by Bruce Magnuson

Ever since August 15 of last

year, when President Nixon’s
get-tough economic policy sig-
nalized another stage in the
crisis of United States imperial-
ism, it has become more obvi-
ous to Canadians that any so-
called relationship between Can-
ada and the U.S. is but a snare
and a delusion.

Faced with the Domestic In-
ternational Sales Corporation
(DISC), other protectionist legis-
lation and demands for abroga-
tion of the Canada-U.S. Auto
Pact, the Trudeau government
has come under increasing pres-
sure in this election year (in
Canada as well as the United
States) to do something to stop
and reverse the growing U.S.
control in the Canadian econ-
omy, which also affects Cana-
da’s social and political life.

But the Foreign Takeovers
Review Act is not going to do
the job. The primary purpose of
that piece of legislation, brought
before the House of Commons
at Ottawa on May 3, is merely
to give the Trudeau government
bargaining power to maximize
benefits of foreign takeovers for
Canadian big business and mono-
polies. The Trudeau policy on
this crucial issue is to permit
takeovers, not to halt them. In-
dustry, Trade and Commerce
Minister Jean-Luc Pepin made
that clear at a press conference
held the same day. He is quoted
as saying that it would be both
dangerous and foolish for Can-
ada to adopt a wide anti-foreign
investment policy when all coun-
tries are looking for more in-
vestments.

So, what does foreign invest-
ment bring to Canada?

The 523-page study paper
published by the government
under the title Foreign Direct
Investment in Canada admits
that such investment can and
does weaken domestic control
in the following ways:

@ It increases the exposure of
the Canadian economy to deci-
sions taken outside of Canada
that have a disruptive effect on
the Canadian economy;

@ It complicates, and at times
may frustrate, domestic policies
aimed at creating a more effici-
ent economy;

@ It occasionally acts as a
vehicle for the extraterritorial
application of foreign law and
policy in Canada, and _ less
frequently, as the raison d’etre
for foreign governments to at-
tempt to bring pressure to bear
on the Canadian government;

® Finally, it can complicate
and frustrate the enforcement
of domestic law.

When we speak of foreign
Ownership and control of Can-
ada’s economy we are speaking
about U.S. ownership and con-
trol.

From 1945 to 1967, the book
value (which represents only a
fraction of actual value of as-
sets owned and controlled) of
U.S. long-term investment
Canada rose from under $5 bil-
lion to $28 billion, with the direct
investment portion increasing
from around $2 billion to $17
billion.

To speak of foreign invest-
ments in general is misleading.
Whether or not a given invest-
ment helps the country in which
it is made can be ascertained
only after a concrete analysis of
all circumstances related to such
an investment.

The distinction between direct
investment which controls the
enterprise in which the capital
is invested, and portfolio invest-
ments which are non-controlling,
is important. U.S. direct invest-
ment means U.S. entrepreneur-
ship, U.S. management, U.S.
technology and U.S. control. But
there are cases in which the
distinction is unreal, notably in
the case of portfolio investment
in. stocks.

The most important factor in
the extension of the influence
of U.S. financial groups in Can-
ada is the role played by the
substantial number of Canadian
industrial and financial tycoons
who act as directors of U.S.-con-
trolled corporations. It is they
who accept to one degree or an-
other the need to integrate the
two economies. It is they who
subordinate capital generated in
Canada to the control of United
States capital and for whom this
is the way to participate in large
and profitable undertakings.

Through these men ahd as a
result of their policies, the influ-

in-

Letter to Bourassa

The following letter was sent on May 12 to Premier Robert Bou-
rassa of Quebec with copies to the CLC, CNTU, QFE and the Quebec
Teachers Corporation, by the Central Executive Committee of the

.Communist Party:

“We are deeply concerned with the anti-labor and undemocratic

actions of your government in connection with the recent strike of
over 200,000 public employees. This was a legal strike directed to
achieve justice for these workers. Instead of granting these demands
your government has seen fit to use the state and the courts to force
the public employees back to work and to have working men and
women, including the three leaders of the Common Front, sent to jail.

