A National Purpose

MR. LANGLEY:

Gentlemen of the Empire Club and Canadian Club, it is now my privilege to introduce our Guest of Honour-which I am proud to do with the simplest and yet most fitting tribute to which a Canadian can aspireGentlemen, the Prime Minister of Canada.

THE RT. HON. LESTER B. PEARSON:

I am honoured today to address your two Clubs. The joining together of the Empire Club and the Canadian Club seems to me to be symbolic. Put your names, side by side. Consider what the urge of "Empire" has meant to our nation's development. Consider also the hopes of nineteen million men, women and children which are written into the one word, "Canadian". Put these words together, as you have done at this meeting, and you blend a great heritage with even greater hopes. This is exactly what all of us in Canada must now do in our search for a national purpose, to help us realize a great national destiny.

Such a national purpose must command the support of people on the farm and in the factory; in management and in the union; in the church and in the schoolroom; in the East and in the West of our continental country; in Quebec and in Ontario. We must find such a purpose to which we can give voice and shape and effort and heart, if we are to survive in this country as a strong and united country, economically and spiritually solvent. A national purpose cannot be formulated merely by legislation or by declaration; by slogans or patriotic emotion; nor by any assumption of special virtue in ourselves.

There must be a determination to understand the real nature of Canada and the forces eroding that nature; to recognize the peril of serious internal divisions; to recognize also the competition and challenge of the changing world community and the competitive world marketplace; to realize the opportunities of national strength through unity and the fatal weakness of division and discord.

This understanding, this recognition, cannot be created by government. But government can establish political, social and economic goals; can identify and try to eliminate internal dissensions; can help to plan, for the essential expansion of our economy, for new trading patterns, for more research and better training, for less dependence on foreign capital to achieve our full national development. Government alone cannot expand the Canadian economy. It can help-by planning and incentives, by co-operation and negotiation. The expansion will be carried out only by people.

We can negotiate, promote and protect-up to a pointCanada's trade. But, while we can help, it is capital and industry that must adapt itself to the demands of tomor row's world for the products of sophisticated technology, or Canada will forfeit the main markets on which tomorrow's prosperity will depend. In striving to create, by working together, the national purpose our times demand, Canadians today and tomorrow have only to equal the achievements of yesterday. Those achievements were proud ones; bridging the continent-welding peoples into a nation never secondrate in war or peace-developing a society whose strength, tolerance and enterprise became the envy of older, larger, more homogenous countries. Today these things stand in jeopardy.

The questions now asked about us in the world are changing. Instead of "How do you do it?" and "May I come?", we now hear "Is it a good place to invest?" and "What's going on?"

In such matters, spirals, both vicious and virtuous, can easily develop. It is not too hard to feel a sense of national purpose if things are going well for a country, as they were for Canada during the first decade or so after World War II, and to become over-confident and even smug. But, when we fare less well, questions begin, and it becomes apparent that our sense of purpose isn't all we thought it was. It is against this background that I want to refer briefly to one or two aspects of our current economic situation.

Government has to grapple with two main problems in our economy. One problem is unemployment, which has been serious and persistent for several years now. The other problem is the deficit in our dealings with other countries. As a nation we normally earn abroad less than we spend abroad. In effect, we have to borrow more and more from other countries in order to make up the difference.

Progress is being made with both these problems. There are prospects for continuing improvement. The most encouraging single sign is the increased sale of wheat, which will help-though not solve-our external payments difficulties. It will also increase employment. The Government has taken other measures to improve employment. There will be loans for municipal development, increased payments for winter works programmes, special incentives to industry in the areas of persistent unemployment, a capital fund for economic development in the Atlantic Provinces. Unemployment this winter may be less bad than in recent years. I do not claim any primary and partisan relationship between that prospect-if it is realised-and the actions of government. The result is what matters.

Nor do I wish to suggest that we should be in any way complacent about the situation. The problems are complex and persistent. New jobs are created but many existing jobs are disappearing on account of automation. Every year more young people are coming out of our schools and colleges, looking for work. We have to run fast in order to make any progress at all. Vigorous action is necessary to encourage new industries, increase production, create more employment and-I repeat-improve our balance of payments with other countries.

Balance of payments brings me to the problem of foreign investment. So far as I am concerned, there is no problem about foreign investment as such. In general it is productive of economic progress and highly desirable. There are questions about the proper role of foreign investment, particularly direct investment, but they are the same questions that arise about every good thing. There is nothing so good that you can't have too much of it, in a given time and by comparison with what you have of other things.

