Conservatism—Myth and Reality

BGEN. ANDRUNYK:

Mr. Minister, distinguished guests, members and friends of The Empire Club of Canada: Speaking to the Empire Club in October 1966, Dalton Camp, the then National President of the Progressive Conservative Association of Canada, had this to say about the state of Canadian political parties:

We, in Canada, must be considered by the rest of the world, if they consider us at all, as a nation of certain fixed irresolution. Our political parties are models of piety, full of ritual, liturgy and platitude, timid about change, standing forever in the shadows of history, reluctant to embrace the true spirit of the party system, free speech, open debate, the clash of ideas, and hesitant before the rising spirit of democracy.

Whether Dalton Camp was unduly harsh on political parties in general and the Tories in particular, and whether the state of political parties has changed much during the past fifteen years I will leave to you to judge, but permit me to observe that parties continue to be criticized for the lack of fresh ideas to deal with the nation's problems, for having leaders who lack the confidence of the electorate, and for failure to enrol the active support of large segments of the population. I have even heard that Conservatives sleep in twin beds and some even in separate rooms and that is why there are more Liberals.

To dispel such and other myths associated with Conservatism, we have as our guest speaker today Mr. Peter Blaikie, the incumbent National President of the Progressive Conservative Association in Canada.

Born and raised in Shawinigan, an industrial community of 40,000 in Quebec, Peter Blaikie grew up at ease in both of Canada's official languages and the two principal cultures.

A brilliant scholar, he completed his studies in English and economics at Bishop's University which led to his selection as a Rhodes scholar. After two years of studies in politics, philosophy and economics at Oxford University, he returned to Canada to enter the faculty of law at McGill University, graduating as a gold medallist in 1956.

Since his admission to the Quebec bar, he has practised law in Montreal in a firm of which he is a founding member. Until he became active in politics a few years ago he taught economics and law successively at Loyola, McGill and Concordia Universities.

Peter Blaikie first ran as a Progressive Conservative candidate in Lachine, an urban Montreal riding, in the 1979 federal election. Although unsuccessful he obtained nearly 13,000 votes--the best result of any Conservative member in the greater Montreal area. He again contested this riding in 1980, receiving thirtyfour per cent of the votes, a minor triumph in the context of Quebec results.

Ladies and gentlemen, it is my pleasure to invite Peter Blaikie, a bright young rising star in Canadian politics and undoubtedly one of our future political leaders, to address us on "Conservatism--Myth and Reality."

MR. BLAIKIE:

It is a very great honour and pleasure for me to be with you today. It is perhaps appropriate and ironic that your chairman should have introduced me beginning with a passage from Dalton Camp's speech in 1966. I hope to emulate Dalton Camp in some things, but not all. I was also pleased that when the President of the Liberal Party of Canada in Ontario was introduced there was modest applause--which proves that in the face of the most recent Gallup Poll the Liberal party is down but not out.

I am rarely accused of excessive timidity and even today my friends are not going to let me get away with it. I accepted this invitation with, I admit, some trepidation. I know that this is a club that has had an enormous range of distinguished speakers in the past. Your chairman has just given me the list of people who will speak in the coming term, and I do feel a certain sense of awe. On the other hand, I learned that the Prime Minister of Canada spoke to this gathering in 1972. He survived, so perhaps I can as well.

Thinking about the Empire Club, as I thought what I might say, led me to think about Empire and brought to mind Benjamin Disraeli who was one of the founders of Empire. He also happens to be one of those political figures I admire. Disraeli was a great wit and one of the things he said which I feel is appropriate at the moment is this. He was asked to draw the distinction between a tragedy and a calamity. Disraeli said in response, "If the Prime Minister were to fall into the Thames that, I suppose, would be a tragedy. If someone were to fish him out that would be a calamity." Today we could substitute our Prime Minister or perhaps the Minister of Finance.

I was speaking last evening to one of the people who works very closely with the Conservative party. She asked me if I had a text as she would like to see it. I replied that I did not have a text. She is here today and I can see her white knuckles from here. You'll recall that when the Prime Minister spoke in Vancouver recently he spoke without a text but from the heart. What I hope to do today is speak from the heart without losing my head.

