Nationalism and Continentalism

BGEN.ANDRUNYK:

Distinguished guests, members and friends of The Empire Club of Canada: Today we are pleased to welcome as our guest speaker Mr. Mel Hur tig, an Albertan who has the reputation of being Canada's leading nationalist and federalist, and whose dream of Canada is one of a strong, independent nation. He is one of the founding members of the Committee for an Independent Canada and is a past national chairman of the organization. Over the past ten years he has frequently spoken in all ten provinces on the future of Canada, the growth of foreign ownership, and Canadian natural resources. His comments and speeches sparkle with humour and good common sense as illustrated by these examples:

When you live next door to one of the world's super-powers, one of the wealthiest nation states in history and one of the greatest culture exporters in the world, unless you are a little bit nationalistic you're going to be swamped.

You could have a man named Mussolini running for office as a Conservative and he would be elected in Alberta. There are two people in this country who clearly have no political futures. One is Dalton Camp and the other is Mel Hurtig.

Mr. Hurtig is also a very successful businessman in the publishing industry. Hurtig Publishers of which he is President has produced many titles which have won the Governor General's award and other important awards and prizes. He was named Canadian Book Publisher of the Year in 1975. Recently he launched one of the largest and most ambitious projects in the history of Canadian publishing--a new comprehensive Canadian encyclopedia which will be published in 1985.

But there is still another side to Mel Hurtig. He devotes a great deal of time to the promotion of Canadian cultural activities and community projects. He is a former President of the Edmonton Art Gallery, a former member of the University of Alberta senate, a past Chairman of the Board of the Canadian Bookseller's Association, and a member of the editorial board of The Journal of Canadian Studies. In 1976 he received the City of Edmonton's Performing and Creative Arts Award, and in 1979 the City of Edmonton's Outstanding Service Historical Award. He received an Honorary Doctor of Law degree from York University in September 1980 and was admitted to the Order of Canada in the grade of Officer a month later.

Ladies and gentlemen, please join me in welcoming Mr. Mel Hurtig to The Empire Club of Canada.

MR. HURTIG:

Ladies and gentlemen: Just over fifty years ago Canada was still very much a colony. Many of our most important foreign policy decisions were made elsewhere. Our highest court of appeal was located beyond our borders. Militarily, we were directly tied into decisions made in Great Britain. Culturally, for at least our elite, and most certainly for our media, the "real world" was to be found only in London, England.

In 1931, the Statute of Westminster, in legal terms at least, made us "independent" by formally removing the power of the British Parliament to intervene in our affairs, with the one notable exception we are all so painfully aware of today.

In the early 1930s, our very young and very sparsely populated and enormous country, along with the rest of the world, was plunged into the disastrous, cruel, lengthy, debilitating depression, and then, in 1939, into the terrible horrors of the Second World War.

During World War Two Canada matured as a nation. Our war effort, our sacrifices, our dedication, our ingenuity, were truly remarkable, the national transformation truly incredible.

In 1945 we emerged from five and a half long years of war as a strong, proud, united and self-confident nation, one of the world's leading industrial powers, a country that had been a major exporter of capital throughout much of the war, and a strong manufacturing country with an end products industry that had developed in but a few years.

Then, about thirty years ago, beginning in the 1950s, we Canadians began to do something most unusual and most exceptional, soon to reach a scale utterly unique in the entire world. We began selling off our country.

We began selling off our natural resources and our manufacturing industry and parts of our service sector and our retail sector and wholesaling, and massive portions of our entire economy, including our urban real estate and rural land.

By the mid-1960s the amount of foreign ownership in Canada was greater than in all of the western European nations combined, plus Japan thrown in for good measure. Most of our vital industries were foreign-owned or foreign-controlled, many by seventy per cent, or eighty per cent, with several key Canadian industries over ninety per cent foreign-owned. Every single year during the 1960s and 1970s, year after year, foreign ownership in Canada grew by a new record amount, despite the so-called "new nationalism" of the late sixties and early seventies.

