Beyond the Looking Glass—Canada after Controls

MR. KARN:

Madame Minister, Mr. Mayor, Reverend Sir, distinguished guests, ladies and gentlemen: Our guest of honour earned our admiration and endeared herself to your Speakers' Committee long before we made her acquaintance today, for several reasons.

Firstly, she is the only one of the first five ladies invited to address us who has accepted. Secondly, she accepted promptly. Thirdly, she is the only one of those from British Columbia whom we invited who has accepted. And fourthly, she readily agreed to a change of date when we had to rearrange our schedule.

We had originally arranged that she would visit with us during Grey Cup Week, even before her appointment to the Federal Cabinet as the Minister of State responsible for Fitness and Amateur Sport. We had been holding this day for a certain speaker from Los Angeles* who subsequently advised us that he could not come before the U.S. presidential

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*Ronald Reagan, who ran against Gerald Ford for Republican Presidential nomination. He was defeated by Ford at the Republican Convention in August, 1976.

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election. In retrospect, we are fortunate in having as our guest one whose political fortunes are still rising and rising dramatically--and who has much farther to go before reaching the orbit of her maximum capability.

Those of you who are familiar with the scenic beauty of Prince Rupert and the surrounding region, the post-war industrial and municipal growth of the federal constituency of Skeena as a whole, and the diverse origins of its citizens, one-third of whom are of Indian heritage, can appreciate the limitless opportunity offered to those who are prepared to serve in the public interest. It was into this environment that Iona Campagnolo projected herself when she was elected a school trustee in 1966 and later a city alderman in 1972. In addition to chairing the athletic committee, she served on committees of council dealing with the environment and downtown beautification.

Iona Campagnolo co-ordinated the visit to her region of our royal family in 1971, and the vice-regal visit of Their Excellencies the Governor General and Mrs. Michener the year following.

For outstanding service to her community, she was awarded the Order of Canada in 1973, and named B.C. Broadcast Citizen of the Year in 1974.

It was inevitable that her electoral constituency of Skeena, which constitutes the northwest quarter of British Columbia and is the third largest in Canada, would send her to Ottawa as their Member of Parliament, which they did in 1974. Since then, she has continued to distinguish herself by taking a firm stand on issues of national importance. In 1975, she was named Parliamentary Secretary to the Honourable Mr. Judd Buchanan, Minister of Indian Affairs and Northern Development, and this September she was appointed to the cabinet.

When I learned of her topic for today I was somewhat apprehensive. Had she chosen "In Front of the Looking Glass" we might have thought that she was going to reprimand us for our nonathletic physical condition--in other words, our loss of paunch control. But this is not so.

Ladies and gentlemen, it is a pleasure to invite Iona Campagnolo, P.C., M.P., Minister of State to the Minister of National Health and Welfare to address us on "Beyond the Looking Glass--Canada after Controls".

THE HONOURABLE IONA CAMPAGNOLO:

Mr. President, head table guests, honoured guests and members of the Empire Club: I would like to thank you very much for inviting me here today, and allowing me the chance to share some of my thoughts with you.

My thoughts, like those of many Canadians these days, are on our economy--the fight against inflation; wage and price guidelines; what happens to us after controls are removed. In fact, I understand that you have had so many speeches on economics this year that any member who attends more than half of your meetings may well be in danger of actually learning something about the subject.

So my original intention, in accepting your invitation, was to give you a change of pace. Perhaps discuss my new responsibilities as Minister of State for Fitness and Amateur Sport--and conclude with all of us doing pushups and jogging around the Royal York. Or give you a learned treatise on the role of women in Canadian society, and suggest that if the voters of Ottawa-Carleton can replace a former finance minister with a businesswoman, then even Earl McLaughlin had better start to take notice. Or perhaps even discuss the regional disparities in our country which can create communities as diverse as your great, economically-diversified metropolis of Toronto, and my own fishing and forestry-dependent home town of Prince Rupert.