I don't come before you as an expert in anything particular. I don't come with the weight of any great office of state. Allan Fotheringham reminds me of that periodically. As a matter of fact I have an approach to Allan Fotheringham. I say if he ever dares say something nice about me I'll sue him. I really come as an ordinary Canadian--someone who has become involved in the political process, someone who is trying to understand what has gone wrong in this extraordinary land with all its potential for greatness, and someone who is trying to participate in putting it right.

What I would like to do today is talk about three things--first of all, briefly, about the budget; secondly, more generally, about the economy; and thirdly about the country. I do so in a very personal way.

I think that one of the very few members of the federal Liberal Cabinet who can travel this country from coast to coast and get a good reception anywhere is Jean Chretien. He and I grew up together. We have known each other for many years. There may have been something in that background--a small, industrial community away from the large centres, on the edge of the Pre-Cambrian Shield--which gave us both a sense of this country. When Jean Chretien talks about the Rockies being his and when he talks about Canada in a very physical way it is something to which I feel very sensitive. It is something which across this country is a very real part of how Canadians feel about the land.

I was deeply upset at the Prime Minister's remarks in Vancouver because I have been travelling the country for the last eight months. I have been in every province. I have been in the Yukon. I have been in most provinces more than once. It may well be that we don't know as much about the country as we should. The country is vast; the country is complex. But one thing is certain and it is that Canadians care very deeply about this country and they care about it in a very positive way. I was profoundly shocked that the leader of the nation could suggest something to the contrary because I don't think it fits the facts.

A few brief words about the budget. There are no doubt many people here today who are more familiar with the details of that budget and its impact than I am. Many of you are experts in various fields and have had occasion to study it. What I would like to do is talk briefly about what I think are the attitudes behind that budget and why we have come in 1981 to that sort of position.

The first thing that struck me as I listened to Allan MacEachen on budget night--in between listening to the pundits who seem to have dominated the event--was a sense of complacency, a sense of smugness that emerged as that budget was being delivered. I think that was again true last night when the Finance Minister spoke to a group in this hotel and said that Canadians misunderstand the budget. Canadians misunderstand the National Energy Policy. This seems to illustrate the principle that "Everybody is out of step but our Jimmy," and I just don't accept that. There was a feeling in that budget, and it's been growing through the years, that somehow the state has a right to everything Canadians produce and by some grace and favour it allows us to keep part of it. I don't believe that is a principle on which any nation can be built.

I think back to a very famous tax case. There may be some tax lawyers in this room who remember it. I don't remember the name but it was in the 1930s or 1940s when the British House of Lords said, "No man is required to so order his affairs as to permit the state to put the biggest shovel into his stores." That, ladies and gentlemen, is not the attitude of this Minister of Finance or of this government. That to me is fundamental and it goes beyond any particular provision of the budget.

The second thing that disturbed me about the budget was that once again the government seems to be selling a fiscal position on the basis that we are going to "sock it to the rich" and we are going to give something to everybody else. The fact is quite simply that this is not true. Fortunately, I have the best evidence because a Conservative Member of Parliament, John Thomson, who sits for Calgary South and who by his own admission is rich, gave an interview to Richard Gwyn. He said, "If I had to write a budget for my own personal interests this is precisely the budget I would have written. My income and my net worth will increase by fifteen to twenty per cent a year."

I have no quarrel with those who are rich although I am not myself. There is something here which is very fundamental. In history there have been countries where there have been a few rich and many poor. We are not and never should be that kind of a country, but I put it to you that in a country where there are no rich there will be only poor because it is precisely by the process of creating wealth that all of us in this country have been able to become comfortable notwithstanding the difficult times through which we live. That process of creating wealth is important. In my opinion it is fundamentally dishonest to present this budget as being something which is going to "sock it to the rich." The fact is that this is a budget which is aimed at the productive middle class. This has become a huge group in this country which is going to pay for it essentially.