Incredibly, as we continued to sell off the control of our country to non-residents, as we became more and more an economic colony of the United States (U. S. ownership represented about eighty-two per cent of all foreign ownership in Canada), we began another and even more astonishing process.

Not only did we continue to sell off huge amounts of our country, but we also began to finance the massive sellout with our own savings. In a country so long brainwashed into believing we were desperately dependent on imported foreign capital, we ourselves provided the vast majority of the funds used by nonresidents to take over the Canadian economy. Through retained earnings and through the friendly hospitality of our five large and prosperous Canadian banks, nonCanadians bought up more and more of our country, using Canadian savings and expanding their control beyond areas long under foreign domination into brand new sectors of the Canadian economy that previously we hadn't even worried about.

Astonishing as it may seem, the growth of foreign ownership in just the four years 1973-1976, through retained earnings only, was greater than the entire growth of foreign ownership for our previous entire history!

One of the many, many letters I've received over the years came from a young man in McBride, British Columbia.

Dear Mr. Hurtig,

I've always wanted to own my own farm and I've been working hard and saving for several years. My wife went out to work so that she could help out. The other day some people from Oregon and a real estate agent flew over the Fraser River Valley in a light plane. Without ever landing, they bought three farms in the valley, driving the price of real estate up to a point where now there's no way that I can afford to buy a farm. We've heard that there are other people from the States coming up next week to buy more land.

I received that particular letter several years ago. Today, as but one example in many, about half the farm land in the Peace River country in British Columbia is foreign-owned. Every week the amount of foreign ownership of land across Canada increases. And every day there are more and more key and vital decisions about the openings and closings of Canadian plants and about the levels of research and development and about the destination of exports and about the sources of purchasing and the levels of dividends, et cetera and et cetera, made outside of our country by non-Canadians, decisions only the most naive could believe are made with Canadian priorities in mind.

While foreign ownership in Canada has been feeding on itself, growing like a cancer, another equally remarkable and unique development occurred. Our own teachers and our own school boards and our curriculum committees and our ministers of education across Canada forgot what country we live in. We simply forgot to teach our young people about our history and our geography, about our contemporary problems and about the people who make up our country, and about why we in fact had a separate nation on the northern

half of the North American continent. Young people leaving Canadian schools all across Canada, finishing grade twelve and grade thirteen, left school knowing virtually nothing about Canada.

Some of you will remember the survey that I conducted, of some 3,300 high school students, in their last year of high school, in schools in urban and rural communities all across Canada. Sixty-nine per cent of the students leaving high school could not identify the name René Lévesque. Over seventy per cent of the students couldn't name any three Canadian prime ministers since the end of the Second World War. Over seventy per cent of the students couldn't identify Margaret Atwood or Margaret Laurence as Canadian writers. Most of the students had no idea into which body of water the Mackenzie River flows or which Canadian won the Nobel Peace Prize or why the War Measures Act was proclaimed. Most were unable to answer even basic and simple questions about our country.

And at the post-secondary level we imported American political science professors and American sociologists and American psychologists and other foreign professors to teach at our colleges and universities. Our students learned about Harlem and not about the problems of Canada's native populations. They learned about Watts but not about what has been happening to our Inuit people. They used American textbooks to learn American history and political economy, but not our own history or the nature of contemporary Canada.

The simple truth is that for almost two decades our educational establishment virtually completely abandoned their responsibility to teach our young people about our own country.

Living next door to the world's greatest cultureexporting nation, living next door to one of the world's greatest super-powers, living next door to one of the most nationalistic nations the twentieth century has ever produced, and one of the most patriotic, we Canadians were told over and over again that we mustn't be nationalistic.

While all of this was happening-the gigantic growth of foreign ownership, the absence of Canadian content in our schools, the transfer of our colonial mentality attachment from Great Britain to the United States--we introduced that "box" into our living rooms. We provided our citizens and our young people with the splendid opportunity to spend an average of three hours a day indulging in the pleasures of Starsky and Hutch, Knot's Landing, Dallas, Magnum, P.L, Family Feud, The Gong Show, Lobo, and other highlights of American culture.