Foreign capital comes to Canada to earn a return to the investor. Good investments are therefore a commitment against our future balance of payments. Unless we are en gaged in a sort of rake's progress of borrowing even more and more-and obviously that can't go on indefinitelyCanada has got to pay the returns on foreign investment out of what we export. And obviously, in a competitive world, we have to be concerned that the commitments shouldn't exceed our capacity to export.

Much of the foreign capital in Canada is invested in exporting industries, especially primary ones. To the extent that it produces export increases which wouldn't otherwise take place, such investment doesn't create a balance-ofpayments problem; though it may involve other problems. The capital produces the export capacity to service itselfand, often, much more. But Canada can balance its foreign accounts and have high rates of economic growth and employment, only if we can competitively export more manufactured products. And here we come to the dilemma of direct investment in Canada.

In the manufacturing industry, most of the foreign companies that now set up subsidiaries in Canada do so in order to serve the Canadian market. They tend to think of exports as the business of the parent company. I don't mean that they deliberately cramp, or discriminate against, the subsidiary in Canada. But, generally speaking, it just isn't set up with exports out of Canada in mind. This is not in any way a criticism of anyone concerned. It is just a statement of business and economic fact which obviously and inevitably applies to much-though not, of course, to all-of the Canadian manufacturing which is operated by subsidiaries of foreign concerns.

Concern about this situation does not mean hostility to the foreign investor. It is concern because an ever-decreasing proportion of Canadian industry is Canadian-managed and controlled, and is not necessarily directed towards winning the largest possible export markets for Canadian products. In other words, the danger of being a branch-plant economy is that, beyond a certain point, it sets up serious economic obstacles to the level of exports needed to pay dividends on the capital that creates the branch plants. It can get to the point where it prevents us dealing effectively without balance of payments problems and, in that case, it harms all investors, both Canadian and others.

This is why our concern about increasing foreign control of industry is not a matter of a narrow economic nationalism. Nothing could be further from the truth. We want to treat the foreign investor fairly. But we won't be able to do that if foreign control and management hinder our economy as a whole from becoming sufficiently orientated to exports, or prejudice our own national interest generally. If that happened, not only Canada, but the foreign investors themselves would suffer, because of the inadequacy of our export earnings to cover a proper return to the investors.

I do not believe there is much disagreement with this point of view in Canada or much unwillingness, among foreign investors, to recognize the validity of the objective as I have stated it. The problems are practical problems of methods. About those, there always are differences of view and there is always value in continuing discussion which may eventually lead to better methods than were thought of in the first place. We must find the best methods, and that is not always an easy and simple thing to do.

I would like to mention another problem which affects national purpose. It arises out of the nature of our federalism and the relations between the Canadians who speak two official languages. I have spoken a number of times recently about this in a general way. Today I would like to refer specifically to one particular problem in this area of federalprovincial relations-the problem of pensions.

We are all agreed, I am sure, in wishing that all other Canadians should have the security that makes the difference between dignity and dependence. We made a large step towards that goal in the early years after the war, when we established a basic pension for everyone at the age of 70. To make that possible, I remind you, the federal government and the provinces had to agree on an amendment to our constitution. The amendment said that the federal government could legislate about pensions in Canada as a whole, provided that, in doing so, we didn't interfere with the operation of any existing or future provincial laws.

Since then, there has been a movement of public opinion towards a further national objective in the field of pensions: that is, to ensure that all Canadians, irrespective of the sort of work they do and whether or not they change their jobs from time to time, should have continuous access to a level of pension provision higher than can or should be provided by the flat-rate, universal government pension alone. An obvious addition is a Canada-wide contributory plan which would make available to everyone the sort of pensions that many people now get by agreement with their employers, provided that they work for one company for a good part of their working lives.

The previous government at Ottawa announced a year or two ago that it was in favour of such a national contributory plan. My own Party had adopted the idea in a resolu tion of our convention in 1958. And in two successive general elections we spelled out the proposal in some detail. Against this background, I am a little surprised to hear a national pension plan talked about as if it were an unconsidered, revolutionary new proposal which has sprung up suddenly.

I know that there are important economic decisions involved in such a national plan; I know that any legislation on the subject must be given careful scrutiny, with evidence heard for and against. I know also that such legislation, for us in Canada, must be handled in the context of our federal structure.

