Mr. Hubert Badanai (Fort William):
Mr. Speaker, as a North American country, it is inevitable that Canada has developed North American points of view on political, social and economic questions and possesses certain North American social and racial characteristics. Geography is an important part of the relationship between Canada and the United States, the customs and outlooks we have acquired, and also accounts for the constant flow of people between the two countries. It has been estimated that one-third of all the people of Canadian origin are now living in the United States, and a goodly percentage of American people are living in Canada. It is, therefore, natural that economic and financial relationships are closer and more extensive than those between two foreign countries.
It is because of this background that in the course of time United States capital began to exploit and develop our immense natural resources and provide a market for our nickel, iron ore, oil, gas and forest products, to name a few. This invasion of capital from south of the border has been exploited by various groups, and has initiated a wave of anti-Americanism, condemning any and all United States investments in Canada. It is not the government that is anti-American.
In an interview given by the Prime Minister (Mr. Trudeau) to a journalist last February, he was asked: "Do Canadians suffer because of domination of the economy by American business interests?" The Prime Minister replied:
They don't, I think, suffer in an economic sense or even for that matter in a technological sense. It is because of American capital investment, and the technology that came with it, that we enjoy one of the highest standards of living in the world-that our resources, which are extraordinarily abundant, have been exploited to the extent that they are and have provided wealth for the people of Canada. So they don't suffer in that sense.
I believe that anti-Americanism in Canada stems from the fact that United States capital has successfully developed some of our major industries, hence the voices of blind nationalism which are heard almost daily in this very chamber. A few weeks ago, I listened to a panel discussion on the topic of American investments in Canada. It sounded as though the "taking over of Canada" by the United States was well on the way; and it ended with a good dose of anti-Americanism. There are reasons for this sentiment. Americans can be ruthless, hard-boiled, keen investors, not afraid to risk capital ven-
Economic Relations with United States
tures in the hope of making a fortune, and they often have. However, the fact is that we are forever tied to the United States by reason of geography, history and circumstances, so let us be practical and make the best of it.
The United States is a great and wealthy nation, with many good qualities and great achievements to its credit. It was born of revolution. It lives in, and on, crisis. But it has been, and continues to be, the most generous nation the world has ever known. It has contributed millions of dollars through foundations and in other ways to Canadian universities and organizations. Its colleges and schools have been freely open to Canadian students and scholars, and every year thousands of them take advantage of these opportunities for study and research. Its contributions to science and technology are almost fantastic. Do we want to build walls against this? Do we want to reject it, and refuse to permit its entry to Canada? As for United States investment and the often repeated cry of "take-over" by our nationalists, this is a matter of concern to every thinking Canadian. But we do need United States capital and United States know-how, and I believe we should continue not only to admit it but to go after it. At the same time we should and must take the necessary steps to ensure that actual control remains in Canada; and the government of Canada is doing just that.
Mr. Gordon Archibald, president of the Maritime Telegraph and Telephone Company, speaking to a conference in Toronto, as reported in the Globe and Mail of October 8, made a vigorous plea for the benefits of continued foreign investments in Canada. He linked it with sharp attacks on anti-foreign investment arguments of the Committee for an Independent Canada, and said:
Businessmen must rally to convince others who oppose foreign investments on emotional and nationalistic grounds. Few, if any, practical businessmen oppose foreign investment, particularly in our resource industries. It would be fine if Canadians could control all companies doing business in Canada, but this is not practical. Until we can, let us be thankful we have a wealthy neighbour, whose citizens have the resources and are willing to take risks and to invest in areas where we Canadians, even when funds are available, are not so inclined to invest our money.
The Committee for an Independent Canada charges that Canada is being "bled", which is questionable indeed.
The basic inflow-outflow comparison ignores the over-all gains resulting from the foreign investment itself: in the form of various taxes and reinvested profits, the creation of exports, substitutes for imports, demand for imports, and other beneficial effects to the balance of payments.
In conclusion, he warned of the serious danger of adopting any kind of nationalism, or desperation measures, to save Canada from an imaginary, self-induced situation.