While already on our news-stands across the country ninety-eight per cent of all the paperback books sold were American, and while already our radio stations were flooded with American music, and while our book clubs in Canada had long offered ninety-eight per cent foreign content, and while our record stores sold ninety-nine per cent foreign discs, and we watched foreign films almost exclusively, we then had the brilliant idea of proliferating cable television across the country, providing our citizens the opportunity to watch a minimum of three American networks, providing Canadians greater access to foreign television than exists in any other nation anywhere in the world.

And all the while, Pierre Trudeau and Robert Stanfield and Joe Clark and Peter Lougheed and Bill Davis and our bank presidents and our newspaper editors and our chambers of commerce and our oil companies told us that we mustn't be too nationalistic.

There was another major trend that began to change Canada. Beginning in the 1930s, with a series of unfortunate and uninformed U. K. privy council decisions, we began to balkanize our country. During the fifties and sixties and seventies we steadily transferred more and more power away from the national government to the provinces. In a nation where there is an almost constant complaint from the power hungry provincial premiers about "over-centralization," we proceeded to erode the authority of the federal government and steadily transfer more and more of the responsibility for decision-making, taxing and spending to the provincial governments. Today, any American governor arriving in Canada is amazed by the power of our provincial premiers.

Soon came the inevitable result: the provinces began to flex their muscles, resulting in a growing balkanization of the country. Barriers were set up between provinces in trade and in transportation and in employment and provinces competed against one another to see who could offer the foreign multinational corporations the largest tax concessions and the largest forgivable government grants: more and more provincial chauvinism and more and more provincial antagonism and more and more policies discriminating against other provinces, against other Canadians. -

And then came separatism. The separatism of Quebec that we worried about for so long, and then western separatism: increasing division and strife within the nation, increasing animosity between Canadians. Strong anti-Ontario and anti-Toronto and anti-Ottawa and anti-central Canada feelings encouraged both by foolish, arrogant policies of the "central government," and also by the increasingly strident, selfish, power hungry provincial governments.

And now, inevitably, we are paying the price, as a 'nation, politically and economically. We have a divided country still struggling to even patriate its own constitution. We have a divided country where provincial politicians strive to bash the federal government at j every opportunity, regardless of the party in power. And economically we have a nation that is so closely tied to the American economic system because of our massive foreign ownership that it is virtually impossible for us to avoid emulating their ruinous policies, such as the exorbitant interest rates of 1981.

So we have continuing high unemployment, approaching an all-time record, and double-digit inflation, and huge internal and current account deficits, poor productivity because of our branch plant manufacturing, gigantic deficits in our finished product imports and other basic structural flaws in the economy.

We have a country that has had a current account deficit with the United States for the last thirty-six consecutive years (to the tune of sixty-three billion dollars), yet still considers itself so vulnerable in our trading relationship with the U.S. that we shake for fear of "retaliation." Our colonial mentality is so advanced that we splash across our newspapers and magazine and television screens stories about the relatively modest Canadian investment in the United States, when it is of little significance compared to the overwhelming American domination in Canada.

We produce a new energy policy that allows foreign ownership in the petroleum industry to grow from thirty billion dollars in 1979 to eighty billion dollars in 1990, and yet hear our own business leaders and our own politicians claim that we are being too nationalistic. We listen to our bank presidents tell us sanctimoniously that we mustn't be nationalistic while they themselves graciously provide most of their loans of Canadian savings to huge foreign corporations inside and outside of Canada.

Well, what can we do? What should we do?

I think there are economic solutions and political solutions that are not radical and not doctrinaire but rather of a type that the Canadian people would happily endorse. Let me see if I can briefly sketch out a few of them. Obviously, given the time available, I'm only going to give you a very short, succinct list.

