The Canadian Department of Industry

MR. LANGLEY:

We welcome today a senior minister of the Federal Cabinet who is as remarkable for his varied accomplishments as he is for the young age at which he has achieved each of his many successes. A graduate of the Royal Military College, of McGill University and of the University of Paris--Bud Drury has an extensive background that has included the Presidency of Avis Transport and the Vice-Presidency Of Foundation Company of Canada. His wartime service as a gunner was brilliant, and he emerged as one of the youngest Brigadiers in our history. As Chief of the United Nations Rehabilitation and Relief Administration in Poland from 1945 to 1947, and with his two years' service in the Economic Division of the Department of External Affairs, followed by his appointment as Deputy Minister of National Defence for the next six years -he gained unparalleled experience in key senior appointments, before returning to the business community. We all know of his recent successful entry into politics and his immediate appointment to Cabinet rank as Minister of Defence Production, followed by his recent assignment to create the new and important portfolio of Industry. Quite a record for a man still only fifty-one years of age, and we take great pleasure in welcoming to the Empire Club of Canada--Brigadier the Honourable Charles M. Drury, Minister of Industry.

MR. DRURY;

The Canadian economy has traditionally been based upon agriculture and our natural resources. However, our manufacturing industry has steadily grown and today employs almost twice as many people as do the primary industries. The total value of goods produced by our manufacturers is approximately two and a half times greater than the value of the produce of our farms, mines, fisheries and forests combined.

At the same time Canada has evolved a politicaleconomic system wherein the public and private sectors interact and the decisions made in one sphere have a sub stantial impact on the other. As the importance of secondary industry has grown over the years, it has therefore become increasingly apparent that the viewpoint of the industrial sector of Canada's economy should be represented when government policy is being decided. With my appointment as Minister of Industry and the establishment of the Department of Industry last July, it became my job to represent that viewpoint, to be the spokesman in the government for Canada's secondary manufacturing.

Furthermore, the establishment of the Department of Industry provides effective administrative machinery through which government and industry can work together towards the solution of mutual problems. The present government believes that economic growth in Canada is based on the success of private enterprise. When private enterprise is alert, ingenious, aggressive and forceful, then we all benefit. Government, however, can do a great deal in terms of establishing the right kind of environment to encourage increased growth and providing specific measures for assistance when they are required.

For other elements of the economy, the need for ensuring coordination between the public and private sectors has long been recognized and there is no question of the vital contribution that the federal government has made in encouraging and assisting agriculture, mining and fisheries. Naturally, the needs for the viewpoint of manufacturing industry to be represented in government councils, for effective communication between the federal government and manufacturers, for government assistance in dealing with certain problems, are not developments which have appeared overnight. Nor has the government ignored its responsibilities until now. Many departments and agencies have undertaken, over the years, various functions in regard to secondary industry as the need for such programmes arose. Certain of the activities Of the Departments of Defence Production and Trade and Commerce have now been transferred to the Department of Industry; but the broader concern of these and other departments with matters relating to manufacturing is not going to disappear. There is now a single department which can examine and reassess the many policies and activities of the government in the context of a coordinated, overall programme, recommending changes to achieve a better balance and greater effectiveness.

The primary objective of the Department of Trade and Commerce is to promote the export of Canadian products, regardless of whether those products are wheat or wood pulp, automobiles or radios. The objective of the Department of Industry is to encourage the growth of Canada's manufacturing industry. Inasmuch as one effective way to achieve this is through the efficient production of goods which are attractively and functionally well designed, which can compete successfully in export markets, it would be difficult to think of two more compatible aims.

The two most important economic problems facing Canada today are firstly, the high and persistent rates of unemployment and secondly, the adverse balance of pay ments situation. These are extremely complex and difficult matters for which there are no simple solutions. A number of measures are being undertaken by the government in a broad programme designed to deal with the various aspects of these problems. The Department of Industry, charged with responsibility for promoting the growth and efficiency of Canadian manufacturing industry, has an important part to play in regard to the success of this programme, as have the Departments of Trade and Commerce, Labour and others. We must look to significant growth in manufacturing as a major source of new employment in the years to come. This growth can be achieved only through the expansion of existing markets and the development of new ones wherever possible. In particular, it is through the vigorous expansion of export markets that we can achieve not only increased employment but also the alleviation of the balance of payments problem.

The expansion of our markets can only be accomplished by being able to produce and sell efficiently and effectively in the increasingly competitive economic environment with which we are faced throughout the world. In the past decade, manufacturing industries in Europe, in Japan, and in many other parts of the world have been rebuilt along the most modern and efficient lines. A series of trade and tariff negotiations, in which all of the leading nations of the free world have participated, have greatly reduced the barriers to trade.

The process of removing barriers to world trade is still continuing. Canada has agreed to participate in a further international trade and tariff conference to be convened under the auspices of GATT this year. The Minister of Trade and Commerce, who attended the GATT ministerial meeting which agreed to this round of negotiations, made it clear that Canada would play a full and active part at the conference.

The continued international emphasis on increased trade underlines the need for manufacturers to be continually improving their ability to compete effectively. This means improving existing production methods and discovering new, more efficient manufacturing and distribution techniques and processes which will lower manufacturing and distribution costs. It means developing new and better products with high standards of quality and design.

