COMMUNIST PARTY WARNS OTTAWA:

No sellout on takeovers:

June 19, 1972 .

Robert P. Kaplan, MP

Chairman of the Standing Committee
on Finance, Trade and
Economic Affairs,

Ottawa, Ontario.

Dear Sir:

We have your letter explaining the
reasons why it is not possible for

us to appear before your Committee —

in connection with the proposed For-
eign Takeovers Review Act, and
frankly, we find it hard to understand
your reasoning. The argument ad-
vanced that it would delay “report-
ing the legislation back to the House
in reasonable time is not a very
serious one, particularly in light of
the length of time it took the Gov-
ernment to advance this very limited
and totally indequate piece of legis-
lation.

If it could take over two years for
the proposed Act to make its ap-
pearance before the House why can-
not the Canadian people be given
two months and more to consider it?

We are not protagonists of delay
but one could ask: Why the rush?
What fires are burning which com-
pel such speedy action?

Who Is Being Served?

We have noted the remarks of the
Prime Minister that unless speedy
action’ is taken, further takeovers
may eventuate. This legislation
could meet such a contingency. How-
ever, the proposed legislation is not
intended to prevent furthér take-
overs. What it is intended to do is
create a mechanism with which and
through which the government wants
to strike bargains with the multi-
national corporations regarding the
terms of sale of natural resources
and takeovers. The screening mech-
anism is the leverage the government
hopes to use for this purpose. Mr.
Pepin put it in a more polite way
when he advised your committee that
“the policy embodied in the Bill is
not a nothing policy. Even against
the background of previous measures
it is a significant new step which will
help Canadians increase the bene-
fits from foreign investments.”

This of course is neither a new or
original statement. The fact is that
this has been the underlying motif of
Liberal and Conservative govern-
ments in the past, the only differ-
ence amongst them being who could
strike the better bargain in the sell-
out of Canada, and in the inevitable
erosion of the sovereignty and inde-
pendence of the country.

Cover-up For Sell-out

Why will the present screening
mechanism be any différent? The
only difference would be in obtaining
a better deal in the sale of Canada’s
natural resources and industry.

To cover up the real intent of the
screening mechanism the Prime
Minister and other Government
spokesmen have argued that foreign
investment is the life blood of the
country, that without it the economy
would collapse, slacken, lead to un-
employment or worse. Indeed quite
recently the Prime Minister was
quoted as saying that “we have to
ask ourselves if we want more jobs
or more Canadian ownership.” This
is not an original point of view.

In point of fact it has been one of
the myths employed with which to
organize the sell-out of the country
: to foreign investors, in this_ case

ee imperialism.

oe

A Complete Misrepresentation

What truth is there in the so-
called dilemma of Canadian owner-
ship or more jobs?‘There is absolu-
tely none. Sixty-one percent or more
of Canadian industry is foreign own-
ed, in some sectors of the economy
there is 80 to 100% foreign invest-
ment and ownership, and even with
all this we have 6.2% of the labor
force unemployed. Foreign invest-
ments obviously constitute no bar to
unemployment as they constitute no
bar to economic crises, stagnation
and decline. It did not do so in the
past, it does not do so now, it will
not do so in the future.

It is a complete misrepresentation
of the facts to say we cannot have
Canadian ownership and more jobs.
This argument is needed to carry out
the continued sell-out of Canada and
its resources. Indeed, the logic of
the argument is that this is what
should be done. Like other myths,
however, it has no relationship to
fact. We can have Canadian owner-
ship and more jobs with an entirely
different set of policies and a govern-
ment intent on carrying such policies
through.

Where Are All Those Jobs?

The Prime Minister has also said
“Canada will need large amounts of
foreign investments for a long time
to come and will face prospects of
fewer jobs and a lower standard of
living if the money isn’t available.”

This too is a myth spread far and
wide to ensnare the Canadian peo-
ple into acceptance of the sell-out of
the country.

