National Purpose and Future Industrial Development

MR. MACNAUGHTON:

Ladies and gentlemen of The Empire Club of Canada: To many politicians it could be a debilitating experience to watch our Annual Meeting proceedings and to see how easy it is for some people to get elected to office: no door-to-door canvassing through slushy streets, no personal attacks at all-candidates meetings, no financial statements to file with the Chief Electoral Officer.

However, for our guest of honour today, the Honourable Herb Gray, Minister of Industry, Trade and Commerce, I suspect that the business portion of our meeting was less unsettling than it might have been for many others--because he is a Liberal from Windsor. And the results in the last election, one in which he won 58 per cent of the votes cast, indicate that Mr. Gray had almost as easy a time then as Reg Stackhouse did today.

After being returned to office with a resounding personal majority and with his party returned to the government benches, Mr. Gray was invited by the Prime Minister to accept responsibility for the important Industry, Trade and Commerce portfolio.

Our guest of honour has assumed his responsibilities at a critical time in the economic history of North America. The storm clouds of a recession are clearly on the horizon and in the days and months ahead Mr. Gray and his ministry will be continually in the spotlight as business, labour and consumers turn increasingly to government for guidance and assistance.

No doubt he can expect contradictory recommendations from these differing interest groups whose assessment of both problems and solutions will present a potentially paralyzing array of alternatives. When faced recently with reconciling differing viewpoints into a consensus initiative Alfred Kahn, economic adviser to President Carter, aptly quipped, "Anyone who isn't schizophrenic these days just isn't thinking clearly."

As business and professional people, members of the Empire Club will recognize that Mr. Gray will have many difficult decisions to make. They will also recognize that business always claims that it can operate best when government policies are clearly enunciated and allowed to continue in force for a reasonable period. In this regard, we are fortunate that Mr. Gray has become Minister of Industry, Trade and Commerce. While we may from time to time disagree with him it is unlikely that we will be uncertain of his views. As a private Member of Parliament, Minister of National Revenue, Minister of Consumer and Corporate Affairs and Opposition Finance Critic, he has always been admirably forthright. As well, he has gained widespread respect as a strong advocate of those policies he believes are best for Canada and for individual Canadians.

It is a privilege, ladies and gentlemen, for the Empire Club to close its seventy-sixth season by hosting one of our nation's economic leaders. It is my pleasure to invite you to welcome the Honourable Herb Gray, Minister of Industry, Trade and Commerce who will address us now.

THE HONOURABLE HERB GRAY:

Ladies and gentlemen: This is my first occasion to speak to an Empire Club audience. So before preparing my notes, I asked one of my assistants to find out something about your club's history, and she brought back a recently-published book called, The Best Talk in Town. Those of you who have read it--and I confess to not having had the time to give it its due--know that, as a collection of excerpts from speeches made to the Empire Club since its beginnings, the book is a fascinating collection of perspectives on Canadian life and Canadian public issues over a time span of some seventy-five years.

In one respect, however, The Best Talk in Town was somewhat of a surprise to me. For as a new Minister of Industry, Trade and Commerce and, more personally, as someone with a long and intense interest in our country's economic development, I would have liked to have been able to follow a thread of observation and knowledgeable thought on our economy as expressed through the years from this platform. But the book did not permit this. Perhaps wisely reasoning that not all of their readers would be federal ministers of Industry, Trade and Commerce, the authors have selected excerpts on an incredibly wide range of subjects and given no special prominence to Canada's industrial development.

Nevertheless, there is one theme that runs from cover to cover in this little history--one that is very pertinent to what I have to say to you today. Speech topics ranged from an early preoccupation with our links to Great Britain to recent discussions of foreign influence on Canadian culture and Canadian economic institutions. And there were also the unending profferrings of opinion on French/English relations and federal/provincial competition. In discussing all these topics, it seems that speaker after speaker has been concerned with, in one way or another, defining what is Canadian, what is Canada. Now I am not particularly surprised by this. For if there is one characteristic that Canadians share it is a propensity to question what being Canadian is all about. So it is only logical that a historical collection of Empire Club presentations should reflect our people's long-standing interest in the need for an indelible national identity.