There was a third very disturbing element of that budget which, I think, is part of this government's philosophy. Over the years, because the government wanted to develop certain programs and because it wanted to encourage certain kinds of activity, tax exemptions or tax preferences if you like were created. One can think of them in oil and gas, in the area of films, the MURB programs and many others. They were a specific form of government policy. In MacEachen's budget and in the subsequent media coverage those have become "loopholes." Those people, who in good faith took advantage of those situations, are now somehow tainted. I happen to be one of them, and I resent it. First of all, none of them has done very well and so it ended up costing me double. That's neither here nor there. That proves that I should practise law and not try to do business. The point is that enormous numbers of people, many of them with relatively modest incomes, are being treated by this government as though what they have done is slightly immoral. That is a very dangerous approach to nation building.

There is a fourth thing and it's fundamental. As a Conservative, I believe that, to the greatest extent possible, people should be permitted and be helped to become independent of the state. This government, over the years and specifically in this budget, is making it more and more difficult for ordinary Canadians to be independent. Many of you know the details. They relate to insurance policies, registered retirement savings plans and other individual activities. The basic thrust is that more and more Canadians of modest income will be less able to protect themselves financially as they get older. That is not a proper foundation for a strong, free, prosperous nation.

Finally, in its overall impact, this is a budget which is anti-creative, anti-invention, anti-innovation and anti-risk.

I have a law practice where I deal primarily with entrepreneurs. These are people who have started small and have built businesses. I have no quarrel with big business, but the history of the last fifteen or twenty years, both in this country and in the United States, demonstrates that the growth, innovation and risk is being taken not in the huge established businesses but amongst entrepreneurs and risk takers. This is a budget and a philosophy which is opposed to that. For the people of this country, in the long term, that will prove to be a disaster.

In recent weeks, as a result of what I consider to be pressure that has been brought to bear, it appears there will be some changes made to the budget. Let's hope there are. That should not lull us into failing to understand what is going on in the Department of Finance, because one of two things is true. Either the government knew what this budget was going to do, in which case it was reckless, or it did not know, in which case it has no right to be a government. Ultimately, our political officials have to be responsible.

To turn more generally to the economic situation: again I don't propose to try to paint all the details, but to try to look at what has happened in the country, why we have come to where we are and to ask where we go from here. I will try to do it from the perspective of someone who is a small "c" conservative as well as a member of the Conservative party.

It is fair to say that throughout the 1950s and the 1960s, as I began to vote and began to be involved in the political life of the nation, I voted for the Liberal party. In the 1950s it was a party which I viewed as a liberal party in the traditional sense of that word and as a party which understood the private enterprise system. I have not done so since 1968. That makes me a real minority in the province of Quebec, not just as a Conservative but as an English-speaking Conservative; there is no group which has been more faithful to this government than English-speaking Quebecers. I sensed then, and I think it has been proven true, that what would happen under the leadership of Pierre Trudeau in economic matters is that the state would intervene more than ever before. Too often our attacks are ill-directed. I am not really sure that Pierre Trudeau is a socialist. There is something that bothers me even more than that as I look at what has happened over the last few years. It is the absence of any sense of economic direction. I would be less concerned if I felt there was a plan and some direction because that would be something that we could really combat. There has been an enormous increase in the amount of state intervention, but it has not, in my opinion, been planned or directed. A great deal of it has happened in a rather haphazard way. The massive thrust of all Western industrial countries in the past fifteen or twenty years has been the concept of redistribution of income. I don't think anybody in Canada would seriously think that we are going to turn back the clock in terms of the welfare state. It is here and it will remain in terms of its basic objectives and its basic programs. The mistake has been made in believing that you can solve all the problems by redistributing income. Quite simply, there isn't enough to go around.

You may recall that last week the Prime Minister spoke rather casually about interest rates. He said that high interest rates were not a matter of government policy and that they were our fault. If you read The Globe and Mail article you will have seen the lines, "We're not in the business of determining interest rate policy; we're in the business of redistributing money." That is the essential thrust of this government, and I think it has been very dangerous.

First of all, it has led to an enormous concentration of economic power. Those of us who believe in individual liberty know that the chief enemy of individual liberty is enormous institutions, whatever their nature. This has not been a period which has been good and encouraging for new development.

Secondly, once you have taken that position, you slow down the whole process of economic growth. I happen to believe in economic growth. It is essential that the Conservative party clearly and positively takes that view. If we are going to do that, we have to decide what kind of economic system we want in this country.