First, we should leave our Canadian dollar alone and let it find its own level. The existing high interest rates are causing more inflation than would result from higher priced imports due to the low value of the Canadian dollar. The multiplier effect of high interest rates throughout the economy is proving disastrous. Leave the Canadian dollar alone and shrink imports. We are already by far the highest per capita importers in the developed world and we import far too many things that we should be buying or producing here. Much of our import excess is caused by foreign subsidiaries buying at non-arms length high prices from their parent corporations. A lower Canadian dollar allowed to find its own true level would encourage substantial industrial activity here in Canada.

We must cut our ballooning end products deficit which has risen from three billion dollars in 1970 to nineteen billion dollars in 1981. As long as we have a predominantly foreign-owned manufacturing sector we're not going to be able to do this. We must build up our secondary industry and concentrate less on the development of non-labour-intensive export-oriented natural resources.

Surely it's about time we started to tell our banks that they must stop financing the sellout of our own country with our own savings through their great generosity to foreign corporations. Other countries tell their banks how they are supposed to behave and it's about time we told our banks that there is such a thing as the national interest. We should decrease bank loans to foreign corporations by at least ten per cent a year for at least the next five years.

We should increase the difference between tax rates for Canadian-controlled corporations and foreigncontrolled corporations. Corporations which are Canadian-owned should be given substantial preferential tax treatment. For those timid Canadians and others who complain about GATT, I suggest they look at the popular GATT-violating Disc arrangements in the United States, as one of many similar examples.

But, we certainly don't want only a small handful, of wealthy Canadian families or corporations owning all of our country. Let's bring in tax incentives for employee profit-sharing arrangements so that all Canadians can benefit in a new national strategy.

Let's accelerate the process of government purchasing through Canadian corporations wherever possible. Remember, even if there is a large gap between Canadian and foreign product cost, the multiplier effect throughout the economy in purchasing somewhat higher priced Canadian goods will most often produce benefits that far outweigh simple price difference.

And for heaven's sake let's stop giving huge multi-million dollar federal and provincial grants to foreign corporations. If governments must give grants to private industry, then let these dollars go only to Canadian-controlled firms.

We simply cannot and must not continue the process of allowing thirty-six consecutive years of current account deficit with the United States. If we allow this to continue, it will bankrupt our nation. One of the two principle reasons for our high interest rates, and one of the most damaging and debilitating contributors to our basic economic problems is our perpetual deficit on goods and services with the U.S. In any new industrial game plan we must strive to balance our current account in our trading with our biggest customer, and in doing this we must also remember that we are the biggest customer for the United States! In our bilateral arrangements with the U.S. we have been far too timid, and it is about time that we acted more like a strong, independent country in our trading negotiations.

Obviously one of the things we have to do is a lot more industrial research and development, but again a branch plant country simply does not do R & D.

We should appoint "public interest directors" to the boards of all large foreign multinational corporations in Canada. We're losing billions of dollars every year in service charges and "sweetheart" deals between foreign parents and their subsidiaries here in Canada.

We must accelerate the Canadianization of our energy industry to seventy-five per cent by 1990. Allowing a growth of fifty billion dollars in the assets of foreign-controlled petroleum corporations in Canada, during the next few years, is, in my opinion, an incredibly foolish, unnecessary and intolerable situation.

There is no reason in the world why we should not be able to develop the tar sands and the heavy oil deposits with heavily predominant Canadian ownership, especially when the multinationals are crying for guarantees of a twenty per cent rate of return on investment. If we are going to proceed with the development of the oil sands on a guaranteed rate of return, then we might as well treat them on a utility basis. A mix of public and private Canadian investment could have substantial long term benefits for the Canadian economy in developing the oil sands, and a planned development would certainly spin off a badly-needed mining equipment industry.

Obviously with large reserves of natural gas we should be greatly accelerating distribution in our country, especially where we can replace imported oil. We should be the world's leading innovators in the use of compressed natural gas. Italy already has more than a quarter million vehicles running on C.N.G. It's a natural solution for Canada but the technology needs to be vastly improved and we should embark on a crash R & D program.

