Britain, Canada, Europe and the Atlantic Community

MR. STAPELLS:

Almost three centuries ago, on May 2nd, 1670, Charles lI granted his royal charter to The Governor and Company of Adventurers of England trading into Hud son's Bay. These Adventurers numbered some 18 who had provided a capital of £ 10,500.

The history of the "Bay" is a panorama of Canada from the colourful chronicles of its true Canadian Founders, those intrepid coureurs de bois Radisson and Groseilliers, the host of explorers, the famous factories of Rupert's House, Moose Factory, Albany, Fort Nelson and Fort Severn and Lord Selkirk and his settlement, to mention only a few events in an action-packed area.

Three years after Confederation, the infant Canada bought the vast territories of the Company for X-300,000. From that time on, the Company established its preeminence in general retail trade throughout the West, thus perpetuating its unchanged standard and motto "Choice goods can be bought for money". It is only fitting that in this special year we should be privileged in the Empire Club to welcome the present Governor of Canada's oldest company, Lord Amory.

Lord Amory has already graced our forum in 1962 when he was the High Commissioner for the United Kingdom in Canada. On that occasion, he addressed us upon the Com monwealth. Since joining the Company of Adventurers, however, his vision has obviously been greatly enlarged because his address today has a title of universality that truly challenges the mind-Britain, Canada, Europe and, no less, the Atlantic Community.

While our guest is one of those of whom it is said he needs no introduction, there are several items of his ciriculum vitae which bear re-telling. For instance, as Chancellor of the Exchequer, he had the distinction of proposing a cut of 9 pence in the pound in the standard rate of income tax, the largest single reduction made in Britain's income tax since the end of the war. Oh, for such a Minister of Finance in Canada! Lord Amory has been Chairman of the Council of Ministers of the Organization for European Economic Co-operation. He has been Chairman of the Royal Commission on the British Penal System. (Lord Amory reported on why criminals should go to prison and Lord Mountbatten explained how they get out.) In business, he is a director of his family's textile firm of John Heathcoat & Co. of Tiverton, and also of Lloyd's Bank and Imperial Chemical Industries and, as Deputy President of the Industrial Co-Partnership Association, he is an enthusiastic crusader for profit-sharing and intelligent employer-employee relations. Education, young people, farming, social services, yachting, all mixed together in a myriad of purposeful endeavours, are significant parts of his life and interests.

I, therefore, take great pleasure in presenting to you The Right Honourable Viscount Amory of Tiverton, P.c., G.C.M.G., The Governor of The Hudson's Bay Company.

LORD AMORY:

I thank you for the honour you have done me in inviting me to address you for a second time. It is one more proof of the power of Canadians to stand up with stoicism to heavy punishment. I cannot remember what I said on the first occasion and I trust you cannot either. Should my observations today however follow a precisely contrary line it will I hope be attributed to the manysidedness of truth.

Last time I spoke to you as a diplomatist. And it is the first rule for a diplomatist that his public utterances must if possible be urbane but must never in any circumstances add anything to existing knowledge. I want to emphasize that anything I say today represents in contrast the views of no-one but myself.

A rather broad subject has been urged upon me today. I feel like the speaker at a conference who selected as his own little contribution "God, Man and the Universe".

It is a particular pleasure to be speaking to you in Canada's Centennial year. We in Britain not only rejoice with you in celebrating Canada's triumphal achievements of the past century but share your pride in them. We have been proud to have participated in Canada's growth in so many ways and hope that we may be privileged to continue to do so in the exciting years ahead.

One thing is certain-however robust the faith and optimism your predecessors in 1867 had in their country's future, whatever visions they conjured up, have been vastly surpassed by the unfolding of events. This is the moment at which, had I still been a politician or a diplomatist, I would have enriched your fare with a flood of carefully selected statistics. It was said of a distinguished British statesman that if the facts were against him so much the worse for the facts. Canada's achievements during the past century require no statistical facts to buttress them; you need only look around. And who can doubt that, looking forward, her progress during the next century is going equally to exceed any reasonable estimates we can make today. A young Canadian today can, indeed, say with the psalmist, "Behold the lot has fallen unto me on a fair ground. Yea, I have a goodly heritage."

At the present time I have the honour as Governor of Hudson's Bay Company to be actively associated with a historic example of successful Anglo-Canadian co-operation. The Company of Adventurers of England trading into Hudson's Bay was formed by Royal Charter 297 years ago with Prince Rupert as first Governor, King James II as second and the great Duke of Marlborough, ancestor of Sir Winston Churchill, as third. Your first feeling may be that in the present holder of that office we seem to have lost a bit of ground!

