»

ahaa

' a OEE
fh

ohly pervasive in Canada but are likely

"d economic growth... itis the function
rNs into objectives for national policy.”

—Task Force Report

Successive Canadian govern-
ments have failed to enact ade-
quate financial disclosure laws
affecting private companies and
it is imperative that steps be
taken to correct this situation
said the report on foreign in-

| vestment in Canada,

Companies having less than
50 shareholders, ‘not offering se-
curities to the public and who

|! have become subject to restric-
MY tions on transferability of shares
are private companies, under the

present Canada Corporation Act.

Federally incorporated public
companies are required to file an
audited financial statement with
the Registrar-General while only
three provinces require any fil-
ing.

The report gives part of the
list of non-disclosing foreign-
owned companies: British Petro-
leum, Canadian International
Paper, Canadian Kodak, Chrys-
ler, Coca-Cola, General Foods,
General Motors, Household Fin-

Hon. Marcel Lambert (Ed-
monton West): May I ask
whether the Minister of Fin-
ance has received notice that
the Amax Petroleum Corpora-
tion and the Southwest Pot-
ash Corporation of Canada,
subsidiaries of American
Metal Climax Incorporated of
New York, and both active in

‘ western mining and _ petrol-
eum production, have decided
to: close their operations fol-
lowing the reallocation of
funds in consequence of
measures taken by the United
States government to curb
business spending abroad? If
so, has the hon: gentleman re-
ceived notice that other com-
panies may have the same in-
tention?

Hon. Mitchell Sharp (Min-
ister of Finance): I read about
this particular case in the
newspapers this morning; I
have not received any other
direct information. I do know
there is some concern with
regard to the action of the
United States government in
curtailing the export of capi-
tal from the United States.
This is, of course, a matter of
concern to the Canadian gov-
ernment because we have
said to industry and to the
public generally that we shall

attention of the United States
government if they threaten
to have serious effects upon
Canada.

Mr. Lambert: In that case
will the minister consult with
his colleague the Minister of
Manpower and Immigration
and ask him whether he now
agrees there should not be
government direction of for-
eign investment?

Mr. E. Nasserden (Ros-
thern): I have a supplement-
ary question for the Minister
of Finance. Has he received
any representations from the
province of Saskatchewan in
connection with the slow
down’ of potash development
in that province?

Mr. Sharp: Yes, I have dis-

premier and with other minis-
ters of the Saskatchewan gov-
ernment.

Hon, Alvin Hamilton (Qu’-
Appelle): My supplementary
question has to do with the
question raised by my hon.
friend from Rosthern. Is the
minister aware Of a state-
ment by an official of the
United States treasury de-
partment last week that if

THE “POTASH” CASE

IN THE HOUSE OF COMMONS, FEBRUARY 13th

bring: cases of this kind to the.

cussed this matter with the ©

any United States subsidiary
were to trade with a country
such ‘as China, its manage-
ment would be liable to
severe fines or prison sent-
ences for breaking the trad-
ing with the enemy act?

Mr. Sharp: I am not aware
of that particular statement,
but of course I am aware of
United States policy in this
respect.

Hon. George Hees (North-
umberland): Has the Minister
of Finance pointed out to the
United States secretary of the
treasury that this country has
a trade deficit of more than a
billion dollars with the United
States every year, SO. we are
assisting them— ;

Mr. Speaker: Order, please.
(Later:)

Mr. T. C. Douglas (Burnaby-
Coquitlam): Mr. Speaker, fur-
ther to the question asked by
the hon. member for Qu’Ap-
pelle may I ask the Minister
of Finance, in view of the
statement made by a United -
States official regarding pot-
ash companies in this coun-
try and whether or not they
can sell potash to certain
countries to which its*sale is
prohibited in the United
States, has the minister or
any other department of the
government made it clear to
Canadian subsidiaries of Unit- _
ed States corporations, includ-
ing potash companies, that
their responsibility is to the
laws of Canada and not to
the laws of the United States?

Mr. Sharp: Yes, Mr. Speak-
er. This - position has been
made very clear. both by the
Minister of Trade and Com-
merce and by myself; and if
there are any cases of this
kind where Canadian compa-
nies are not observing Can- |
adian law I hope my hon.
friend will bring them to my
attention and I will hav
them investigated’ immedi-
ately.

Mr. Douglas: As a supple-
mentary question, will the
minister make it clear
these companies that the traq-
ing with the enemy act which
applies in the United States
does not apply to Canadian
subsidiaries of United States
corporations operating in Can- -
ada?

Mr. Sharp: Mr. Speaker, the
hon. gentleman knows that
United States laws do not
apply to any Canadian com-
panies.

1IP AND CONTROL

ance, IBM, Kraft Foods, Procter

and Gamble and Sun Oil.
Better-known Canadian non-

disclosing companies are T.

Eaton Co. Ltd. and the Irving.

interests.

“The blame for this state of
affairs must properly be put at
the door of Canadian govern-
ments for not insisting on public
disclosure,” the report adds.

“It can hardly be doubted
that foreign firms would disclose
were they legally required to do
so. At the same time, realism re-
quires recognition that com-
panies. find disclosure at least an

inconvenience and that they are.

not adverse to using their in-
fluence to limit its extent.”

The pattern
of U.S.

control

Eighteen of 20 companies
which served a $2.46-billion
market in Canada’s petroleum
and coal products industries in
1964 were foreign controlled.

Fifteen of twenty largest
companies in the Transportation
equipment field had 79 percent
of the market in that field.

These figures and others were
released in the report on foreign
ownership and control.

They are taken from figures
filed by companies under the
Corporations and Labor Unions
Returns Act. :

The report, prepared by a
group of eight economists said
official statistics on foreign
ownership and control are scarce
and late. It recommended new
measures to keep all large cor-
porations under better govern-
ment surveillance.

The rubber industry saw 13
foreign owned in the top 20 com-
panies. Eight of the top 20 had
80 percent of the industry’s
sales.

The report said that $27.35-bil-
lion of foreign capital was in-
vested in Canada at the end of
1964. More than $17-billion of it
-was in the capital stock of Cana-

dian companies and the net as-.

sets of unincorporated branches
or other long-term investments
apart from bonds and debtures.

This $17-billion was the book
value of the investment. In a
rising market such as has pre-
vailed through most of the post-
war years, the. market values-of
the stock and other assets would
be much higher. :

By the end of 1964, direct
foreign investment involving
legal control totalled $15.88-bil-

-lion. Portfolio investments which

do not include legal control were
$9.42-billion.

The report also contained pre-
viously announced figures on the
growing percentage of foreign
ownership and control over the
last half century or more.

Thirty percent of Canadian
manufacturing industry was
U.S.-controlled in 1926. This rose
to 46 percent in 1963. With a
negligible amount of any petro-
leum and natural gas industry in
1926 U.S. control amounted to

MARCH 1, 1968—PACIFIC TRIBUNE—Page 7

rol

rt

| acain ieee aie 1a