30 p.m.)
The farmer can then find solace, as the Minister of Finance said, in the fact that he has a job: milking the cow.
Millions of American dollars have created employment in Canada, and today we wake
May 29, 1969	COMMONS
up with a Canada-U.S. economy. Canadians no longer control their economy but they must pay taxes to the federal government in order to give special privileges to American companies. In fact, Canadians have only one thing to do, milk the cow and give their wealth to the Americans who are supplying capital and making millions of dollars of profit. As I will prove it in a few minutes, Americans have taken over our national wealth.
Now, the Minister of Finance cannot charge us with failing to suggest in this house since 1935 solutions to prevent what the New Democratic party is denouncing today and what we have also already denounced, that is control of the Canadian economy by the United States. Since 1935 we have been saying that even though Canada has resources, labour and talent, we must recognize that the American people have provided us with the technique, for which we have paid and are still ready to pay.
We have everything we need in Canada-a country described as beautiful, great and rich-except capital. Some incompetent governments had no foresight. Hence, after one century of confederation, Canada finds itself controlled to the extent of 85 per cent by the Americans, to whom it turns over billions of dollars in profits each year.
Here in Canada, we are lessees. We do not own our resources that we discovered and developed. We have discovered those resources ourselves, but they have been taken away from us due to a leasing and financial system that has allowed Americans to rob us of the fruits of our labour.
Mr. Speaker, we have on a number of times said: If we had the guarantees, the resources, the holdings in Canada-the potential-why should we depend on foreign countries to develop our resources? The Bank of Canada could develop our economy and allow Canadians to be their own masters. Why not use it? This is a suggestion; we have made it before and I repeat it: Why not use the Bank of Canada to allow the outflow of private capital, public savings, private savings? In Canada savings have been invested in provincial bonds for the building of roads, in school board bonds for the building of schools. All provincial developments have been financed through provincial bond issues.
We have used private savings in order to freeze public capital, in order to build schools, bridges, universities, roads, sidewalks, aqueduct systems, sewage systems. We have
DEBATES	9229
Foreign Control of Canadian Industries used the savings of Canadians to turn it into non productive capital. That explains why today money is scarce, as far as the financing of Canadian industries are concerned. It is because Canadians believe that Canada Savings Bonds give them more security and produce more interest that they buy them. All that money will not serve industry and the development of our wealth, at home.
First, Canadian savings frozen in public funds must be used. Another system of financing will have to be established so that public funds are not supplied by our savings. That is why the Creditistes are proposing that the Bank of Canada be used to provide public capital and that private savings be used to finance private industry and provide private capital.
Mr. Speaker, to show you to what extent economically, we are the slaves and satellites of foreign countries-as the Minister of Finance already said in the house-I will say a few words concerning foreign investments in Canada. On page 1086 of the 1968 Canada Year Book, one can read the following: Dependence upon externl sources of capital for financing in periods of heavy investment activity has been characteristic of Canadian development.
Unfortunately, Canada cannot depend on its own sources of capital.
During the exceptional growth that occurred before World War I, non-resident investment was very high and the main source of that investment was London. However, during the first part of the inter-war period, the United States became the principal source of external capital and by 1926 the portion of Canada's international debt owned in that country exceeded that owned in Britain. With some interruption during the 1930s, United States investment in Canada continued to increase, particularly after 1947 when the period of intense activity in the petroleum industry got under way. Nearly half of the United States investment in Canada at the end of 1965 was accumulated since 1956.
But, Mr. Speaker, turning to the daily bulletin of the Dominion Bureau of Statistics published on Thursday, October 24, 1968, one can read, on page 3, and I quote:
-direct investment by foreign companies and individuals in Canadian firms of foreign allegiance, by the end of 1965, had a real value of $17,208 million, compared to $15,889 million at the end of 1964, an increase of $1,319 million.
The total book-value of such investment, including money invested by Canadians and residents in other countries, was $22,918 million.
The detailed distribution of direct foreign investment, by country of origin, is shown below. Direct U.S. investment, with a book-value of $13,940 million, represents 81 per cent of direct foreign investment in Canada. The book-value of direct investment from the United Kingdom ($2,013 million)

Foreign Control of Canadian Industries
and from other European countries ($1,120 million) amounts to 18 per cent of the total.
This means that the U.S. invested in Canada $12,750 million in 1963, on a total investment of $15,434 million.
In 1965, the U.S. invested $13,946 million, on a total investment of $17,208 million.
Mr. Speaker, it is most surprising, when those figures are considered a little more closely, to find that U.S. investors bought Canadian stock with our own money, and I would like to prove it.
If the Americans failed to conquer Canada by force of arms, in 1814, it is because they did not really try, for there were but a handful of inhabitants in this country. Roads did not exist as yet, natural resources were still unknown and big farms were non existent. Instead of conquering Canada, they bought it with our own money.
That started in 1885. At that time, Americans were selling $9 worth of goods per capita to Canadians, while we were exporting $7 worth per capita. It is not necessary to use a computer to show that the difference amounted to $2 per Canadian to the benefit of the Americans.
At that time, our population numbered approximately 4.5 million. The Americans therefore made an annual profit amounting to $9 million.
From 1947 to 1966, according to statistics published in the Canada Year Book, our imports from the United States were valued at $72,439,721,000 and our exports to that country at $58,017,080,000. The net gain accruing to the Americans was of $14,422,641,000, or $700 at the expense of every Canadian. It is with our money that they have purchased our natural resources, our industries and our mines.
From 1947 to 1966, the Americans made a net profit of $14,422,641,000 in their business transactions with Canada.
At the end of 1955, according to the daily bulletin published by the Dominion Bureau of Statistics on October 24, 1968, American investment in Canada amounted to $13,946 million. They used our money to invest in our own country and to control our own economy.
Mr. Speaker, at page 44 of the Budget Papers tabled in the house on May 27, that is last Tuesday, one reads the following:
Canadian borrowing outside Canada rose to a record $1,889 million .. . with a substantial carryover of undelivered bonds at the year-end. Retirements of $394 million left net new borrowings very close to $1.5 billion.

DEBATES	May 29, 1969
-But at the same time, this new source of funds did not drastically diminish the momentum of the more traditional Canadian borrowing in the United States, which reached $1,349 million in gross new issues, or very little less than the record level of $1,357 million recorded in 1966.
Mr. Speaker, in 1968, we thus paid foreigners in interest and dividends, according to page 137 of the Budget Papers, profits of $1,310 million, and our deficit in this regard reached $971 million according to page 138 of the same papers.
Mr. Speaker, we paid to foreigners $1,310 million compared to $1,190 million in 1967.
[DOT] (4:40 p.m.)


Mr. Deputy Speaker:: Order, please. I am sorry to interrupt the hon. member but his time has expired.


Some hon. Members:: Continue.


Gilbert F. Rondeau: I would like to speak another five minutes, Mr. Speaker.


Mr. Deputy Speaker:: Is there unanimous consent that the hon. member should have further time?


Some hon. Members:: Agreed.


Gilbert F. Rondeau: Mr. Speaker, it is quite strange to note that we borrowed more abroad in 1968 than in 1967, namely an additional amount of $120 million. We collected less in taxes on dividends and profits paid to foreigners. We increased our debt abroad, but on the other hand, in connection with profits and taxes paid by foreign companies, it is stated on page 172 of the last budget papers that we collected $15 million less in taxes and that we borrowed $120 million more in 1968 than in 1967. That is called progressive administration. I suggest that this Liberal administration is enriching the others at our expense and prefers to tax the Canadian taxpayers rather than the foreigners who take advantage of our resources and labour. Those statistics, Mr. Speaker, are given on page 172 of the last budget papers.
Mr. Speaker, how unfortunate it is to see that as Canada develops, its debt grows. Canadian profits are not paid to Canadians in the form of dividends or capital income but rather, increasingly, to foreigners who have invested in Canada. I do not blame them, but the government because it lacks the financial
May 29, 1969	COMMONS
and monetary policy to be self-sufficient. We must not rely only on our neighbours. We need our neighbours, but we must not live because they exist. We should be economically independent,, otherwise we shall remain more and more politically dependent as it has been the case in the last few years unfortunately.


Frank Howard: Mr. Speaker, we know that the Minister of Finance (Mr. Benson) is absent because he is preparing his budget. For a while the Secretary of State for External Affairs (Mr. Sharp),, the minister really concerned with this matter, was present, but I notice he has now left. It is a bit awkward to make any comment on the remarks of the Minister of Finance in his absence. However, I would be prepared to repeat in his presence any comments I make now.
After listening to the minister's speech the greatest compliment I can pay it is to ignore it for it was filled with false statements and scurvy accusations so typical of a Liberal, particularly a Liberal who has been hurt by the truth. The Minister did make some sense in his closing statement. In winding up his speech he admitted that in the area of foreign investment and domination of our economy there are problems. He recognized that fact and declared he was concerned. In that regard it must be clearly understood and recognized that it is the minister alone who is able to do something about this situation. We in the New Democratic party cannot do anything about it, nor can the members of the Conservative party or the Liberal backbenchers, no matter how they feel about this subject. The minister can do something about it, and if he recognizes there is a problem he is derelict in his duty in not doing something about it.
The minister talked about the problems caused by the divided jurisdiction in Canada. He said that the provinces have some jurisdictional or constitutional authority over certain matters and this causes difficulty of action on his part. I wish to point out that under the constitution the federal government and parliament do have jurisdiction over such matters as finance, which is vitally important to us in the control of our economy. They have exclusive jurisdiction over banking and the issuance of money and credit, which are also vitally important. They have exclusive jurisdiction in regard to foreign exchange and relationships with other countries, both of
DEBATES	9231
Foreign Control of Canadian Industries which are vitally involved in the problem of foreign control and ownership. For the minister to proclaim that he faces difficulties in this field because under the constitution jurisdiction is divided with the provinces is simply a lot of hogwash. The authority and responsibility are there.
This causes one to wonder why no action has been taken. Probably one reason why no action has been taken is that the Liberal party is the party of big business, and because big business in Canada is foreign business it follows that the Liberal party is the agent of foreign big business. The Liberal party certainly receives its campaign funds from those sources.
While I am on the subject of campaigns I wish to place on the record apropos of the accusation made by the minister, a false one incidentally, a challenge to the Liberal Party, which has classified itself as pure in the field of campaign fund contributions, to open its books to the public. Let the people of Canada see where they get their dough from. Let them see who owns and controls the government, who pays the shot. Is anyone willing to stand up and make such a statement on behalf of the Liberal Party? Not a soul! Not a single taker! The government wants to keep the source of its campaign funds an absolute secret.


Mr. Deputy Speaker:: Order, please.


Mr. Turner (London East):: Mr. Speaker, I challenge the hon. member's statement. I happen to be a working man. I certainly do not have big business behind me in the city of London, Ontario.


Frank Howard: The hon. member is one of those insignificant Liberal backbenchers.


An hon. Member:: Come on.


Frank Howard: I do not say it unkindly. You are in the same class if you say, "come on". Is there a Liberal member who will stand up and say he knows where the party receives its funds? Is there a Liberal member who is prepared to open the books for the general public to see? I am sure the public would be glad to know. I am asking about the Liberal party, Mr. Speaker, the organization that controls this group over here. I am not talking about the individual backbencher who does not know what goes on in the Liberal party because he has no control
May 23, 1969
9232	COMMONS
Foreign Control of Canadian Industries over it. He is just a cipher. He votes when and how he is told to vote. That comes from no less an authority than the Minister of Energy, Mines and Resources (Mr. Greene). He made that declaration some time ago and that is what I am talking about. Is anyone prepared to stand up and open the books of the Liberal party to the general public? Not a taker. You haven't got the guts to do it! You don't dare do it.
With respect to these scurvy accusations by the Minister of Finance about the sources of funds for the New Democratic party, let me put it on the record again-we have said this many times in the past-that our books are open for the public to see because we believe as a political party that we are dealing with the public's business and so the public had better know what our business is.
[DOT] (4:50 p.m.)


An hon. Member:: Where are the books?


Frank Howard: They are open. Do you want to come down to our national office to look at them? You are welcome at any time. Phone Cliff Scott, our federal secretary. He would be glad to accommodate you.


Mr. Danson:: Does he just go to the unions to pick up the money?


Frank Howard: My hon. friend says now that we are going to fix up the books.


Barnett Jerome Danson: I did not say that.


Frank Howard: Then I apologize. I misunderstood what the hon. member said. In any event, I see that the hon. member for York North (Mr. Danson) wants to speak in this debate, and when he does get the floor I will listen attentively to what he has to say about the campaign funds of his party which is owned and controlled by foreign big business and corporations.
Reference has been made to the Watkins report on foreign control, which I believe was tabled some time in February last year just prior to the Liberal leadership convention and prior to the election being called. Now that the Messiah has been elected with his comfortable majority the government is in a position to bury that task force report on foreign control and not do anything about it.
It was a cabinet committee that appointed that task force. Mr. Gordon was on that committee. He has now gone from this place. Mr. [Mr. Howard (Skeena) .1

Teillet was a member of that cabinet committee. He too is gone. There were three other members of that committee, one of whom is in the chamber now, the Secretary of State for External Affairs. The others were the Minister of Regional Economic Expansion (Mr. Marchand) and the Minister of Justice (Mr. Turner). Where do these three individuals stand on the question of foreign ownership? Were they serious when they appointed the task force? If they were, why has something not been done about it, or was the appointment of the task force a political gesture? Was it an attempt by that great double-standard person, Mr. Pearson, to have his cake and eat it too, to maintain within the cabinet the strong man for foreign ownership, now the Secretary of State for External Affairs, and to say to the general public, "We have appointed a task force to look into foreign ownership," in order to win favour with the Canadian people who are vitally concerned about this matter? It was an attempt to go in two directions at the same time and to get the best of both worlds.
There are those who advance the concept that we should reduce foreign ownership simply for the sake of reducing it. That in itself is not a valuable point of view. On the other side there are those who say we should increase the degree of foreign ownership in this country for the sake of increasing it. And then there is the government that supports the concept-I say this after listening to the speech by the Minister of Finance-of increasing the amount of foreign domination of the economy of this nation simply for the purpose of doing it for its own sake and not out of regard for the benefits that may flow from it. In fact, an economist by the name of A. E. Safarian, who worked with the task force on foreign control, has come to the conclusion that whatever benefits may have accrued or will accrue from foreign equity investment in Canada have been dissipated by the government itself through its lack of policies in a positive way-


Mitchell William Sharp: Does the hon. member agree with all the views of Professor Safarian?


Frank Howard: I did not hear the question.


