Canada's Opportunity—A Progressive Programme for Nation-wide Prosperity Through Full Resource Development

Before I outline the policies which, in my judgment, must be pursued to give every Canadian the full benefit of these priceless assets, I shall endeavour to qualify myself as somewhat of an expert on my subject. My approach necessarily is not that of a professional economist. The opinions expressed here are the outcome of a lifetime spent largely in practical activities, including experience in electric power, railroads, lake shipping, iron ore and steel.

In the early, formative years of my life, national policies were one of my studies. In Nova Scotia, where my family were farmers, lumbermen and merchants, we also kept the post office, which was the sorting and distributing centre for a dozen surrounding communities. Here was a golden opportunity to learn to know the newspapers of Canada and to read the detailed accounts that they carried, in those days before the comic pages, of the proceedings and speeches in Parliament.

Joseph Howe, Nova Scotia's great Liberal, was my grandfather's closest friend and, although Dr., later Sir Charles, Tupper, her leading Conservative was the physician who brought my father into the world, he was named Joseph Howe Eaton. From the beginning, I had the good fortune to know statesmen from both sides, and I have been personally acquainted with every Premier of Nova Scotia since Fielding.

When I was fifteen, I went to Ontario to school and college. During my four years in Toronto, I attended meetings of the Ontario Legislature as often as I could to listen to the debates. I have known personally every Prime Minister of Ontario since Sir Oliver Mowat, and every Prime Minister of the Federal Government from Sir Charles Tupper to Mackenzie King.

To help put myself through college, I had a part time job in the advertising department at Ryrie's, now Birks, and it was there that I learned what an important adjunct the newspaper is to successful merchandising. I early made the acquaintance of Sir John Willison, who had left The Globe to found The News. I saw considerable of his successor on The Globe, Macdonald, and of Joe Atkinson, then a rising star in the newspaper world. I regret that I did not have the privilege of knowing John Ross Robertson. From that time to this, Canadian newspapers have come daily to my desk, and continuous reading of them, and especially their splendid financial pages, has been of great value.

During my student days in Toronto, Goldwin Smith was at the height of his career as a provocative analyst of the political and economic problems of Canada and the Empire. His home, the Grange, was a mecca for those who were deeply concerned with what he termed the economic backwardness of Canada, and who, like him, were constantly searching for remedies. Goldwin Smith was not famous for his tact, but he had a penetrating intellect and a brilliant pen. For a former professor and a writer, he was no mean financier, furthermore, as the estate of $1,000,000 that he left testified.

The summers of my college years were spent across the border in Cleveland, where I was lucky enough to find employment with John D. Rockefeller, Sr., in my estimation, the economic titan of all time. From this inspiring relationship came my decision to make my business headquarters in Ohio, reluctant though I was to leave my loved Canada.

But before settling in the United States after graduation, I made a tour of western Canada and spent five months ranching in Saskatchewan. I was present at the ceremonies in 1905 when Prime Minister Laurier and Governor-General Lord Grey inaugurated the governments of the new Provinces of Saskatchewan and Alberta. The next seven years, my vacations all led back to the Canadian west and, ever since, I have maintained social and business relations in the western cities of Victoria, Vancouver, Calgary, Edmonton, Regina and Winnipeg, as well as in the eastern centres of Toronto, Ottawa, Montreal, St. John, Charlottetown and Halifax. In my early days in the electric power business, I owned the utilities in Brandon, until I sold them to the Province when John Bracken was Premier of Manitoba.

Business has brought me constantly to Canada over the years. Since 1928, I have had a large farm in my native Nova Scotia, and the summer never passes that my children, my grandchildren and I do not spend at least six weeks there. I have never developed the habit of going south, but any winter holiday when I can get some of my family to accompany me is spent on skis in Canada.

I have been constantly interested in the welfare of Canada, and one of my life-long preoccupations has been in some small way to give an impetus to the material progress of my native land. The most recent step toward that goal has been my participation in the development of the Steep Rock iron ore range in western Ontario.

Eight years ago when I joined hands with the late General Hogarth, Julian Cross, "Pop" Fotheringham and other Canadian friends in that venturesome and pioneering task, the Steep Rock deposits were a dubious prospect of unknown quantity lying far below the bed of a deep lake. Today, in its sixth full season. of production, Steep Rock has set a new record of shipments of 1,215,000 tons of high grade ore. More important still, the Steep Rock reserves of high quality iron ore are now known to exceed those of any other range, old or new, on the continent. In 5 years, we aim to have at least 6 mines shipping a minimum of 10,000,000 tons annually.