In July, the federal government put forward for consideration the outline of a pension plan. In August, there was an important change in the situation. At that time, the Legislature of the province of Quebec unanimously passed a resolution to establish a public pension plan for everyone in that province. There is no doubt that under the constitution every province has the right to establish such a plan. There is equally no doubt that it would be foolish to have two plans, federal and provincial, operating on top of each other. And finally, there is also no doubt that, under the wording of our constitution, a provincial plan takes precedence if the provincial government wants it to. Therefore, as soon as the Quebec Legislature had passed its pension resolution, the federal government made it plain that we wouldn't try to apply a federal plan in a province which sets up a similar plan of its own. But what about the people of the rest of Canada? And what about people who move between one province and another?

The answers to these questions involve a very important problem in federal-provincial co-operation. My concern is that the federal government and the provinces should work together to find solutions which are in the best interests of all Canadians. I think that, in its attitude to the Quebec plan, the federal government has shown full willingness to co-operate with the provinces in these matters in the general interest of Canadians. We want to sustain such co-operation, which, I do not need to point out, is a two-way street. It requires, on both sides, a reasonable degree of flexibility, and give and take.

In this whole question of pensions, the province of Ontario has a special role not only because of its size and importance but also because it has already taken a lead over other provinces by legislation to regulate private pension plans and compel them to be made more widely available. The Premier of Ontario has stated his wish to co-operate with the federal government in his support of the principle of a national contributory pension plan. I refer to that in order to express my appreciation of it and my desire to reciprocate. With friendly consultation when required and with full public discussion in and out of Parliament, I am sure that we can solve this problem by measures, which are economically sound and socially desirable. The two things must go together.

I have talked about pensions as only one example of the complex problems of our confederation, which are linked with economic and social problems quite tough enough in themselves. We will not find the right solutions to any of them if our ideas are either rigid or unrealistic. There can be no standing still in today's world, but we must move forward with care, forethought, and common sense.

The national purpose that we are all searching for is, in its essentials, simple. It is the purpose of all good people; of good business; of good trade unions. And it is the purpose of good government, of laws which have the authority of respect, of administration which is honest and competent. It is, perhaps above all, the purpose of honest and fairminded public discussion, among people who do not confuse argument with the imputation of motives, whose concern is solely for the public weal.

A strong Canadian national purpose rejects, I believe, the idea that the government should forcibly intervene in a labour dispute which has become a lawful strike after the required processes of collective bargaining have been exhausted; intervene, that is, in order to force man back to work.

But a strong national purpose means that if the national interest is seriously and demonstrably damaged, if serious national consequences are flowing from a strike, and if all reasonable efforts at mediation are exhausted, then government must intervene to stop the strike in a way which will ensure that there is no prejudice to the interest of either the employee or the employer in a fair settlement.

I do not think that a national purpose can be set down in glowing phrases. It is expressed in the spirit in which we deal with particular problems. It is the purpose, and the determination to make Canada "a union not of parchment, but of men's hearts and minds".

We shall find out in the months ahead whether we are able to achieve that purpose.

I believe we can.

Thanks

Thanks of this meeting were expressed by Mr. W. Harold Rea, the President of the Canadian Club of Toronto.

The dedicated attention with which your speech has been received and the applause with which you have been acclaimed make my few words of thanks but a formal ending to a great occasion. I call it a "great occasion" because your presence here has once again justified our existence as forums of national enlightenment and furthered the high purpose for which these two great and famous clubs were originally founded and have consistently laboured during many years of our national life.

In welcoming the leaders of our nation as they have spoken with authority and frankness on Canadian problems, we have ever sought to promote the union and the unity, the progress and the prosperity of this great land. You, Mr. Prime Minister, carry burdens as heavy as any borne by your illustrious predecessors. Yet, after sleepless nights ... or the threat of sleepless nights ... and sittings of Parliament where splinter parties do not always appear to be "chips off the old block", you have generously and courageously shared with us your precious time to address us with the honest simplicity of straightforward speech. You have made a powerful plea for racial and religious understanding and tolerance, and an irresistible appeal to all Canadians to devote the trinity of their heads, their hearts, and their minds to bring strength and progress, national and international, to their beloved motherland.

We believe with you that a united and individual effort is bound to succeed in a land settled by a people so rich in variety and romance, a nation of pioneers which has brought law and order to a continent and still can see, and is determined to conquer, the beckoning immensities of bright horizons.

A wise man has said that democracy is a method of accounting for everyone ... the little works of many hands, the little loves of many hearts, the light of many minds. That, I believe, Sir, is your hope and your faith.

I am sure then that everyone in this audience, of every political party, of every creed and every racial origin, is deeply grateful for your presence and the words that you have spoken. In their name, I thank you.