There is no doubt we have what is often referred to as a mixed economy. If you look over the past fifteen or twenty years, it is a mixed economy in which an increasing portion has become either directly or indirectly the property of the state. A lot of it has happened in a way far less dramatic than the transactions which are on the front pages of the newspapers. It has been done by smaller and very effective companies being purchased directly or indirectly. One of my own clients in the word processing business, which has been a very successful company, is now the property of the Canadian Development Corporation. It continues to be a successful company, but once again you have a situation where the state has increased its influence and its power. Domtar, which I continue to think of as being in the private sector, is in fact owned forty-two per cent by the government of Quebec. There are other situations across the country where this has been happening.

We have to make a basic decision. I believe in the market economy. I believe in the free enterprise system. I also happen to believe, and it has become a word one is almost afraid to use, in capitalism. I do so for a number of reasons, and I think it is important that we talk about some of them. People who make the kind of speech I am making often say, "We believe in the system," without trying to explain why. It's important that we try to explain why.

First, I believe in it because it is the only system which is consistent with individual freedom, which I value very deeply. I am not blind to the history of the system. I am not blind to its flaws, but the overwhelming importance of individual freedom, not only in personal activity but also in economic activity, weighs very heavily in favour of the free enterprise system.

Second, we have history. Thirty or forty years ago, when there were not many countries in the world which could be described as socialist, it was perfectly reasonable for the "jury to be out." But today, in 1981, we have enough evidence that socialism just does not work. The old aphorism, "If you weren't a socialist at nineteen you had no heart and if you weren't a conservative by twenty-nine you had no head," is just not true anymore. Socialism is a system which does not work.

Third, capitalism is not a system which has primarily benefited the wealthy and the powerful. In fact, if you look over the whole range of human history, it is only under free market economies that the true gap between those who are rich and those who are not has narrowed. There are any number of people from Eastern Bloc countries who will testify to that. Those of you who have read the books of anybody who has lived in or studied those countries carefully know that those are the facts. Capitalism is a system which has been most able to provide equality of opportunity. In fact, if that is one's wish, it's the system which has produced the best and fairest distribution of what is produced. It is also, and to me this is extremely important, the only economic system which does not require to be worshipped as a type of religion. It is a system for producing goods and services. What we do with them depends on other political decisions.

In 1956, Harold Macmillan, the Prime Minister of England, subject to heavy criticism, as Prime Ministers tend to be, was asked why he was not producing a "vision" for the people. His response was, "If the people seek a vision, they should see their Archbishop." He was using that in a very broad context, but I suggest to you that one of the ultimate defences of the market economy is precisely that it does not impose on us the way in which we must live. It is a mechanism for producing goods and services. It is the best system and one we have to be prepared to defend.

Having said that, the next question is "Where does one go from here?" First, people like yourself have to be prepared to defend that system if you believe in it. It has to be defended in public speeches, in universities, in schools, before trade unions and across the country. There are obviously any number of people in this room who can do it.

The situation is now such, and it's very sad, that political parties to a great extent feel that they are not able to stand up and defend these principles. You can stand up and defend the trade unions--the NDP has no problem doing that. But, somehow, we all feel inhibited in defending the basic system which produces our well-being.

I think it's time that people in the business community became prepared to serve in the front line. We have often talked about being involved in politics. I don't necessarily say that everybody should leap to the barricades and become a candidate, but you cannot back off in defending the system. There are some things one can do in a practical way. For example, in recent months the oil companies have decided that they are going to defend what they think is the truth and what they think is the right position. They have been taking a series of advertisements in the newspapers. Whether I agree or disagree with everything they say is immaterial. It's a good thing that they are doing it, because at least there is a counterweight when the headline on the left side of the page reads "Pricing inquiry told about unscrupulous practices of oil companies." It's time for the business community generally to stop feeling intimidated.

Let me give you another example: I do so with some caution. Recently, there has been an inevitable outcry about the situation of the banks. The Minister of Finance would like to blame the banks for all the problems. He talks about the banks "bleeding a little." The NDP is calling for heavy taxes on excess profits and legislated interest rates at ten per cent.

