Liberty, Unity and Prosperity

JOINT MEETING THE EMPIRE CLUB OF CANADA THE CANADIAN CLUB OF TORONTO

On the first day of September, 1905, Alberta and Saskatchewan became provinces of Canada. Thus the chain of provinces from the Atlantic to the Pacific was completed and the hope, which the Fathers of Confederation had cherished forty years before, was fulfilled. Alberta's coat of arms painted its picture sixty years ago. At the top was the cross of St. George symbolizing their British settlers and Princess Louise Caroline Alberta, one of Queen Victoria's daughters, after whom the province was named. In the middle was a foothill and mountain scene and at the bottom a field of golden wheat.

But with the discovery of oil at Leduc in 1947, Alberta added an industrial boom more than equal to its earlier settlement boom. Such is the robust health of Alberta that it boasts of a debt retirement programme which will pay off all provincial debt by 1973. No eastern province, even with the backing of the financial barons of Bay Street, can make that pledge. In the realm of politics, the west has been an establishment breaker. Social Credit in Alberta was swept into office in 1935 under the vigorous leadership of William C. Aber hart and Mr. Manning, our guest today. At the age of 26, Mr. Manning became Provincial Secretary and on Mr. Aberhart's death in 1943, the Premier of the province. Three years from now he will be the longest reigning premier in Canada's history.

Under Mr. Manning's leadership, Alberta has not followed the general slide in Canada towards socialism. In fact, the province is considered by many to be a model of free enterprise and has been described as "a restful haven in a sea of socialism".

A broad and human approach to life comes easily for a Premier who has time, in addition to running his government efficiently, to maintain an active Christian layman's ministry through his weekly radio service "Canada's National Back to the Bible Hour". This broadcast is heard from coast to coast and is the most far-reaching ministry of its kind in Canada.

This concern for both the spiritual and material welfare of his fellow men has enabled Mr. Manning to develop, what appears in Canada to be, a unique political philosophy. With great pleasure, I therefore introduce to you the Honourable E. C. Manning, Premier of Alberta, President of the Executive Council and Attorney General, who will address us on "Liberty, Unity and Prosperity".

MR. MANNING:

Mr. Chairman, distinguished guests and gentlemen. May I, first of all, express my appreciation to the Empire Club of Canada and the Canadian Club of Tor onto for their gracious invitation affording to me the privilege' of being with you today. It is a pleasure to come from that restful haven to which the Chairman made reference, to join you in the turbulence of this great metropolis of Toronto for at least a few hours. In less than two months, we, as Canadians will enter our Centennial year. We end our first century as a nation, grateful I am sure for many things we see about us. We are privileged to live in a good land, a land with vast resources and tremendous potential. In our first hundred years we have made a great deal of progress in this country. We do have many things of which we can be justly proud.

It is equally true that we are ending our first century amid circumstances which are causing thinking Canadians a great deal of justifiable concern. The steady growth of Government intervention into all aspects of social and economic life is causing many to wonder how much real liberty the future holds, not only for individuals but for those who have associated themselves together in the various commercial and industrial business enterprises of our country.

Certainly there are many today who have grave doubts about the future prospects of a strong and enduring national unity in this country. You will agree many share a serious concern for the continued prosperity of our nation in the light of spiralling costs and prices, pyramiding debts, staggering government deficits and the steady increase in the burden of taxation that these deficits imply. When we add to all this the national political confusion and the parliamentary instability of our times, it is not hard to understand why there is widespread public frustration and much genuine concern.

My first proposition to you today is that national situations of this kind do not correct themselves. This doesn't mean that they cannot be corrected, but they can be cor rected only by wise decisions and intelligent action on the part of the Canadian people. Before such intelligent, united action is possible, the people of Canada must acquire and agree upon an intelligent set of national objectives or goals. Having regard to the circumstances and trends of our times may I suggest that we adopt as our national Centennial goals in this country what I have designated in our topic as a state of liberty, a state of unity and a state of prosperity. If we can agree on these as desirable goals, our course of procedure must comprise two necessary steps. In the first place, we must develop a set of practical philosophical guide-lines we can agree upon to follow. By this I mean we must spell out in understandable language what we mean by a state of liberty, what we mean by a state of national -unity and what kind of economic structure is required in Canada, to produce and preserve prosperity in the Canadian context.