A great many Canadian manufacturers have adapted to this rapidly changing environment with success. A number of industries have expanded appreciably and have pros pered and created many new jobs. In most instances these "growth industries" have made full use of modern research and development discoveries. On the other hand, some of our traditional consumer industries have experienced serious difficulties in adjusting to the new competitive situation.

These so-called traditional industries form an important part of our economy. They provide jobs for many thousands of Canadians and are the main source of support for numer ous communities. Furthermore, they are important consumers for the products of other Canadian industries. It is, therefore, vitally important that they should be sound and healthy members of our industrial structure. In this regard, one of their strengths lies in the wealth of experience which they have accumulated over many years of practical business experience. They must constantly keep in mind, however, that to be effective this experience must be combined with the best technology that is available for their needs. If they do not keep abreast Of modern business methods, their experience will be of little avail.

We have already been able to play a significant role in the formulation and introduction of new measures to foster greater production and trade in motor vehicles. These measures, introduced on November first of last year, were implemented after detailed and careful consultation with motor vehicle producers and auto parts makers. While this programme was designed to meet the particular circumstances of the automobile industry and is not appropriate for general application, I believe that the process of close prior consultation with the industry concerned is vital. It is our intention to follow this pattern of consultation in future relations of the department with various governments and industries.

Although we will be developing new programmes to assist industry, we are not neglecting those activities which in the past have demonstrated their usefulness. The Domes tic Commerce Branch of the Department of Trade and Commerce has been transferred to the Department of Industry. This group has been engaged in a wide number of industrial development activities, such as detailed industry studies, import studies, and technical missions to study industrial methods in other countries. It has also provided information and assistance in the field of government regulations as they affect business.

Two weeks ago, as a specific example, in addressing the Canadian Furniture Mart here in Toronto, I spoke of two missions of industry representatives who travelled to Europe and the United States under government sponsorship to compare furniture making and marketing processes in the countries visited with those in Canada. The members of these missions have prepared extensive reports on their findings, which are being printed by my department and will be made available in the very near future to all those who are interested. These reports contain many valuable observations and recommendations and have stimulated a great deal of interest in the Canadian furniture industry.

We are expanding these activities to assist industry to increase production of existing products and to seek out new product opportunities, to achieve a greater degree of pro cessing of Canadian raw materials, and to help industry in adopting the most effective means of manufacturing and marketing their products.

The Industrial Design Branch is now also a part of the Department of Industry and will continue to expand its programme of helping industry to take advantage of better design as a means to improving its products. With design becoming increasingly important as a marketing factor, it is of great importance that manufacturers be encouraged and assisted as much as possible in this field.

In March the first design centre to be jointly sponsored by the National Design Council and the Department of Industry will be opened here in Toronto in the Colonnade Building on Bloor Street. The centre will be a permanent place of exhibition where Canadian products of good design will be displayed for the benefit of domestic and foreign buyers and the general public. The centre will focus attention on the good design work now being produced by industry and Canadian designers. I hope that it will also encourage greater and more widespread efforts towards innovation and creation of a new image for many Canadian products.

I have been speaking of the Department of Industry's activities in connection with its responsibilities to promote the establishment and growth of manufacturing in Canada and generally of the contribution which this growth will make towards creating employment. However, there are a number of regions in this country where the level of unemployment has been substantially higher than the national average for the past several years. The department has therefore established an Area Development Agency which is taking a broad regional approach to the economic development of such areas.

These regional problems arise from a variety of factors. In some instances, communities are dependent upon a single industry. When technological change makes this industry redundant to the economy or when there is a prolonged period of low demand for the products of this industry, a large group of workers with skills no longer required are left without employment. In other cases, migration from farms to urban centres leaves communities without sufficient population in the surrounding district to support the service enterprises which have grown up over the years.

The situation in many of these regions is both urgent and grave. Accordingly, measures have been introduced to encourage new enterprises to establish in these areas. These measures include such important tax concessions as exemption from income taxes during their first three years of operation and accelerated capital cost allowances. To date, thirty-five such areas have been designated.

The Area Development Agency will work closely with provincial authorities and with industrial and commercial interests to develop further methods of stimulating employ ment and encouraging greater growth of these areas. This Agency will also be working closely with the provincial authorities to examine ways in which the federal government might assist long term industrialization programmes for undeveloped regions and areas in Canada of lagging economic development.

The Department of Industry is a very new organization. It has been given the important tasks of encouraging the growth and development of Canadian manufacturing indus try, improving the effectiveness of the federal government's participation in industrial research and fostering the economic development of designated areas. Some programmes to achieve these objectives have already been undertaken and others are being developed. These programmes are being developed in close association with industry and other organizations concerned and will be designed to make a contribution in those areas where the federal government is uniquely able to do so, avoiding duplication of activities already being undertaken elsewhere.

Canadian manufacturing industry has successfully met the challenges of the past. I am confident that through determined effort and the cooperation of both industry and government, the new and difficult problems we now face will be overcome.

Thanks

Thanks of the meeting were expressed by Past President Dr. Z. S. Phimister.