Mitchell William Sharp: Does the hon. member agree with all the views of Professor Safarian?
May 29, 1969
COMMONS DEBATES	9233
Foreign Control of Canadian Industries Mr. Howard (Skeena): Maybe if the minis- and Conservative governments it has been ter stood up and spoke louder I would be able steadily increasing to the point where-I am to hear him.	sure the Secretary of State for External
Affairs will not disagree with this-if the Mr. Sharp: I am sorry. I was asking wheth- trend keeps up, within a matter of a few er the hon. member associated himself with years time it may be impossible and too late all of Professor Safarian's views? I would be t0 do anything about it.
very surprised if he did.	Qne 0f the shocking facts about the growth


Frank Howard: The minister is the most surprising minister I have encountered. He would be surprised at many things, just as I am surprised at the manner in which he toadied to the United States on the question of straight base lines in respect of fisheries protection. He shakes his head and shows consternation on his brow, but it is a fact that he and his predecessor did have discussions with the United States over the establishment of straight base lines in this country to protect our fisheries. They still have not been established mainly because of objections from the United States, and these great upholders of our sovereignty were the ones who knuckled under to them.
The history of the Liberal party shows that it favours foreign capital, foreign control, foreign domination of our industry and our economy. Just one example, that of Time magazine cited by my deputy leader, the hon. member for York South (Mr. Lewis), will indicate just how anti-Canadian ^n a real sense the Liberal party is.
Successive Liberal governments have done this, Mr. Speaker. They have always talked out of both sides of their mouths, as the Minister of Finance did earlier this afternoon, saying that they recognized the problem and expressing concern, but behind the scenes they did everything they could to increase the amount of foreign investment and foreign domination. They have persistently shown no pride in Canada in this regard. They have persistently exhibited no faith in our own ability to do things ourselves. They have persistently shown a desire not to be proCanadian.
of foreign control is that it has been effected partly because of government policies but also by the reinvestment in Canada by those same companies of profits and moneys that they have accumulated from the exploitation of Canadian resources, thus enabling them to gain a larger and larger degree of control over us in the process. In turn, the government endorses this concept of using our own wealth to put ourselves more and more in hock and in debt to somebody else.
There is a companion activity involving the export of our raw materials. The conscious and deliberate policy of the government in this regard is to promote the export of raw materials, thus promoting the export of job opportunities for Canadians. At the same time it advances thereby the economic interests of those countries to which we export our raw materials because they manufacture them into finished products which we then buy back at probably eight to ten times the amount for which we sold the raw materials. In effect we are feeding the industrial machines of other nations of the world with our raw material wealth and our job opportunities.
Let me now read a short excerpt from a speech by no less a personage than the current Minister of Public Works (Mr. Laing) when he spoke on Friday, June 16, 1967, at the New Imperial Mine banquet in the Yukon:
There is another aspect of this development which I believe must be mentioned. The product is to be shipped to Japan.
That is the raw material, the concentrates in the stage next removed from the ore itself.
Let me give a brief example by way of statistical information. In the 1930's manufacturing in this country was under foreign domination to the extent of 38 per cent. Today it is 60 per cent. Mining and smelting were 42 per cent foreign owned. Today they are about 60 per cent. I could go through all the other industries and indicate the same sort of growth of foreign control. Twenty-five years ago foreign control was much less but because of the policies of successive Liberal
[DOT] (5:00 p.m.)
The Yukon is vitally concerned with Canada's world trading position. Everyone here can easily recognize the necessity of the Japanese maintaining their ability to buy their raw materials abroad. Without the Japanese market and the faith of Sumitomo in the future ability of Japan to compete in world markets, there would be no New Imperial Mine today.
That is fine Chamber of Commerce stuff but it does not really mean much to most
Foreign Control of Canadian Industries Canadians who are concerned about job opportunities. The minister continued:
The Japanese have shown remarkable ability to manage their economy in the last 20 years.
A remarkable ability. They did it by a combination of things. One was by refusing to permit equity capital investment in Japan. They permitted debenture capital money that was lent but controlled rigidly the amount of equity capital invested in Japan. In other words, they restricted and almost prohibited foreign ownership of the industry and economy of the Japanese nation. They did this also by a curtailment to an almost minimal proportion of the amount of budgetary expenditures in Japan on matters such as defence, which are dead-end expenditures and drain off the wealth of the nation. In this regard, incidentally, following the end of the war and the end of the United States occupation, Japan did what we are advocating Canada should do, contrary to the statement of the minister that we are advocating a closed economy, which was a false statement in itself. The present Minister of Public Works went on to say:
Their growth has been spectacular. The Japanese people's standard of living has risen dramatically. To keep it rising will require exports which must be used to pay for imported raw materials.
That statement is semi-treasonable, to say the least. It is a shocking declaration from a minister of the Canadian government that we should export our raw materials to another country in order to ensure that that country is able to continue to increase steadily its standard of living. Is the minister not concerned about our standard of living and about jobs for the people here? Is he not concerned about improving the industries and the professions in this nation or about increasing the wealth of Canada? No; he is concerned about the wealth of Japan, and that attitude I classify as semi-treasonable, to say the least.
One of the areas in which we are involved in respect of foreign control is the financial. In the period 1957-58 we had a report by the Gordon royal commission on Canada's economic prospects. The royal commission recommended that we must ensure that our banks and financial institutions, including insurance companies and the like, be retained under Canadian control. In the period since that time nothing has been done except to maintain the position in so far as the banks are concerned. The insurance, trust and loan 
May 29, 1969
companies represent a multi-billion dollar part of our economy. Yet to a great extent they are controlled by foreigners. To a great extent the decisions are made by people sitting in board rooms who are not even citizens of Canada, who have no responsibility to Canada and are not subject to any of the political pressures of Canada but are subject to the political and economic pressures in their own country.
As is well known, some of us in the New Democratic party have embarked on a filibuster program in respect of these insurance companies.


Mr. Deputy Speaker:: I regret to interrupt the hon. gentleman but his time has expired.


Frank Howard: May I have
unanimous consent, Mr. Speaker, to continue for a few minutes?


Some hon. Members:: Agreed.


An hon. Member:: One sentence.
Another hon. Member: Not a Paul Martin sentence.


Frank Howard: No. I had intended to quote the hon. senator. Most Canadians as individuals and groups within our nation are proud of our nation. We are proud of our culture. We are proud of our national inheritance, we are proud of our intentions and I hope are proud of ourselves too. We wish to heaven the government would exhibit a little bit of pride too.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order, please. Before I recognize the hon. member for York North I should like to advise the house of the items to be debated at the time of adjournment tonight. They are as follows: The hon. member for Central Nova (Mr. MacEwan)-Shipbuilding-failure of government to participate in investigating committee; the hon. member for Hamilton-Wentworth (Mr. Gibson)-Water Resources-pollution-request for control at Hamilton Bay; the hon. member for Gander-Twillingate (Mr. Lundrigan)-Regional Development-Newfoundland-request for program of assistance.

May 29, 1969	COMMONS



GOVERNMENT ORDERS


[Stage Direction]
The house resumed consideration of the motion of Mr. Lewis.
Barnett Jerome Danson: My.
Speaker, I had intended to start by thanking the members of the New Democratic party for choosing a topic which is of general concern to many Canadians. I share that concern, but I reject their twisting of facts, their vitriolic diatribes, the bogeymen they raise and the silly, neat little packages they bring up which are based on complete misconceptions and by which they are trying to mislead a great many people who do not know any better.
I have here several pages of notes I have made which I thought would be constructive in respect of this debate and which would deal with their arguments and tear them apart, because this is what debate is all about, in order to try to get something constructive on the record. But when the hon. member for Skeena (Mr. Howard) gets up and makes the type of accusations he has made and uses the kind of tactics he has used, which are not really relevant to this debate at all, and makes remarks about the hon. member for London East (Mr. Turner), a respected member of this parliament, a hard working railway man and trade unionist, I do not think any comment is deserved. I could take page after page after page of the notes I have made during this debate. I think I have seven or eight pages now. These are notes in respect of the absolute nonsense which has been spoken here this afternoon. I do not think there is much point in this sort of thing if it just results in a vitriolic personal attack and this irrelevant nonsense which we have sat here and heard.
I am very deeply concerned about this problem. The members of my party know of that concern; so do my leader and the members of the cabinet. Constructively we want to do something about it. We have to keep it in balance. I am not an apologist for my party. I believe I am just half as sincere as the N.D.P. think they are. I believe we must put this thing in balance.


An hon. Member:: Tell us what you think should be done.
DEBATES	9235
Foreign Control of Canadian Industries


Barnett Jerome Danson: Well, I think I have some suggestions. I have made them. If you are really sincere about wanting to know, may I say that I made quite an extensive speech on this subject on November 19, which is recorded at pages 2916 to 2921 of Hansard. I shall not bore you with that again. I think, however, that I had something constructive to say then and will continue to say it.
I believe we want to keep the balance. In order to keep the balance we must see what the total picture is. We do have extensive reliance on foreign capital. This is by no means a recent or new phenomenon to Canadians. On the contrary, it has for generations been a key feature of Canada's development. Canada's abundant natural resources, spread over great distances, have taken tremendous amounts of capital and related management initiative and know-how to develop. But because of Canada's relatively sparse population the domestic supply of these essential nation-building resources has fallen well short of requirements, particularly in periods of rapid development. At the same time, almost limitless growth opportunities coupled with a tradition of stability in the economic and political environment have made Canada a generally attractive place for outside capital. As a consequence foreign participation in Canada's growth has been substantial.
A major portion-about half-of Canada's foreign indebtedness takes the form of direct participation in industrial operations. Foreign controlled enterprises account for approximately three-fifths of Canada's manufacturing and mining industries and nearly three-quarters of the oil and gas industry. This direct form of foreign investment brings major benefits to Canada.
First, direct foreign participation in Canadian enterprises provides not only needed capital funds but also new forms of technology and managerial know-how not otherwise available. I should like to deal with that later. Second, many foreign owned enterprises in resource fields have been developed to supply affiliated companies, thus contributing a greater degree of market stability than is customary in the marketing of basic materials. Third, the international company constitutes a ready-made avenue for the kind of international specialization needed to develop more productive industry. Results being achieved from the automotive program illustrate how foreign affiliates can be adapted to contribute to more productive industries
Foreign Control

of Canadian Industries
May 29, 1969
through rationalization of operations on an international basis.
[DOT] (5:10 p.m.)
At the same time, a high degree of foreign participation in Canadian industry has certain limitations and some quite serious problems. The basic problem is the exposing of Canadian industry to foreign decision-making which may not always be in Canada's best interests. Such decisions are not always against Canada's best interests but frequently they may not be in our best interests. This exposure is accentuated to the extent that foreign governments use the parent-subsidiary relationship as an instrument for solving national objectives which may not be in harmony with Canadian objectives. To encourage a positive and constructive contribution to Canadian development and to lessen the risk of restrictive and disturbing influences which can arise from external decisions, foreign owned subsidiaries operating in Canada are urged to adhere to some guiding principles of good corporate behaviour if we have any. There is quite a list of them. They are somewhat for motherhood and against sin. Having seen these guidelines some time ago and knowing the people who receive them, I think this was one of the funniest things we have done in Canada-if you have that sort of sense of humour they are not real; they have no teeth.
When Conrad Hilton moves into a country, he says. "What are your rifles? What are your terms for foreign investment? Tell me what they are. I'll live by them, but don't change them on me." I think we have to tell people what our rules are. Given proper recognition of the essential ground rules, foreign owned companies will undoubtedly continue to play a major role in Canada's economic development. Canada's growth potential is great and it is expected that development will continue to proceed at a pace requiring further substantial capital resources from abroad. Even if it were possible to generate sufficient capital resources in Canada to meet our development needs we would still benefit from having foreign participation in Canadian development companies by Canadian participation in enterprises in other countries. Just as nations benefit from a flow of goods across international borders, so also the movement of capital resources internationally facilitates international specialization in the use of capital, technology, management and resources to the mutual benefit of all concerned.
This raises some fundamental question which I think we must face in this house and during this debate. First, is Canadian busi-
ness to be denied the opportunity to sell to the highest bidder, domestic or foreign, even though the owners have a better use for natural resources? Is the foreign company to be denied the opportunity to assume participation or ownership even though it is in a position to provide technology, management and other forms of leadership not available elsewhere? Is foreign participation to be prevented even though it provides a form of industrial organization most conducive to the best performance with consequent benefits to the consumer and producers alike?
Given the rising expectations of Canadians and many demands for a better living, can we afford to rule out this avenue to better industrial performance? I suggest, Mr. Speaker, that we can have our cake and eat it; they are not mutually exclusive.
Professor Watkins and his committee-the task force on foreign ownership of Canadian industry, I think is the proper title-produced a report which is not radical. As a matter of fact, I think in many cases it was understated and, to quote Watkins, "if all of our proposals were put into effect, Canada would still have one of the most liberal policies toward foreign direct investments in the world. Foreign corporations are still finding Canada a profitable place to invest." I do not think that is an overstatement. My experience, which has been in business and in other countries, would bear that out, having seen what goes on there.
We are living in a far more international world; yet I do not think there is anything incompatible in a healthy degree of nationalism and internationalism. I believe we can have both. It is chauvinism that worries me, this sterile flag-waving type of nationalism-patriotism with nothing to back it up. It is much the same here, and we are perhaps oversensitive to this in Canada. Our type of nationalism is a quiet nationalism. I would suggest it is a little too quiet at times. There is nothing wrong with a greater show of our patriotism. There is nothing wrong with looking after our best interests within the international community with which we want to co-operate. It is very much like individuals who must do things to maintain their own self-respect before they can contribute effectively to the society in which they live. And this is what we must do as a nation.
We must develop our strengths. We have to prepare the strength of our economy and our industry and our society for the free trade toward which we are heading through such
May 29. 1969
COMMONS DEBATES	9237
Foreign Control of Canadian Industries steps as the Kennedy Round. In my experi- or two. It becomes commonplace. Our prob-ence these negotiations have been tremen- lem becomes one of getting passports, dously helpful in net effect, for Canadian Because we are the sort of people we are and industry and industry of other countries. As our passports are honoured, because we were the Kennedy Round rules come more and free with them and found we had to do some-more into effect I feel there will be further thing about the matter, we have a problem
benefits, and we must prepare ourselves for them. The recent bill to establish the Export Development Corporation, which was sent to the Standing Committee on Finance, Trade and Economic Affairs of which I am a member, is a unique and exciting piece of legislation that can help develop the potential of this country.
I am sometimes concerned that we put too much emphasis on exports and I do not think we can do that unless we balance it with the same amount of investment effort and concern about the development of our internal economy and society. We can then best produce because we are imaginative, because we are original, because we are well managed and because we compete on the market and on our terms. Then our products and the export incentives are simply the result of that. We back up good products, good productivity and good craftmanship with export incentives, but not as a crutch.
So we must look into the future and see what world we are building, for our old age and for the future of our children. We are going through this period of participatory democracy. I hope it is a permanent form of participatory democracy. I favour equally anticipatory democracy because we must see what is ahead of us. We are so inclined to look at today's problems and then simply react to them, but if we can anticipate we will be doing our job well here by seeing into the future. We get so bogged down hearing these speeches today, Mr. Speaker, hearing the gloom and doom. One would think we lived in the most depressed and terrible country in the world; yet our greatest problem individually as members of parliament is getting passports for people who want to go overseas. This is some commentary on our society.
I do not say we do not have problems, but they are problems of affluence. These are not wealthy people travelling abroad. Certainly there are wealthy people too, because we have a lot more wealthy people than we ever had before. But these are working people. In my own company, which is a small one, the people come from all parts of the world but mostly from the United Kingdom, Germany, Italy, Holland and Czechoslovakia. These people go home to see their families every year
because our people want to travel abroad.
I could go on and on about our guidelines. To me, guidelines and buying back our country are not very constructive. Americans do not mind guidelines. We talk about foreign ownership, but we are really talking about American ownership. We are not fooling ourselves and we are not fooling the Americans. They quite appreciate this. But they do not object. They will buy our guidelines if we set them and set them realistically. What they do object to, and for this I do not blame them, is any retroactivity which might be involved. We live by our rules. Canada has a reputation for making rules and living by them of making deals and living by them, and I think we deserve credit for that. We want to keep that reputation.
[DOT] (5:20 p.m.)
But any rules we make for the future should be made in our best interests. The American businessman is an American, and he is a businessman. All we should be is Canadians and businessmen. They understand that. I dealt with them when I was in civilian life. They are great people to deal with if you lay it on the table. I was in Cleveland a week ago tonight with the Minister of Industry, Trade and Commerce (Mr. Pepin) when he spoke to the Mid-Atlantic Region World Trade Congress, a huge group of American exporters. The minister laid it right on the line and told them exactly what the problems were, where we stood and what our concerns were. They are the same concerns that the Americans have. The minister put these things in context and perspective. He not only did not lose friends but he gained friends and respect, as he usually does wherever he goes. We have problems with licence arrangements which I think sap our inquisitiveness and restrict us in foreign markets. These are things we must deal with. I am probably taking too much time, Mr. Speaker, because I dealt with these things in a previous address.
The same thing applies to joint ventures. I think we could do a lot more in stimulating our economy with a much more imaginative approach through the Industrial Development Bank, which I think sometimes is far too restrictive, far too introverted, far too timid and far too careful. The Canada Development