These guide-lines must be realistic and definite enough to serve as guide-lines, first of all, to individuals, who in a free society are the final decision makers. They must serve as guide-lines to business and industry. Perhaps most important of all they must serve as guide-lines to governments. You will agree that governments are prone to lay down guide-lines for others. The time has come when governments should acquire and adhere to some intelligent guide-lines for themselves. Having established a set of guide-lines, our second step must be within the framework of those guidelines, to formulate for both the private and public sectors of our society, practical policies and programmes which will ,clearly outline a course of action that will achieve our three-fold objective -a state of liberty, a state of unity and 'a state of prosperity.

I submit, unless these preliminary steps are taken, we will not recapture in Canada a clear-cut, positive sense of direction, that in my opinion is patently lacking in our national life and national economy.

Let us now consider briefly the application of this approach to each of the three national objectives I have indicated.

A state of liberty. By a state of liberty I am referring to a condition in which the coercion of some by others or by the state, is reduced to an absolute minimum. I don't say eliminated because we are all aware that in any form of organized society there are certain rules that are essential for the preservation of society as an organized unit, and such rules invariably circumscribe to some degree what might in a certain context be regarded as the liberty of people. But if we can agree that we want to establish in Canada a society and an economy in which the coercion of some by others, including the state is reduced to an absolute minimum, if this is to be one of our national objectives we must accept this objective as a guide-line upon which to base our policy decisions as individuals, as corporations and as governments. We must use our agreed objective as a yardstick, to measure any programme or policy that is proposed. When a policy is proposed, be it for a corporation or a government, if a state of liberty of the type I have suggested is accepted as a national guide-line, the first thing we would do is ask ourselves will this policy enhance or reduce the state of liberty in Canada. Will it increase or reduce the coercion of some by the state? If it will increase coercion let's set it aside. If it will result in less coercion of some by others, then if we are serious in wanting a state of liberty, let us pursue that course.

May I add, if a state of liberty is to be one of our national objectives, we must take the necessary steps to eliminate inconsistencies in our society relevant to liberty. Let me give you a simple illustration. We hear today many declarations of the absolute necessity of intellectual freedom. I subscribe to this proposition that under no circumstances should any section of the public, or particularly the state, circumscribe intellectual freedom. But I am puzzled when I hear the same men who vehemently champion intellectual freedom, many of whom are doctrinaire socialists, advocating with equal vehemence that the freedom of business and the freedom of individuals should and must be circumscribed and regulated to an ever increasing degree by the state. Surely this is indefensible inconsistency. If we accept individual freedom as a sound premise in the intellectual realm, and I submit it is, then to be consistent we must accept the same premise as being equally sound in the realm of private and corporate enterprise. In these realms also men have an equal right not to be coerced or have their freedom circumscribed by the intervention of government or government agencies.

Our second point is a brief look at this matter of a state of unity. I submit to you there are two different approaches we can take in trying to establish national unity in this nation. One is the melting pot concept which endeavours to produce a semblance of unity by breaking down and eliminating distinctive characteristics of individuals and groups. This can be defined as the unity of conformity, in which we try to make everybody conform to a common mold, and arrive at a semblance of unity by that process.

The second approach is the mosaic concept, by which I mean a unity achieved by fitting together on a common foundation elements which are diverse one from the other and which are allowed to retain their individual differences and individual characteristics. This we can refer to as the unity of diversity. Let us recognize it is possible to have a unified national society without eliminating the unique features and the distinctive characteristics of the individuals and groups that make up that society. This concept is supported by what has been referred to as the universal doctrine of variety, which simply means a recognition that no two humans are exactly alike. As long as distinctions between men are neither immoral or unjust, variety in human life should not only be recognized but encouraged as good.

