BACKSTAGE

The PM’s election role: the Paul Revere of Canada

Peter C. Newman September 10 1960
BACKSTAGE

The PM’s election role: the Paul Revere of Canada

Peter C. Newman September 10 1960

The PM’s election role: the Paul Revere of Canada

BACKSTAGE

Peter C. Newman

AT OTTAWA

JOHN DIEFENBAKER’S MINISTRY has finally snapped out of the inertia that weighed it down during much of the last parliament. There’s a fresh sense of excitement among Ottawa’s Tory strategists as they debate the prime minister’s plans for a revision of emphasis in his approach to Canadian voters.

The full effects of the new policy won’t be visible until Diefenbaker hits the hustings in the next general election campaign. But the groundwork will probably be laid in the throne speech that will open the next sitting of the House this fall. Despite earlier guesses that few radical measures would be introduced to combat winter unemployment, it’s now expected that the new session will bè>: asked to vote on a major jobcreating federal expenditure program, its size dependent on the gravity of the unemployment outlook.

Aside from straight anti-recessionary measures, legislation will probably be introduced that will form part of Diefenbaker’s proposed new election appeal: the Tories are planning to capitalize on the uneasiness of many Canadians about the increasing domination of the United States over this country’s economy.

The decision to portray Diefenbaker in the next campaign as an angry crusader against the excesses of American profit-taking from our resources is partly the result of a shrewd assessment by his advisers of the prime minister’s effectiveness on the hustings. When he’s been on the offensive, attacking the sins of the Liberal government, he clearly established himself as one of the greatest vote-getters in the history of Canadian politics.

His performance as a defender of policy is less impressive. In the next election campaign, he will of course be attacking the Liberals again, but this time only in a negative way — blaming them for the errors of their various stands in opposition. That kind of attack doesn’t garner many votes. But Diefenbaker plans to stay on the offensive, and one of his prime targets will be the Americans who invest in this country without even attempting to become what the prime minister calls “good corporate citizens.”

The national development policy that became the controversial “vision” of the 1957 and 1958 election campaigns will probably be replaced by a straight national policy that will lay down — through new laws as well as oratory—an astonishingly strong line of domestic economic sovereignty.

Diefenbaker’s approach to American-Canadian relations is colored by his image of himself as the greatest champion of Canadian rights since Sir John A. Macdonald. The literature issued by the Conservative party has already been painting the Liberals as being soft on the Americans. Says a recent pamphlet: “The Liberals were, for good reason, the opposition party for most of the first thirty years of Confederation. They opposed Sir John A. Macdonald’s national policy . . . later they so completely lost faith in Canada’s economy that they endorsed a type of reciprocity with the U. S. which was immediately hailed by the Americans as the first step towards annexation.”

The next Tory campaign will stress that throughout Canadian history the Conservatives alone have stood up against the economic ambitions of the United States — first by rejecting reciprocity, later by establishing the imperial tariffs, and now by introducing legislation to limit the devouring of our profitable enterprises and resources.

The line will be emphasized most strongly in Quebec, where the Tories will have to fight without the help of the Union Nationale’s electoral machine. They will stress that if any threat to the long-term survival of French-speaking Canada exists, it now comes from the U. S., not Britain.

All this does not mean that Diefenbaker plans to become a sort of beardless Castro, carelessly flinging about invitations for the Yankees to go home. The Tories are perfectly aware of the importance to Canada of the continued inflow of American investment funds, and they don’t plan to endanger economic relations between the two countries. They’re relying, in part, on studies that have been submitted to the prime minister extending the findings of the ten-year-old Paley Commission Report on the long-term inadequacy of U. S. natural resources. These show that the

Americans, in many instances, soon will have to come here for their raw material supplies. They can’t pull out.

The Tory policy really amounts to an admission that since we can’t buy back the sixty percent or more of the economy we’ve given up to the Americans, we might as well try to get the maximum benefit out of our squatter’s rights.

The emphasis rather than the theme itself is new for Diefenbaker. He has repeatedly urged U. S. parent companies to make available to Canadians shares in their Canadian subsidiaries. Since the voluntary appeals have failed, the government now plans a tougher approach.

It amounts to the same thing, but the legislation aimed at U. S. investment in Canada is expected to be drafted to give advantages to those companies that agree to Canadianize, rather than to punish those that don’t. Measures being discussed include tax incentives for American companies to spread ownership of their subsidiaries among Canadians. There’s also talk about amendments to the Companies Act, requiring the Canadian subsidiaries of American corporations to publish separate financial statements. Another idea is a system of tax incentives for subsidiary companies to originate export business from Canada rather than from their parent organizations.

Some fairly tough anti-American measures have already been passed by the Diefenbaker administration. One 1957 amendment introduced a law requiring the majority of the directors of Canadian insurance companies to be Canadian citizens, and gave them the power to prevent transfer of corporate control outside the country.

The new oil-lease laws for the Yukon and Northwest Territories specify that holders must be Canadian citizens, or companies either listed on Canadian stock exchanges or with a fifty percent Canadian interest. When Alvin Hamilton, minister of Northern Affairs, discussed these measures in the House during his estimates in the dying days of the last session, he called them just the first step in a drive to increase the domestic ownership of Canadian resources. He predicted new devices that would “increase, accelerate, and safeguard Canadian investment in the equity ownership of its resources development” and significantly added that in such undertakings the role of government must be “dynamic, not passive.”

Diefenbaker rarely sits in the House during the debates on estimates. But he kept popping in and out of the chamber during Hamilton’s remarks, until finally, breaking his own precedent, he rose to participate himself. His off-the-cuff speech was a strong attack against the behavior of American investors. “We say,” the prime minister affirmed, “that foreign investment in Canada must fully regard Canadian industry, Canadian interests and Canada’s economic destiny ... we have the right to ask that full account be taken of the interests of Canadians in the policies which are followed in the direction and use of that capital ... we ask, in general, that companies investing in Canada—United States companies—should not regard Canada as an extension of the United States market; that these companies should be incorporated as Canadian companies, making available equity stock to Canadians.”

Just as the Liberals occasionally paraded before the voters as the champions of Canadian independence by tweaking the tail of the British lion, so the Tories now plan to pluck some of the American eagle’s tail-feathers. ★