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men and equipment north. Cana–
da's harsh winters are proverbial.
This makes resource extraction and
processing, not to mention t rans–
portation, an expensive venture.
Then too, was the matter of
dependency on foreign capital.
"Canada has always been heavily
dependent upon foreign capital to
finance her economic expansion. In
1900 Britain supplied 85 percent of
the foreign capital invested . .. by
1926, 54 percent of imported capital
carne from the United States.... In
1959 investment from tbe United
States was 76 percent of the total"
(Ricker, Saywell, Rose,
The Mod–
ern Era,
pages 307-308).
The truth is, a nation like Cana–
da, with a small domestic market, is
vitally dependent upon
foreign
trade
and especially trade with her
best customer, the United States.
Economic nationalists led by
Finance Minister Walter Gordon
(1963-65) pointed out legitimate
concerns about the scope of
American industrial projects
in Canada, but the bottom
line was painfully clear: The
Canadian economy is at the
merey of American policy to
an uneasy exten t. And by the
early 1960s the United
States itself was encounter–
ing economic head winds.
How
and
Why?
"Trade or fade," U.S. Presi–
dent John F. Kennedy
warned bis fellow-country–
men in 1962.
What was happening"?
In June 1957 six of the
war-ravaged nations of West–
ern Europe, rebuilt in part
16
with the help of Marshall Plan dol–
lars, formed the European Eco–
nomic Commun ity.
It
worked .
Volkswagen sales in North Ameri–
ca signaled a new economic era- a
shrinking global market for Canada
as aggressive multinational corpo–
rations vied frenetically
for a larger sl ice of a
wor ld econ omy whe r e
demand seemed to out–
strip production.
Yet Canada enjoyed a
mild boom from 1964 to
196 6. U.S. P r esident
Lyndon Johnson's step-up
of the Vietnam War was a
stimulus. Asia's industrial
spu rt in the 1960 s
boosted Canadian t rade
j ust as J apanese invest–
ment in Canada began its
steady climb. Cold War
pressures also rebounded
to Canada's advantage-Cuba and
the People's Republic of Ch ina
"bought Canad ian" during the
decade. Unemploymen t averaged
only 4 percent. Inflation was held
to 3 percent. Near stability.
But the Canadian economy was
l iving on borrowed time. The infla–
tionary impact of the Vietnam War
grew. An industrial slowdown in
1967 pointed to t roubled times
abead.
Twenty years of general prosper–
ity, the "bigger and better" mental–
ity, had set the stage for the har–
rowing inflation battles of the
1970s. Everyone expected more,
not less, from the marketplace.
Global trends deeply affected
Canada, with her comparatively
small domestic market. By 1970 , the
very pillars of the postwar monetary
and trad ing system were shaking.
West Germany
revalued
the mark in
October 1969. This helped intensify
the American slump as the level ing–
out effects of the Vietnamese war
boom took hold.
Ame.rica's nose d ive p layed
Canadian-manufactured
deploying arm of NASA space
shuttle (upper left). Clockwise
from Jower Jeft Open pit
asbestos mine in British
Columbia. DriUing for oil in the
Beaufort Sea. Computer panel
at an oil refinery in Alberta.
Timber operation in
Shawinigan, Quebec. Sulphur
mine in Alberta. Unloading the
day's catcb of fish in
Newfoundland.