We must decide which we want to strive for as a national objective in Canada, whether the unity of conformity or the unity of diversity. I submit the latter concept should be the one we adopt as our national objective because I am convinced it is the only form of national unity that is possible in Canada. Furthermore it is a better kind of unity than the unity of conformity because it will provide a richer, a more resourceful, and a more productive national society. In other words, a living mosaic is preferable to the melting pot concept.

Turning to the third point-the matter of a state of prosperity, I think you will agree that to ensure this we must make a decision concerning the organization of our Canadian economy. As a guide-line in this respect, I would suggest that the national objectives of the Canadian people relative to the organization of our Canadian economy should be, first, to ensure that the ownership and control and responsibility for the national economy and the development of our national resources rests primarily in the hands of private individuals and associations of individuals rather than in the hands of the state.

We are living in an age of specialization. Let's carry this into the organization of our society. Let's have governments specialize in the field of government. The field of governing is not the field of operating business enterprises. Let's designate the private sector of our society to provide the specialists in the fields of resources development and commercial and economic expansion, and let governments confine themselves to areas that pertain only to government.

In addition to this we must strive to establish and maintain freedom of economic activity. We must apply this status to all categories and not only to some. You cannot have freedom of economic activity which applies only to management but not to employees, or to employees but not to investors. It has to be applied with equal equity to all segments of economic enterprise.

Finally, I would suggest that the establishment of private ownership and control of the Canadian economy on the broadest possible base is something that is necessary to sustain national prosperity.

I hope we can reach ultimately in Canada a position in which every Canadian who is interested will be a shareholder in some facet of the Canadian economy.

I am sure you have found in your own experience that the people who have no stake in the economy are the ones who are loudest in their demands for the government to take over the ownership and operation of the economy of the country. Once a man becomes a shareholder and thereby has a vested interest in economic development, his attitude to government ownership of business enterprises undergoes what I believe is a very healthy change. I am not advocating the redistribution of ownership of existing industries althought there may be room for some adjustment in this direction but with regard to future expansion both business and government should give serious consideration to ensuring the maximum number of citizens an opportunity to become equity holders, in some facet of the national economy.

Still referring to this matter of national prosperity may I suggest three further requirements. First, we have to ensure a smooth and intelligent adjustment to technological prog ress. There is no question, whether we like it or not, technological progress is going to bring drastic changes. The extent to which we intelligently prepare for the adjustments technological progress will make inevitable, will determine whether such progress enhances the prosperity of our nation or becomes a disruptive factor impeding the national prosperity it could help make possible. Secondly, we have to develop an emphasis on function. The function of each business enterprise is to produce a certain product or products, or a certain service. Suppose you ask a man, "what business .are you in" and he says, "I am manufacturing shoes". You then ask, "why are you manufacturing shoes" and he replies, "I'm doing it to make money". There's nothing wrong with making money but his answer indicates that he has missed the point that the true function of any industry or business is to produce a certain product in the most efficient manner possible. The profit is important but it must not become the prime function. Rather, profit must be the reward of fulfilling the proper function of industry. The same principle must apply to labour organizations. The proper function of a labour union is not to see how many more dollars it can get for the members of the union. I am not minimizing the importance of the union's responsibility in that field, but its main function should be the efficient management of human resources and the effective organization and allocation of labour resources in the economy. Wages are important, but if they are given priority over the proper function of a union, they can reduce employment opportunities and thereby reduce aggregate income.

Finally, we need in Canada a much greater emphasis on productivity. I hope the day will come when we will relate wage rates to the actual productivity of workmen. No busi nessman is adverse to paying more wages to a man whose work increases production. If we can relate wages to productivity, wage increases could be automatic as the workman's productivity increased. Certainly this would create a powerful incentive and a much more realistic labour-management relationship than we have today.