The fact, quite simply, is that when the government is borrowing at 19.5 per cent on Canada Savings Bonds there is no financial institution which is going to be able to function at ten per cent rates. I don't hold any particular brief for the banks. I owe them far too much money. I pay them far too much interest. What I do hold a brief on is their right, and more than that, their obligation to defend their own position. That, precisely, was the purpose of an intervention by Michael Wilson in the House of Commons a few days ago which has generated a certain amount of controversy. I think that Michael Wilson was trying to create a forum in which those financial institutions could demonstrate that they are good "corporate citizens." We have to be very careful, as citizens of this country, before we allow such attacks to build on fundamental institutions.

We talk about economic nationalism. The banks, to the best of my knowledge, are almost exclusively owned in this country. They are part of a huge complex of financial institutions, many of which are not doing particularly well as a result of current interest rate policy.

I am not here as an apologist for the banks but they, amongst others, have to be prepared to speak in their own defence. I have a very specific suggestion if there are some bankers here. You may recall a couple of years ago that Alf Powis, who then and now is the President of Noranda, did a series of advertisements. I regarded those as extremely successful. Not everybody is as telegenic and charismatic as Alf Powis, but for the Royal Bank today to have a series of advertisements which say "When you succeed, we succeed," when what people are seeing across the country is the bank succeeding when they are failing, is perhaps not the wisest public strategy.

I would suggest to the Royal Bank that they con sider having the Chairman or the President go on television and start explaining something about the financial system. I really don't need Anne Murray to tell me why I should bank with the Canadian Imperial Bank of Commerce. In the United States today, there are an enormous number of companies which are using either their chief executive officer or a senior executive officer to do commercials on behalf of the company. I believe that's a good step.

Somehow, in this country, we have to stop the growing war between labour and management. There are any number of groups which are responsible for the situation, but ultimately the entire population is going to suffer from that war. It's a war which is largely unnecessary and which can only be brought to an end if those who own, manage and run companies take a different approach to their labour relations. They must make it clear that the interests of management and labour are largely synonymous. It's remarkable how many people who work as trade union members or otherwise understand that perfectly well. They know that you don't pay increased wages out of last year's losses, that you only pay them out of last year's profits. Unfortunately, an incredible spirit of distrust has grown. It's been fostered and helped along and it now threatens to destroy, or at least seriously damage our entire economic structure. Those countries in the world today which are largely avoiding the serious economic strains that we face are countries which have been able to solve these problems and to introduce a sense of partnership between management and labour.

Let's not forget we are long past the age when human beings could not be replaced on assembly lines. In the days of robots, computer-assisted design and computer-assisted manufacturing, there is only one resource that really counts and that is brain power. That's human resources. In the information society, machines and those who run them have a very different role to play. We all have a responsibility there.

There is a tendency in the Conservative party to shy away from that whole area as though somehow the Conservative party and its position were inimical to labour. While I don't expect to ever win Dennis MacDermott to the Conservative party, nor do I expect to win Jim Kinnaird in British Columbia, I tell you that we can win the votes and we can win for the system the support of an enormous number of ordinary working men and women across this country. It's time we started saying it and its time we started doing it.

If you permit me just a few more minutes I would like to talk about our country, and I do so perhaps from a slightly different perspective.

I think that we have not sufficiently celebrated what has taken place in the last two weeks on the constitution. I believe we need some celebration. It has been a very difficult year and a half. It has been a very difficult ten years if you like. It's a long way from being over, but I think we need that touch of celebration. There is credit for all in what has happened.

I became, if you like, an active non-Liberal in 1968 because I felt Pierre Trudeau would not achieve a vision which is honourable. I don't think anybody, or at least I hope nobody in this room, would suggest that Trudeau's vision is not an honourable one--the vision that across this country people of either English or French language and origin could feel comfortable. It is and will continue to be an honourable vision. It's a vision which has become twisted, thwarted and which has not yet been achieved, but he deserves credit because in the final analysis he did move away from some very rigid positions. The Premiers also deserve credit.