Still, I will admit that it is distressing to me and to many Canadians to be reminded that uncertainty as to the existence of a unique national perspective--a too-common attitude of our past--persists, even today, for a lot of people in many parts of Canada. Why this should be so is not entirely evident. We have, after all, in our 113 years as a nation, elaborated the mechanisms and institutions for easy communication, for transportation and ultimately for a sharing of common values. Together, we have made the transition from a rural-based economy to an industrialized country with a standard of living that is the envy of most of the world. And we have learned to share our well-being. For instance, with their taxes and consumer dollars, all Canadians have borne the costs of maintaining the viability of certain regionally based industries. Similarly Canadians are sharing their well-being with one another and all parts of their country through equalization payments, social assistance programs and, not to be forgotten, energy prices that are significantly below world levels.

But for all that Canadians are bound together by history, by profound cultural and economic interdependence, and--I would like to believe--by a promising future, one still hears the old questions:

- about whether our differences are greater than our similarities;

- about whether the whole, Canada, should be greater than the sum of its parts or merely equal to the sum of its parts;

- about whether the country will continue to exist.

These questions are, as I said, old. But they are also new and pose a very real present-day threat to our country's ability to survive and prosper.

There are several obvious reasons why at this point in our history we cannot be complacent about incipient disunity or lack of national purpose within our borders. From my vantage point as Minister of Industry, Trade and Commerce, one of the most important of these reasons is economic. For, as everyone j in this room is well aware, we are living in a difficult time when economic conditions at home and abroad give good reason for many people to be very concerned about the economic future. Along with almost every other industrialized country in the world, we have persistent inflation. In the words of the Throne Speech, we have unacceptably high interest rates, a slow rate of economic growth, increasing energy costs, the threat of energy shortages, and higher unemployment than anyone wants. And as we move into the 1980s, our industries are confronting ever more fierce competition in the freer trading environment that is emerging from the last round of GATT negotiations.

Under the best of circumstances, meeting and successfully overcoming these problems would not be easy. In conditions of divisiveness and regional isolationism, the task would be virtually impossible. On the other hand, we should not forget that Canada is a country with unique endowments. Particularly in our large base of natural resources and in our highly-skilled labour force we have assets from which to commence a pace of industrial development and growth that could be unparalleled in our history. Therefore, I do not think that I reveal excessive optimism in stating my belief that if, as a nation and a people, we can work together, if we can seize and mobilize our strengths, then--despite our problems, both international and domestic--we will be able to turn the eighties into a time of opportunity for all Canadians.

The new Liberal government in Ottawa quite fully appreciates the number and magnitude of the problems, serious problems, which threaten our social fabric and our economy. Nevertheless, it has made a fundamental commitment to the Canadian people to work to ensure that, as expressed in last week's Speech from the Throne, "Canada will endure, grow and prosper." That the government is able to make this commitment is certainly not because it is content to play the role of passive bystander in the context of the economic and political problems that beset our country. Rather, it is because we are prepared to act and act energetically to fulfill the terms of the mandate given to us in February.

The activist stance of the new government is, I think, well illustrated by our plans in the area of industrial development that were outlined in the Throne Speech. Briefly stated, these plans are as follows:

- We are going to identify and use the country's strengths in order to improve the welfare of all Canadians. For instance, Canada's natural resource base will be used as a basic building block for national industrial development. Through a Madein-Canada price for oil, we plan to help companies in every region to have a competitive edge in international trade. And we will also ensure that to the maximum practical extent Canadian workers and investors will be in a position to capture the benefits of the huge expenditures on resource development expected during the next decade.

Canada's other rich resource, our educated and talented labour force, will also be used and promoted, particularly in the emphasis that our industrial strategy will place on encouraging more advanced technology in Canada. Through the explicit identification of sectors with potential for high technology for support from government procurement and through other assistance measures such as the National Development policy for the electronics industry, we plan to encourage the kind of development in high technology that is recognized throughout the world as a vital key to contemporary economic growth and prosperity.

In our effort to improve overall economic performance we will also be paying attention to the more traditional industry sectors, which occupy important places in many regions. The automotive sector, for example, presents some very serious problems--as testified to in the all-too-frequent newspaper headlines announcing new automotive layoffs. But it presents significant opportunities as well.

