Can Canada Survive The Soviet Challenge

We are wasting vast human and natural resources by unemployment, regional underdevelopment, undistributed food surpluses, and a seventeen hundred million dollar annual expenditure on a "bow and arrow" defence programme.

Defence is desirable, but, in my opinion, Canada today stands defenceless. The accelerated advance of Russian technology in the weapons field has made Canada defenceless. The Bomarc missile, designed to shoot down a manned bomber, has had its sixth test failure, is far from perfected, and when operational, will obviously be obsolete.

The Canadian government still insists on maintaining a policy of spending one hundred and twenty-five million dollars that is just money down the drain.

In my opinion, strengthening the deterrent, strengthening the offence, is the only sensible approach to defence today. But in my view, wasting seventeen million dollars of our resources is sheer madness, weakens our economy, and makes it the easier for Russia to overtake and to exceed our standard of living.

The latest unemployment statistics show that there are 685,700 Canadians receiving unemployment insurance. Unemployment is a great menace to our way of life. Unemployment is a drain on production, is a waste of resources. I think it is a crime against humanity.

Solve the problem of unemployment and we automatically go a long distance in guaranteeing the democracy that we wish to protect.

Canada is facing a severe trade crisis that will likely worsen in the next few years. Markets for our primary production in mining, forestry, and agriculture, are facing increased competition.

Canadian exports of lumber to the United Kingdom have declined substantially since 1954-55 from over 70 million dollars at that time to not much over 40 million dollars in less steadily. The Soviet Union has now become the world's

Wheat.--The Soviet Union has now become the world's third largest wheat exporting nation. It is forecast that Russia will be able by 1965 to export up to 10 million tons of wheat, that is, to exceed Canada's current exports and become the world's second largest wheat exporter.

In the first nine months of 1959, there was a net capital inflow of $1,119 million. Our current account deficit with the United States was $911 million, and, for the first time, there was a current account deficit of $200 million with overseas countries.

James E. Coyne, Governor of the Bank of Canada, has pointed out recently that our nation is living beyond its means, that our prosperity is a false one, that our consumer production is being maintained very substantially by capital imports, that our consumption advantage of today will be a consumption disadvantage for the future.

Mr. Coyne goes so far as to give us his solution: "Canadian savings and the machinery of the Canadian capital market now can supply all of the capital funds needed by governments and business combined to carry on a capital expenditure programme as large in total as is sound and healthy for the Canadian economy to sustain in any one year."

Inflation, the silent robber, continues to depress our export industries, reduces the standard of living of those on fixed incomes, and erodes the savings of our people. Many economists now say that inflation is inevitable. Tight money, high interest rates, have failed to halt inflation.

The Chief Economic Advisor to the Department of Trade and Commerce, Dr. O. J. Firestone, in his forecast of Canada's economy for the next few years; states that there should be some recovery in 1960, tapering off in 1961, and that the recession we may be facing in 1962 could be more extensive than anything we have yet experienced since the end of World War II.

The public mind today is being mastered through control of the advertising media, television, radio and newspapers. The Madison Avenue crowd, psychologists and psychiatrists so play on the normal human emotions as to manage our buying tastes, invade our personal lives, even determine the political party that dominates the nation. Have they robbed us of that free independent judgment on which the continued life of a democratic society depends?

The rapid expansion of four leading newspaper chains has brought a large section of newspapers under the control of four goliaths, four huge corporations in this country. Of Canada's 95 English-language newspapers, 37 are owned by four prominent newspaper chains. This is one of the most ominous developments of our time, the subverting of independent newspapers to the power of size.

Parliament itself, the bastion of our democratic institutions, is itself in danger of being debased. To view Parliament in recent days is to see little evidence of any realization of the great challenge that faces our nation. We have seen exhibitions of political unreality, the slick phrase, political charges and counter-charges; accusations of failure now, or failures of the past administration, are apparently the substitutes for action and leadership. The Government and the Official Opposition have been re-fighting the 1957 and 1958 elections.

Perhaps this is a successful political strategy; nonetheless, the microscopic search for weakness and failure of the 22 years of the former administration is no substitute for policy, for fresh ideas, and the inspiration necessary to the survival of our democratic society.

We should recognize the challenge and put forward our goals and solutions.

The first principle, the first decision to be made, is to acknowledge the threat and to accept the challenge that confronts the Western world and above all to recognize that urgency in making our economy more effective must be the order of the day.

Without a sense of challenge and urgency, the great productive and enthusiastic effort of which the Canadian people are capable cannot be called forward.

Urgency is required so that we can set our house in order; so that we can remove the impediments to progress while maintaining the cherished principles of a free society that have been obtained with so much sacrifice.

The second principle upon which a new economy must be built is the determination to strengthen freedom itself. We must halt the erosion of the free press and of public discussion. We must come to grip with the mass manipulators of public will immediately.