Foreign Control of Canadian Industries Corporation offers enchanting prospects. It is very interesting, simply looked at. If you look at it from the N.D.P. viewpoint, that is the answer. But it is a very complex thing. It requires the utmost of study but in my opinion it does have a place in our economy.
I had the good fortune of being in Italy recently as a guest of the Italian state department, and I saw the functioning of their state organizations. It is really not what we would conceive in respect of the C.D.C., but it serves many of the same roles-companies like I.R.I., E.N.I., and Efim-Brada. The Italian government did not really mean to get into this. It happened in 1934, I think, under Mussolini, who made the trains run on time and established these organizations, which may not be good or bad, in spite of other things he did. But he finally got his just desserts. It happened because the banks failed and the government had to take over the banks, and the banks happened to control a lot of the industry. So the government found itself in business.
I was quite interested in this subject and met with the officials of these companies. There is a balance between public ownership, being the state in this case, and private ownership. The shares are traded on the exchange. I think we could learn much from what our Italian friends have done in this field. As I travelled through the south of Italy, a part of the country to which I had never been before, I saw the tremendous development by Italsider, the great steel complex, a fully integrated steel mill at Taranto, and Montecatini-Edison in Brendisi. There are so many others I could name, but they are not too easy to pronounce and do not come so quickly to me. This was in their depressed area.
Their problems are not so different from ours. The country is spread out and they have areas that are stultified where the people are what they call peasants. However, they are a charming, attractive, fun-loving people, with good wine and good music, who are now, through this intervention, developing a way of life which is consistent with that of the 20th century. I do not know if they will thank their government for it, but at least they are enjoying the material things which bring sprit spiritual things, too, in many respects but not always, that the rest of the country is enjoying.
There are two particular points I would like to stress in reference to what we must do 
DEBATES	May 29, 19G9
to build our strength so that we can realistically build our economy, so that we can realistically set guidelines and put ourselves in a position where we can manage our own affairs. One is the area of research and development, innovation, and good business management. In management techniques I think we are deficient-it is not a net but a gross deficiency-in relation to our friends to the south. This is the reason or one of the reasons-there are many-that they have great international corporations. We have not paid sufficient attention to that aspect of education in Canada.


Mr. Speaker:: Order, please. I have to interrupt the hon. member to remind him that his time has expired.


Some hon. Members:: Continue.


Mr. Speaker:: The hon. member may continue if he has the unanimous agreement of the house.


Some hon. Members:: Agreed.


Barnett Jerome Danson: I shah try to be brief. I am so impressed with what I have written here that I really want to say it all. I think the area of management training is of particular importance. We have a growing number of schools of business management in Canada, but I suggest that we expand these and that they be given the highest priority by the governments with jurisdiction and assistance by those governments that do not have jurisdiction. But we do not have a first rate graduate school in this country. I suggest that we make sure we meet this deficiency very rapidly because our graduate students must at the moment go to other countries. This is not necessarily bad; this interchange can be really excellent. But nevertheless it is not a made in Canada product. Because it is made in Canada does not mean it is better, but there is a Canadian orientation that we must have in these things for our students and foreign students who come here.
Further to that, I would urge the establishment of an elite school-I hope there would be at least one French speaking graduate school and one English speaking, both with a bilingual orientation-for the graduates of these schools. Then we would encourage management in such a way that they would be really mature people, the type of leaders who will have great leverage in our society. This must take very high priority because like it or not, industrial leaders do have leverage. But it can be positive and beneficial, and
May 29, 1969	COMMONS
frequently is. It is not always bad, as some of our friends here would suggest.
They should be skilled in the social sciences so they are totally mature men who realize the need for political activity, who realize their responsibilities in housing, in social concerns, in bringing people along, in breaking down prejudice, in the cultural aspects of our society. If we develop leaders, management people of this quality, we will have a brand of Canadianism, I suggest, with a dynamic economy that will be unsurpassed. I believe we have an opportunity in this country to do very many great things. We must work at it. We have lots of ideas; some constructive ones weie suggested this afternoon.
The fact that this is a subject of debate is interesting, because we can bring forward constructive suggestions. I hope we can be more constructive from here on. We have so much going for us in this country. We are in a unique position because we are just ready to take off. We think we are pretty good now, but it is nothing to what we will be if we do it intelligently, if we anticipate, if we think and are thoughtful instead of just being clever, which we are not always, if we realize the potential of our youth, the potential of our future immigrants, the potential of our natural resources, the potential of our good will, the potential of our own strengh, if we work toward it in an organized fashion, in an orderly fashion, with fairness, with compassion, with humanity and a full appreciation of what is good in Canada and for Canada, and what is good in the whole world, of which I hope we will be an effective part.


Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, during the course of the debate today we will hear much about the effect of economic domination of our industry and resources by foreign powers. While it is well known that our industrial and resource base has reached such an alarming degree of foreign domination as to be well nigh irreversible, according to Professor Watkins, we do not generally recognize the extent to which the control of our institutions of learning, culture, information and communication have been similarly invaded, risking domination of our thought processes by ideas and ideals not necessarily reflecting a Canadian identity but reflecting instead a continen-talism of outlook, taste, and attitudes, much in the manner that this government favours the continental approach to manufacturing and raw materials distribution. I intend, therefore, Mr. Speaker to deal with the
DEBATES	9239
Foreign Control of Canadian Industries difficulties facing Canadians in attempting to construct a distinctive national identity and national pride when the very means to achieve this development are increasingly in the hands of citizens beyond our border.
[DOT] (5:30 p.m.)
I refer specifically to the domination of our magazine and text book publishing industry by non-nationals of Canada; I refer to the foreign control of our radio and T.V. outlets and their programming into Canadian homes;
I refer to the presence in our institutions of higher learning of what is now estimated to be a majority of professors who owe allegiance of citizenship and ideas to countries other than Canada; and, finally, I refer to the cultural invasion into Canada in art, music and drama by the dominant North American culture.
It would be simplistic and unthinking to interpret this concern as an anti-American tirade. It is true that because of proximity and similarities of language and culture it is inevitable that Canadians should be influenced by American ideas and technology. For that matter, so has the whole of the western world. But we are not Americans, and if Canadians desire a genuinely independent Canada, a Canada which has not exchanged political colonialism for colonialism of the spirit-and there is considerable evidence that they do-then there are some pretty important steps we must take.
But a culturally independent community is not simple to achieve and requires courage on the part of the government, a quality which has not been its most notable asset. In fact, this government has not only failed to halt major erosions of Canadian cultural identity, it has given us only costly examples of government tinkering in an almost futile attempt to develop this cultural awareness and uniqueness. I cite as examples a few of the most prominent. The C.B.C., $161 million this year; the National Arts Centre, $46 million with an annual budget of $2.5 million; the Canada Council, $23 million. Then there is the new languages legislation, and God knows what this will cost in terms of translation, printing and courses before we are through; perhaps between $80 and $150 million. And there are many more examples.
What is the justification, I ask, for spending the Canadian public's tax money on this kind of cultural tokenism if those factors much more central to our development are ignored or soft-pedalled? I believe that Canadians would support all these institutions
May 29, 1969
9240	COMMONS DEBATES
Foreign Control of Canadian Industries
gladly if they were meaningful to them, if they preserved and enhanced the lives of Canadians. That is the only way that Canadian unity or identity will be served, not by grandiose statements of glorious intent and massive outlays of money that serve no real purpose.
We may well react as people betrayed. The publications industry, everyone reconizes, is an important factor in the exchange of ideas. And yet Saturday Night and Macleans are but two meek Canadian voices to counteract the flood of foreign opinion emanating from the 400-odd American magazines sold here, Macleans, we are told, is on its last legs. I should like to quote John Fisher from an article which appeared in the Toronto Telegram of November 16, 1968. The report reads as follows:
"Macleans Magazine, Canada's long-established national magazine, will be out of business within two years," freelance writer and broadcaster John Fisher forecast today.
And its death, he told 350 delegates to the Ontario English Catholic Teachers Association, will be only another symptom of a worsening state of affairs in the Canadian communications industry.
He urged teachers to encourage tough questioning of their society by both themselves and their students to counteract what he called "a sex-and-materialistic-economic treadmill that bombards them day and night".
The main reason for Macleans predicted demise is that two magazines alone, Time and Readers' Digest, which receive a $1.5 million annual Canadian postal subsidy, soak up over half the money spent in Canadian magazine advertising, leaving little for Canadian publications.
It is very generous of the Post Office Department to assist Time and Readers' Digest. However, the government has not been similarly generous to Canadian publications and Canadian postal users. While 1 am on the subject of the Post Office, Canadians should be gravely concerned about what is happening to our non-profit press, ethnic, political, scholarly, professional and labour publications, as a result of the new postal rates. When these papers fold, and hundreds have, or will shortly, opinion, dissent and thought will be limited and expression will be concentrated in the hands of fewer and fewer and fewer men. In this situation there is no need to curtail freedom of the press or impose consorship, since it already will exist de facto.
The book companies in Canada are, by and large, foreign subsidiaries. All of us are aware of the difficulties faced by an unknown 
author in getting his work published in Canada. I need not elaborate on this point further. But the preponderance of our school, and certainly our college texts, are published by foreigners. From his earliest contact with education the Canadian child is therefore exposed to the emphases and priorities of another country without being aware of this subversive subliminal influence upon him. The Indian child being confronted with a reader in English whose contents rely on experiences of a suburban middle class family is an extreme but not irrelevant example of what happens to most Canadian school children.
Turning now to broadcasting, another powerful media for influencing Canadians, we find that the story is almost the same. Radio and television stations all across our land are becoming increasingly owned and controlled by outside interests. CKLW of Windsor, is owned by RKO. CKCF in Montreal is owned by British Marconi; television stations in Kitchener and Vancouver are controlled by outsiders. Wherever you go the picture is similarly dismal.
In 1957 Robert M. Fowler in his first report outlines the problem on page 27:
We have a good broadcasting system. We are trying to do something that is not easy. The natural pressures are against us; the flow runs north and south and we are trying to make some part of it run east and west. The forces of economics are against us too, as they have been against many odd Canadian dreams and aspirations in the past. But this is one we had better work at, for it is really important if we are to keep a Canadian identity and culture; if there is, in fact, to be a Canadian force in the world. And that may be important to many people-both inside and outside Canada.
To do this, we must be prepared to spend public money in quite large quantities. The Canadian economy is just not big enough to support a broadcasting system on commercial revenues alone. At least, it would not be one we would want to have or one that would be anything more than the scattered outposts of American broadcasting networks. The central factor in a Canadian system is the CBC, supported by money out of the public treasury for both its capital and operating needs.
But I submit that we are indeed becoming, to quote Mr. Fowler again, "scattered outposts of American broadcasting networks" and, in spite of C.B.C. efforts, sales of outlets to foreign concerns are achieving this by the back door.
Of current interest is the purchase of 50 per cent of Famous Players Canadian Corporation Limited by the giant Gulf and Western Corporation. The C.R.T.C. has stated that, because of Ottawa's new broadcasting rules,
May 29. 1969	COMMONS
only 20 per cent is allowable for foreign voting capital and so a major test case is under way.
Famous Players has a chain of 21 broadcasting companies across Canada which reach into thousands of Canadian homes. In opposing the application, the Canadian Society of Film Makers said: "Granting the change-inownership would be a sellout allowing American interests to retain their stranglehold on Canadian broadcasting. It has become a wearying and discouraging task to try to save a little of this country's soul in the face of the indifference of successive Canadian governments."
These are serious matters, Mr. Speaker. For all our efforts and money to establish a viable alternative to imported programming we are now being told that even the 55 per cent Canadian content rule is under review. Mr. Juneau has told us he will have a new policy by spring.
Speaking in Edmonton recently, Mr. J. R. Peters, Vancouver president of the Canadian Association of Broadcasters had this to say, as reported in the Gazette of May 9, 1969:
[DOT] (5:40 p.m.)
Private broadcasters have done their best over the past 50 years to meet the requirements of public policymakers that radio and television programming safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada.
As a result of technical developments, the so-called public policy objectives . . . are approaching the position where a far more realistic objective must be sought. In fact, the combination of satellite and cable communication makes it likely that this long-standing government policy is even now obsolete.
I suggest that what Mr. Peters is saying is that, unless we are extremely wary, our radio and T.V. stations will become nothing much more than expensive juke boxes spinning out canned, foreign produced films and music at fantastic profits to the owners, and with complete irresponsibility towards developing Canadian talent or identity, while using the publicly owned airways to accomplish this.
The public does not have nearly enough access to information about the ownership of our broadcasting stations. There has been nothing printed giving the details of ownership and management of broadcasting stations since the list on page 287 of the Fowler report. I charge that the Canadian Radio and Television Commission is guilty of keeping the Canadian public in the dark about the ownership of our broadcasting stations by failing to publish annually reports concerning 29180-585
DEBATES	9241
Foreign Control of Canadian Industries ownership of stations, plus financial disclosures which would reveal some enormous profits on relatively small investments. The public must see what is taking place in this industry.
I would like to deal now with a third subject, that is Canadian higher education. Considerable publicity has been given recently to the studies of Matthews and Steele showing that our universities are dominated, at least in numbers, by professors who are not citizens of our country. I would like to underline the fact that my concern is with the citizenship, not the national origin, race or religion of the immigrant professor.
It has been reported that 86 per cent of the new academic appointments to Canadian universities this year went to non-Canadians, and at present 51 per cent of the positions are similarly filled. At a time when there is marked concern for Canadian identity, we Canadians have allowed to take place what no other civilized country in the western world has permitted-that is, if the trend continues-a virtual monopoly of its higher education institutions into which our government pours upwards of $500 million per year; a virtual monopoly of instruction and policy making decisions by citizens owning allegiance to countries other than Canada.
Before someone challenges me on the ground that knowledge is international, and therefore it follows that to suggest a policy would be parochial, discriminatory or noncosmopolitan, let me say that I agree with them wholeheartedly. But the concept of a cosmopolitan university is markedly different from that of the existing situation, where there is no reciprocity and equally or better qualified Canadians with up to 10 years of investment in higher education are denied positions in Canadian colleges, preference being given to outsiders. The United States does not operate this way; neither does Sweden or France, nor even little Tanzania. None of these countries gives permanent and senior positions to non-citizens.
Last year 1,013 persons entered Canada from the United States to take positions in our colleges. Only 105 persons from Canada- after waiting a minimum of eight months- entered the United States in search of academic appointments. During that time nearly 10,000 Canadians have qualified themselves here and abroad for positions in Canada, so no one can excuse this trend on the basis of a shortage of qualified Canadians, except in a few fields. On the contrary, there is an estimated excess of highly qualified Cana-
May 29, 1969
9242	COMMONS DEBATES
Foreign Control of Canadian Industries dians in English, chemistry, entomology, history and the classics, and yet they cannot find jobs in Canada.
Why not? The reason for this stems partially from the "grapevine" system of hiring practices common to Canadian institutions of higher learning. When positions are vacant, more often than not the department head makes the appointment. If he happens to be a non-Canadian, preferences are likely to be given to those recommended who may be known to him in the other country. The practice then becomes self-accelerating as more non-Canadians teach here. All university vacancies should be advertised publicly so that qualified citizens can avail themselves of equal opportunity for employment here. Perhaps a university manpower department would be the answer.
Given time I could go much more deeply into the course we are following which is so pernicious to the development of Canadian culture, but I look to Matthews and Steele for their views on this problem. In March 1969 a brief was submitted to the commission on the relations between universities and governments, and this paragraph appeared in the brief:
What is the condition of the Canadian university at present? It is a condition, in the first place, in which the study of the Canadian culture and access to Canadian knowledge generally is shamefully neglected. It is a condition in which more and more full time members of the community are less and less knowledgeable about the Canadian fact. It is a condition in which the Canadian view of the world (even as expressed in and through disciplines other than those connected directly to the Canadian fact) is being more and more obscured as fewer and fewer Canadians are being hired to teach Canadian students in a university system finding ineluctably that its most dynamic relation is to the community out of which it takes its being.
We have listened with respect and interest to the arguments which declare that anyone can teach anyone anything anywhere. We reject the idea when it means the disappearance of a majority of home scholars. For while the claim is insistently, even hysterically made, we continue to receive reports that students feel they are being cheated of their own culture; that non-Canadian models and information are being fed increasingly into studies of political being, social structure, and psychological understanding; that there is a wanton failure to know what qualified Canadians are available and to make known to qualified Canadians the availability of positions in Canadian universities.
It will be argued that there is nothing notably sinister about the presence of a preponderance of non-Canadians here. Many are very fine people, I agree. I have worked with them and as recently as a month ago I personally acted as a sponsor for one of them at a citizenship court in Vancouver.
[Mr. Rose.l
But what evidence do we have that the majority of them ever intend to become citizens? Are they here rather to build their reputations, to enhance their academic prestige through research prepared for and delivered to other countries, and to flit back again across our borders when a better deal presents itself? And will all this be done at the expense of Canadian studies and emphasis by people who have made no legal commitment to us at all?
It has been argued by at least one eminent Ontario legal authority that members of selfgoverning occupational groups such as law and medicine who personally receive some of the sovereign powers of the state and who exercise some legislative and judicial powers as a result should be required to possess the same qualifications as legislators; that is, full citizenship.
For our cultural protection, should not this concept be extended to our universities which receive and exercise similar powers on behalf of the state, and which are self-governing entities. Should they not require full citizenship from those in administrative positions who hold decision making powers over courses and content? It is not unreasonable, then, is it, following from this, that positions from chairmanship to chancellorship be awarded exclusively to men and women who have opted for Canada permanently? Let me repeat that the position I take in this regard is not to keep scholars out of Canada. Far from it; we need scholars of outstanding reputation. We need skilled people to become Canadian citizens. But the facts seem to point to the contrary.
[DOT] (5:50 p.m.)
When an United States university wishes to employ a distinguished foreign scholar, it offers him a two year exchange. After that period expires, more than likely out he goes. There is no evidence to indicate that Americans are particularly concerned with the universality of scholarship, or a cosmopolitan university either. They look after their own. This blatant academic nationalism is not suitable for Canada, as many other foreign practices are not suitable, on counts involving restrictions on immigration or the balance to be struck between foreign and native scholars. I believe, however, that a majority of our university teachers must be Canadian citizens and that the remainder should be drawn from all countries of the world. I do not think these people should be given a two-year income tax holiday, either.
May 29, 1969	COMMONS