Our Company started with 18 shareholders, or Proprietors as we still call them, and a capital of $30,000. Today we have over 30,000 Proprietors, mostly in Britain, 14,000 employees, almost all of them in Canada, share capital and reserves of about $145 million and 95% of our operations and the management thereof in this country. Deeply rooted in Canadian soil, with a record of service in the development of this country of which we and our Proprietors are proud, we seek today to combine a respect for the past with a vigorous determination to keep abreast of modern techniques and developments.

I have mentioned the Company of which I am so proud so that you can understand how easy I find it to feel an absorbing interest in the future relations of Canada and Britain. I am one of those who would regard it as a major tragedy if the future paths of our two countries were to deviate to a point where our traditional relationships were to lose meaning. But if we feel like this, we must be realistic and recognise that in some respects our interests and ways of life are not identical, and may become still less so. In some ways we are drifting apart. Ties of sentiment, if they are to last, must be refreshed by renewed appreciation of common interests. Let us take a cool look both at our common interests and at our divergencies. We owe allegiance to the same Queen. About half the present population of Canada, I suppose, are of British stock. A majority of Canadians use English as their first language and British legal forms and processes. Canada's Parliamentary institutions are modelled on Westminster traditions. So if there is anything there that is less than perfect, we must take the blame. We are both nations who rely largely on foreign trade for our livelihood. You are already the fifth trading nation and we are the third. And we are the two senior members of the Commonwealth. So much for our most obvious common features.

We must be equally frank in assessing our differences. Canada has not had the heavy responsibilities that we have had and still are not completely absolved from in the colonial field. Canada has responded magnificently when Britain's survival in two world wars was at stake, but her day to day interests and economic problems are centred in North America rather than in Europe. Your habits, way of life, techniques, newspapers, television, sport and educational patterns are dictated by your North American environment. Your economy is influenced much more directly by that of your powerful neighbour to the South than with Europe, and you, unlike us, are not members of the sterling area.

We have many formidable problems that you are free from-our need, now that the administration of a vast empire is a thing of the past, to adjust ourselves to a new role in the world; the task of changing the pattern of our industry to play our part in a world in which most of our traditional customers have effectively built up their own industries behind tariff walls; the need, when most of our overseas investments had to be realised to pay for the war, to increase our exports by 50% in real terms to balance our account; our almost complete lack of natural resources and the consequent need to import almost two thirds of our food and nearly all our raw materials; continuing financial commitments and aid, totalling a very formidable annual sum, to previous colonies recently come to independence.

What I think is imperfectly realised even by ourselves is the very substantial progress we have in Britain made over the past 20 years in effecting these readjustments. Periodical balance of payments crises, less than planned growth rates, self-criticism that sometimes approaches the pathological, sometimes create alarm and despondency among our staunchest friends. And perhaps all these things are needed to counter our national inclination for complacency until our backs are patently against a wall. I remember Sir Winston Churchill saying in effect (I wish I could remember his exact words) "Tell the British people that they are prosperous and their lot to be envied and they will be sunk in the deepest melancholy and harbour a profound grudge against you. Tell them that their affairs are in ruin and their doom almost certain and their spirits will rise and they will think the world of you." So we must always have a wall handy to put our backs against.

But when history comes to be written I think historians may record surprise, not for the first time, at the steady way in which Britain during the fifties, sixties and seventies changed her course, readjusted her national housekeeping and fitted herself for a new role. Today we are exporting more per head than any of our Western competitors and our exports are paying for more than 95% of our imports as against the 65 % before the war. Though our Gross National Product has risen of recent years less fast than some of our neighbours', it has risen twice as fast as anything we knew before the war.

Britain's standard of living has improved more over the past 20 years than in any previous half century of our history. The proportion of our national income devoted to investment, though still far below our needs, has risen substantially. Our portfolio of overseas investments, almost eliminated in the war, is being steadily restored. Whether in all this our priorities have been right is another matter. We have been doing ourselves a bit too well. We may have allotted more than in the short term we could afford to current consumption and we have tended to borrow short and invest long to the detriment of the sterling reserves on which as banker to the sterling area we have to operate.

On the social and economic changes in Britain over the past twenty years I will only say that they have made us socially more one nation. In education and in the technical management and equipment of our industry great changes are taking place. Our scientists and technologists are holding their own in an onrushing technical age. I do not wish to inflict irreparable damage on your digestions after our excellent luncheon by referring to the sordid subject of taxation. I will only admit-and it is a soul-searing confession from a one-time Chancellor of the Exchequer-that we have not got our system right. We ought to switch a substantial proportion of our taxation on incomes and earnings to taxation on expenditure, thereby bringing ourselves more into line with most of our international competitors.