The fact is that foreign control and
domination of the economy is grow-
ing not so much through foreign in-
vestments but through the use of
Canadian capital. Foreign Direct In-
vestment which has been published
by the Government of Canada

states on page 26 that “over 60% of

the financing for the expansion of
foreign controlled firms in the 1961-
1967 period came from sources in
Canada.” Indeed there are claims
that the Canadian banks are finan-
cing up to 80% of takeovers in Can-
ada.

What foreign investments are pro-
viding jobs?

Canadian Funds Given U.S.

Moreover it is well known that
through the Regional Development
Programs Canadian dollars are made
available to U.S. corporations com-
ing into Canada. IBM received $6
million to establish itself in Nova
Scotia. U.S. interests received over
$100 million to develop the heavy
water program in that province. The
Roblin government in Manitoba
gave $90 million to some Swiss cor-
porations, for development purposes
in Northern Manitoba. Literally hun-
dreds of millions of dollars were
granted U.S. and other corporations.

We have the fact that billions of
Canadian dollars are invested in the
USA, in actual fact larger percent-
agewise than U.S. investments in
Canada, which could and should be
put to use to develop the Canadian
economy.

These and other examples empha-
size that foreign investment is not
an absolute necessity for Canadian
development, or for Canadian public
ownership and control, and that what
we really have is a wholesale give-
away program with no commensur-
ate benefits to the Canadian people.
In any case there needs to be a clear
distinction between foreign invest-
ments under strict democratic con-
trol and foreign ownership which
continually erodes the sovereignty
and independence of the country.

Sweetening Sour Milk

In passing we would also like to
comment on the proposal of Premier
Davis of Ontario with respect to

- proposes:

proposed legislation making mand
tory Canadian directorships of U.
companies in Ontario. This is meré
adding some sweetening to the S0
milk. Those who become direct?
may be pleased with their titles an
increased incomes but for Onta Oe
and for Canada it changes nothin
Foreign ownership remains, forele
control remains, decisions contrary
to the Canadian interest rema@be"
This sleight of hand performant
this game of musical chairs is
to the proposed takeover legislatio
a lot of noise signifying nothing ®
consequence for the Canad
people. a
ae serious approach to the prob
lem must make one come to the
clusion that the way to end foreig®
ownership, foreign control and oa
mination is by public ownershiP:
Until this is recognized and a
upon, the sell-out of Canada we)
continue and affect the jobs ®
standards of the Canadian people:
_ ae

Assure Public Control

=e

ward, providing it were part ®)
larger objective and fitted in iat
aim of achieving genuine Cana
independence. However, the

posed legislation does not ally f
achieve this. Canada doesn’t a ods
pill to legitimize takeovers, it ® take"
legislation to prevent further here.
overs and- the. elimination y cig
controls regarding Canadian fore?

>

trade. : wld
It needs legislation which whi
assure public control and owM® "9

of the key natural resources °

country, including energ Act

If the Foreign Takeover RevieW (gi) |,

does not spell out such clear t€
of reference it is misleadiNB ji)
Canadian people’ and petrayiné
real national interest. Moreove? og
terms of reference of the PFOM out

legislation should clearly SP® sagt |

that no company, industry Mayo

en eee n, |
may arbitrarily close downs asi

workers or undertake any to th
or acts which go contrary cansd
true national interests of of th
and in opposition to the 1awS ~~

country. — ~~

What Should Be Done _—
cnerefOe

RE
e That the Foreign Takeove’ op

view Act spell out fully and hol
the terms of reference whic furth?
include: the prevention of io
takeovers and the elimina nadian
U.S. controls regarding

foreign trade, the
closedown of plants and J8Y" jog
workers, the mandatory

ment of technology in Can@ or RS
e That the Foreign Taker der

: ch

a first step in the direction of iP

The Communist Party

will from now on be Tre t
loan capital only and tha ment
the cooperation and agree’. i
Provinces and of Quebec ™ ‘od
plementation. ve the OY a
We ask that you submit voll
to your Committee. ee
Sincerely yours, ont f

Central Executive © cand

Communist Party ’
william Kesh

PACIFIC TRIBUNE—FRIDAY, JUNE 23, 1972—PAGE 6

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