Mr. Deputy Speaker:: Order please. I am sorry to interrupt the hon. member but his time has expired.


Some hon. Members:: Continue.


Mr. Deputy Speaker:: Is there unanimous consent for the hon. member to continue?


Some hon. Members:: Agreed.


Mark Willson Rose: Thank you, Mr. Speaker. I shall conclude my remarks rapidly. In any event, this is the position in which we find ourselves in the last third of the twentieth century. Our major publicly supported institutions of culture and learning run the real risk of being dominated by foreigners. Skilled young men and women who have been educated by the state and whose efforts have been buttressed by scrimping and sacrificing parents run a real risk of being denied employment in their own Canadian institutions.
Some may argue that the particularities of the Canadian environment are so insignificant and unimportant that they do not merit serious, scholarly attention by anyone. With this attitude I disagree. Many Canadians I believe are becoming increasingly aware that the much vaunted materialistic way of life of that great nation contiguous to ours is not what they want at all. Most Canadians and many United States citizens are beginning to reject the conformist approach adopted to the solution of all problems in that country. They reject the concept of poverty amid plenty, the idea of big city strife and the resulting racist and college unrest. These people want something that is unique and different and look to Canada for what they want. If we do not reverse the trend that allows a growing number of our publications, broadcasting facilities, universities and art productions to fall into the hands of non-Canadians, how can we be distinguished from our neighbours to the south? Our French-speaking Canadians will soon be the only people who will enable others to distinguish between us and our neighbours to the south. This French fact is, in my opinion, our major defence against our becoming carbon copies of the people of the United States and I for one cherish this defence which will prevent our being swallowed completely.


Mr. Deputy Speaker:: Order, please. I
understand the hon. member for Laurier (Mr. Leblanc) would like to revert to routine proceedings for the purpose of tabling a report. Is there unanimous agreement for this?


Some hon. Members:: Agreed.
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Foreign Control of Canadian Industries



ROUTINE PROCEEDINGS


[Stage Direction]
NINTH REPORT OF STANDING COMMITTEE [Translation]	*
Ninth report of Standing Committee on Miscellaneous Estimates, in French and in English-Mr. Fernand Leblanc (Laurier).
[Editor's note: The text of the foregoing report appears in today's Votes and Proceedings.]


[Stage Direction]
The house resumed consideration of the motion of Mr. Lewis.
Mr. E. B. Osier (Winnipeg South Centre):: Mr. Speaker, I wish to make some brief remarks and if hon. members will be kind enough not to call it six o'clock until the clock is actually pointing to that hour I think I can finish what I have to say. Although the New Democratic Party has shown justifiable concern about the problem it has alluded to, I think it has overstated its case. The motion before us now reads in part:
-the failure of the government to ... prevent further takeovers... by foreign corporations,-
I want to know how we are to prevent takeovers by foreign corporations if Canadians themselves do nothing about these takeovers? I am convinced that nobody in western Canada is the least bit interested in knowing from where our capital comes. They do not care who owns the capital; all they want is to see our industries and resources developed. Years and years ago, and I am certain my hon. friend from Calgary will support me in my contention, although everyone in the west knew that we had a potential oil industry in our area we could not get it developed. You could go east on the train and approach the moguls in the halls of commerce of Montreal or Toronto hat in hand and get absolutely nowhere. Not until U.S. corporations invested money and built up our oil industry was anyone truly aware of that
9244	COMMONS
Foreign Control of Canadian Industries industry. Yet people are now bleating about United States companies dominating our oil industry. I suppose it would be very nice if Canadians dominated it, but Canadians did not trouble themselves about it and took no notice of it. So, western Canadians feel that the origin of development capital is a secondary consideration and that what is important is that money should be available to develop this country.
I wish to make one other observation. I think the hon. member for Skeena (Mr. Howard) demonstrated the dilemma in which his party is. It wants to be the farmer's friend; it also wishes other countries to buy our farm products. Yet, when another country develops its industry to the point of being able to sell its products-as it must if it is to buy our farm products-to our farmers at prices lower than those charged for similar Canadian products, that party cries the blues and shows an inconsistent attitude.


Some hon. Members:: Oh, oh.


Edmund Boyd Osler: The Canadian farmer is not the least bit interested in protecting eastern Canadian industries. He would sooner buy his finished product from Japan if that product is just as good as any available here, and cheaper.


Mr. Peters:: And rightly so.


Edmund Boyd Osler: The hon. member says, and rightly so. I point out, however, that he cannot wear both hats at the same time.


Frank Howard: Will the hon. member permit a question?


Edmund Boyd Osler: Not just now, please. I have such a short time. It seems to me that those who have been crying gloom and doom have overstated the case greatly. Hon. Walter Gordon is the prophet of gloom and the hon. member for York South (Mr. Lewis) is uttering lamentations. I nevertheless suggest, as several other hon. members have suggested, that the government ought to look long and hard at the Watkins Report and consider some sensible and balanced way in which to approach this entire problem.


Mr. Deputy Speaker:: Order, please. It being six o'clock the sitting of this house is suspended until 8 p.m.
At six o'clock the house took recess.
.
DEBATES	May 29, 1969


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
Gerald William Baldwin: In view of the fact this is a motion which will not involve a vote, I can express a greater variety of views than might otherwise be the case. Certainly, international capital has made a considerable impact on the Canadian economy. The motion as put, at least the first part of it, is fairly straightforward. Indeed, the situation set forth in the first part of the motion is almost indisputable.
The present government has not taken any action to prevent foreign companies from investing in Canada's resources, development and other aspects of the economy, nor has it taken any preventive measures for the future. It is not clear to me, or I am sure to the public, whether this government is even giving consideration to the economic and other issues which are involved here. If the government were considering these matters in a well balanced way, we would not need to be as concerned about this subject as the present motion indicates. It is by no means clear why the government should act to prevent some of the tilings to which our friends to my left are objecting. This is not a simple black and white issue. We are talking about welcoming foreign investment while still maintaining firm political control.
I was in this chamber on Tuesday and Wednesday when I should have been in the city of Grande Prairie where a crowd of some 10,000 welcomed the completion of the Alberta Resources Railway running from the C.N.R. west of Edmonton near Brule along the eastern slope of the foothills of the Rockies to the city of Grande Prairie. This railway not only opens up a new hinterland of resources to development, but also gives incidental and ancillary benefits to the people of the Peace River area as well as the Northwest Territories by providing a more direct route to the Pacific coast. If we had waited for Canadian capital to open up that part of the country we probably would have had to wait until hell froze over, if our past experience is any indication.
There are a number of resources in that area such as coke and coal from the Little Smoky River district; at least one or possibly two pulp mills and a gas processing plant. These are the bread and butter reasons for the existence of this particular railway, which was built by the C.N.R. at the instance of and for the Alberta government. However, foreign
May 29, 1969

capital from the United States, Japan and Europe was required to underwrite the exploration, delineation and development of these resources and to construct this $100 million railroad, with all the benefits which will flow from it. I think it has already been said we would have preferred Bay Street money. However, when Bay Street money is not available we will take Wall Street money to bring about the development we must have in a new area. I mention that simply to show the situation is not as simple as might appear at first blush.
It is not by an overwhelming fear of every stranger who comes to invest money in jobs for Canadians, that we will maintain control of our economy but by faith in our own country, faith in our own resolution. I know of no foreigner who has come to this country wanting to take control away from us. Very few of them have any real interst in taking over control either of our economy or our political system. Good heavens, with the mess the present government has got us into with soaring inflation and higher and higher unemployment, who would want control but a Canadian?
A good deal of the present fuss arose from the Merrill Lynch bid to take over Royal Securities Corporation of Montreal. I think this concern is well founded. It is considerably better founded than the fuss made earlier over a United States tobacco company trying to take control of a brewery from another foreign tobacco company. After all, Royal Securities is an old, firmly established Canadian company. For some time that company has played an important role as one of 15 companies given special money privileges in exchange for contributing to an important market for short-term Canadian paper.
It is clear that firms such as Royal Securities are playing an important role, perhaps even a critical role, in the management of the economy under the direction of the Bank of Canada. I think there is a case to be made that in certain types of industry and corporate entities, a sizeable Canadian presence must be established and maintained. Obvious illustrations which come to mind are chartered banks, the broadcast media and newspapers. I think the case in respect of these is automatic.
[DOT] (8:10 p.m.)
We have been invited from time to time to put forward our own proposals with regard to certain problems affecting this country. I say to those who are here, and to the Prime Minister (Mr. Trudeau) who is not here, that
DEBATES	9245
Foreign Control of Canadian Industries all one needs to do is to examine the records of this house to see the amendments and the proposals which this party has put forward indicating our specific and definite policies, I think it is most unfortunate, Mr. Speaker, that the government is so blind that it will not adopt these wise and sensible solutions we have suggested. It continues to ignore them. As long as the government refuses to accept some of our proposals it will continue to remain in the mess in which it is now.
There is probably a case for considering the establishment of some form of inquiry into both the general issue and specific instances. I know we have had the Watkins report, which was a royal commission. It may well be that in specific instances, where it may not be for the maintenance of a Canadian presence, we should have some form of machinery for establishing a board of inquiry. It may even be supplemented by a parliamentary committee. I think it would be fatal to suggest that this be done in every case. Of course, our jurisdiction would be restricted, naturally, to federal companies. But if those concerned realized that in certain cases of intended takeover such hurdles and obstacles had to be overcome, there would be a lot more caution displayed than has been the case heretofore.
What is needed is a careful investigation of all our major institutions; first by type or category and, secondly, by size or sub-type within each category, to see if we can come up with some agreement on this question of national identity in our business institutions. This information would supplement the Watkins report. I think there is no question in the minds of most of us that the decision with regard to the chartered banks was undoubtedly right, as it was with regard to the media, but where do we go from there? I think there is one further important step that might be taken. This question of the content of national ownership in takeovers by multinational or global companies is of world-wide concern. Canadians are not alone in their worries and fears about the consequences of the spread of multi-national corporations.
I had thought at first that perhaps we might explore the possibility of having parliamentary inquiries into these takeovers by foreign corporations, but might there not be some merit in having an international look at this question in all its implications? Could we find a forum that could undertake it? Canadians are joined in their concern here by Brit-ains-certainly the concern in the United Kingdom, where I was a short time ago, is
May 29, 1969
9246	COMMONS
Foreign Control of Canadian Industries growing-by Frenchmen, by Italians, by Japanese, by Indians, and probably by many more people I am not aware of and of whom most members of this house are not aware. All are worried about the implications for their national identity and sovereignty in the rise of the great multi-national conglomerates, the modern equivalents of the great merchant adventures of Phoenicia, of Venice, and of the Baltic ports, of times long past.
There were two limited attempts made to survey areas of the problem in this country. I quote from page 320 of the Watkins report:
The Eisenhower-Diefenbaker joint statement on export policies of July 9, 1958, recognized that the export policies and the laws of the two countries may not be in complete harmony and called for "full consultation between the two governments with a view to finding through appropriate procedures satisfactory solutions to concrete problems as they arise."
There is no doubt that some of the ministerial meetings that have taken place since then were brought about as a result of the meeting of the then prime minister, Mr. Die-fenbaker, and the then president, the late General Eisenhower. Later on in 1964, during the administration of Mr. Pearson, there was the meeting between Mr. Pearson and President Johnson following which, and here I quote from page 322 of the Watkins report:
-the Merchant-Heeney report, "Canada and the United States, Principles for Partnership," was issued in June 1965. It recommended this ideal solution, namely, that American subsidiaries in Canada be granted a general exemption from the administration of foreign assets control regulations under the Trading With the Enemy Act. This recommendation has not been implemented and seems at present to be a dead letter.
Despite those who say that the United States government will not be concerned, it is possible that with the right approach we could have discussions with that government. I think our government might try, in co-operation with the United States government, to initiate an international forum in which this matter could be considered on an international basis. As a result, perhaps certain common rules could be laid down. It is going to affect us all. Even the United States is not immune to some of the economic consequences which flow from actions in other countries. We need no better proof of that than the world monetary crisis which is still with us and could become very serious.
I think that, with patience and time, this is an approach that might well he considered in connection with this difficult problem. Certainly, there is no excuse for not attempting
IMr. Baldwin.]