Our chief economic problem since the war has been continuing inflation. At the moment we are going through a period of deflation enforced in the interests of our balance of payments. No-one enjoys this, but the remedy is being successful at the price of a temporary halt in our economic growth. We are currently earning a surplus on our balance of payments. How to combine a sound balance of payments with absolutely full employment, a stable price level and steady economic growth has so far defeated all our post-war Governments and most of our economists. I think for that matter no other country has found the solution to that equation. Few countries, however, have as narrow a range for manoeuvre as we have.

The current balance of trade between Britain and Canada is not very satisfactory from our point of view. We buy from you about $2 for every $1 you buy from us. British ex ports to Canada, however, I am glad to hear have improved about 15 % over the past 2 years. We both want to see trade between us rise to higher levels. It will help us achieve this end if our trade can be got into better balance. Your Minister of Trade and Commerce has been good enough to say that he welcomes our current drive to increase our exports to Canada and urges our exporters to familiarise themselves with the Canadian market. I trust they will take that wise advice.

You on your part will be helping to increase AngloCanadian trade to our mutual advantage if you will put your needs clearly before us. Tell us frankly when our efforts fall short, and be glad when you can fill your import requirements from British sources. I believe in general British products are good value for money today and our delivery and service much better than when we were in the throes of inflation.

You, too, are doing some hard thinking about Canada's place in a changing world.

You have certain problems that do not press on us. Your twin languages and cultures; the economic pressures from the U.S.; Federal-Provincial relations. Two current experiences may be common to us both. First, a certain decline in the prestige of Parliament. And secondly some perplexity about the future of the Commonwealth ideal.

Perhaps it is time we took a fresh look at the Commonwealth. Is it developing purposefully or is it drifting? The Commonwealth means different things to different people. To some it is a cherished reality, to some a convenience and to others a word only. What can we liken it to? With its highly diversified composition it is hardly any longer a family, if it ever was. Having no rules, it is not a club, its members are not "like-minded". It has no common policies, political or economic, or any shared defence commitments. Its member nations vary in population from 500 millions to a few hundred thousand and in relative wealth as widely. Its Governments are by no means all parliamentary democracies. Its meetings at Government level take no executive decisions. It does not function as a group at the United Nations. Its members belong because they do not wish to leave. A certain inertia characterises its existence. Is it worth preserving? I believe it is. But its value lies not in its homogeneity so much as in its diversity. It consists of a group of very dissimilar peoples, spread over five continents, multiracial and multi-religious. Its existence is based on a custom of discussion and consultation -a practice made easier by a tradition of close acquaintanceship and the English language, and the use of certain common forms and practices.

The Commonwealth is the only organisation that could bring together such a heterogeneous cross-section of the world for informal discussion and there precisely lies its special value.

In the modern world discussion and consultation between such a diversified group representing a fifth of the population of the world has undoubted value. It is a practical example of sane and sensible international confraternity. And perhaps the most fruitful meetings are the many functional conferences at non-governmental levels.

I believe therefore we should prize and do all we can to foster these special links which exist between us through the accident of history. What we should not do is to deceive ourselves that the Commonwealth in the foreseeable future is going to provide a solid base on which to rest our individual national policies, political or economic.

We in Britain are faced with one political problem of the first magnitude. Are we to throw in our lot with the European Economic Community or Common Market as it is called? It is of course not a matter for unilateral decision by us as we can only enter with the unanimous agreement of the present six members, and it is by no means certain that France will agree to our entry now any more than she did a few years ago. Perhaps she may still prefer that the E.E.C. shall be free from Anglo-Saxon influence. British public opinion seems to have moved a good deal since 1962 in the direction of approving our entry. The majority in all three British political parties I think now support entry in principle. This concensus is, however, still a long way from unanimity and is far from favouring entry at any price.

This movement of public opinion is probably not unconnected with a certain perplexity about the future of the Commonwealth and a weakening of Commonwealth ties. But its main foundation is a realisation that in fact Britain is a part of Europe, whether we like it or not; that what happens in Europe affects our destiny profoundly, as two world wars have witnessed; and that we deceive ourselves if we pretend otherwise. And on the economic front that, as we have to compete with these other European countries in the markets of the world in any case, we may as well compete with them at home and, together with our EFTA partners, share in the benefits of a tariff-free market of 250 million people.