But, sure enough, when your President phoned my office to ask for the title of my at-that-point-unwritten speech, I automatically reached for our "issue of the day"--and somehow came up with Lewis Carroll.

But when you stop and think about it, and think about what's been happening to our economy for the past few years, we do look almost as though we've fallen, like Alice, into a strange and different type of reality. And the characters are certainly all there. We have Joe Morris of the C.L.C., playing the economic Mad Hatter, with Ed Broadbent tagging along behind as the March Hare. And some of our more influential corporate executives, perhaps somewhat miscast, but still doing a passable imitation of the Queen of Hearts saying, about the Prime Minister, "Off with his head!" Then there's Joe, the Cheshire cat, not really saying or doing much, just sitting back and smiling watching--as if he had no role to play in helping us to find the right economic signpost.

And, of course, there's Alice herself, being played superbly by the Canadian public. Not quite sure of where we are and not exactly sure how we got here. Being faced with situations where things that were once real and substantial literally shrink before our very eyes. Knowing that the temporary benefits of an inflationary Wonderland will be as mocking and hollow as the grin of the Cheshire cat when brought before the harsh light of economic reality.

Yes, we've been in Wonderland for the past while where A plus B equals 12% more than C, and where we find ourselves further behind the faster we try to run. Where, just over a year ago 20,000 Quebec nurses were demanding a 60% increase and a cost of living allowance; 20,000 members of the Canadian Union of Postal Workers were looking for an immediate pay increase of 71% plus a 30 hour work week over 21 months. Alberta doctors were demanding a 40% increase in rates; B.C. bakery workers, meat cutters, and retail clerks wanted an immediate raise of from 38.6% to 76.2%; 87,000 Quebec teachers were demanding 48.3% in a one year contract to catch up with Ontario teachers who were simultaneously demanding 43.9% more as well as a $720 lump sum payment as a cost of living allowance.

Last October, though, the Prime Minister said "Stop!". The government, in an effort to bring us out of our Wonderland, and back to reality, imposed strict economic controls and a three year program of guidelines on wages and prices. And, in themselves, these controls are working. Inflation, which was at 11% when controls were brought in, is now down to an annual rate of increase of 6.5 % -still too high, but significantly below our first year goal of 8%.

Unjustifiable wage demands are being reduced. Excessive profit margins are being trimmed, and are being closely monitored. A glimpse of light is starting to appear as we climb back up closer to the top of the "rabbit hole".

But let's not kid ourselves. Even if we achieve our goal of a 4% annual inflation rate; and even when the controls are lifted--as they will be, in 1978 or sooner, because the law of the land, known as the Anti-Inflation Act passed by Parliament last year says they will be removed in three years or sooner--we will not necessarily have solved the problem of inflation.

The controls program cannot solve our problem for us; it can only give us a bit of breathing space. A breathing space in which we can regain our economic breath, take a good look at where we are and, to return again to Lewis Carroll, try to find a way around, rather than through, the looking glass.

Wage and price guidelines and government-administered controls are all the horrible things that our critics say they are. They interfere with the free operation of the market system. They only mete out rough--if any--justice. They discourage initiative. They are costing the government support in the opinion polls. And so on. And I as a Liberal personally find them abhorrent, and opposed to everything that my own philosophy stands for.

But our visit to the economic Wonderland has, unfortunately, made them necessary, and, despite what some critics say, the results so far show that they are working, and that we are regaining a measure of control over our economy.

The real question, though, is what we, as Canadians, want to do after the controls are lifted. There are real and pressing problems in our economy, structural problems, which must be resolved if we are to avoid a continuation of such severe economic dislocation. And in resolving these problems, we Canadians have an opportunity to go behind the looking glass, and shape the economy and society we want to live in during the years ahead.

The role of government in society. The future of a market-system economy. The resolution of industrial disputes. How to increase productivity. The social and environmental consequences of economic activity. How to live in a world of "Big"--Big Business, Big Unions, Big Government.