During the recent election campaign, the Prime Minister spoke of the auto industry and of the stake that Ontario and all of Canada have in its future. He committed the new government to work to restore and increase the long-term health of the automobile industry and in the past few weeks, we have, I believe, made a good start through the discussions with the industry aimed at accomplishing greater sourcing for automobile parts in Canada, increased capital investment and more automotive research and development to be done in this country. We have also informed the United States government and received their agreement to enter into formal consultations about the auto pact which will be aimed at improving its operations from Canada's point of view. Our goal, and I'm quoting the Prime Minister here, is to obtain "a fair share" for Canada.

One other important area of the government's industrial policy--that relating to foreign control of the economy, appears to have aroused a lot of interest within the business community and has certainly generated more inquiries than any other part of our program so far. Consequently, I was not surprised to learn that your President, Mr. MacNaughton, had suggested that I devote a part of my remarks to sharing with you some of my thoughts on foreign investment.

Let me start by restating our goal in industrial development. It is to improve the overall performance of industry in Canada, making it more competitive abroad and better able to create jobs at home. And let me also say that there has long been good reason for concern about the effects that a very prominent foreign presence in our economy have had for efficiency, growth and the directions that industrial development have followed in Canada. It is precisely this concern which prompted the current government to make a new commitment during the campaign and in the Throne Speech in regard to this aspect of our economy's structure.

Now I should like to take a moment to explain what that commitment is. It is to ensure that foreign investment adds to our ability to take full advantage of the opportunities that are opening up to us. It is to promote the development of strong Canadian-owned businesses and to ensure that foreign-owned companies operate in accordance with Canadian industrial goals. It is also a pledge to encourage small and large Canadian businesses to grow and become more competitive while ensuring that there is a practical maximum of significant benefit from the foreign-owned sector.

The Throne Speech states that the Foreign Investment Review Act will be amended to provide for performance reviews of large foreign firms and for publication of major acquisition proposals by foreign companies. The government will assist Canadian companies wishing to repatriate assets or to bid for ownership or control of companies subject to takeover offers by non-Canadians. I stress that we view these measures as just one component, but an important one, of our new development policy aimed at strengthening and building Canada's industrial base.

The Liberal government's program to create a future of industrial development for Canada is admittedly ambitious. It seeks an optimal development and utilization of the country's human, natural and capital resources. It seeks to create jobs and stimulate growth in all of Canada's regions. And it seeks to restore to Canadians a vital measure of control over our economic destiny.

Earlier in these remarks, I referred to the questioning that has been part of our past and is part of our present as to whether there is a unique national perspective in Canada. Well, I think that the new government's national development strategy reflects a growing consensus on the part of many Canadians--especially of younger Canadians--that there is such a perspective, that we can address and use our unique resource endowments, that we can meet our regional and national development needs, that we can realize our enormous economic potential.

Now I don't think I have to remind you that in the past it was only because a strong federal government was sensitive to the interdependence of regional and national interests and prepared to act in that light that there is today a significant aerospace capacity in Canada, one with great potential for job creation and growth. Today, the fruits of those actions are being realized both in our current ability to share in the benefits of the industrial offsets which are part of the new fighter aircraft program and in the strong production and sales position of de Havilland in Ontario and Canadair in Quebec. The present level of activity and the very existence of these companies today are because of federal government actions. In our new national development strategy, in our industrial policies, the federal government will work in co-operation and consultation with the private sector to bring these kinds of benefits--of job creation and growth--to all Canadians.

Over the years your club has provided a forum for a diversity of opinions on many subjects. However, as I noted earlier, one theme--that of Canada's identity, its purpose and its unity--has predominated over all others. In fact, to quote Peter Lougheed speaking to the Empire Club in the mid-1960s, "One of our guideposts (is) that we should work towards an Alberta government which considered itself Canadian before Albertan and hence promoted the cause of national unity and economic sovereignty as well as the determination of national purpose." For any Canadian politician at any level of government, those are good words, especially valid today. All of us, especially those of us in public life, should make them our watchwords as we confront and deal with our country's problems and turn them into opportunities for further growth and benefits for all Canadians.

The thanks of the club were expressed to Mr. Gray by Henry J. Stalder, a Director of The Empire Club of Canada.