OCTOBER 10, 1963
A National Purpose
AN ADDRESS BY The
Right Honourable Lester B. Pearson
PRIME MINISTER OF CANADA
MEETING THE EMPIRE CLUB OF CANADA AND THE CANADIAN CLUB OF TORONTO
The President, Mr. Arthur J. Langley
Gentlemen of the Empire Club and Canadian Club, it is now my
privilege to introduce our Guest of Honour-which I am proud to do with the
simplest and yet most fitting tribute to which a Canadian can aspireGentlemen,
the Prime Minister of Canada.
THE RT. HON. LESTER B. PEARSON:
I am honoured today to address your two Clubs. The joining together
of the Empire Club and the Canadian Club seems to me to be symbolic. Put your
names, side by side. Consider what the urge of "Empire" has meant to our
nation's development. Consider also the hopes of nineteen million men, women
and children which are written into the one word, "Canadian". Put these words
together, as you have done at this meeting, and you blend a great heritage with
even greater hopes. This is exactly what all of us in Canada must now do in our
search for a national purpose, to help us realize a great national destiny.
Such a national purpose must command the support of people on the
farm and in the factory; in management and in the union; in the church and in
the schoolroom; in the East and in the West of our continental country; in
Quebec and in Ontario. We must find such a purpose to which we can give voice
and shape and effort and heart, if we are to survive in this country as a
strong and united country, economically and spiritually solvent. A national
purpose cannot be formulated merely by legislation or by declaration; by
slogans or patriotic emotion; nor by any assumption of special virtue in
There must be a determination to understand the real nature of
Canada and the forces eroding that nature; to recognize the peril of serious
internal divisions; to recognize also the competition and challenge of the
changing world community and the competitive world marketplace; to realize the
opportunities of national strength through unity and the fatal weakness of
division and discord.
This understanding, this recognition, cannot be created by
government. But government can establish political, social and economic goals;
can identify and try to eliminate internal dissensions; can help to plan, for
the essential expansion of our economy, for new trading patterns, for more
research and better training, for less dependence on foreign capital to achieve
our full national development. Government alone cannot expand the Canadian
economy. It can help-by planning and incentives, by co-operation and
negotiation. The expansion will be carried out only by people.
We can negotiate, promote and protect-up to a pointCanada's trade.
But, while we can help, it is capital and industry that must adapt itself to
the demands of tomor row's world for the products of sophisticated technology,
or Canada will forfeit the main markets on which tomorrow's prosperity will
depend. In striving to create, by working together, the national purpose our
times demand, Canadians today and tomorrow have only to equal the achievements
of yesterday. Those achievements were proud ones; bridging the
continent-welding peoples into a nation never secondrate in war or
peace-developing a society whose strength, tolerance and enterprise became the
envy of older, larger, more homogenous countries. Today these things stand in
The questions now asked about us in the world are changing. Instead
of "How do you do it?" and "May I come?", we now hear "Is it a good place to
invest?" and "What's going on?"
In such matters, spirals, both vicious and virtuous, can easily
develop. It is not too hard to feel a sense of national purpose if things are
going well for a country, as they were for Canada during the first decade or so
after World War II, and to become over-confident and even smug. But, when we
fare less well, questions begin, and it becomes apparent that our sense of
purpose isn't all we thought it was. It is against this background that I want
to refer briefly to one or two aspects of our current economic situation.
Government has to grapple with two main problems in our economy. One
problem is unemployment, which has been serious and persistent for several
years now. The other problem is the deficit in our dealings with other
countries. As a nation we normally earn abroad less than we spend abroad. In
effect, we have to borrow more and more from other countries in order to make
up the difference.
Progress is being made with both these problems. There are prospects
for continuing improvement. The most encouraging single sign is the increased
sale of wheat, which will help-though not solve-our external payments
difficulties. It will also increase employment. The Government has taken other
measures to improve employment. There will be loans for municipal development,
increased payments for winter works programmes, special incentives to industry
in the areas of persistent unemployment, a capital fund for economic
development in the Atlantic Provinces. Unemployment this winter may be less bad
than in recent years. I do not claim any primary and partisan relationship
between that prospect-if it is realised-and the actions of government. The
result is what matters.
Nor do I wish to suggest that we should be in any way complacent
about the situation. The problems are complex and persistent. New jobs are
created but many existing jobs are disappearing on account of automation. Every
year more young people are coming out of our schools and colleges, looking for
work. We have to run fast in order to make any progress at all. Vigorous action
is necessary to encourage new industries, increase production, create more
employment and-I repeat-improve our balance of payments with other
Balance of payments brings me to the problem of foreign investment.
So far as I am concerned, there is no problem about foreign investment as such.