There is one other person who, I think, deserves enormous credit and has not sufficiently received it. I ,enormous disappointed, and I hope some of you were, that Canada's "National Magazine" Maclean's could write an editorial and a major article about the constitution without a word of the text referring to Joe Clark. The fact is that without his lonely courage in the fall of 1980 we would not have had the constitutional agreement that we are in the process of getting. If he had not intervened, the Prime Minister would have pushed the original resolution through. There would have been no public hearings, no Joint Committee of the Senate and the Commons, no chance for the Supreme Court to decide, and there would have been greater division in the country than there is even today. It's important that we all remember that he played, in the face of enormous obstacles, within the party, within the media, and within the public, a role. It was not the leading role, but it was an important one.

The question is, "Where to from here?" We all have a sense that it has been with us forever. That's partly a result of the immediacy of television, but the fact is that we have only just begun the process of deciding what this nation is going to be. It's the first phase. The immediate difficulty--as it always appears to be--is a crisis within Quebec. I am very optimistic. What happened on the weekend, internally in the Parti Quebecois, should give rise to a number of different feelings. First of all, one of horror, horror that two thousand Canadians would stand and give an ovation to a convicted terrorist. In fairness, when that crowd stood and gave that ovation to Jacques Rose, Rene Levesque was as horrified as anybody else. If you saw the news, the television cameras panned to Levesque's face and he was devastated. So there is that feeling. There is also relief, because finally the position is clear. It's established, it's on the table and the people of Quebec finally will have to "fish or cut bait." That's something which they have been able to avoid until now. It cannot be avoided much longer and there is obviously concern as to what will happen.

In that context I make a plea. Historically, the people of Quebec have been more generous to their minorities than the government of Quebec. That's certainly been true in recent years and I think it remains true today. There remains a great fund of generosity in that province towards its minorities. It's probably true in the rest of Canada, historically, that governments have been more generous than the people toward their minorities, at least to their French-speaking minorities.

I have had a sense in the past year that that was changing. I have had a sense of a growing spirit of generosity amongst the people of Canada. I am concerned that what has happened in the last month, with some extreme language by Rene Levesque, will damage that increasing spirit of generosity. I ask you most sincerely to remember that at all times, because I think, more than ever before, Quebecers are going to look to what happens in the rest of Canada to see how governments, but more important, how the people of Canada interpret the new constitution and the new charter.

There are other things of enormous importance which are going to have to be done. In this entire debate, we have really hardly stopped to think about what the true nature of this country is going to be. We have not even begun to talk about the distribution of powers between the central government and the provinces. Obviously, that is at the heart of any federal system and it's something we are going to have to do as a nation. We cannot keep putting it off. Equally, we cannot allow it to be exclusively in the hands of governments and political leaders.

The people of Canada, and in particular, groups such as this, are going to have to become involved in that process. We are also going to have to decide whether this country can continue to function as it has with a parliamentary system, whether that system can continue to work well. There are two dangers and I ask you to consider them.

First, what's been happening to an increasing degree over the years is that we have been grafting a presidential system onto a parliamentary system. Most people now go to the polls to vote for a Prime Minister. The result of that is a weakening of the system across the country. It has led to the situation where the Liberals have virtually no representation west of this province and the Conservatives have no representation in French Canada.

The second thing we have to do as political parties is to define ourselves. It's part of my reason for being in politics. For a political system to work, people really do have to have a choice between what one can call a small "1" liberal and a small "c" conservative party. That is our challenge as a political party. It's not an easy one because we do it in the face of legislation which is proposed and which we constantly have to oppose. We do it, unfortunately, in the face of a passion in the media to concern itself with the internal workings of a Conservative party. It boggles my mind today that the party whose leadership you constantly read about in the press is the Conservative party. Don't those people who write and who are on television have any interest in the leadership of the Liberal party? That surely should be the primary subject of concern and not the leadership of the Conservative party. I can assure you that it is in good hands.

One final word. I think what has happened in 114 years of Canadian history is that we have preserved a union. Now we have to decide whether we are going to build a nation. It's an enormous challenge; it's an exciting one; and I feel honoured to be part of the process. I also feel honoured to have had the chance to be with you today. Thank you very much.

The thanks of the club were expressed to Mr. Blaikie by Henry N. R. Jackman, a Past President of The Empire Club of Canada.