to negotiate and discuss with the Americans whom we meet from time to time, not only at the ministerial level but at the parliamentary and congressional level. I, of course, bear in mind the fact that the Congress of the United States is in a position to initiate this sort of discussion if it were aware of world difficulties and inclined to take this step. Members of the United States Congress have a great deal more power than do members of parliament in this country.
There is another proposal in this regard, and I give the government credit for initiating it. There is at present before the other place Bill S-38, to amend The Loan Companies Act. I know I cannot go into this bill in detail, but I mention this as one of the ways by which this problem can be dealt with. Under clause 5A of this proposed amendment, in the case of incorporations, and under clause 6(l)(b), in the case of existing corporations, a company can petition to have the three restrictions in 5A(a), (i), (ii) and (iii) included in their letters patent. These are restrictions which can be placed either in the letters patent of a new company or added to the letters patent of an existing company. I quote from clause 5A as follows:
-to provide any restrictions desired by the petitioners in respect of
(i)	the classes of persons who may become shareholders of the company,
(ii)	notwithstanding section 56, the voting rights of shareholders, and
(iii)	the number of shares that may be recorded in the name of any shareholder in the books of the company:
This is a simpler method by which a company may petition but ultimately a policy and administrative decision at the level of the officials of the federal government is required. I do not know to what extent provincial governments have undertaken measures of this kind. I do know that my leader, when premier of the province of Nova Scotia, by indicating the intention of his government to do this brought about a situation whereby one of the large communications companies was compelled to take a position which was acceptable to the government and the people of that province.
[DOT] (8:20 p.m.)
So there is a means by which certain restrictions can be undertaken without necessarily having to beat the United States or any other country over the head and say, "No, we do not want you here under any circumstances". I think some of these approaches- which are undoubtedly important-would
May 29. 1969

save us from the narrow, mindless emotionalism which often plagues such issues when they are restricted to one country. If we could look at the problem at the international level, I think this would be very effective. We have been asserting that the entire field of corporate ownership in Canada is so important and so complex that we must look very carefully before we leap. We should scrutinize the ramifications of each policy initiative lest we injure the patient's health because of unthinking ignorance. This approach to the problem is also crucial in relation to the evocative question of the preservation of Canadian culture. One of our supreme priorities should be not only the preservation but also the positive stimulus of a vibrant strong culture which is uniquely Canadian.
I am glad to say one of the reasons I and other members of this house were persuaded to support the measure which we have recently given second reading and sent to a committee was this very thought. It does constitute a rampart of defence against what otherwise might be the case with regard to these proposed takeovers. In a country as diverse as Canada, in a country so close to the proud, selfconfident American colossus as is Canada, the people and their government must make a continuing effort to maintain their own culture. But in this area, as in the question of control over economic institutions, we must examine very carefully the relationship between ownership of social institutions and the preservation of a strong and continually developing culture.
The relationship may not be simple; indeed it is probably exceedingly complex. Certainly, it is much more complex than our friends to the left seem to imply in their motion which we are considering today. We must protect our way of life; we must be concerned with the influence of United States ownership of institutions within our society on those ways of life. But we must not be blinded by a raging obsession with the cultural perils of United States capital; we must not raise the emotional cry of universal anti-Americanism. Indeed, we benefit from exposure to ideas, not only cultural ideas but economic ideas, from beyond our national boundaries, even perhaps from American ideas from time to time. We must ensure that the great great American dream does not become the great Canadian nightmare. I suppose we might introduce sleeping with the elephants into this but-
DEBATES	9247
Foreign Control of Canadian Industries


The Acting Speaker (Mr. Bechard):: Order, please. I must interrupt the hon. member to inform him that his time has expired.


Gerald William Baldwin: I shall finish with that
nightmare.


Mr. Alastair Gillespie (Etobicoke):: Mr. Speaker, in speaking to this motion this evening I wish to emphasize two aspects. First, to a large extent I think the answer to this problem of foreign domination will be a matter of will rather than a matter of technique. Second, this will involve us in discussions with the provinces rather than discussion with the United States. I listened with considerable interest to the last speaker, the hon. member for Peace River (Mr. Baldwin). While I share many of his concerns, I am not sure I share his same hope that discussion with the United States will bring about an answer to this particular problem. I think it is very largely a constitutional problem. I believe, as I said in my introductory remarks, that it is a matter of will rather than a matter of technique. The thing I am concerned about is not so much the takeover of our industry, serious as that is. I am not for one moment advocating that we should sit back, passively accepting it. I am very much more concerned about the takeover of the Canadian mind and the Canadian spirit, a takeover which is more subtle and more pervasive, and infinitely more serious and important. If this takeover is ever made, then the takeover will be complete.
That is not to say that I want to speak this evening on the effect of the United States media, of radio, TV films or magazines, Rather I want to talk about our political independence and the fact that it will depend on Canadian attitudes toward our own originality, our ability to do our own thing. Our political survival as a country will depend on our ability to harness the energies and excite the imaginations of our Canadians of both official language groups and of the cultural diversity which is Canada. It will depend on our ability to build a society which is different from that of the United States.
We must approach this distinction in a positive way and not in an anti-American way. We must do this in a way which sets out the fact that we have many interests and aims which are similar to those of the Americans; that we are different; and that our interests are Canadian interests, even when they happen to coincide with the United States interests.
May 29, 1969

Foreign Control of Canadian Industries
It is in this context that I should like to focus attention on two particular areas which are of concern to me, and I hope of concern to all members of this House, perhaps to millions of Canadians. I wish to talk about two areas in which the thrust of our Canadianism is seriously threatened, I shall discuss the area of corporate initiative, of attitudes toward innovation and risk-taking which have been influenced over the years by the prevalence of licensing agreements. In that connection, I wish to mention the attitudes in respect of developing foreign markets, developing new processes and developing new products. All these attitudes, in my view, have been distorted by the prevalence of and the terms of the manufacturing agreement.
Secondly, I wish to talk about the thrust which may be muted in our schools and universities. May I say that I am very much aware of our economic dependence on the United States, and not just in terms of ownership. Perhaps 70 per cent of our manufacturing industry is controlled by the United States interests, but our dependence extends to exports, to capital and to technology. United States purchases are of the order of 75 per cent or more of our manufactured exports. In terms of imports of capital it supplies perhaps 80 per cent of our foreign capital or more and the figure has been much higher. Perhaps most important of all is our import of technology from the United States. I would estimate that this is in the order of between 75 per cent and 80 per cent. That is the more important aspect of foreign ownership.
Let us put the manufacturing licensing in context. Many foreign owned firms are Canadian branch plants. Many have licensing agreements with their parents. This provides access to technology. What is equally important is that a very large part of the remaining 30 per cent-that is the 30 per cent of Canadian industry which is not controlled by foreign corporations, have foreign licensing agreements. What is a foreign licensing agreement? Briefly, it is an undertaking between two parties whereby one, the licensor, who has the proprietory know-how licences the other, the licensee, to manufacture and market a product or service in exchange for royalty income. There are several aspects of the licensing agreement with which I should like to deal.
[DOT] (8:30 p.m.)
First of all, the research and development which is made available to Canadian operations is important. It is made available at an

attractive cost. It is risk free, and it is instant know-how, if you like, or packaged technology. It is predictable as to cost and it is "closed-ended" rather than open-ended. It is also variable because it is usually related to so much per unit of production or a percentage of sales dollars.
Secondly it has the major advantage that it gives exclusive, or usually exclusive access to the Canadian market-a non-competing advantage to the Canadian firm. There is no close competition with a similar product.
Thirdly, and perhaps in many ways the most important from the point of view of developing Canadian outward-looking attitudes, the Canadian licencee undertakes to devote himself usually to his own market. Usually he restricts himself from selling in foreign markets. I should like to read you a clause from a typical licencing agreement:
The licence herein granted is for the country of Canada and specifically excludes any rights to manufacture, assemble, distribute, or sell in or export to any other country or countries.
This tends to cause inward-looking attitudes on the part of Canadian entrepreneurs. Equally, it provides little or no incentive to Canadian entrepreneurs to improve the process, although he may have acquired the knowledge to do so as a result of the licence agreement. I should like to read another clause from a typical licencing agreement.
All technical information relating to the process licenced hereunder in the possession of the licencee shall be made available to the licensor without charge.
In other words, you may ask the question, as many Canadian manufacturers have asked, what incentive is there for the manufacturer, as a party to such an agreement, to spend money on research and development or to use his originality if all the benefits of the improvement go to the licensor? In my view the licence agreement has played, and is playing, an important part in the development of our country by providing us with the know-how we do not have, by developing skills and employment, but the time I think has now come to convert this know-how into more outward-looking attitudes.
I should like to mention something that occurred in Toronto today which was sponsored by the Department of Trade and Development of the Ontario government. The name of this particular conference was "Joint Ventures and Licencing Agreements". It was convened precisely to engage the attention of
May 29, 1969	COMMONS
Canadian manufacturers in respect to exporting their know-how, to stimulating their interest in export markets, and in reversing the process so that they in turn might licence foreign manufacturers.
This is an area where the provinces and the federal government must work in close har-money. The Ontario initiative displays the kind of understanding so important to solving national issues. I hope the provinces and the federal government will discover the same sense of purpose in the constitutional area and I shall come to that in just a moment.
The Hon. Stanley Randall, in his opening remarks, emphasized the importance of multinational corporations and asked his audience to think about the multi-national corporation not defensively but in terms of the opportunities it provided because there is no question that the multi-national corporation is here to stay and will be even more important in the future.
What about the federal government's part? There is a place where the federal government could give important assistance to this whole question of the manufacturing licence. I refer to Canadians developing their own technology which they, in turn, could export. I think that exports made by Canadians firms which result from licence agreements between foreign corporations and Canadian firms should receive special encouragement. I would provide this by giving the royalties payable on such sales favourable tax treatment. This would be a way of encouraging Canadian manufacturers to think beyond their domestic markets. Similarly, foreign earnings made by Canadian companies from royalties or engineering fees based on their own research and engineering development should receive special treatment. We now provide for research and development under the I.R.D.I.A. program. This approach to royalties earned on export business or paid on export sales is similar in principle.
I think we should provide incentives for this type of export oriented R & D. This would be a way of saying to Canadian entrepreneurs, export markets are important. Indeed, they are particularly important where Canadian originality is involved.
I should now like to turn to the educational field because I think this is a major area of thrust as far as Canadianism is concerned which has been overlooked. Recently we have been very much reminded of the importance of university professorships. Professors Steel 29180-586
DEBATES	3249
Foreign Control of Canadian Industries and Matthews have drawn to the nation's attention the alarming fact that most, or over 50 per cent of all positions held in Canadian universities, are held by non-Canadians.
The Toronto Star in a recent editorial indicated that last year we graduated close to 10,000 Canadians with master's degrees or doctorates, yet in that same year less than 4 per cent of our appointments were given to Canadian graduates. In that same year more than 1,000 appointments went to Americans, 545 to British graduates and 722 to academics from other countries. I do not propose to deal further with this point other than to raise it because this is something which the federal government and provincial governments jointly should concern themselves with. I will have more to say about that in a moment.
The second aspect of the educational field which I think is important involves textbook publishing. The Massey commission of the late 1940's and early 1950's concerned itself with what might be described as the cultural instruments of our national identity.
That commission studied the status and health of the arts, of TV, of radio, of periodicals and newspapers. It looked at the artist and spent a few minutes considering general publishing. The commission did not consider or concern itself, as far as I have been able to determine, with that place where this process starts of cultural originality, that is to say with the child-with the field of textbook publishing.
The bald fact is that 70 per cent of all textbooks published and used in Canadian schools-elementary and high schools-are today published by corporations which are foreign controlled. It is quite possible that within a period of years virtually all the textbooks used in Canadian schools from Grade 1 through to the end of university will be published by companies which are foreign controlled. I think this far more important than perhaps some of our other preoccupations with foreign ownership. I think Canadian people think this is important.
If we thought it was important to protect the ownership of our newspapers; if we thought it	was	important to	protect	the
ownership of our periodicals; if	we thought
it was important to protect the ownership of our TV	and	radio stations	and if	wethought it	was	important to	protect	the
ownership of our banks, then surely it is equally important to protect the ownership of our textbook publishing industry.
May 29, 1969
9250	COMMONS DEBATES
Foreign Control of Canadian Industries
[DOT] (8:40 p.m.)
There are grants given to the publishing industry. Recent Canada Council grants totalled $77,000, but these did not include the text book publishing industry. Grants are given to the Canadian film industry, but they are not given for text book publishing. To visualize the problem, all we really need do is recognize that the research and development which goes into building a text book is very similar to the research and development that may go into building an appliance, an automobile or even a mousetrap. How foolish, it seems to me, that we should provide industrial incentives to build an appliance, an automobile, or even a mousetrap, but not provide them for educational materials. How foolish that we should provide industrial incentives for the defence industry, but ignore the educational industry. There is legislation now which could be extended to include editorial R & D. It would help.
I now come to my point on the constitutional interest in these matters. I am concerned that we may be so preoccupied with our internal stresses that we are overlooking the external threats,' that we may become so preoccupied with the jurisdictions between the provinces and the federal government that we ignore the really important questions of Canadian nationhood and Canadian identity. I would like to urge, in my concluding remarks, that the questions of Canadian ownership and Canadian identity be placed on the agenda of the forthcoming constitutional conference.


Some hon. Members:: Hear, hear.


Alastair William Gillespie: It seems to me important that we start now to develop a dialogue with the provinces, a dialogue which they will recognize as being equally important to each of them. I would hope that out of this dialogue would come an understanding of the problems of preserving a Canadian identity based on our own unique originality, an understanding which would include resource industries, and education which are now very largely provincial matters. I would hope that out of this understanding would come an agreement that certain powers might be transferred to the federal government so that it can deal effectively with this aspect of our national life.


William Arnold Peters: Mr. Speaker, I was very interested before the dinner adjournment to hear the hon. member for York North (Mr. Danson) use his initiative 
and produce a different speech than he had originally planned. I am happy to see that he has now been relegated to the rump, which may be significant.
However, this is a very serious debate. It is one that produces a great deal of heat on the part of some people. In my opinion this is a very good thing, because it is probably one of the most important problems we face today. The problem is growing at a fairly alarming rate. I was interested to hear the last speaker, who I understand has considerable experience in manufacturing, raise the arguments on the constitution that other hon. members have raised today. It is quite true that in a federal state we have more difficulty in developing a national aptitude and a national policy than would be the case if we were a Unitarian state. It is also true that most nations in the world are Unitarian.


David Lewis: "Unitary".