In general it is productive of economic progress and highly desirable. There
are questions about the proper role of foreign investment, particularly direct
investment, but they are the same questions that arise about every good thing.
There is nothing so good that you can't have too much of it, in a given time
and by comparison with what you have of other things.
Foreign capital comes to Canada to earn a return to the investor.
Good investments are therefore a commitment against our future balance of
payments. Unless we are en gaged in a sort of rake's progress of borrowing even
more and more-and obviously that can't go on indefinitelyCanada has got to pay
the returns on foreign investment out of what we export. And obviously, in a
competitive world, we have to be concerned that the commitments shouldn't
exceed our capacity to export.
Much of the foreign capital in Canada is invested in exporting
industries, especially primary ones. To the extent that it produces export
increases which wouldn't otherwise take place, such investment doesn't create a
balance-ofpayments problem; though it may involve other problems. The capital
produces the export capacity to service itselfand, often, much more. But Canada
can balance its foreign accounts and have high rates of economic growth and
employment, only if we can competitively export more manufactured products. And
here we come to the dilemma of direct investment in Canada.
In the manufacturing industry, most of the foreign companies that
now set up subsidiaries in Canada do so in order to serve the Canadian market.
They tend to think of exports as the business of the parent company. I don't
mean that they deliberately cramp, or discriminate against, the subsidiary in
Canada. But, generally speaking, it just isn't set up with exports out of
Canada in mind. This is not in any way a criticism of anyone concerned. It is
just a statement of business and economic fact which obviously and inevitably
applies to much-though not, of course, to all-of the Canadian manufacturing
which is operated by subsidiaries of foreign concerns.
Concern about this situation does not mean hostility to the foreign
investor. It is concern because an ever-decreasing proportion of Canadian
industry is Canadian-managed and controlled, and is not necessarily directed
towards winning the largest possible export markets for Canadian products. In
other words, the danger of being a branch-plant economy is that, beyond a
certain point, it sets up serious economic obstacles to the level of exports
needed to pay dividends on the capital that creates the branch plants. It can
get to the point where it prevents us dealing effectively without balance of
payments problems and, in that case, it harms all investors, both Canadian and
This is why our concern about increasing foreign control of industry
is not a matter of a narrow economic nationalism. Nothing could be further from
the truth. We want to treat the foreign investor fairly. But we won't be able
to do that if foreign control and management hinder our economy as a whole from
becoming sufficiently orientated to exports, or prejudice our own national
interest generally. If that happened, not only Canada, but the foreign
investors themselves would suffer, because of the inadequacy of our export
earnings to cover a proper return to the investors.
I do not believe there is much disagreement with this point of view
in Canada or much unwillingness, among foreign investors, to recognize the
validity of the objective as I have stated it. The problems are practical
problems of methods. About those, there always are differences of view and
there is always value in continuing discussion which may eventually lead to
better methods than were thought of in the first place. We must find the best
methods, and that is not always an easy and simple thing to do.
I would like to mention another problem which affects national
purpose. It arises out of the nature of our federalism and the relations
between the Canadians who speak two official languages. I have spoken a number
of times recently about this in a general way. Today I would like to refer
specifically to one particular problem in this area of federalprovincial
relations-the problem of pensions.
We are all agreed, I am sure, in wishing that all other Canadians
should have the security that makes the difference between dignity and
dependence. We made a large step towards that goal in the early years after the
war, when we established a basic pension for everyone at the age of 70. To make
that possible, I remind you, the federal government and the provinces had to
agree on an amendment to our constitution. The amendment said that the federal
government could legislate about pensions in Canada as a whole, provided that,
in doing so, we didn't interfere with the operation of any existing or future
Since then, there has been a movement of public opinion towards a
further national objective in the field of pensions: that is, to ensure that
all Canadians, irrespective of the sort of work they do and whether or not they
change their jobs from time to time, should have continuous access to a level
of pension provision higher than can or should be provided by the flat-rate,
universal government pension alone. An obvious addition is a Canada-wide
contributory plan which would make available to everyone the sort of pensions
that many people now get by agreement with their employers, provided that they
work for one company for a good part of their working lives.
The previous government at Ottawa announced a year or two ago that
it was in favour of such a national contributory plan. My own Party had adopted
the idea in a resolu tion of our convention in 1958. And in two successive
general elections we spelled out the proposal in some detail. Against this
background, I am a little surprised to hear a national pension plan talked
about as if it were an unconsidered, revolutionary new proposal which has
sprung up suddenly.
