Canada’s ambivalent relationship

Mary Janigan November 26 1984

Canada’s ambivalent relationship

Mary Janigan November 26 1984

Canada’s ambivalent relationship

Mary Janigan

It began as a simple improvement on a quiet Ontario campus and it ended in a moral war. With the nearest bank five kilometres away, officials at Peterborough’s Trent University asked the Canadian Imperial Bank of Commerce to install an Instant Teller in the foyer of the campus library. The CIBC readily agreed and a formal contract was signed last July. Then the politics of South African apartheid intervened. Protesting the bank’s refusal to proclaim that it will make no more loans to South Africa, Trent’s student union rebelled—passing resolutions, staging demonstrations and exchanging vehement letters. Last week the university insisted that the machine will be installed before Christmas. But in a simultaneous move, student leaders last week vowed to mount a boycott right in front of it, complete with films, speakers and literature about racial repression inside South Africa.

Prestigious: That campus confrontation is a capsule version of Canada’s awkward relationship with the Republic of South Africa. Links between the two nations are neither old nor deep. Trade and investment are modest compared to Canada’s other economic partnerships around the world. And Ottawa’s diplomatic discourse with Pretoria is stiffly correct and occasionally frosty. Still, a handful of powerful and prestigious Canadian companies do business in and with South Africa. And those connections create an ethical dilemma that may be unresolvable.

The essential debate is between those analysts who contend that Canada should break all relations with South Africa and others who take the position that severing ties is a defeatist approach. Corporations argue that boycotts ultimately hurt South Africa’s 18 million blacks as much as its 4.6 million whites. But opponents of apartheid, notably church and civil rights groups, contend that repression of blacks has increased during the decades of Canadian involvement. The struggle between those groups creates a chronic ambivalence in Canadian-South African relations. Ideals tug policy one way, the profit motive another. The CIBC, for one, has made no new loans or loan renewals to Pretoria since 1975,and its management denounces apartheid. “But we cannot break the principle of confidentiality,” argued Everett McCrimmon, the bank’s public relations manager.

“Would you have confidence if a bank indicated that—given the right circumstances—it might talk about your loan?” Countered Thomas Haig, Trent’s student union international commissioner: “Our ultimate goal is humanitarian—we simply care about the rights of others.”

The conflict between idealism and

pragmatism dates from Canada’s earliest contacts. Ottawa sent a 7,300-man contingent to help the British conquer the Dutch-descended Afrikaners, or Boers, at the beginning of the century. As a result, South Africa and Canada became fellow members of the British Empire, later the Commonwealth. During the 1950s Canada insisted that South Africa’s racial policies, although morally wrong, were the country’s own internal affair. But by 1961, with new and vocal African and Asian nations ex-

erting international pressure, John Diefenbaker, then Canadian Prime Minister, successfully argued that the Commonwealth should adopt racial equality as a principle.

Deploring: The South Africans were prepared for the consequences. In 1960 white South Africa had voted in a referendum to become a republic. And on

March 15, 1961 it formally withdrew from the Commonwealth. In the same year Canada supported a United Nations resolution deploring racial apartheid, but it opposed a call for economic and diplomatic sanctions. Since then, the fine diplomatic line that Canada drew in 1961 has remained largely intact—a line defended in a 1984 government policy summary on the basis that it “leaves in no doubt Canada’s opposition to and abhorrence of apartheid but also leaves the way open for contacts and dialogue which increase Canada’s capacity to encourage the process of change.”

While balancing on its policy line, Canada supported a UN-sponsored voluntary arms embargo in 1963, extended it to spare parts seven years later and, in 1977, made it mandatory. Incrementally, under pressure from nonwhite nations, Ottawa has also toughened its stand on athletic contacts. In 1972 Ottawa withdrew funds for exchanges of Canadian and South African sportsmen, although that

men, failed to head off a black African boycott of the 1976 Olympic Games in Montreal. In 1978 Ottawa extended the sanction to participation by Canadian athletes in sporting events anywhere involving South Africans—an action that helped to avert an African boycott of the Commonwealth Games that year in Edmonton.