William Arnold Peters: Well, Unitarian, unitary; what's the difference? It seems to me to be the same thing. There may be a difference in congregation. These problems may be easier to handle if you do not have the additional problem of being a federal state. It seems to me that anybody who uses the constitution as an excuse for every difficulty, as the Liberal party appears to be doing on almost every issue, is really not willing to face up to any issue at all.
Canadians faced a constitutional problem many years before we in this house were born and before our nation was founded. It was a problem before Canada developed, and it will be a problem for many years to come. There are those who say that because the constitution does not allow an easy distribution of powers, the federal government should not do anything about these problems until we have a constitutional conference of the federal government and the provinces. I ask, what will this accomplish? Provinces will take a totally different position about Canadian ownership and control of our economy; each province will have its own ideas on this subject, and rightly so.
I have been interested in the last few days in listening to some of the cabinet members who represent Quebec ridings portraying in a very aesthetic sense a solution for Canadian unity; yet the province they represent is in more desperate need of Canadian economic development and control than any other province of Canada. Quebec is now faced with an immense unemployment problem. Part of that
May 29, 1969	COMMONS
problem has evolved from the fact that most of the resources of the province are being exported in the form of raw materials.
I am interested in this matter for exactly the same reason that many of the members from Quebec, particularly northern Quebec, should be interested in it. We in northern Ontario have an industry that according to the Dominion Bureau of Statistics figures was 53 per cent American-owned in 1959. This figure is now 52 per cent. I suppose the small decrease has come about because a number of mining companies in the area are no longer in existence. But this does not represent the situation in our area.
We heard several weeks ago a very pleasant announcement that the Texas Gulf Mining Company was going to build a smelter in Timmins. The members from northern Ontario received this information with a great deal of rejoicing because of the efforts that had been made to have the company build a smelter in that area. Why do we want a smelter in that area? We want it for the simple reason that in the Timmins area we are giving away an immense resource which will reap for the company untold millions of dollars from the sale of our ore.
I am one of those very naive people who does not know the constitutional rights of the Indians, or the law. I do not know the rights of a number of other people who may be involved in this question and believe that the ore in those mines belongs to the Canadian people and ought to be used for their benefit. We are quite happy to have somebody come in, set up the mine and mine the ore; but we want our share of the benefits derived therefrom.
For the multi-million dollars worth of ore that will be taken out of the area, jobs have been provided for 300 or 400 people. Three hundred or 400 people being employed in this industry is a very good thing and we are happy they are employed. These people are receiving a very good wage. But because this industry is one that lends itself to highly industrialized, secondary development, it will provide 4,000 or 5,000 jobs before the material is processed, to any great degree.
We suggest that the industry should be instructed by the government of Canada, the government of the province of Ontario and every other Canadian who is interested in the problem, to carry out the processing of this resource as much as possible in the area. What is the situation? The federal government had put up $6.5 million to help build
29180-586J
DEBATES	9251
Foreign Control of Canadian Industries that development. But really this is not very much money, because the people of Ontario will give back to that company by way of tax concessions over the next seven or eight years, an estimated $800 million. Suppose it were to provide 600 jobs? Why not look at it practically? Why not divide the $800 million plus the $6.5 million among the people in the area? I am sure they would be able to do something with it, if it were provided as a capital sum. In any event, we are making a major contribution and it has certainly not been in the interest of the community to wait so long.
[DOT] (8:50 p.m.)
I take another example. In my area there are two iron mines. Incidentally, I am shocked when I find that whether management is United States or Canadian does not seem to make a lot of difference. In this case, one mine is owned by a Canadian company with a great deal of support from outside capital and the other is totally owned by a United States concern; it is controlled entirely from Detroit.
As a government we have provided considerable assistance to this company to enable it to operate this iron ore project. The economical situation dictated that there should be a pelletizing plant. The Ontario government made available a subsidy applicable to the transport of the ore which allowed it to be hauled by rail to Pittsburgh, probably the longest iron ore haul in the world. This was arranged by the mine, which calculates its haul value to be $16.50 per ton. This is not what the ore is worth nor is it necessarily the market value, or the cost of production. But the company owns the mine and has decided how much it shall be worth. In short, we have provided many concessions to this industry and we have obtained out of it jobs for probably 400 people in the next 25 years. Suppose we were to set up an iron ore complex for ourselves in northern Ontario, or decide there should be a major steel works in northern Ontario as part of this general development program. The mines there now are only a beginning; there is a considerable reserve of ore in this region. A smelting complex in the area would handle the ore and provide jobs for a hundred years. It would, in truth, be a growth centre.
The funds necessary for such a development will never come from the Pittsburgh interests. They have a captive mine which will provide thousands of jobs in the Pittsburgh area on the basis of our ore. What do
May 29, 1969
3252	COMMONS DEBATES
Foreign Control of Canadian Industries we get out of it? Some employment is provided and eventually we shall get something by way of taxation, though we shall have to weigh this against the concessions we have already made in connection with freight and tariffs. But when the mine is exhausted we shall be in the same position as we were when gold mining ended its profitable production. I am sure there is no one here who does not believe we ought to rely upon the economic aspirations of most Canadians who wish to develop vigorous industrial growth in this country rather than upon the aspirations of the Secretary of State (Mr. Pelletier).
To change the subject, let me refer to what the government has done or failed to do in the past. Over the years, with the exception of C. D. Howe, Walter Harris, Walter Gordon, and whoever was responsible for one particular measure put forward by the Conservatives, there has been no attempt on the part of national government to develop Canadian autonomy. In fact, the effort has been the other way in many instances. What has happened with respect to the insurance companies? We constantly find that large outside corporations are gobbling up insurance companies in Canada including some which had been established here for many years. I was talking to a gentleman in my office today. He told me that one of the reasons he wanted a particular piece of legislation to go through parliament was to prevent a take-over of a company which had been in existence here for about 120 years. I suggest some of the Liberals on the back benches should take a look at the legislation we have provided in this field.
Some may be aware that we in this party have been trying in a small way to oblige some of the major foreign insurance companies to develop plans to provide for Canadian majority control over a period of time. We are well aware of the weakness of such control systems, when it comes to the point. We are well aware that companies such as Argus, a holding company, does in effect exercise total control over its subsidiary companies. Nevertheless, what we advocate seems to be a step in the right direction. When we told companies such as Transcoastal Insurance that they should be willing within ten years to provide Canadians with an opportunity to buy stock and place control in the hands of Canadians it was found, to the surprise of the lawyers and others concerned, that if these companies did divest themselves of 51 per cent of the stock they would not be able to vote the 49 per cent remaining to them but 
would only be able to vote 10 per cent. Talk about stupid legislation. We have certainly made it difficult for Canadians to buy back Canada in many fields. I understand a recommendation is being made by the Superintendent of Insurance that this particular piece of legislation should be changed because of the obstacles it presents to the making or arrangements to allow Canadians to obtain control of undertakings which operate in this country.
Many countries across the world found it necessary to pass legislation to ensure the independence of their economies. Japan and West Germany are outstanding examples. I supose no two countries were ever the recipients of more money than the Americans were willing to make available to these nations after the war. It is certainly to the credit of the American people that they were willing to allow nationalism to develop among the Japanese to the extent that the latter were able to pass legislation to ensure control of their own financial institutions and of their industry. How did Canada get into such a mess by allowing foreign capital to be invested in this country?
[DOT] (9:00 p.m.)
We need and would like to receive foreign capital. We do not yet have the ability to generate enough capital to continue as rapid an increase in productivity as we would like. Other countries are willing to allow foreign investment to a very large degree, but always in loan capital. They do not allow foreign investors to set up a company and control it; but they are allowed to put up the money and reap the reward in the marketplace.
Much of the money that has come into the municipal market in the last few years has been of this nature. Most municipalities, even some small ones in northern Ontario, go to the New York market to float their debentures and return to Canada with the capital they require. Surprisingly enough, New York investors have not asked for the ownership or control of the sidewalks, sewers and tax rolls in these communities. You might ask why this is so, Mr. Speaker. Perhaps they should, because that is what they did in the resource industries. However, they do not, and to me this indicates that the money is forthcoming as a result of the interest rate that can be expected from Canadian development. If we were to make investment subject to control of the type found in almost every other civilized country, we would find little opposition from the United States and little loss in our national standard of living.
May 29, 1969	COMMONS
The Liberal party forgets one very simple fact, and that is that the United States needs us much more than we need the U.S. We have the resources and the raw materials. Because of depletion of all types of raw materials, the United States has a limited reserve in almost every major resource area, even in agriculture. They need us desperately as a bank. We are a stable people. We have stable if unimaginative governments. We are not the kind of people who are going to embark upon a banana republic type revolution. Therefore, U.S. long term investment is fairly protected in Canada.
While our Minister of Industry, Trade and Commerce (Mr. Pepin), our minister who really believes in continentalism but with restrictions, was trying to negotiate with the U.S. about transporting our gas through U.S. territory, considerable opposition in the U.S. was raised because of the diversion of some of the gas in the market.


The Acting Speaker (Mr. Reid):: Order. I have to interrupt the hon. gentleman because his time has expired.


Mr. P. M. Mahoney (Calgary South):: Mr. Speaker, I very much enjoyed the speech of the hon. member for Fraser Valley West (Mr. Rose), who zeroed in on the cultural aspects of the motion before the house. The hon. member is a cultured gentleman and very knowledgeable in the area of which he spoke. It is indeed regrettable that those in his party speaking to the economic side of this question do not share his expertise.
Basically there are three types of foreign borrowing with which we in Canada are concerned. We can borrow to finance imports of consumer goods, which means paying for our groceries out of debt, as we have been doing on a substantial scale for years; hence an unfavourable balance of trade. We can also borrow to build social capital, such as roads, schools and hospitals. Most municipal and provincial borrowing falls into this category. Thirdly, we can borrow by allowing foreigners to invest in new or existing business enterprises. In this case the foreign investor takes his chances. If he makes profits he sends some of them home. He employs Canadians and he makes them pay taxes. This expands the Canadian economy. If he makes no profits, then he alone is the loser. Canada pays him no interest on his money, and if he loses nobody else is there to repay him.
The first form of borrowing occurs when we have a trade deficit. It is reversed when
DEBATES	9253
Foreign Control of Canadian Industries we have a trade surplus. The solution is simple, if not easy.
The second form of borrowing is necessary, but social capital provides no direct production of new wealth with which to repay the loans. We must instead count on increased productivity and efficiency in our nation resulting from improved transportation, better health, and better education to generate the means of repayment.
The third form of borrowing, which is foreign investment in our business enterprises, has caused furious argument. The fact is that we will need this money for many years to come, even if we have a trade surplus, simply because we cannot generate enough savings in Canada to develop our resources at an adequate rate.
There are three areas of vulnerability ascribed to the policy of borrowing outside capital in the form of equity. Firstly, there is the vulnerability of importing unemployment, particularly from the United States, because we buy more than we sell. There is the vulnerability of importing economic instability into Canada as a result of depending on an uncertain flow of capital which is largely relative to our total level of domestic productivity. Then, there is the third vulnerability of losing our proper share of ownership and control over the nation's industry and resources.
The argument that Canada imports unemployment because it buys large quantities of goods from the United States overlooks the fact that Canada's exports also go to the United States where unemployment is considered to be a problem on many occasions. The question is whether our unemployment situation is a more serious problem than theirs, and if so, why? And if not, why? We might also ask ourselves whether unemployment in general is caused by importing goods, services and capital from other nations, or is due to more fundamental factors that work upon the economy. We might also keep in mind that there is such a thing as domestic investment in our nation and that its behaviour may be more closely related to unemployment, or employment, than the importing sector.
The second vulnerability is capital inflows which are heavily concentrated in one source, the United States. It is true that a nation that depends on another for most of its capital will experience a demoralization of business activity if there are some interruptions in the movement of capital. The question to consider is why these breaks in the
May 29, 1969

Foreign Control of Canadian Industries capital flow have occurred. Is it possible that uncertainties in the political climate or that fears of nationalization can suddenly reduce the volume of investment in Canada? Supposing we do accept the suggestion that Canada borrow more from Europe in the future. Would this alleviate the second vulnerability, namely the uncertainty of not having money when we need it, or the internal dislocations that interruptions bring?
The third vulnerability, that of inadequate control over our economy, is probably the most frequently discussed point with in regard to United States investment. Several factors need to be considered. One is the belief that a larger representation of Canadians on boards of management would better safeguard Canada's public interest. The question that follows from this is whether Canadian or U.S. executives are actually any different from each other in accepting responsibility in relation to their nation's needs. Another thing to consider is this. What is the character of United States business operations in Canada. Just how does United States business consider this market? Does United States business really want to indulge in foreign investment, per se, or is this only an instrument by which it can reach other goals, such as having a dependable source of raw materials, guaranteed markets and so on?
[DOT] (9:10 p.m.)
The final point I wish to make is that we import inefficient subsidiary plants which operate in certain lines of manufacturing, not because we have to acquire foreign capital to offset our trade deficits, but because our entire tariff structure tends to create an environment that will attract such firms. As one economist pointed out the reason these industries do not operate to the best advantage of Canada is not because Canadians do not hold a large enough share in their capital or because there are not enough Canadian executives on their boards of management, but because Canadian tariffs protect inefficiency.
Economically there is no argument against having foreign investment in Canadian industries when foreign owned companies are absolutely subject in their behaviour to Canadian law. From the psychological viewpoint there have been profound objections and politicians, being more concerned with psychology than with economics, have put forward their case which has appeared on occasion to prevail over sound economics.
Probably the greatest value of the Watkins Report is that it has analyzed the foreign

ownership situation in Canada dispassionately, removing discussion of the subject from an area that is highly charged and emotional to an area in which we can approach it with sheer logic. There is a good deal in this report that commends itself to many Canadians.
The fact remains that the right kind of foreign money is desperately needed in Canada for the right purposes. It forms part of our social capital, goes toward equity investment as well as towards the development of our resource and industrial capacity. As I said in my budget speech last fall, and I think I can repeat this again with the full confidence of knowing that nothing has changed, so long as Canadians find it desirable to develop resources and productive capacity at a rate faster than Canada's own savings permit- and this has been the situation and is likely to be the situation for the foreseeable future- Canada must maintain fiscal policies calculated to attract foreign investment. If we are to reduce the need for foreign capital in the foreseeable future while still providing a standard of living acceptable to Canadians, we must maintain fiscal policies calculated to encourage the formation of investment capital within Canada.


Leslie Gordon Benjamin: Mr. Speaker, I had not expected to be called on to take part in this debate since I was low man on the totem pole, in the list of speakers. If you think my remarks sound ill-prepared you will be quite correct. May I first say that it is not only the members of this group who are happy to see allotted days. Our new procedure enables the backbenchers of the house, especially those on the Liberal side, to take part in debates. Many of them deserve the opportunity to take part in this debate since they have spent many weeks keeping silent, and their patience needs to be rewarded.
However, I am disappointed in the dissertations I have heard from them. There have been some speeches about motherhood but not too much said about Canadian independence and sovereignty, let alone Canada's survival as an independent nation. I agree with my colleague for Timiskaming (Mr. Peters) who said earlier this evening that it is not good enough for the government to hide behind the perennial excuse that constitutional considerations prohibit the government of Canada from acting on housing, or giving leadership in making us economically independent. In my opinion, sir, unless Canada regains its economic independence and sovereignty we will not survive as an
May 29, 1969

independent nation, and a constitution therefore will be of little use. The perennial excuse that our system of government, which splits responsibility between the provinces and the federal authority, stops any action being taken by our national government is nothing but nonsense. Political control inevitably follows economic and cultural control, and if anyone thinks that is not so then I say he is suffering from a delusion.
Before putting on record how I and my party feel about this matter, I wish to reply to certain comments the Minister of Finance (Mr. Benson) made earlier today. The hon. member for Skeena (Mr. Howard) replied briefly to the minister. I am talking about the matter of political party financing. I endorse the remarks of my colleague for Skeena and invite federal members of parliament on the Liberal side of the house as well as in other opposition parties to follow the example of the New Democratic Party and publish every year full and complete financial statements. I also invite hon. members of this house to inspect my party's books as they relate to my constituency. Of course, I should appreciate the opportunity of doing this sort of thing with respect to the books of other parties.


An hon. Member:: The act says nothing about that.