Tariff-wise our entry would mean, of course, throwing open our home market to free imports from Continental Europe. It would also probably mean the end of Common wealth trade preferences as regards the U.K. It would certainly call for a major change in the system by which British agriculture is supported. This last change would be expected to cause some increase in our cost of living. This would be a price to pay in the short term, but in the longer term the British economy should be strengthened and the efficiency of our industry increased by the free competition of a huge European market.

But the arguments for our entry on political grounds are probably even stronger. Twice in the lifetime of many of us Britain, though an island, has been caught up in a European war. Our national fortunes are so closely involved that it is imperative that we should participate fully in the political decisions on which the fate of the Continent hangs. But though a majority in Britain probably feel this way, fewer are ready to give unqualified support to the supra-national provisions of the Treaty of Rome. Some degree of political unification in Europe is clearly desirable-how much is the question. Some surrender of national sovereignty will certainly be required and accepted. My countrymen, I think, would prefer to approach this aspect with pragmatic caution. Such an attitude, of course, does lay us open to the charge that we are not really wholehearted in our enthusiasm-that we are not yet good enough Europeans. I think, however, in this respect of political integration we should probably find ourselves able to swallow about as much as the French.

Will the soundings being currently made by the British Government indicate an open or a closed door? It is as yet impossible to say. General de Gaulle may well use his black ball again. I would expect that actual negotiations will only be opened if the prospects for success seem favourable. My own guess would be that it is more likely than not that we shall be substantially involved in the E.E.C. within the next five years or so, together with our EFTA partners but not much sooner.

What should be the attitude of Canada to Britain's desire to enter the E.E.C.? It would be an impertinence on my part to answer this question for you. I will only suggest that from Canada's own point of view an economically strong Britain would be likely to be a more rewarding trading partner than a weak Britain; and that Britain with an effective voice in Europe would be a more valuable ally.

I think, too, that Britain's influence inside a European community would always be exerted in favour of an outwardlooking attitude and that is something that I suggest would be greatly to Canada's advantage. The European community with Britain in it would cover more than a third of world trade. If you put these things into the scale against the coming external tariff and the loss of Commonwealth preferences, my own guess is that in the long run it is to Canada's advantage to see Britain in.

I would emphasize strongly that the kind of European community that Britain wants to join is not a closed selfsufficient block. And it is here that the question arises of the relations between an expanded European community and the U.S. and Canada. Is some form of North Atlantic community feasible? Is it a practical possibility? To me it is an ideal that makes a strong appeal. A NATO dedicated to normal peaceful activities is a satisfying vision, open maybe one day even to European countries behind the Iron Curtain. The closer one looks at it, however, the greater the practical difficulties look in the immediately foreseeable future. It is, however, I do believe an ideal that is capable of realisation by gradual steps-given the will. We should edge toward it.

One difficulty of substance is the difference in size in terms of population and economic strength between the U.S. and any single European country this side of the Iron Curtain.

If what is proposed is an economic free trade area, the wide difference that exists-though not as wide as 20 years ago-between price levels on either side of the Atlantic and the formidable obstacles hitherto experienced in negotiating even the most modest reductions in tariffs illustrate the difficulties.

If a North Atlantic community were to envisage a measure of political association, some surrender of national sovereignty would be involved. One wonders how feasible this would be in the light of the constitution and political traditions of the U.S.

These kinds of practical considerations seem to make an early forward move in this direction unlikely.

What I would like to see, whether Britain enters the European Community or not, is a new combined effort towards freer international trade on as multilateral a basis as possible. Whether the Kennedy Round is going to produce results I do not know; I hope so, but I fear the results may be less than were hoped for. I was interested in your Finance Minister's recent suggestion that a sector by sector removal of tariff barriers should be attempted. This surely would be well worth going for. It might result in some sensible freeing of channels of trade that are blocked now by quite obsolete and unnecessary restrictions. And surely such a project, embarked on by the U.S., Canada, the E.E.C., and EFTA, would set a valuable example. It seems to me that a move of that kind could be undertaken now and need be no "pie in the sky".