I would apply this same principle in the field of corporate enterprise. It would be a wise move on the part of governments to make corporation tax reductions the reward for increased productivity. If an industry can improve the economy of the nation by increased production, why wouldn't it be a good move for governments to induce greater production by reducing corporation income tax in direct relation to the amount an industry's production increased over a given period of time.

There is one further important policy decision, which will have a direct bearing on the future state of liberty, unity and prosperity in Canada. I refer to the intelligent allocation of responsibility as between the private and the public sectors of our national society. There is today in this country justifiable anxiety over the present trends in public expenditures. You are all aware of the recent Federal-Provincial Conference at Ottawa at which were made public the aggregate revenue and expenditure projections of the various levels of government in Canada. These forecasts indicate in the next five years the governments of this country may well be faced with deficits in excess of two and one half billion dollars, the greater part of which will be borne by municipal and provincial governments. The point I want to draw to your attention is that these deficits are going to materialize if the present trends in government revenues and expenditures continue as they are at the present time. The fact these projections indicate that the federal picture is going to be substantially better off than the provinces is justifiable grounds for the provinces' requests for further abatements in tax fields from the federal to the provincial sphere. But, let us not lose sight of the fact that tax abatements do not increase by one cent the aggregate revenues of governments collectively. It will be impossible to offset by tax increases the huge deficits forecast, without the tax increases being so excessive that they would reach the point of diminishing returns and have a serious impact on the national economy and detrimentally affect the standard of living of our people.

This problem has to be approached from another angle. It calls for re-assessment of the allocation of the costs of social services as between the private and public sectors of our society. The present trend is to progressively reduce the financial responsibility for social services to the private sector and increase the responsibility to the public sector. To give a concrete illustration, I refer to the proposed National Medical Insurance Plan. The Federal Government insists that the cost of this programme must be assumed 100% by the public sector, which on the basis of their own figures means an expenditure of public money in the vicinity of 600 to 720 million dollars a year with substantial increases anticipated as the programme is enlarged.

I ask you to consider the financial load such a programme will impose on the public sector and compare it with what the situation would be, if the public sector was required to subsidize the cost of a voluntary medical insurance plan up to say one-third of the total cost leaving the remaining two-thirds to be borne by the private sector. In my own province, we are operating a government subsidized volun-, tary medical insurance programme for which we are providing, from public revenues, subsidies which cost our treasury approximately one-quarter of the cost which the federal proposal would impose. If we increased our subsidies to one-third of the total cost the programme certainly would be within the financial reach of every citizen. Applied on a national basis, this would mean a reduction in cost to the public sector of some 400 to 480 million dollars a year, as compared to the cost to the public sector if it is required to pay the entire bill as the Federal Government insists. This reduction, gentlemen, is equal to 6 to 7 percentage points of taxable corporate income or 10 to 12 points of personal income tax.

In the light of the forecast deficits we are facing, surely there is merit to the argument that we should allocate the cost of a national medicare programme between the private and public sectors of society when by so doing we can achieve the programme's objective and at the same time reduce the cost to the public sector by some 400 to 480 million dollars. This would immediately release 10 to 12 points of personal income tax or 6 to 7 percentage points of corporate income to meet other necessary public expenditures, and thereby help reduce the widening gap between aggregate public revenues and expenditures.

The present course we are pursuing in this nation is in my opinion fraught with serious dangers. It is a drift rather than the pursuit of a clearly defined and intelligently char ted course. If the present drift is allowed to continue it most certainly will jeopardize the future of individual liberty, of national unity and of prosperity in Canada.

As we enter our second century, it is time for Canadians to face these facts realistically and make some wise decisions from which we can proceed to take intelligent action. If we are willing to do these things it is in our power to establish and maintain in Canada during the second century of her nationhood, a state of liberty, a state of unity and a state of prosperity.

Thanks of the meeting were expressed by Mr. J. F. Dinnick, President, The Canadian Club of Toronto.