Leslie Gordon Benjamin: I had the experience several years ago of going on a hunting trip with the vice-president of a United States insurance company. I was his guide more or less because he did not know where to go hunting in Saskatchewan. We had an enjoyable three days together and during the course of our association we discussed subjects like Canadian independence, the amount of foreign capital invested in our industry and the Canadian economy. He said to me, "You know, I handle tens of millions of dollars each year of investment capital for our insurance company, and most of it goes to Canada. We have two primary considerations when considering where our investment money shall go. One is, will the investment pay a reasonable return; and the second is, is the investment secure". By that he meant that he invested in this country because we do not have revolutions every other weekend, as they have in banana republics, and we would not nationalize industries without paying the owners compensation. He said to me that once these two conditions are satisfied, it does not much matter to his company what the investment money goes into. Then he said, "I am getting
DEBATES	9255
Foreign Control of Canadian Industries sick and tired of hearing Canadians, including you, complain about United States foreign investment." He said, and I agreed with him, that the problem was that we Canadians still have not made up our minds what it is we want to do, how we want to do it or when and where it is to be done. That being so, we need not criticize our friends to the south.
The hon. member for York South (Mr. Lewis) who opened this debate emphasized that we are not anti-American. We look on the United States not only as a neighbour, but as a friend. We like the people of that country. But, Mr. Speaker, the fact I also like my relations does not mean I want them to move into my house and force me to live in the garage. I think our neighbours to the south will respect us more and will be more neighbourly to us if we, as an hon. gentleman on the other side of the house said a while ago, "do our own thing".
It has been said that the N.D.P. is opposed to foreign investment. This is nonsense. Then the Minister of Finance made a remark to the effect the New Democratic Party government in Saskatchewan encouraged the entry of hundreds of millions of dollars of foreign capital. That is perfectly correct, Mr. Speaker. I wish to point out some essential differences between our idea of foreign investment and that carried on by the traditionalists and the old line parties. There is a great deal of difference between those two, the traditionalists and the parties. The Saskatchewan Power Corporation, through the encouragement of the Saskatchewan C.C.F. government, brought in over $600 million of foreign capital for the growth, production and distribution of electricity in that province. In a similar period of time private power corporations in Alberta and other parts of Canada did the same. All of that money needs to be repaid. The essential difference is that when it is repaid, the people of Saskatchewan will own the Saskatchewan Power Corporation. The same cannot be said of private power plants in other provinces.
[DOT] (9:20 p.m.)
The point I am trying to make is that it is not necessary to discourage foreign investment. However, it is necessary to lay the ground rules as to the type of foreign investment which we want. The New Democratic Party has never opposed foreign capital entering this country, provided it is on our terms and not those of the investor. There is a myth that if free enterprise is healthy, it
May 29, 1969
9256	COMMONS
Foreign Control of Canadian Industries automatically follows the nation is healthy. One need only look at the ups and downs of Canada's economy to see what has been done to the Canadian people while free enterprise remained healthy.
I agree with the remarks made earlier today by my colleague, the hon. member for York South (Mr. Lewis) when speaking about nationalism. I do not mean the old fashioned, high tariff, isolationist brand of nationalism. What we need is a brand of nationalism which allows our nation to be developed to the fullest and yet remain masters in their own house. Democratic socialists have a long history of internationalism in the world, both in peacetime and wartime. In many countries there is a parochial nationalism which stifles understanding and co-operation between nations; this kind we oppose.
It may seem strange for internationalists to talk about Canadian nationalism. But we believe that only when Canada is fully independent and sovereign will it be a better internationalist. The problems which face our people and our country are the results of over 100 years of old line party governments. To deal with these problems effectively and democratically requires a fundamental change in the direction and purpose of our society.
We in this party keep raising these and similar matters in the hope that by some strange metamorphosis one of the old parties will change and do things differently. The greatest confession ever made in the history of mankind has been that made by the so-called free enterprise systems when, in the early 1950's there was the realization that there were millions of poverty stricken people within those systems. In the era prior to that we had been told this was the only kind of system in which people should live. A society that permits one-third of its citizens to live in poverty or near poverty in the midst of great wealth, is basically immoral. A society that perpetuates the waste and selling out of our resources, denies opportunity and fulfilment to millions of people, leads to its own destruction. A society whose purpose is to put profits ahead of the health and welfare of its people betrays what is best in all of us.
A country with a system which permits ever increasing amounts of its industry, resources and culture to be owned by outside interests is on its way to extinction as an independent political entity. It is illusionary to ask a foreign owned corporation to make decisions which will be in the best interests of Canada. This is not only illusionary, but unfair. They will make decisions in the best


interests of their companies and shareholders. That is what takes priority in their decision making.
There are numerous examples in Canada of decision making by these foreign owned companies that harmed Canada. These decisions were made in the best interests of the corporations, shareholders and investors. A good illustration of this is the flour mills. A decision is made in a board room in Chicago to close a flour mill in a small city in Saskatchewan without the slightest consideration for or consultation with the citizens of that city, the provincial or federal governments. This decision was made only because this particular corporation has some surplus capacity and this particular plant, along with a number of others in the United States, were fast becoming worn out, needing to be replaced or scrapped. It is perfectly natural for that milling corporation to close down plants outside its borders. I suppose if we were put in the same position, we would make the same decision. This corporation would only be asking for trouble if it closed plants in its own country before closing those of a similar nature outside its borders. They made a decision which, in their opinion, was perfectly justified. But the Canadian government sat, said and did nothing. Those same flour milling corporations obeyed the laws of the United States, not Canada, when they refused to accept orders to mill Canadian wheat into flour which would be sold to Cuba. This is a good example of a betrayal of citizenship.
Plants of the canning industry in Canada which were taken over by foreign companies have now been shut down. These companies can these products outside our borders, label them with the manufacturer's name and send them to Canada. This means a loss of jobs in canneries for Canadians. I do not condemn the United States corporate decision makers, but the spineless Canadian governments who sit and hide behind constitutions, worry about languages rather than activities such as these.
All hon. members in this house know of a number of examples with regard to auto manufacturers and the decisions which they make outside of our boundaries. These decisions have harmful effects on our people, yet our government stays silent and does nothing. We in this party intend to raise this matter ad nauseum, according to some. We are not going to remain silent. We can be good neighbours with our friends to the south, but we must be masters in our own house if we are going to avoid becoming a 51st state. I know that members of other parties have
May 29, 1969
sometimes become a little annoyed with members of my party because we hold up the activities of other countries as examples of what this country could do. I know some hon. members are expecting me to say something about Sweden.
[DOT] (9:30 p.m.)


Some hon. Members:: Oh, oh.


Leslie Gordon Benjamin: And I just happen to have voluminous material here that I could quote until past ten o'clock but you, Mr. Speaker, would make me quit before then. Here is a nation of similar climate-


Stanley Ronald Basford: Let us hear about Britain.


Leslie Gordon Benjamin: In my opinion the present British government is being stupid in trying to implement social democracy by using capitalistic techniques. They are born losers, and I will make a prediction that they will lose because they are forgetting good socialist ideas.
Sweden in 1916, not under a Social Democrat government but under a Conservative government, whatever that means in Swedish terms-it is hard to tell what it means in Canadian terms because we have two Conservative parties of long tradition in this country-limited the right of foreigners to acquire shares in Swedish companies. Many of the most important Swedish companies through their articles of incorporation have limited the right of non-Swedish nationals to acquire shares on the basis of the 1916 law. In some cases when foreigners acquire shares in a Swedish company they are allowed inferior voting rights. That showed some imagination by that country as far back as 1916. It showed concern for its survival as an independent sovereign nation.
We could not buy back all the foreign investment that presently exists in Canada. It would be a waste of our capital resources to try to do that, but we can start reversing the trend so that Canadians will have more of a share in making decisions that affect Canadians. No doubt in the process, whichever party forms the government, we will make some mistakes, and some of those mistakes will be dandies. But there will be something refreshing about them. For a change they will be our own mistakes, not mistakes imposed upon us from outside our borders. That in itself will do something for our nationhood. Let us hope that this so-called new Liberal government will listen to some of the people
COMMONS DEBATES	9257
Foreign Control o] Canadian Industries who are new to the Liberal party and who do not say as much in this house as I think they would like to say. Let us hope that this government, after much prodding, will begin to institute measures to reverse the situation that exists at the present.


Mr. Judd Buchanan (London West):: Mr. Speaker, Canada enjoys a none too happy distinction amongst the industrialized nations of the world. This distinction is a much greater control by foreign capital of our industries than any other industrialized state. We are all happy to take advantage of the development and employment which this investment creates, but we are very concerned about the long-run implications of such a high degree of foreign control for our political, cultural and social independence. Such significant foreign control gives rise to doubts as to how effectively the Canadian government can control the level of economic growth, employment and prices.
At what point do we reach the position where absentee ownership of our industries and resources has political consequences, diminishing the control we can exercise over our destiny as an independent nation? There are certain areas where the government has taken vigorous action to ensure that control remains in Canadian hands. The government has made certain that federally incorporated financial institutions and the media of mass communications are completely Canadian. The reasons for this are obvious: the communications media are so pervasive and have such a tremendous power to influence our society, and the financial institutions play such a dominant role in our economy. However, with these exceptions Canada has probably the most wide open and untrammelled policy on foreign investment of any major industrialized nation.
Unfortunately, the pace of foreign acquisition of Canadian industry is accelerating rather than diminishing. This month we have seen the loss of control of Salada Foods Limited of Toronto to the Kellogg Company of Battlecreek, Michigan, and at present Merrill, Lynch, Pierce, Fenner and Smith, the largest brokerage house in the United States is acquiring control of the Royal Securities Corporation of Montreal. Although it is not retroactive and will not affect the Royal Securities Corporation takeover, I was happy to see the proposed new ruling of the Toronto Stock Exchange which will require members to have a minimum limit of 55 per cent Canadian ownership.
May 29, 1969
9258	COMMONS DEBATES
Foreign Control of Canadian Industries
In effect this will likely bar future acquisi- of both national independence and an increas-tions by foreign companies of any firm which ing standard of living. This will require pre-is a member of the Toronto Stock Exchange, cise and definite policy, and not vague and The reason for this is that any firm large generalized exhortation. Unfortunately, this enough to be in a position to acquire a problem is more complicated in a federal Canadian firm would likely be a member of state like Canada, as the Prime Minister the New York Stock Exchange, and on its (Mr. Trudeau) pointed out the other day when side the New York Stock Exchange has a referring to the Royal Securities situation, ruling that all members must own 100 per that it is primarily unitary states like Japan cent of any subsidiary. This would mean France or Great Rritain that the American company proposing to take
over the Canadian brokerage firm would have to relinquish its membership in the New York Stock Exchange to take a minority position in the Canadian firm. This is not likely to happen.
To what extent is Canadian industry controlled by foreigners? The foreign control of corporations located in Canada is concentrated in manufacturing, petroleum and natural gas, and mining and smelting. Foreign control of Canadian manufacturing industries has increased from 35 per cent in 1926 to 60 per cent in 1963. In mining and smelting foreign control has increased from 38 per cent to 59 per cent during the same period. Our petroleum and natural gas industry is 74 per cent foreign controlled. There are some areas of the manufacturing sector where the foreign control is extremely high. For example, foreigners control 97 per cent of the automobile, automobile parts and rubber industries. Foreign ownership controls 78 per cent of the chemical and electric apparatus industries. Foreign investment in Canada at present totals approximately $40 billion.
We have not been nearly as fortunate as our American friends to the south. The development of their industrial base, which was capitalized to a very large degree by European money, was done on a debt basis rather than equity financing. Canada's foreign capitalization is primarily of the equity type. The result in the United States was that the bulk of the debt was retired leaving American nationals owning the industry, and those parts of their industrial capacity which were still foreign owned were to a very large degree bought back during the First and Second World Wars when the European nations were destitute. As I said earlier, unfortunately we are not in such an enviable position.
Two of our major goals must be national independence and a rising standard of living. The question is whether these two goals are irreconcilable. I do not believe that they are. It is therefore imperative that the government develop policies to achieve the optimum 
[DOT] (9:40 p.m.)
However, I believe that there is still room for manoeuvre open to the federal government. First, I believe that we should be using our tax system as effectively as possible to maximize benefits for Canadians from foreign direct investment. I also believe that we should grant special tax arrangements to encourage greater Canadian ownership of Canadian firms. I am optimistic that the Minister of Finance (Mr. Benson) will be announcing steps in this area next Tuesday. Second, I believe that we should give birth to our long awaited Canada Development Corporation. Its size and semi-public nature would permit it to make a significant contribution in putting together syndicates of investors, domestic and foreign, and thereby enable it to carry out large projects beyond the capacity of any single institution and yet still maintain a Canadian presence. It should be permitted and encouraged to be active in all segments of our economy. I was very sorry to see that it will likely not get before the house before the end of this session.
I am certain that the Canadian public, after watching our performance here in this chamber over the last few months, will be far more receptive to the idea of some rule such as 16A which would permit the government to program legislation so that we could avoid this situation in which legislation which is vital and important for our country is being so unconscionably delayed. I feel that we on this side were very lax in the rules debate last December when we did not get the message across to the Canadian people that, far from choking off debate, the new rules provide 25 opposition days each session, such as today, when the government can be attacked on any subject of the opposition's choosing.
Finally, I think that the government should take steps to ensure a degree of Canadian participation in foreign owned firms and also a Canadian presence at the decision-making level in the board room. Countries such as Mexico and Japan seem to have been able to
May 29, 1969
do this without seriously impairing their ability to attract outside capital.
I would like to digress for a moment and indicate that I feel that the great conser-vativism of our Canadian banks and insurance companies and their reluctance to become involved in equity situations has played a significant role in permitting control of Canadian industry to move into foreign hands. This is one reason I was happy with the changes which the Minister of Finance made regarding life insurance companies. I believe that the new tax regulations pertaining to life insurance companies will do a great deal to pull them out of the traditional ultra-conservative habits and move them into a more dynamic role in the Canadian economy.
I was very happy to see the legislation recently introduced by the Minister of Consumer and Corporate Affairs (Mr. Basford) which requires much greater disclosure from private companies with assets in excess of $3 million, as well as a much more detailed breakdown of financial detail on conglomerates. One of the problems pertaining to foreign ownership has been the lack of information about wholly owned subsidiaries. This proposed legislation which applies to Canadian and foreign owned companies will do a great deal to remedy that problem.
In conclusion, I do not believe that the twin objectives of a rising standard of living and maximization of Canadian sovereignty are irreconcilable. However, I do believe that it will require strong, vigorous and determined action by the government to achieve these objectives and I am optimistic that the legislation which wiE be introduced into this house over the next few months wEl do a great deal to assist us in moving toward these goals.


Henry P. Latulippe: Mr. Speaker, I am pleased to take part in the debate on the motion introduced by the New Democratic party because it is of immediate concern to us. We have to consider this motion in order to know where we are going, with whom we are dealing and to know also what is exactly our economic position. The motion under consideration reads as follows:
That this house condemns the failure of the government to provide policies to prevent further takeovers of Canadian resources, industry and financial institutions by foreign corporations, thus
Foreign Control of Canadian Industries increasing the danger of a foreign domination of Canada's economy and culture to the point where Canada's political independence is threatened.
We shall never achieve political independence as long as we do not have economic independence. We must be economically independent if we want to become politically independent. We shall achieve economic and political independence only through massive investments. At the present time, we let foreigners invest in Canada giving our own wealth as security while we could invest ourselves and use those same guarantees which we give to foreigners. We wiU achieve economic independence mainly if we use American, European and Japanese technology. The technology available to us can be used to achieve our goals, to become owners of our institutions, of our industry, of our trade.
At the present time, our trade falls into foreign hands. Everyday we learn about rather important businesses being sold to Americans. Why?-Is it because Canadians do not have what is necessary to operate those industries? It is rather because they are discouraged by taxes and they do not find the necessary capital to invest in those industries. Capital is needed to modernize them and add to them. New techniques as well as capital are also needed to organize aU that and it cannot be found.
There are two kinds of capital, public capital and private capital. At the present time, the latter is being invested in the public sector. That is one of the reasons why there is no capital left for private industry.
At the present time, the federal, provincial and municipal governments and the school boards vie with one another in selling debentures and Canadians invest in public affairs, while they should invest in social and private affairs.
Mr. Speaker, the present system is Elogical. It wEl never allow private enterprise to develop, or Canadians to invest heavily enough to take over the control of their industries, their businesses and their institutions. Because of the present system, we wiE never be able to do it.
When there is a depression, when we need credit, under the present system at every level of government, we go and borrow money from the Americans.
That is what happened when the time came to nationalize electricity in Quebec. The Americans invested in our resources, our

9260	COMMON
Foreign Control of Canadian Industries properties, our goods, our guarantees. Could the Bank of Canada not have done the same thing, that is invest in the same guarantees, leaving private capital for private industry and its development? This was not done, on the contrary.
We will never achieve our economic independence unless private industry invests heavily. But to do so, it must have capital. The governments, at every level, must not get hold of it, by every possible direct and indirect means, leaving nothing for the Canadians, for investment, for the development of our natural resources.
If strangers, like the Americans for instance, manage to make money by investing in what guarantees we have, why could we not do the same? Is it not possible for the Bank of Canada to invest in all public concerns without interest and to devote the capital to the development of our industries and of our natural resources? It is the contrary that is done: we seek foreign capital which is indeed created from nothing, as it could be done by the Bank of Canada.
So, if we are capable of giving those guarantees to foreigners, would they not be good for our own institutions? It is argued that those guarantees are not good for our institutions, while they are good for foreign institutions.
[DOT] (9:50 p.m.)
I have only a few minutes at my disposal to say that we all know that the Americans own more than 80 per cent of our natural resources and of our businesses in Canada. The same situation prevails in many countries because the Americans have learned to build what they needed, as the institutions develop and as the countries, the provinces and the municipalities build themselves. The Americans do not fear to create money and to put it at the disposal of these agencies, and at the same time they get all the benefits out of it.
But the citizens who use these means remain "water-carriers", citizens under foreign institutions under the rule of foreign capital, whereas they could create their own capital by using the same means.
This is, Mr. Speaker, the best example we could use. Further, as I was saying, we could use technology, technique and development in all kinds of fields. All that is available to us, and we could certainly use it. This is what is called foreign capital.