I think there are some vital political solutions as well. Let me mention just a few.

We should have a modified proportional representation system to much better reflect the popular vote in House of Commons seats, to produce more Conservative MPs from Quebec and more Liberals from the west and a more accurate reflection of the NDP popular vote across the country.

We should reform the House of Commons and have many more free votes, and better, stronger, more independent Commons committees.

We should have the world's best Freedom of Information Act--open government with much more citizen access to information and the decision-making process.

And I'm convinced that we should have a three-year set term for Parliament. In our modern society, with its vastly accelerated pace of events, three years is both long enough for the public to assess a government's performance, and long enough for a government to implement its important strategies. A set three-year term would soften much of the frustration from the election of what appears to be perpetual prime ministers and eternal Liberal governments. It is interesting to note that there is much less temptation for executive arrogance in the U.S. because of mid-term elections two years after presidential elections.

No Canadian prime minister, in my opinion, should be allowed to serve more than two three-year terms. It is two four-year terms for American presidents and in Mexico one six-year term. I can see no reason, in Canada, why any man or woman, through whatever circumstance, should be in office in our highest position for more than two terms. And I can think of lots of reasons why they shouldn't be.

We badly need a new Upper House with perhaps half of the members appointed from the provinces and half by the federal government, and with each province having the same number of seats, ridiculous as this works out in terms of population. The new Upper House, replacing the Senate, should have the power to substantially delay legislation directly affecting provincial jurisdiction, and the ability to suggest improvements, but it must not have the ability to change in important ways the decisions of the elected members of parliament. The last thing in the world we need is an elected Senate. An elected Senate would change our entire system of government, and I can't imagine it being for the better.

Surely at this stage of our history we should amend our equalization formulas to better reflect true income across the nation, and that means taking into consideration provincial natural resource revenue. I'm not talking about complete and equal distribution of all income. Not at all! But rather our present system is grossly unfair and desperately needs updating. I'm convinced the vast majority of Canadians would agree. There continues to be much talk about Canada being over-centralized. I have to always ask, compared to where? For my own part I am tired of the petty, parochial, paranoid, provincial premiers. I think we have balkanized our country enough. And yet on the other hand I am certainly not interested in the kind of arrogance from Ottawa that we have had in the last few years.

By and large the real answer to our problems must lie in the democratic political process. It's very sad that fewer than four per cent of adult Canadians belong to any political party, and fewer than half of one per cent of adult Canadians ever make a contribution to any political party. If we're going to make important changes in Canada they must come through greater public participation in the political process and I for one would like to see every student in this country emerge from our educational institutions with a thorough understanding of how the political system works and how the individual can go out and take part in it, and play an important role in it.

Many years ago a gentleman named Martin Nordegg wrote a book called The Possibilities of Canada are Truly Great. I still think that is the case and I think we could make Canada into a wonderful country of happiness and prosperity. I remain optimistic that we could do this and still have the freest country in the world.

We are certainly not going to do it, though, with the quality of political leadership we now have. We could do it if many more Canadians decided that they had time to become actively involved in the political process, so that a much greater amount of altruism was injected into politics, and so that the decision-making process had a much better chance of producing policies in the best interests of the nation.

Today in Canada there are continuing battles between the so-called nationalists (who are no longer only the academics and intellectuals, but now include many aggressive Canadian entrepreneurs as well) and the same old continentalists. Recent speeches by the Chairman of the Royal Bank of Canada, the Leader of the Opposition, the Premier of Alberta, and a number of others, are a clear indication that the same old colonial attitude and the same old continentalism are very much alive in Canada. I think the early 1980s will see a vital struggle between the "nationalists" and the "continentalists." And I'm convinced that the very future of Canada will be determined by this struggle. If the "continentalists" were to be successful, then Canada would disappear forever, well before the turn of the century.

I, for one, do not intend to let that happen.

The thanks of the club were expressed to Mr. Hurtig by Robin Chetwynd, a Director of The Empire Club of Canada.