The "Business Review" published by the Bank of Montreal for October 27, 1971 carries an article by Mr. Leonard Walker, president of the bank, and I should like to quote a few paragraphs from it:
The Canadian attitude towards foreign capital has been described as a love/hate relationship and the description seems to me to be quite appropriate. On the one hand, as a matter of national policy we have from the beginning welcomed foreign capital with open arms, and even the most ardent nationalist will admit that we could not have got along nearly as well in the world as we have, or have enjoyed so many of the good things of life that come from a high and rising material standard of living, if we had not been able to use other people's savings for the development of our great country. On the other hand, there have over the years been waves of resentment about the degree of dependence on
November 4, 1971
Economic Relations with United States
foreigners which the use of their capital seems to imply, as well as ill-defined fears about the dangers in terms of loss of political sovereignty or the loss of a national cultural identity. However, as with any relationship as devoid of logic as the phrase love/hate suggests, realism has tended to be submerged by emotion.
Frankly, I am less concerned about the so-called "American take-over" in the sphere of industry, economics, and natural resources, than I am about unemployment. If American capital will develop an industry in Thunder Bay that will create jobs for our unemployed, I am all for it. I am confident that the Canadian government will continue to recognize the need for foreign investment for some time to come. Canada has the fastest growing labour force, relative to population, in the western world. The investment required to create a new job in manufacturing is around $25,000.
Job requirements and welfare costs are the main reasons Canada has a continuing need for foreign investment. The economic nationalists argue that Canada should be able to get along without foreign investments. Their argument fails to take into account the rising cost of new job creation, and social welfare. Recently, the Hon. Jean Marchand, Minister of Regional Economic Expansion, announced an incentive grant of $332,000 to Larson Woodlands Research Limited for a new plant to manufacture short wood harvesters in Thunder Bay. The new plant will empl oy 80 persons. The incentive is based on a rate of 15 per cent of the approved capital costs which are estimated at $.5 million, plus $3,200 for each new job created.
The President of the Canadian Chamber of Commerce, Mr. Neil V. German, speaking to the Canadian Club of Toronto, a few weeks ago, said:
The goal of Canadian foreign policy should be to obtain some kind of special relationship with the United States imbedded in law and treaty, which could begin with selected free trade, industry by industry.
Since Canada has no major outlets for its manufactured goods, which employ more Canadians than any other economic sector, we may find ourselves obliged to seek and make special arrangements with the United States, so that they will give us some special treatment. Our bargaining power for such negotiations is substantial: they need our raw materials in the foreseeable future.
One fact of life is that it is clear that Canada is utterly dependent on the American market.
No one can deny that foreign capital has helped to keep Canada together, and prosperous, as a nation, beginning with the construction of the Canadian Pacific Railway a century ago, down to the development of the Steep Rock Iron Mines in northwestern Ontario and the creation of a community of 6,000 people at Atikokan.
Another example is the export of Canadian coal to Japan, mined in the Kootenays of British Columbia, developed by United States capital which alone will contribute $324 million in labour income, and $210 million in taxes over a 15-year period, according to Mr. H. M. Romoff, Research Manager of the Canadian Pacific Railways. He made these statements before a Canadian Transport Commission hearing, which further indicated much greater loss than the sum of these two figures, if the area was not developed at all. There must also be taken into consideration all the jobs created; special railway equipment had to be designed and built in Canada; a new
superport, Robert Bank, had to be built; townsites had to be constructed to accommodate staff, with all that means in provisions of supplies and services, as in the case of numerous other developed projects. Whole new areas have been and are being opened from such simple beginnings as a single mine-from new homes to offices, beauty salons, bowling alleys, supermarkets, hotels and newspapers. The fact about this particular coal mine is that the coal which is now being mined would still be in the ground, unused and contributing nothing, if an American company with the necessary money and nerve had not undertaken to develop it.
Full employment is the key to prosperity and, although the employment picture across the country is one of concern, there has not, and it appears there will not be, any immediate danger of mass lay-offs in Thunder Bay. The manager of the Canada Manpower centre in my constituency said recently that we did have some lay-offs at the Great Lakes Paper Company. He said, however, that the economy in Thunder Bay in general is fairly reasonable. Construction has been booming. The shipyards and Canadian Car are moving ahead with work; and there will be no slackening of activities at the grain elevators. In other words, the Thunder Bay economy, I am pleased to say, appears to be better than in most Canadian cities.
In conclusion, I want to stress that my views on foreign investments are that I would much prefer to see greater encouragement for Canadian-owned industry, rather than discourage foreign investments.
Topic: GOVERNMENT ORDERS
Subtopic: BUSINESS OF SUPPLY