DEBATES	May 29, 1969
Foreign capital, Mr. Speaker, is skilled labour, technique and technology. Other countries, on which we depend, provide us with what is called foreign capital, which we can use as it is available to us.
I quote from an article published in the magazine Les Affaires, of Monday, March 17, 1969:
Today, everybody reads statistics, because there are statistics galore. Most businessmen are probably able to interpret these statistics quite sensibly. But it seems obvious that too often they stop to look at a fact without reaching the obvious conclusions and above all without taking sensible and logical steps.
I quote from ''The American Challenge", of which much more will be heard, the following figures. In 1961, the industrial corporations making over $500 million business a year were distributed as
follows:
United States	97
European Common Market	27
All other countries	22
Five years later, in 1966, the figures were as follows: United States	134
European Common Market	41
All other countries	49
We must add, for it is just as important, that the gap between the United States and the rest of the world with regard to medium corporations (those whose turnover varies between $150 and $300 million) is even greater still. It is therefore easy to conclude that, beside the monolithic American giant, the world comprises a myriad of small businesses, so minuscule at the level of international industry and trade that they have no chance of playing any role whatever.
Of course, there is the philosophical aspect of the question. And it is fairly easy, faced with our own weaknesses, to vituperate against the imperialism of the Americans, against their economic colonialism. Which still solves nothing. We must finally point out that in most cases, our horror of economic imperialism is only due to the fact that we do not have the means ourselves to practise it at our advantage. Therefore, we have to know what we want.
If it is, and that is only human and quite sensible, improving our standard of living in the broadest sense of the term, measures dictated by the facts will willy-nilly have to be taken.


Mr. Speaker:: Order.
IEnglish]


Mr. Speaker:: Order, please. It being ten o'clock it is my duty to inform the house that, pursuant to section 11 of Standing Order 58, the proceedings under this motion are deemed to have expired. Therefore, the question before the house is that this house do now adjourn.
May 29, 1969	COMMONS


[Stage Direction]
A motion to adjourn the house under Standing Order 40 deemed to have been moved.
Mr. H. Russell MacEwan (Central Nova):: Mr. Speaker, the matter which I wish to put forward this evening in the short time available on the adjournment motion stems from a question which I asked on May 22. It was answered by the hon. Minister of Industry, Trade and Commerce (Mr. Pepin) on May 23 and relates to the matter of shipbuilding in this country.
This matter goes back to last fall, I think in November, when the present Minister of Transport (Mr. Jamieson), then the Minister of Supply and Services, was asked a question by me regarding the matter of shipbuilding policy in this country. At that time the minister said a committee would be set up, or had been set up, consisting of himself and the then Minister of Transport, to look into this matter. If my memory serves me right, in January of this year representatives of the shipbuilding industry of Canada met with the then Minister of Transport, the present Minister of Transport and the Minister of Trade and Commerce. It was then agreed to set up a committee to look into the matter of shipbuilding in this country in view of heavy unemployment.
The situation continued and we all thought, including the shipbuilding association and shipbuilders in this country, that the committee had actually been set up. On March 27 I again asked the minister a question in this regard. The Minister of Trade and Commerce advised me on March 27, as recorded at page 7196 of Hansard for that date, as follows:
Mr. Speaker, after a visit by a group from the industry we were supposed to get a committee going. Two attempts were made to bring the other side along with us in forming this committee. This has been done now.
I thought, as the shipbuilding industry thought, that the committee was set up and working. Following that, on May 22, I asked the minister whether these facts were correct; that the government had decided not to be a member of this shipbuilding committee. The minister stated that was correct after telling me on March 27 that the committee had been

Proceedings on Adjournment Motion actually set up. I point this out because either the minister did not know anything about this when he answered my question or he did not put the facts before the house.
The reason I bring this subject forward is that there has been evidence in the last two days of the proposed closing of a yard in Montreal and a lack of work in steel shipyards in this country. I am calling upon the government to proceed with a policy for shipbuilders and for a national marine policy in this country. I am aware of the fact that the Minister of Transport advised the house the other day that the Canadian Transport Commission was looking into the matter of merchant marine policy.
[DOT] (10:00 p.m.)
The hon. member for Saint John-Lancaster (Mr. Bell) asked the minister about this. I trust that the terms of reference of the Canadian Transportation Commission's review will include looking into the decline of work in the shipyards. Suggestions have been made from this side of the house for the last several months about steps that could be taken to put our shipyards in the picture and provide them with assistance in the same way that other countries give assistance to their shipyards and shipowners, things like long term financing, depreciation allowances and investment allowances.
I trust that the government will give these suggestions full consideration. I think the government has adopted a lackadaisical approach to marine matters in this country, a country which is a great exporter of grain, minerals, lumber, and so on. Most of these products are now carried in foreign vessels. We need a consistent and constructive maritime policy which extends to both builders and operators. The Minister of Industry, Trade and Commerce (Mr. Pepin) pointed out that there had to be some rationalization among the shipyards of Canada. Perhaps this is so. I think they have now been rationalized to such an extent that the government must consider what it can do for our remaining shipyards to ensure their continued existence in this maritime country of ours.
I have raised the question thi9 evening because the government does not seem to have moved in this regard. The first chairman of the committee was the former minister of transport. The chairmanship was then taken over by the Minister of Industry, Trade and Commerce. I understand that the last word received by the Shipbuilding Association was that the government would not take part in
Proceedings on Adjournment Motion this committee, that the shipbuilding industry would carry out the functions of the committee and a chairman would be appointed who would be agreed upon by both sides. To my knowledge this has not been done as yet.
Therefore, I urge the minister who is in charge and should know, and if he does not he had better make himself knowledgeable in this regard, to bring forward a policy which, as I have said, will ensure the continued existence of shipbuilding in this country, which provides employment to our people, and will provide us with a merchant fleet for this maritime country of ours.
Hon, Jack Davis (Minister of Fisheries and Forestry): Mr. Speaker, I will try and answer the hon. member. I listened to his plea with considerable sympathy because I represent a riding which has a very substantial shipbuilding industry, the largest shipbuilding industry on the west coast. One of the main problems the Canadian shipbuilding industry has faced lias been the declining requirement of the federal government. I think the public of Canada by and large has demanded a reduction in our defence effort. This has tended to fall rather heavily on the shoulders of the shipbuilding industry of this country. There has been less federal government work forthcoming from the Department of National Defence.
We are in a period of budget stringency; therefore, some of our other requirements have had to be cut back. But I want to assure the hon. member that the government and the Minister of Transport (Mr. Jamieson) are very concerned about this matter. I recall that the former minister of transport commissioned a comprehensive study not only into the shipbuilding industry but into the much larger question as to whether we should have a Canadian merchant marine. This study will be forthcoming shortly. I am sure the new Minister of Transport will be looking to it for advice and will be discussing this question with hon. members in all corners of the house.
Basically, the policy now is to buy ships from the lowest cost yards; the lowest tender will get the work. There has been a program of regional allocation which is now in process of material, are being hit harder than yards with higher wage rates and often higher costs of material, are being hit harder than yards on the east coast. Having said this, I must again express my own concern; I certainly take to heart many of the comments made by the hon. member.

May 29, 1369


Mr. Colin D. Gibson (Hamilton-Wenfworth):: Mr. Speaker, I am glad the minister is here tonight. The situation which exists at Hamilton Harbour with respect to pollution is extremely serious. The bay area, once a magnificent natural resource, is now a stinking, rotten quagmire of filth and poisonous waste.
For many years the situation has gone from bad to worse. Now, we are faced with a large body of polluted water which constitutes a real and dangerous health hazard. Mr. Speaker, I urge the government to carry out the following proposals: 1. Set up immediately a plan whereby the bay is cleaned up; 2. Do this in co-operation with the Province of Ontario and the City of Hamilton; 3. Provide tax incentives to industry as a spur to fast action in this matter; 4. Make pollution of natural resources a crime and give the courts power to close down industries which continue to cause pollution by way of injunction; 5. Take the initiative in creating a national pollution control board as an agency of government to deal with water pollution and air pollution at all levels of government; 6. Set up pollution standards and guidelines so that one agency controls this important area of government responsibility.
It is a fact that lack of co-ordination in this field between federal, provincial and municipal governments will result in all three levels of government neglecting this immensely important threat to our resources and health control. If this country blinds itself to the pressing need of pollution control, we shall end up with a large nation linked by poisonous water, sea, lake and rivers alike, from coast to coast. We shall be ruined by poor planning and neglect. Let us turn our attention to repairing the damage in this infested area now.


Hon. Otto E. Lang (Minister without Portfolio):: I appreciate very much the statement made by the hon. member on the serious situation at Hamilton Bay. The government is of course extremely conscious of the concern being expressed across this country about pollution in a general way, and about this specific example. The government shares the concern of those who call attention to the importance of keeping our water clean and available for many alternative uses.
There are, of course, certain specific legislative powers in existence already. There are powers under the Fisheries Act, under the Shipping Act and so on which can be used to

May 29, 1969	COMMONS
correct specific types of pollution or occasions of pollution. There are also powers available under provincial laws. We are conscious that more than this may be necessary and of course this is what we are considering in connection with the preparation of a Canada water act.
What will be required is a major co-operative effort along tire lines suggested by the hon. member, between the governmental authorities involved, industry, and, indeed, everyone else who makes use of water. There must be a united effort to do something positive with regard to a very serious situation.
[DOT] (10:10 p.m.)


John Howard Lundrigan: Mr. Speaker, I asked to appear on the proverbial late show in order to try and get the Minister of Regional Economic Expansion (Mr. Marchand) to clarify for me, and more importantly for all of Newfoundland, the reason for the conflicting statements which have recently been made with regard to the program of development for that eastern Canadian province.
Last fall-I do not have the exact date with me-the minister made a statement that there would be a development program for the west coast. A little later on he made the statement that the program FRED was dead. That point was brought up by the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall). Then we had an indication that there would be a special program for Newfoundland. A little later on we had an indication that there would be no special program. Then we had an indication that there would be a program shortly. Today the minister gave me an indication that there would not be a program perhaps by the end of this session, that parliament would rise without the announcement of a program for Newfoundland.
The reason I want the minister to respond is that I am not sure everybody is quite as aware as we in Newfoundland of the financial crisis that is facing us. The fact is

and this has been announced recently-that out of a total revenue of $209 million a year for the province, $44 million was expended on interest on long term loans. In other words, roughly 20 per cent of the total revenue was thus expended, and I suggest this could be easily classified as an indication of a state of poverty.
DEBATES	9263
Proceedings on Adjournment Motion
I am worried. I do not want to be a Canadian from the east coast who comes from an area that will have to be taken over as a protectorate, or one who comes from an area governed by a commissioner from Ottawa. Yet this is the direction in which we are moving. At the moment our unemployment insurance level, according to figures produced by the Dominion Bureau of Statistics, is 12.9 per cent. This means that in most areas of Newfoundland outside of the so-called urban areas, the percentage of unemployed is approaching 25 to 30 per cent.
A most serious economic state of affairs is facing Newfoundland and has been ever since I was bom in 1939. We have been listening to some commendable statements emanating from the Minister of Regional Economic Expansion about a long term plan of development, and this is absolutely necessary. I take no issue with this; it is completely essential that good guidelines be laid down, with sound philosophy, objectives and aims, so that it will eventually grow into a long term program.
However, unless this year, 1969, the government is willing to introduce a crash program which will eventually fit into a long term program, there is no hope for the province of Newfoundland; and perhaps this will satisfy certain people. I am thinking of a long term program with provision for interim measures which can be taken now to speed development.
I take issue on two bases with waiting around for a long term program. Firstly, I think a national policy of endeavouring to curtail inflationary trends should not apply to the slow growth areas where unemployment would be affected to a great extent by the application of such policy. The construction industry of Newfoundland, one of our lifelines, is at a standstill completely. In the area of public works we do not need a pork barrel approach, but we cannot just cut ofE money for public works projects. Every person who becomes unemployed in the small post offices of Newfoundland today means another Newfoundlander is added to the unemployment roll. All kinds of little programs have been curtailed, such as the subsidies paid to a certain steamship company in Newfoundland, a subject into which I could go in great detail.
I suggest that we should, on a short term basis, immediately take action on such projects as the Bonne Bay national park, which will be able to amortize itself. We should have a fisheries development program, and a
Proceedings on Adjournment Motion great deal more effort should be put into generally upgrading the transportation system of Newfoundland. I want to see the development of Gander airport which would be a great economic blessing to the east coast. I could talk about all kinds of subject matters having to do with forestry resources, the development of small lumbering industries and so on. I could go into great detail but I will not, being deeply disappointed after having come here this evening only to find the Minister of Regional Economic Expansion absent. The Minister is not present, neither is his parliamentary assistant, and I am bitterly disappointed. This is the second time I have come to the late show only to have the minister not show up.
I will not, therefore, raise the points I wished to raise but will wait for the minister to show up for the late show, even if I have to wait until Christmas. The subject is too important. I see that the Minister of Fisheries and Forestry, (Mr. Davis), who is a great gentleman, is here to answer on behalf of that other minister. But I am a Newfoundlander and will not be fobbed off in this way. If my province is to have any future the government must introduce immediate crash programs which will develop into long term programs. I will wait for the Minister of Regional Economic Expansion to show up and will make no further remarks at this time except to serve notice that I will raise this matter again, on some other occasion, at 10 o'clock.


Hon. Jack Davis (Minister of Fisheries and Forestry):: Mr. Speaker, may I on behalf of the Minister of Regional Economic Expansion (Mr. Marchand) offer apologies to the hon. member. The minister could not be here tonight. As the hon. member knows, the minister will be bringing his legislation concerning establishment of programs, particularly for eastern Canada, before the house in a few days and I am sure that we shall hear
May 29, 1969
at length from the hon. member during the ensuing debate. I well remember the hon. member describing some of our earlier efforts with respect to fisheries as "band-aid treatments". At that time he was after long-term solutions-


John Howard Lundrigan: On a point of order, Mr. Speaker. That was the present Minister of Transport (Mr. Jamieson).


John (Jack) Davis: When we have-


John Howard Lundrigan: On a point of order, Mr. Speaker.


Mr. Speaker:: Order please. I wish to
remind the hon. member that during the adjournment debate seven minutes are allowed for the hon. member who asks the question and three minutes for the minister who replies. If that time were to be taken up with points of order and questions of privilege I think we should quickly see the end of this procedure.


John Howard Lundrigan: Mr. Speaker, can I not raise a point of order?


Mr. Speaker:: Order, please. An hon. member can raise a point of order at any time while the house is sitting. But it has been the practice in the house since we have embarked on this adjournment debate for other hon. members not to interrupt hon. members speaking but to allow them their full allotted time. It has been customary for hon. members of the opposition not to interrupt the minister, whose time has practically ended. We have taken up much of the three minutes allowed to the minister with this discussion. In fact, I must say now that the minister's time has expired. This house, therefore, stands adjourned until eleven o'clock tomorrow morning.
Motion agreed to and the house adjourned at 10.20 p.m.



Friday, May 30, 1969