Every hour of every day since 1942, I have been in direct touch with the manifold aspects of the Steep Rock undertaking. It has brought me face to face with the difficulties of creating and developing a new industry in Canada, and it has given me a first-hand knowledge of the problems of transportation, communication, electric power, finance and markets for a new Canadian enterprise.

No undertaking can flourish, of course, unless there is a ready market for its product. Goldwin Smith sixty years ago foresaw that the logical outlet for Canadian products was the United States. We pointed out that it would not be forever possible to suppress geography and that, despite political reasons for trying to trade with the Mother Country, in the end Canada would do more business with the millions of customers a few miles away across the border than with Great Britain 4,000 miles across the sea. How right Professor Smith was is clearly shown by the statistics: in 1890, Canada's exports to the United Kingdom totalled $48,000,000, to the United States $38,000,000. In the first ten months of 1950 the United Kingdom took $394,000,000 worth of Canadian products, the United States $1,661,000,000.

In his historic essay on "Canada and the Canadian Question", published in 1890, Goldwin Smith went so far as to doubt that the four blocks of territory constituting Canada could be kept by political agencies united among themselves and separate from the continent of which geographically and economically they were parts.

The case of my native Nova Scotia was uppermost in Professor Smith's mind. Up to the time of Confederation in 1867, Nova Scotia was a separate entity, sharing only adherence to the Empire with the rest of Canada, and prospering from a lively trade with the United States. Confederation and the ensuing high tariffs impoverished Nova Scotia. The rest of Canada did not need or want her products of farm, forest, mine and sea; the American market was closed to them, and because of the new high tariffs, Nova Scotia was now forced to pay high prices for all manufactured goods. A further serious consequence was the wholesale, though reluctant, exodus of the flower of Nova Scotia's youth to the United States to find a way to make a decent living.

Nova Scotia's plight has been to some extent alleviated in recent years. She has developed a pulp and paper industry whose products can enter the American market duty free. Her tourist trade also brings in worthwhile revenue. But her agricultural problem is acute, and 5,000 of her once thriving farms have been abandoned. We are trying to develop a purebred livestock industry there, by urging concentration on registered breeding stock that can go duty free into the American market. I sent my first such shipment of Shorthorn cattle from my Nova Scotia farm to the States last spring, to demonstrate what can be done.

I am not one who favours political consolidation of Canada and the United States. As I tell my American friends, the only way that could ever be accomplished would be by repeal of the Declaration of Independence and by the designation of a Canadian city, probably Toronto, as capital of the new nation. But I do believe that the economic destinies of the United States and Canada are interwoven, and I do want to urge the fullest possible interchange of goods between the two countries.

Canada's exports to the United States have caught up with and even overtaken her imports from the United States in recent months. The American market is eager for more and more Canadian products, so that Canada is in an excellent position to launch on a large scale expansion of every segment of her economy if she chooses to follow the bold and optimistic course.

There are those in high places who will sincerely decry such a policy as inflationary. The answer to them is that the only sound road to the reduction of prices is increased production, resulting in a greater abundance of goods. On the other hand, a policy of deliberate deflation, accompanied by drastic artificial measures to contract credit, check speculation and reduce prices, can play sufficient havoc with legitimate business to lead to unemployment and depression.

My observation is that the individual Canadian is in an optimistic mood, and is ready to move rapidly forward on the economic front. But the big institutions, without whose wholehearted participation there can be no major progress, are holding back. The Federal and Provincial Governments and the appropriate privately owned companies owe it to the citizens of Canada to provide railroad facilities, telephone service, electric power and highways on the vast scale required and the strong nationwide banks must extend the credit needed to enable the Canadian economy to make the most of its unprecedented opportunity.

In my long association with the Chesapeake and Ohio Railway on the American side of the border, I have found that, where we built extensions of our line to reach new coal mines in hitherto inaccessible areas, and persuaded the telephone and power companies to build telephone and power lines and the Federal, State and local authorities to construct highways, profitable business developed for everybody concerned and splendid new communities sprang up. The Chesapeake and Ohio has not hesitated to spend millions of dollars to enable a single new mine to ship tonnage to its market. The Chesapeake and Ohio has just lately placed orders for $130,000,000 worth of new freight cars and locomotives.

There are no finer highways in the world than those that circle Toronto. Go a thousand miles West, however, and you will find communities that have no highways to join them with the outside world. Just across the border in Minnesota are modern roads connecting towns, villages and hamlets no larger than the isolated outposts of neighbouring Ontario. It is obvious that the next ten years will see a tremendous increase in motor traffic in Canada. The roads that will inevitably be needed could be built now, with tremendous economic advantage.

