May 30, 1972 (28th Parliament, 4th Session)

Mr. Badanai:

Under the new policy, foreign investment will continue to play that vital role and, notwithstanding Mel Watkins, Walter Gordon, Mel Hurtig and the whole Committee for an Independent Canada, our identity will be as secure as it has ever been. Mr. Alfred Powis, President of Noranda Mines, speaking at the annual meeting of

shareholders of the company held on April 28, 1972, had these significant observations to make:
Canadians are quite rightly concerned about how to provide the additional employment needed to accommodate the fastest growing labour force in the industrialized world. Many proponents of an industrial strategy start from the assumption that primary industry cannot provide the level of employment needed and that we must foster more rapid growth in the manufacturing and service sectors.
In its more extreme form, the argument assumes that Canada has a chronic shortage of capital and surplus of labour. It alleges that past national policies designed to stimulate investment, such as tax incentives, have fostered capital intensive industries such as mining at the expense of other sectors of the economy. It is said that these industries pay very little in taxes, and in addition have not only created too little employment but have also resulted in foreign domination of our economy. Therefore, the conclusion is that we need a national industrial strategy which will divert capital from primary industry to the secondary manufacturing and service sectors where many more jobs will be created per unit of investment. To the extent that this reduces or eliminates the growth of such industries as mining, it is said that nothing will be lost in the long run because our resources are vital to the rest of the industrialized world.
Such arguments have a superficial plausibility, and they are being repeated often enough that there is some danger that they are becoming accepted as conventional wisdom, at least in certain influential circles. They are probably the reason why the mining industry fared so badly in the so-called tax reform exercise. In fact, these arguments are dangerous nonsense and, with respect to the mining industry, they are based on official statistics which are fragmented and highly misleading.
Another point to consider is the extent to which the rest of the world really depends on our natural resources. In some circles, there seems to be an assumption that we have a sort of monopoly on natural resources, and that we can hold the rest of the world to ransom for them and use them as bargaining counters in international trade negotiations. As far as mine products are concerned, this is sheer nonsense. Although we are the world's largest producer of nickel and zinc, 80 per cent of the world's known reserves of these metals are outside Canada, and in all other important metals our share of known reserves is considerably smaller. Moreover, the statement that the rest of the world is running short of mineral reserves so that ours will become increasingly valuable is untrue in the case of mine products. Leaving aside the potential for new discoveries on land, there are almost limitless reserves of most metals on the floors of the oceans which are now close to being within technological reach. Clearly, our mineral resources are only an asset if they are found and developed, and if we fail to do this the rest of the world will simply pass us by.
The last point to consider is the question of foreign ownership of the Canadian mining industry. A great deal is made of the figures produced by Statistics Canada which purport to show, for example, that 80 per cent of our smelting and refining capacity is foreign controlled. However, as indicated previously, these figures are fragmented and highly misleading. The fact is that Canadians control 67 per cent of our copper refining capacity, 70 per cent of zinc capacity and 100 per cent of lead capacity. It is only in aluminum and nickel that so-called foreign control is predominant, and this is because Alcan and International Nickel are considered to be foreign companies because somewhat less than half of their shares have been owned in Canada. However, if the trend of increasing Canadian ownership of these two companies continues, a majority of their shares will soon be held in Canada and the statistics will then show that all major sectors of the smelting and refining industry are overwhelmingly controlled in this country. This is not to argue that there is not an important degree of foreign ownership in Canadian mining. There is. But the real point is that there is also a substantial and healthy Canadian component, and its relative importance is growing.
Thus, the arguments raised against continued emphasis on development of our resources simply do not stand up. The best
May 30, 1972

national industrial strategy is to concentrate on the things we do well, where we have a demonstrated record of international success. This is not to deny the importance of the manufacturing and service industries. We obviously need balanced growth, and this is the direction in which any national strategy should point us. However, unless we stimulate the development of primary industry, we are likely to have no growth at all.
The late Ross Thatcher, former premier of Saskatchewan, argued eloquently for many years against any attempt to halt or reduce the flow of much needed foreign capital for the development of Canadian resources and secondary industry. While members of the NDP, of the waffle group as well as others advocated buying back Canada, and they were making loud noises in the province of Ontario especially, Premier Thatcher was heading to the United States to tell American businessmen that, so far as he was concerned and Saskatchewan was concerned, they were welcome in Canada as good corporate citizens.