I for one would hate to feel that Britain's entry into Europe would sever one single Transatlantic link at present existing. On the contrary I would personally hope that it would have the effect of making such links more meaningful. Europe as an independent third force, neutral between North America and the Russian Soviet complex, has no attractions for me. The North American Alliance must be preserved as a live and effective partnership, not only for peace-keeping but as an example of pragmatic international co-operation. Groups or blocks may well be a feature of the modern world. They have their justifications. But if they become sources of international rivalry and division rather than stages in cooperation, they have their dangers too. Nevertheless groupings of nations on a regional basis must, I think, be accepted as a realistic phase in the development of international relations. Two tides are flowing in opposite directions. It is a paradox that, at a time when the most powerful nations are becoming more conscious of their interdependence, nationalism seems to be growing among the smaller nations.

Against this sort of background what should be the aims of Canada and Britain? Do they coincide or conflict? Lsuggest to you that in essentials they coincide. Canada, as she sets out on another century of history, has to think out her national role just as Britain is currently adjusting herselfnot for the first time in her long history-to a new role in a changed world. We are both going through a period of introspective self-examination. Canada has its problem of finding the right economic arrangements with its powerful neighbour to the South, Britain with its Continental neighbours. Both of us have an interest in untrammelled international trade. And both of us therefore have a natural aversion to purely restrictive blocks set up in rivalry to one another.

We in Britain want to see Canada ever growing in strength -a virile independent nation with a vigorous voice in North American affairs. You, I fancy, want to see Britain strong and influential in Europe. Finally both of us, I hope passionately, want to see effective and enduring links maintained across the Atlantic-politically for the preservation of peace, trade-wise for mutual benefit and culturally so that our heritage of shared tradition may be preserved and developed.

If Canada can solve her bilingual and bicultural problem, as I am confident she will, her nationhood is assured, with very close economic relations with the U.S. dictated by the facts of her situation but secure in her political independence. Britain-as her history proves-has a power of survival and a facility for readjustment to events which are not going to fail her now. You may perhaps think she has gone soft and lost some of her drive and her will to survive. Do not believe this. So many have done so on past occasions and have said "this time Britain is finished". They have always lived to find themselves mistaken.

One hundred and sixty years ago the great William Pitt said, "There is scarcely anything around us but ruin and despair." Forty years later these were the lucubrations of three of the leading statesmen of the day:

Lord Shaftesbury: "Nothing can save the British Empire from shipwreck."

Disraeli: "In industry, commerce and agriculture there is no hope."

The Duke of Wellington: "I thank God I shall be spared from seeing the consummation of ruin that is gathering round."

A few years later Britain was at the very height of her power and prosperity. Gazing into my crystal ball, therefore, I see-if we both play our cards sensibly-no cause for lamentation or beating of breasts and no painful parting of the ways ahead.

Canada will grow proportionately faster than Britain. You are growing faster than the U.S. But Britain's further growth will not be negligible. It is estimated that our population of 55 millions will be 75 millions by the end of the century.

I can see no possible conflict of interests that need divide us. The only danger is that because we are each absorbed in our own day to day domestic problems we may drift apart not through controversy but through inertia. Weeds choke the untrod path. As Mr. Winters said the other day speaking of British Canadian relations, "A relationship like this does not just happen. It is established and maintained through the efforts of those who value it." Let us not fail to make that effort. We have much still that we can learn from one another and much too that we can do together to help newer nations with a shorter experience of democracy. But if we believe, as I do, that to draw apart would be a tragedy, positive action is required. Perhaps the most productive action open to us is to encourage the generation now growing up in our respective countries to visit each other, compare notes and get to know one another. Each of the last two generations have been brought together by a world war. That is an expensive way. I have a nephew of 18 over here now for a spell between school and university. It was his idea and he chose Canada, no doubt after a careful study of the relative levels of student holiday remuneration in the appropriate international tables. Send your sons and daughters over to Britain. They will-find that our youngsters are not all Mods and Rockers, and hair styles for young males are getting shorter again in Carnaby Street, my spies tell me. The future of our countries is going to be in their hands. It will be their decisions that will count. Ignorance of each other's problems and apathy are the dangers.

To you as you embark on another century of achievement I bring you a message of congratulations and good wishes from all of us in Britain. We wish you the best of luck without any qualification whatever. What is good for Canada is good for Britain too and I think you feel the same way about us. And if you would think it fitting to mark this warmth of fellow feeling would it not be a nice gesture in this your Centennial year to restore to Hudson's Bay Company the 1,400,000 square miles of territory we surrendered in the Settlement of 1867?

You in this Club value our mutual traditions. How right you are. We have much in the past to be proud of.

In the words of Sir Winston Churchill, "The future is unknowable but the past should give us hope."

So in this Centennial year let us both-Canada and Britain-look back to the past with gratitude and to the future with courage.

Thanks of the meeting were expressed by Mr. Bruce Legge.