Commercially, Canada withdrew its trade commissioner from South Africa in 1977. At the same time, Ottawa suspended all Export Development Corp.

support for South African government purchases of Canadian goods. In 1980 Canada terminated a preferential tariff agreement and in 1982 cut off EDC lending to private South African importers. But credit insurance for Canadian exporters to South Africa is still available.

Aggressive: In truth, Canada’s trade with South Africa is small but significant. It amounted to $166 million in 1983 export sales, including sulphur and wood pulp, and $194 million in imports, including sugar, manganese and tungsten. As well, sales of the South African gold Krugerrand coin are promoted aggressively in Canada. South African wines and spirits are marketed by Canadian provincial governments through their liquor stores. The giant Rothman’s-Carling O’Keefe group is heavily

involved in Canada’s brewing, tobacco and wine industries. South African investment in Canada, valued at about $130 million in 1980, is led by the gigantic Anglo-American Corp., with interests in 61 companies operating in Canada. Among its holdings: Hudson Bay Mining and Smelting, Canadian Merrill Ltd. and Francana Oil & Gas Ltd.

But the greatest controversies swirl around Canadian firms that operate directly in South Africa. Statistics Canada documents show that 28 Canadian enterprises own 35 subsidiaries in South Africa, with a 1981 book value of $247 million. On paper, the largest investor is Ford Canada of Oakville, Ont., which owns the Ford Motor Co. of South Africa and supplies vehicles to South Africa’s armed forces. But when Canadian critics attempt to confront deci-

sion-makers, they encounter a sprawling and bewildering corporate maze in which the subsidiary is run by the Middle East and Africa division of Ford’s parent company in Detroit.

Montreal-based Alcan Aluminum Ltd. claims a 24-per-cent interest in a South African Company, Hulett Aluminum Ltd. In its 1983-84 annual report, the Taskforce on the Churches and Corporate Responsibility—a multidenominational watchdog—said that “Hulett products are bound to be supplied for military purposes.” Perkins, a British subsidiary of Canada’s Massey-Ferguson Ltd., has agreed to transfer diesel engine technology to a company owned by the South African government. And Canada Wire and Cable (International) Ltd.—a subsidiary of Noranda Mines Ltd.—owns 35 per cent of South Afri-

ca’s Transage Cables. The firm makes magnet wire which it sells to other manufacturers—“some of whom may have military or police contracts,” said the task force. Many Canadian firms, it asserted, own minority interests in South African companies and “Canadian investment thereby becomes a silent partner.”

Abhorrence: The task force has preoccupied itself with the South African issue since its formation in 1975. In its 1983 annual report it observed that its handball lobbying tactics are paying off and “Canadian banks have grown reluctant to lend to the South African government.” But the report also chronicled a growing list of Canadian investments. And it criticized Ottawa for granting an export permit to Control Data Ltd. of Mississauga, Ont., last

June to supply 11 large-scale computer systems to the Iron and Steel Corp. of South Africa, an important military supplier. Said the report: “The government and Canadian companies are involved in ‘business as usual’ with South Africa, while developing a set of elaborate justifications which are meant to show that these transactions are still compatible with an abhorrence of the apartheid system.”

Realistic: Canadian labor unionslike the government—walk a narrow line, funnelling $125,000 into South Africa, organizing legal aid projects and privately pressuring Canadian corporations with employees in the country to improve working standards. “Churches should talk about moral issues while trade unions realize that you have to negotiate to get a better deal,”

said Paul Purrit, international affairs officer of the Canadian Labor Congress. “It helps to have them yelling and screaming. It creates a better climate for us to negotiate in. Trade unions are more realistic, but thank God that the churches are there.”

Purrit occupies the tenuous middle ground in a debate in which all groups claim that their approach most improves the lives of black South Africans. To the churches, Canadian money is propping up immoral policies of racial segregation. To business and government, investment opens doors and indirectly raises living standards for white and black alike. It is an argument that will continue to rage as long as blacks have no vote and no power—and as long as there is money to be made under the South African flag.