The demand for electric power in Canada exceeds the present supply, but the undeveloped waterpowers are a potential source of enough electricity for Canada's own full future requirements, with a substantial surplus to sell for cash to the United States. Once the water has gone unharnessed down Canada's mighty rivers, the power is forever lost. Where hydro is government-owned, there is an especial obligation on the part of the public servants to prevent this conspicuous waste of one of the people's greatest resources.

To encourage the opening up of new industries, the public power commissions ought to make ample power available at low prices. The present practice in some localities of forcing a new industry to pay almost twice as much per horsepower as an established industry is a serious check on economic progress.

Swift telephone communication with the continent is essential to a successful enterprise. I would like to see Canada's great telephone system join in the risks involved in opening new areas.

One of the strengths of the nationwide Canadian banks and railroads is their size. It is also one of their grave weaknesses. The division superintendent of the railroad who cannot buy a wheelbarrow and the local bank manager who cannot make a loan without head office approval are reduced to the role of minor bureaucrats. There is immense talent going to waste in railroad station agents and branch bank heads. They have plenty of time to serve as directors of local companies, to own farms and to take a more active part in developing Canada's resources.

If transportation, electric power and credit are provided in adequate amount, there can be tremendously increased activity in the production not only of raw materials and semi-finished goods, but also of manufactured articles, both for domestic consumption and export. With the modern trend toward decentralization, there is no reason why every Canadian community of any size should not have a thriving industry of its own.

An essential element in Canadian economic progress will be the closest harmony and co-operation between capital and labour. Canadian business leaders would be well advised not to rely on governmental agencies to handle labour matters, but to get to know and understand their employees and the leaders of the labour organizations to which their employees proudly belong. Any executive who bases his claim to office on his prowess as a labour baiter is a heavy liability to his company.

Turning to the intellectual and spiritual aspects of the programme I am outlining, I think the educators and churches of Canada have an important part to play. Socialism and communism are not primarily concerned with encouraging the life of the mind and the spirit; their central aim is to provide for the material well-being of the people. Functioning properly, capitalism can produce more of the good things of this world than any other system. And the life of the mind and the spirit will flourish if there is material progress in nations which combine the capitalistic system of economics with the political system of democracy.

The educators and churchmen must enunciate the worthiness of striving for the good things of this earth, and they must encourage recognition for those who take the lead in promoting material progress. It is too much the fashion, in the United States as well as Canada, to reserve recognition to the statesmen, the military man and the literary man, as opposed to the industrialist, the farmer, the engineer, and the banker who take the leadership in practical pursuits.

For some years I have been an Elector of The Hall of Fame, America's Westminster Abbey. I have tried repeatedly, but without success, to persuade my fellow Electors to honor Andrew Carnegie, the Scottish genius who made modern American industrial civilization possible by bringing together the iron ore of the Great Lakes and the coal of Pennsylvania and Ohio to create the steel industry. When he retired, Carnegie gave away his immense fortune to promote the spread of knowledge and to help humanity toward its goals of international justice and universal peace. I could not get the Presidents of our great American universities and others of my fellow Electors to cast a majority vote in favor of Carnegie.

On this St. Andrew's Day, I am happy to report, however, that I was able to help the election to the Hall of Fame of that other Scotchman, Alexander Graham Bell, for an inventor somehow seems to escape the stigma that attaches to other practical men of affairs. Some of you will recall that Bell spent his boyhood in Ontario and, after his retirement, when he could afford to choose from all the world, he selected Nova Scotia as his place of residence for the last and best years of his life.

Viscount Milner, whom our old friend Lord Tweedsmuir described as the British Empire's greatest intellect of his day, earned unpopularity by asserting that while England led the world in the development of gentlemen and scholars, her genius did not include the economic upbuilding of the vast "undeveloped estate" of the Empire. England's charm and cultivation remain something for all of us who are devoted to the Empire to cherish. But each member of the Commonwealth must now look to itself for its own development, and each can make its maximum contribution to the Mother country by increasing and maintaining its own economic strength. Canada especially has everything to gain by strict adherence to the precepts of Viscount Milner and that other Empire builder, Cecil Rhodes, whose vision, ambition and driving power make exemplary models for Canadians to follow.

Canada is held back by the excessive caution of her banks, railroads and utilities and by her Federal and Provincial Governments, especially in their approach to electric power development and highway construction. Canada, like the rest of the world was laid low by the economic depression of the 'Thirties. Now, twenty years later, it is time for her big institutions to abandon the penurious and unprogressive policies of a contracting economy, and to embark on the bold and courageous course of expansion to bring the economic status of every Canadian to the highest in the world.

VOTE OF THANKS, moved by the Hon. Charles McCrea.