The Smooth Canadians
VANCOUVER, B.C.—Suddenly the shoe is on the other foot. After decades of large U.S.-based corporations colonizing the Canadian economy, the colony is striking back. The Canadian government is pursuing a policy to bring under Canadian ownership 50 percent of the country’s oil and gas industry in 1990. Canadian corporations are aggressively moving into markets and acquisitions in the United States.
These moves from our northern neighbor have aroused the ire of companies in the United States who, predictably enough, are demanding that Congress and Ronald Reagan act to stop the Canadians. Congressional hearings are under way to do just that.
All this “Canadians are coming” clamor by giant companies in the U.S. invites some wry commentaries from Canadians. They know how much of their economy is in the hands of business, largely American conglomerates.
Here is a sample tally: Under foreign control are 75 percent of the oil and gas industry, 70 percent of mining, 46 percent of paper and pulp, 96 percent of motor vehicle manufacturing, 82 percent of chemicals and 56 percent of all manufacturing industries. As Energy Minister Marc LaLond reminds his U.S. critics, what American government would ever stand for even a fraction of such foreign control? Fully two percent of the non-financial sector of the U.S. economy is foreign-owned and many federal legislators in Washington think that is too much.
For many years U.S. companies have followed their version of the Golden Rule throughout Canada—”He who has the Gold, rules.” Now a number of energetic Canadian companies are returning the favor. Large real estate interests from British Columbia and Ontario are buying or building major building complexes in Miami, Houston, New York and other cities. Canadian oil companies are bidding for U.S. oil companies. Canadian cable companies, especially the Rogers group, are winning cable franchise rights in American cities and are trying to buy the fast growing UA-Columbia Cablevision Corp. A Canadian trucking transport firm, Cast North Ltd., has made, in the words of the Journal of Commerce, “spectacular inroads into the U.S. market in recent years.” Not to be outdone, large Canadian banks have been financing projects and acquisitions of U.S. companies at very sizable dollar levels
Instead of U.S. companies relishing the competition, they are going to Uncle Sam with shouts of “unfair” and lists of restrictions they want Congress to enact. There are presently pending in Congress bills to (1) place a nine-month moratorium on Canadian purchases of U.S. energy companies, (2) discourage U.S. importers and exporters from using Canadian ports for through traffic, (3) place margin requirements on Canadian banks financing acquisitions and (4) prohibit Canadian companies from obtaining mineral leases on U.S. public lands.
Behind the scenes diplomatic pressure by Washington on Ottawa is getting heavier, particularly owing to the displeasure of Mobil Oil, Exxon and other petroleum companies with Prime Minister Pierre Trudeau’s “Canadianization” energy policy.
It is argued that the Canadians themselves are using unfair methods of competition. After all, U.S. banks are under margin requirements when financing a corporate takeover. And Ottawa is providing incentives to Canadian oil companies on public lands in that country. But U.S. oil companies are known to have special access to obtaining leaseholds on the federal lands as well as many tax subsidies derived from the U.S. government. So, too, are U.S. banks benefiting from governmental policies.
Viewed from a broader historical perspective, American corporations’ favorite colony is, as Canada’s ambassador to the United States, Peter Towe, put it. trying to “right the balance.” If Canada’s political sovereignty and self-determination are to mean anything, there needs to be a reassertion of control over a heavily absentee and foreign-controlled economy. It is needed for restoring the nation’s self-confidence and diminishing its dependency on foreign investors who conveniently ignore how much of their investments, such as oil and gas, are internally financed in Canada.
Americans can benefit from a liberated Canada and the creative diversity that it would bring to North America. So hold that Maple Leaf high, 0 Canada, and do what Americans would do if they were Canadians.