All of these issues, and more, are what we mean when we say "Where do we go after controls?" I know that I have my thoughts on these issues, and I'm sure that all of you have your own opinions. And while it is the duty and responsibility of the government which is elected by and responsible to all of the people of our country (something Joe Morris seems to find hard to understand) to forge a concensus of opinion and provide the leadership needed to resolve these problems, it is also the duty and responsibility of that government to consult with the people of Canada, to seek their views on our economic future, and then it is the government's duty to shape policies which reflect the consultation process and the views expressed.

The controls program is only one-third over, and already that consultation program has begun. It was reflected in last week's Speech from the Throne, when His Excellency, the Governor General, stated:

". . . the development of new strategies required by the times in which we live will demand the closest possible cooperation among governments, workers, businessmen, cooperative and voluntary organizations and all other sectors of society. To that end, the government will launch a major series of consultations throughout Canada to secure a greater sharing of economic and social responsibility among all Canadians."

The last phrase is the key . . . "a greater sharing of economic and social responsibility among all Canadians."

Put more bluntly, it's the "I'm all right Jack" attitude that got us into this mess. It's going to take a somewhat more mature attitude, on behalf of all sectors of our society, to get us out.

So we, as a government, will be consulting with you, as Canadians, and asking you for your advice. That, really, is what I'm doing here today. And you, as Canadians, had better tell us what you think, because the future we're planning is one we'll all have to live with.

One of the issues I cited earlier as examples of the problems we must together resolve, is the question of industrial disputes. It is a question in which I have long been personally interested, and I'd like to discuss it briefly with you today, just as an illustration of the complex problems we face, and the type of input I and my colleagues in the Cabinet seek from you, through this process of consultation.

Industrial relations in Canada have traditionally been based on the system of collective bargaining between employees, represented by their union, and management. The federal government remains committed to this system as the fairest and most publicly acceptable method of determining wages and working conditions, in both the private and public sectors.

But, and this has been obvious for some time now, the collective bargaining system has not been working as equitably or effectively as it should. And Canadians in general, as well as the parties directly involved, have suffered from the consequences. Wage demands are not the cause of double-digit inflation. There is no one single cause of such a complex problem. But the figures I cited to you a few minutes ago--71%, 40%, 76.2%, 48.3% aren't examples of what I would call restraint. And neither is the practice of some of our larger corporations, whose dominant positions in their particular market allows them sometimes to pay such irrational wage increases, on the basis that they can just pass it through to their customers and it's easier on them than a strike. Well, you may be all right in the short-run, Jack, but what happens to all of us a little further down the road?

So, is collective bargaining the answer? If not, what is? And if it is, then how can we improve it to get the stable system of industrial relations that we all seek?

A process of continuous bargaining? Compulsory arbitration at a certain point in all labour disputes? Employee representation on boards of directors? Employee stock ownership plans? Productivity allowances instead of cost of living allowances? The whole question of "industrial democracy" is one which we must look at very closely, and one in which all Canadians should be taking part.

One suggestion in this regard has been that we adopt the West German approach to industrial relations. In that country, they, like us, use the adversary system of collective bargaining, but there is a general, all-party concensus that the strike is not the way to go. As a consequence, for every 20 days lost in Canada to strikes in 1974, there was a loss of less than one day in West Germany. Just think of that figure--less than one-twentieth of the time lost to strikes than we have had in Canada. Consider what the regaining of that lost time alone would do to improve our productivity.

It's certainly a system which, at least on the surface, looks attractive. But, as with everything else, there's more than the surface to consider. Unions in West Germany are willing to forego a wage increase for a particular period of time if it is apparent that the result of that increase is a reduction in the ability of their company to compete effectively, or the possible lay-off of some of their members. Are our unions willing to give up that power, and give up higher wages today for greater job security tomorrow?