“The harsh jail sentences and the enormous fines inflicted on in-
dividuals and unions make clear the hatred of the courts and the
government for the working people as it makes no less clear the
intent to intimidate and break unions and undermine collective
bargaining.

“The significance of these revengeful and vindictive actions will
not be lost on the working people of Quebec or the whole of Canada.

“We express our complete and unequivocal solidarity with the
aims and struggle of Quebec workers and urge that your government
do the following:

@ Grant amnesty to all those confined to detention arising from
the legal strike of public employees.

@ Repeal Bill 19 which undermines collective bargaining including
the right to strike.

e Accede to the just demands of the public employees of a $100
minimum wage plus the increases asked for.

“We believe such action would go some way in righting wrongs
inflicted on the workers and their unions.” ~
PACIFIC TRIBUNE——FRIDAY,, MAY:19) 19%2r.RAGE 8 >

1

i

>

ence of the U.S. financial groups
is felt in the Canadian banks,
where the percentage of US.
capital invested is small but the
number of bank directors linked
to the U.S. interests is high.

We have, therefore, a two-
fold problem here. First, there
is the relationship between the
control of Canada by a small
group of big shots — the top
layer of Canada’s ruling class.
Second, is their alliance with the
United States financial groups
that results in the growth of U.S.
domination in Canada.

U.S. domination, however, is
not an absolute condition. Cana-
dian governments and Canadian
tycoons have freedom of action
to end it. But the truth is they
exercise their freedom by their
own choice in such a way as to
put the national interests of
Canada — and hence the inter-
ests of the Canadian working
class — in a secondary position
to their own chance of sharing
as junior partners in the enter-
prises controlled by the United
States monopolies.

struggle for Canadian indepen-
dence.

Monopoly means _ concentra-
tion of production in a few
forms; ability to manipulate
prices and markets; interlocking
of financial groups, centred on
the banks, with the big indus-
trial enterprises; most intimate
relationship between the appar-
atus of monopoly capital and the
apparatus of government; world-
wide operations through export
of capital; and an international
struggle for markets and profits.

To justify their policy of sell-
ing Canada to the USA, the big
business tycoons spread the lie
that without U.S. direct invest-
ment the Canadian economy
could not be developed and our
living standards would suffer a
catastrophic decline. None of
this is true. For example, in the
Second World War Canada
found all kinds of funds to invest
in new industry, to make loans
and outright gifts of as much as
$1 billion at one time to the
United Kingdom.

_ Monopoly capital in Canada
makes enormous profits out of its
partnership with U.S. imperial-
ism. This does not mean that
there are no contradictions be-
tween Canadian and U.S. capital.
For instance, Canadian capital
would much sooner be an equal
partner with U.S. than a junior
partner.

To win genuine independence
the working class has to become
the centre of the struggle, the
leading force in the fight for
independence. It must seek . to
curb monopoly power and
strengthen public control
through democratic nationaliza-
tion, and eventually control of
the commanding heights of the
Canadian economy, which is the
only way in which Canadian
control can actually be assured.

The trade union movement
has to become a more vocal and
demonstrative factor in the day-
to-day struggle for Canadian
independence.

(The Tribune regrets Bruce
Magnuson’s byline was inadver-
tently omitted from the article
“Professor's version of trade
union history isn’t true” in our
Jast issue.)

PVAaAsei

Shy HSM oisy¢ ioe #1 baK

LABOR SCENE Mees monopoly takeover Pl @'@\@tvan (cm mci
and the workers duty

lights.

munity declares.

this fair country . . . assist us

weapon is unity.”

