More recent Hurtig article

[k hanly <khanly@xxxxxxxxxxxxxxx>]

 Celluci the US ambassador is the same one who lectured Canada for not
supporting the Iraq war. Seems he now believes not just that Canadian and
Mexican oil is American but also Iraqi oil.
    Of course Hurtig does not say what percentage of Canadian companies
should be controlled by Canadian workers rather than capitalists.

Cheers, Ken Hanly


Mel Hurtig - Globe and Mail Tuesday, May 6 2003

Before the House of Commons prorogues for the summer, Statistics Canada will
release its annual report on foreign ownership, The Corporations Returns
Act. The report will reveal an all-time record one-year growth in foreign
ownership and foreign control in Canada in 2000.

Not too long ago, the Investment Review Division of Industry Canada reported
a record number of foreign takeovers of Canadian companies in the same year.

After the House of Commons Industry Committee recently proposed dropping
restrictions on foreign ownership of telecommunications and cable companies,
our two national newspapers and some of the Asper dailies bubbled over with
lavish praise. That this is happening in a country that already has such a
terribly high degree of foreign ownership and foreign control is not only
difficult to comprehend, but dismaying for those of us who value Canadian
sovereignty and independence.

Even more dismaying is the likelihood that once Paul Martin becomes prime
minister, the sale of Canada to foreign owners will accelerate. Today, over
thirty-five per cent of corporate profits in Canada already go to foreign
companies. Wouldn't it be revealing for some enterprising journalist to ask
Mr. Martin how much foreign ownership he thinks would be too much? "Mr.
Martin, sir, would it be forty percent? Fifty percent? Or perhaps sixty
percent? At what point would you say that enough is enough? And then,
exactly what would you do about it? Of course, you do recognize Mr. Martin
that under the investment provisions of NAFTA we must continue allowing
Americans to buy up our country, whether we like it or not. What would you
then do about NAFTA, Mr. Martin?"

The Globe and Mail's April 29th editorial on the subject of foreign
ownership was bizarre in the extreme. Some of the editorial's logic backing
the Industry Committee's decision was either misleading or incomprehensible.

For example, the suggestion was made that "Canadians, it seems, have got
used to the idea that we don't have to control companies to benefit from
them. After all, foreign owners pay taxes and employ thousands of Canadians
too." Moreover, while "Many Canadian energy companies have disappeared in
recent years, often into the corporate arms of foreign competitors.few
concerns were raised that resources critical to our economy were being sold
off to foreign companies."

The suggestion that Canadians find our unusually high level of foreign
ownership acceptable is nonsense. Public opinion polls consistently show
exactly the opposite. Earlier this year, a Decima poll showed that 72
percent of Canadians opposed foreign ownership in the media and
telecommunications industries, 60 percent in the telephone industry and 66
per cent in newspapers. In a Maclean's poll, 81 percent agreed that Canadian
ownership of businesses operating in Canada was necessary "in order to
maintain a strong Canadian identity" and in 2000 the Globe reported that 70
percent said they were opposed to more foreign control and three in five
said that they were angry that the government wasn't doing more to stop
foreign takeovers.
Other recent polls have shown that 89 percent of Canadians believe that U.S.
takeovers of Canadian companies is responsible for the Americanization of
Canada (Ekos), three in every five Canadians say we are losing our
independence from the U.S. (Maclean's), and 75 % say Canadians should have
the right to curtail and regulate foreign ownership (Vector).

Perhaps most dismaying of all, one poll showed that only a quarter of
Canadians are confident that there will be an independent Canada in 25
years.

As for the Globe's contention that Canadians are not concerned about the
increasing foreign control of our natural resources, another poll shows that
83% say "it is very important that Canada remains sovereign in the area of
natural resources." As well, last year an Ipsos Reid poll showed that 80
percent of Canadians said that they were concerned about the foreign
ownership of Canadian energy resources.

Perhaps someone should mention all of this to Ambassador Paul Cellucci who,
according to the Globe's John Gray, "seems baffled by the suggestion that
Canadian oil and gas should, perhaps, be Canadian. He says the United States
want to look on Canadian and Mexican energy as domestic, in effect as
American."

More importantly, we should remind both Jean Chrétien and Paul Martin of how
Canadians feel before President Bush's impending energy-related visit to
Canada.

Today, most manufacturing and oil and natural gas operating revenues in
Canada already go to foreign owners. Dozens of key sectors of the Canadian
economy are majority foreign-owned and controlled. As I have indicated in
the past, in the United States there's not one single industry majority
foreign owned. Not one!

Why do virtually all other developed countries resist massive foreign
ownership of their economies? Here's a quick and very partial short list.
Foreign corporations employ sophisticated transfer pricing and debt-loading
schemes to transfer profits to their own countries or to tax havens before
they are taxable in the host country. Foreign firms import much higher
levels of parts, components and services than equivalent domestic companies.
As a result, employment ratios to sales are invariably well below that for
domestic firms. (One recent study showed that foreign firms in Canada import
five times as much as domestic firms on a comparative basis).

Excessive foreign ownership leads to hollowing out (witness the recent Globe
articles about Calgary and Vancouver). Head office jobs transferred out of
the country result in truncated management, and key corporate decisions are
made by people who live in another country and care little if at all about
the welfare of the host country.

No self-respecting country would allow foreign corporations to control so
many industries and so much of their economy as we do in Canada. The
greatest irony of all continues to be that our own banks, pension funds and
other financial institutions have for years been putting up most of the
money that foreigners use to buy up our country.

Finally, updating some figures I mentioned in my last Globe and Mail article
on foreign ownership, in the years since Brian Mulroney abolished the
Foreign Investment Review Agency, of all the hundreds of billions of dollars
of foreign direct investment monitored by Industry Canada, 96.6 percent has
been for takeovers and only a pathetic 3.4 percent has been for new business
investment. During this period just under 10,500 companies in Canada have
been taken over by foreign buyers.

Welcome to what will soon be the colony of Canada.

Mel Hurtig
Edmonton.


Mel Hurtig is the former chairman of the Committee for an Independent Canada
and the founder of the Council of Canadians. His most recent book is The
Vanishing Country: Is it too late to save Canada?


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