Should we not discourage this avalanche of advertising by reducing the amount of expense allowed as an expense deduction in our income tax laws?

Moreover, I suggest we should take positive steps to assure that radio, television and the press are avenues of free and open discussion, that the power of bigness, the growth of chains, shall not reach the place where freedom itself and open discussion have been subverted.

That is why I have placed on the House of Commons Order Paper a resolution asking that a special committee of the House of Commons be established to enquire into this growing danger to freedom in Canada, to recommend steps that might be taken to safeguard democracy.

The third principle is the necessity for planning and direction.

I am pleased that this necessity today is being recognized by the business community, by labour, and by agricultural organizations.

Just this week the Canadian and Catholic Confederation of Labour, in their brief to the government, proposed the setting up of an economic planning commission that would include in it representatives of the federal government, of provincial governments, of business organizations, and of labour, farmer and consumer groups.

The purpose of this organization would be, and I quote from their brief:

"(a) to inquire into the causes of economic unrest, into the economic structures of the country,

(b) to recommend to the various governments (federal, provincial or municipal) measures to be taken to obtain full employment and maximum prosperity."

Claude Jodoin, the President of the Canadian Congress of Labour, in this city a few weeks ago, proposed the calling of a government-labour-management conference to deal with the economic problems facing our country today.

The fourth principle is the need for a very substantial increase in the field of public ownership.

In the developing society that I envisage, a society that could successfully meet the Soviet challenge, I see a great role to be played by every part of our economy.

We should develop the co-operative movement which is based on democratic principles, principles of self help. There is a great role to be played by private ownership. Private ownership where competitive, where providing useful services, has nothing to fear in the kind of economy that I visualize.

In this plan for progress there is, I suggest, a need for increased public control of currency and credit.

The time has now come for an amendment to the Bank of Canada Act that would give the Bank of Canada control not only over bank credit but over the volume of consumer credit. I refer to credit which is now made available by finance companies, by instalment and discount houses.

Contrary to belief in some quarters, public ownership is often the most efficient means of industrial development. The public development of hydro-electric power, and the distribution of natural gas, have by the experience of many provincial governments proven to be most efficient.

In my own province of Saskatchewan the entry of the provincial government into the field of fire insurance on a competitive basis with private companies has resulted in fire insurance rates on private dwellings of 40 cents per hundred dollars of coverage, exactly 30 cents per hundred dollars lower than the 70 cents per hundred dollar coverage charged by private companies in the neighbouring provinces of Manitoba and Alberta. Public ownership in this limited way has reduced fire insurance rates in Saskatchewan by 43%, bringing an estimated saving of $6 million annually to the people of Saskatchewan. A larger and more rapid development of the public sector is necessary to arrest inflation and to reduce prices. There is also room for corporate ownership as we now know it.

Although in my view there is substantial room for the development and expansion of the area of public ownership, nonetheless, the instrument of corporate ownership with the dispersion of management and control among many companies is a safeguard against an all-powerful government bureaucracy. Corporate ownership in many areas of development gives a flexibility to our economy that is a fundamental part of our Canadian way of life.

All of these types of ownership operating as part of an over-all plan should be directed towards the strengthening of democracy, the improvement in our standard of living, the protection and advancement of the welfare of the aged, the disabled, the weak. Given the inspirational leadership, we can accept the Soviet challenge, which thus might be a great blessing in disguise.

The fifth and last principle I suggest we must accept in meeting the Soviet challenge is that of equality. This should be more than a slogan, this should be more than a catchphrase. It should be the determined objective of our national government to bring about the greatest measure of equality of opportunity in the field of education, equality for all individuals in the field of hospitalization, medical, dental and optical service, equality before the law, equality irrespective of race, colour or creed.

There should be a conscious striving--to bring about a greater measure of economic equality and opportunity, to remove special privilege, to guarantee a basic Canadian standard of living to all willing and able to perform useful service, and there should be substantial income guarantees for the disabled and handicapped, and for our elderly citizens.

Absolute equality is not possible. The setting of equality as the ideal objective, though a distant one, towards which our legislation should be directed and towards which we should strive, is in the best interest not only of the weak, the aged and the underprivileged, but it is in the interest of a strong and dynamic Canadian nation. When we are building a stronger and better Canada in which ownership is restored to the people, in which freedom is the foundation of all our activities, we are building a part of a greater whole.

The good life we hope to provide to Canadians must be shared with human kind. We are our brothers' keeper. Let us build in such a way that mankind in other nations and climes will benefit. We are part of a world community of nations and what we are building for ourselves we desire for others.

Let us recognize that we are part of the larger Commonwealth of Nations, that we are part of the still larger world community of nations. Let us declare that what we are building for ourselves, one day, in cooperation in brotherhood, shall be the inheritance of all mankind.

That is my answer to the Soviet Challenge.

THANKS OF THE MEETING were expressed by Mr. Marvin Gelber.