I know that there are important economic decisions involved in such
a national plan; I know that any legislation on the subject must be given
careful scrutiny, with evidence heard for and against. I know also that such
legislation, for us in Canada, must be handled in the context of our federal
In July, the federal government put forward for consideration the
outline of a pension plan. In August, there was an important change in the
situation. At that time, the Legislature of the province of Quebec unanimously
passed a resolution to establish a public pension plan for everyone in that
province. There is no doubt that under the constitution every province has the
right to establish such a plan. There is equally no doubt that it would be
foolish to have two plans, federal and provincial, operating on top of each
other. And finally, there is also no doubt that, under the wording of our
constitution, a provincial plan takes precedence if the provincial government
wants it to. Therefore, as soon as the Quebec Legislature had passed its
pension resolution, the federal government made it plain that we wouldn't try
to apply a federal plan in a province which sets up a similar plan of its own.
But what about the people of the rest of Canada? And what about people who move
between one province and another?
The answers to these questions involve a very important problem in
federal-provincial co-operation. My concern is that the federal government and
the provinces should work together to find solutions which are in the best
interests of all Canadians. I think that, in its attitude to the Quebec plan,
the federal government has shown full willingness to co-operate with the
provinces in these matters in the general interest of Canadians. We want to
sustain such co-operation, which, I do not need to point out, is a two-way
street. It requires, on both sides, a reasonable degree of flexibility, and
give and take.
In this whole question of pensions, the province of Ontario has a
special role not only because of its size and importance but also because it
has already taken a lead over other provinces by legislation to regulate
private pension plans and compel them to be made more widely available. The
Premier of Ontario has stated his wish to co-operate with the federal
government in his support of the principle of a national contributory pension
plan. I refer to that in order to express my appreciation of it and my desire
to reciprocate. With friendly consultation when required and with full public
discussion in and out of Parliament, I am sure that we can solve this problem
by measures, which are economically sound and socially desirable. The two
things must go together.
I have talked about pensions as only one example of the complex
problems of our confederation, which are linked with economic and social
problems quite tough enough in themselves. We will not find the right solutions
to any of them if our ideas are either rigid or unrealistic. There can be no
standing still in today's world, but we must move forward with care,
forethought, and common sense.
The national purpose that we are all searching for is, in its
essentials, simple. It is the purpose of all good people; of good business; of
good trade unions. And it is the purpose of good government, of laws which have
the authority of respect, of administration which is honest and competent. It
is, perhaps above all, the purpose of honest and fairminded public discussion,
among people who do not confuse argument with the imputation of motives, whose
concern is solely for the public weal.
A strong Canadian national purpose rejects, I believe, the idea that
the government should forcibly intervene in a labour dispute which has become a
lawful strike after the required processes of collective bargaining have been
exhausted; intervene, that is, in order to force man back to work.
But a strong national purpose means that if the national interest is
seriously and demonstrably damaged, if serious national consequences are
flowing from a strike, and if all reasonable efforts at mediation are
exhausted, then government must intervene to stop the strike in a way which
will ensure that there is no prejudice to the interest of either the employee
or the employer in a fair settlement.
I do not think that a national purpose can be set down in glowing
phrases. It is expressed in the spirit in which we deal with particular
problems. It is the purpose, and the determination to make Canada "a union not
of parchment, but of men's hearts and minds".
We shall find out in the months ahead whether we are able to achieve
I believe we can.
Thanks of this meeting were expressed by Mr. W. Harold Rea, the
President of the Canadian Club of Toronto.
The dedicated attention with which your speech has been received and
the applause with which you have been acclaimed make my few words of thanks but
a formal ending to a great occasion. I call it a "great occasion" because your
presence here has once again justified our existence as forums of national
enlightenment and furthered the high purpose for which these two great and
famous clubs were originally founded and have consistently laboured during many
years of our national life.
In welcoming the leaders of our nation as they have spoken with
authority and frankness on Canadian problems, we have ever sought to promote
the union and the unity, the progress and the prosperity of this great land.
You, Mr. Prime Minister, carry burdens as heavy as any borne by your
illustrious predecessors. Yet, after sleepless nights ... or the threat of
sleepless nights ... and sittings of Parliament where splinter parties do not
always appear to be "chips off the old block", you have generously and
courageously shared with us your precious time to address us with the honest
simplicity of straightforward speech. You have made a powerful plea for racial
and religious understanding and tolerance, and an irresistible appeal to all
Canadians to devote the trinity of their heads, their hearts, and their minds
to bring strength and progress, national and international, to their beloved
We believe with you that a united and individual effort is bound to
succeed in a land settled by a people so rich in variety and romance, a nation
of pioneers which has brought law and order to a continent and still can see,
and is determined to conquer, the beckoning immensities of bright horizons.
A wise man has said that democracy is a method of accounting for
everyone ... the little works of many hands, the little loves of many hearts,
the light of many minds. That, I believe, Sir, is your hope and your faith.
I am sure then that everyone in this audience, of every political
party, of every creed and every racial origin, is deeply grateful for your
presence and the words that you have spoken. In their name, I thank you.