Similarly, West German industry has come to accept a much greater degree of involvement by unions in "their" affairs than would be considered acceptable here. In some circles in our country, the entire concept of unions and employee rights has not really been accepted. How would these individuals react to the presence of union involvement in company activities, on every level from the shop floor to the corporate boardroom. And make no mistake, for the West German system to work, such involvement must not only be tolerated, but actively sought and acted on.

There are still some corporate dinosaurs in this country, some of whom still think that we're living in the world of the Family Compact and the Hudson's Bay Company rules. Are they prepared to give up some of their power and welcome the unionists into their executive suites for the greater productivity of the nation?

And are our governments, on all levels, prepared to accept a much greater degree of involvement by both labour and management in the designing of new legislation concerning industrial relations? And are labour and management prepared to accept the responsibility of such involvements? If we do not learn to work together, Canada as we know it will no longer exist.

These are the questions which we, as Canadians, should look at if we hope to successfully alter our system of industrial relations in the post-controls period. It is one of those challenges that we can use the breathing-space for, to consider these types of changes.

And, as I said earlier, the consultation has already begun. In this particular field, the federal Department of Labour has commissioned a study by Mr. Charles Connaghan, currently the Vice-President of the University of British Columbia, and prior to that the President of the B.C. Construction Labour Relations Association, on the question of industrial relations in Canada, and dealing particularly with the West German experience and how we can benefit from it. This report has now been presented to my colleague, the Minister of Labour, and is available to the general public. It is an excellent report, raising many points of relevance to our Canadian society; and I would strongly recommend it to any of you interested in pursuing this subject in more detail.

But, as I have said, industrial relations is only one of a number of the issues that we, as a country, must face if we hope to establish a better, and more responsive, postcontrol economy. I am confident that Canadians want to be consulted by their government on matters such as these, and that they want to have a voice in determining the shape of our economic future.

I spent the entire month of August, back in the not-so-hectic days, travelling throughout my constituency and meeting with people in the cities and towns, and Indian villages, and isolated logging and mining camps. Talking to them, trying to help them with their problems, and seeking their views on issues of national concern. One of these issues was the question of wage and price guidelines, and what kind of society do we want after controls. One of the answers I kept getting back--in both Chambers of Commerce and Union Halls--was that, after controls, these Canadians wanted more controls! They didn't want to return to the free, open economy our society has traditionally been based on.

Now this was by no means a majority opinion. But it was raised, and raised consistently enough for me to be quite concerned. Economic controls are to me, as a philosophical liberal, the opposite of everything I stand for. A& I believe that they are the opposite of what Canadians in general want to see.

The post-control period is a great opportunity for us, working together as a society, to meet the challenge of the future and to take an active role in influencing the circumstances that too often control us, rather than the other way around.

We have a great future ahead of us in this country. We have the natural resources the world will need. We have a young but highly-trained work force. We have one of the stablest economic and political structures in the world. And, by creating an opportunity out of an economic crisis, we have a chance to leave wage and price controls behind, to return from our economic Wonderland, and step beyond the looking glass into a world we have some control over, rather than through the looking glass into a continuation of the economic absurdity of double-digit inflation and the threat of government by pressure group.

Or, as our friend Lewis Carroll put it:

Thus grew the tale of Wonderland Thus slowly, one by one, Its quaint events were hammered out And now the tale is done, And home we steer, a merry crew Beneath the setting sun.

Ladies and gentlemen of the Empire Club, I wish to thank you for giving me this opportunity to speak to you today. And, in honour of what, at least for me, has been a most interesting and enjoyable meeting, and as a reminder of the economic Wonderland we all want to leave, I'd like to take this opportunity to present your President, Mr. Bill Kam, with a copy of the collected tales of Alice, by Lewis Carroll.

The appreciation of the audience was expressed by Mr. Peter Hermant, 1st Vice-President of The Empire Club of Canada.