With threatening letters, white crosses and slashed tif
the Ku Klux Klan and similar organizations have begun 9 ©
paign of racial aggression against Toronto's
On several occasions the U.S. based fascist
and the Ku Klux Klan have identified themselves as the
petrators of criminal acts including the defacing of the
World Bookstore, slashing of car seats and smashing of

The oldest and most dynamic organization within ithe ris
community, the Universal Negro Improvement Association
ceived 4 letter which read: “Nigger you are next”. In the
eight weeks these racist acts have
stant physical attacks on Black. youth in various parts ©
city, and a proliferation of racist slogans throughout
a press release issued on behalf of the Toronto B

* cf
The statement also calls upon other Canadians ae
your part in co-operating with us to put an end to racis
in stamping out the actl
those fascists, their organizations and people, who have &
to deny Black people a free and fulfilling development. a!
Leonard. Johnson, owner of Third te
Tribune, ‘To date these attacks have cot
individuals who are afraid to show themselves. The Blac ith
‘munity in Toronto is going to respond to those attacks ¥
weapon that hasn’t been used in the Black communi:

Black commun
John Birch 50°

been supplemented “by ©

Toronte F
lack ¢

vities
cho’ 7

World Bookstore,
been the acts of cow

’ oad

Blows at Canada s und
: Therefore, e US A t
caus cre bear Made-in-USA sta”

By RICHARD ORLANDINI

It appears that public service
workers across Canada are the
first targets of the attack
against labor with the aim to
impose a wage freeze on Cana-
dian workers. And the attack,
while not publicly announced,
indicates that the tactics being
used were not conceived in
Canada. ;

When Richard Nixon announc-
ed his Phase II program that
was to limit pay increases for
U.S. workers to 544% per year,
Officials in Ottawa were quick
to deny that similar actions were
proposed for Canadian workers.
It is now more than a good
guess that the Canadian gov-
ernment wanted to test accept-
ance to such measures by first
trying them out on the public
workers through limiting their
increases to 11% over two years
—exactly within the- guidelines
imposed by Nixon.

With the federal and other
elections in the offing, no gov-
ernmental agencies—municipal,
provincial or federal — appear
to be willing to incur the wrath
of the electorate by making such
policies official. Instead, with
the cooperation of the municipal
and provincial governments, the
federal government has_ set
down the rules. The recent ac-
tions of Vaficouver’s Mayor Tom
Campbell, Toronto’s Mayor
Dennison, and the Halifax City
Council attest to the range of
the attack.

In Vancouver, the two year
package to the public employees
would have resulted in increases
below the 11% unofficial guide-
lines. The unwillingness of the
politicians to consider an offer
above that has resulted in a
bitter strike.

In Toronto, the initial wage
package offered to CUPE Local
43 workers was 6% the first
year and 5% the second; once
again the “magic” figure over
two years. The city negotiators
refused to move from that offer
until the Ontario Department of
Labor moved in with Guindon
as the mediator. A “settlement”
was reached for 8% the first
year and voluntary arbitration
the second.

© FO MOLLY ayy AVON?

It would not be at al®
ing if the offer for ei
year was put at 3% ane
of compulsory arbitrat

The City Councils 97
offer to members Of
79 (inside workers) be ;
first year and 3 helt %
Solidarity resulted i? © ve
ning a 14% increase ed
two years and improv —
benefits. {0

Officials of CUPE Loot
which represents rib g
workers, told the 7?
although the wage. ¥
fered to them is still
plicated, it appears f
offer “falls just short rs:
range.” \

In Halifax, after ‘lic t!
bitter strike, the
workers settled for 1%.
crease of under mand
though the initial den
ceeded that figure. the

The question, “ Y el
lic service for BOY gf
sault?” has obviow pal
Controls over munic! 0
by the federal 2
through grants % |,
enables the federal 6 irgilye
to set many of the gest
rules. And CUPE, tro!
size, is not the § pat
unions in Canad 5 oy
CUPE’s weakness iio” pt
its membership conte ete 4
many office w0 “st”
are os generally acy"
labor struggles. ef!

There is ample ay
the government
CUPE for an UM
freeze has met W! is
the anticipated ae,
CUPE locals havé
strike battles, staV
ment legislated
bitration and hav’
won settlements
the unofficial 11
in the case 0 se
their 15% incre#
years. as “gill
The government at |
the time and placé
and it is going © jab.
effort by the enti unix?
ment to prevent 5h
extension of all
wage freeze for
labor. es

Bee eet