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December 1944 — Vol. 25, No. 12 —
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What is this Canada? Is it merely
the biggest country in the Americas, the third largest in
the world, with an area of 3,700,000 square miles stretching
from the United States to the North Pole, and extending over
48° of latitude and 84° of longitude? Is it merely a land
of rocks which form the lid on a treasure house of nickel,
gold, silver, asbestos, radium, and scores of other minerals;
of wide prairies that produce the world's fourth greatest
crop of wheat, of inexhaustible forests, and of the earth's
largest area of fresh water lakes?
Canada is all these, and more. Nature bestowed gifts upon
her with a lavish hand, but the treasures lay unused for the
benefit of man throughout milleniums until only yesterday.
Canada's pride today is that so great—development of
nature's bounty has been accomplished by a mere 1/188th of
the world's population.
So industriously have Canada's 11½ million people explored
the wilderness, probed the rocks, tilled the plains, and built
dams to operate their factory wheels, that their country is
among the world's leaders in supplying the world's needs.
Canada is first in production of nickel, newsprint, asbestos,
platinum and radium, and in supplying food for the United
Nations. She is the world's second largest producer of aluminum,
wood pulp, and hydroelectric power, and second in the building
of cargo ships. Canada is third in producing copper, lead
and zinc, third among the United Nations' sea powers, and
the third trading nation in the world. She is fourth among
the world's air powers, and fourth in production of United
Nations' war supplies.
Canada's scanty population has been achieving mightily through
inventive genius and enterprise. These have developed the
benefits inherent ill the Dominion's strategic geographical
position, her abundant and varied natural resources, her wealth
of cheap water power, her thousands of miles of transportation
facilities by rail. highway, waterway and air. Her people
have kept her credit and exchange sound in the markets of
tile world.
Today, Canada is on the threshold of further advancement.
It isn't what we did yesterday, but what we are ready to do
tomorrow, that makes for greatness. This Dominion occupies
a central position between four of the world's great powers,
and her territories actually adjoin two of them: the United
States of America and the Soviet Union. With the other two,
Great Britain and France, she has strong bonds of tradition
and affection.
Canada is no land of the midnight sun, half British and
half American, populated chiefly by Indians, Eskimos, the
Mounted Police, and trappers on snowshoes. It is a land of
opportunity for individuals and organizations who have a forward
look and are not afraid to work. This Letter will attempt
to tell wherein some of the opportunities lie, as well as
to give an idea of how Canada has reached its present eminence
under the stimulus of the northern climate, the initiative
fostered by life in a new, vast and rugged country, and the
courage and self—reliance bred of great open spaces and
freedom of enterprise, movement, speech, religion and politics.
Canadians do not form a compact group like the English or
the French, but are a collection of diverse races molding
themselves into a nation that takes its pattern from the land
of their adoption. They are held together by love of country,
common interests, and loyalty to the Crown. At the time of
Confederation the largest individual British racial group
was Irish, and the Irish and Scottish together outnumbered
the English by almost two to one. After 1881 the English predominated,
and the Scottish moved into second place after 1911. By the
time of the 1941 census the numerical strength of the principal
racial stocks was in the following order: French, English,
Scottish, Irish, German, Ukrainian, Scandinavian, Netherlands,
Jewish, and Polish. Taking the best traits and abilities of
all these races, the Canadian nation is ready to march forward
in peace as it has done in war.
When Canada's first census was taken in 1666 to measure
the advancement made by this French colony since the founding
of Quebec by Champlain 58 years earlier, it was found that
there were 3,215 inhabitants. The growth from this figure
to ll½ million in 1941 places Canada among the leading countries
of the Empire in rate of population growth.
The first Canadians were natives found on the Atlantic coast
by early European explorers, and one tribe - the Kanatas of
the St. Lawrence villages - gave its name to the whole country.
First recorded European to set foot on the North American
mainland and meet its inhabitants was Leif Erickson, a thousand
years ago. John Cabot planted the flag of Henry VII on the
Atlantic shore around Cape Breton in 1497, but it was not
until after Jacques Cartier had been accounted a failure in
1535 when he did not succeed in blazing a trail through to
the China Sea that the European nations came to view Canada
as something in itself, and not just an obstacle to the North
West Passage. Two hundred years later the English and French
were fighting for possession, and in 1763 Canada was finally
ceded to Britain. Even as late as 1815, the year when Wellington
broke Napoleon's power at Waterloo, the thinly populated coastal
river and lake regions and the fur—trading stations of
the Hudson's Bay Company were the only outposts of the British
Empire in Canada. Development which started slowly then may
be said to have led logically and steadily to confederation
in 1867. By that time had come the railroad, making possible
the westward expansion of adventurous people, and the shipping
eastward of their produce from the prolific prairies.
Canada has overcome many natural barriers to unity, and
has performed prodigies of exploration and development, but
she has not yet quite succeeded in bringing a solution to
her great human problem, the amalgamation in one ideal and
philosophy of the two races that form the bulk of her population.
A French—Canadian journalist, Jean—Charles Harvey,
has said: "If we can some day unite in our land the descendants
of the two greatest civilizations of modern times, without
destroying the essential qualities of either the French or
the British blood, we shall have accomplished probably one
of the finest feats in human history." Canada is officially
bilingual, and the census of 1941 revealed 1½ million persons
speaking both official languages, while 7¾ million spoke English
only, and 2,200,000 spoke French only. The original occupants
of the country, the American Indians, now number 118,000,
and there are 7,200 Eskimos.
Several conditions, most of them geographical, have hindered
the speedier growth of Canada. Eastern and Western Canada
are linked by a neck of rock north of Lake Superior, narrow
and rough, through whose inhospitable barrenness the transcontinental
railways had to be driven to link the 4,000—mile—apart
coasts. There is rough, rocky ground lying between the Maritimes
and Quebec, and the Rocky Mountains separate British Columbia
from the Prairies. On the other hand, Canada is blessed with
what is probably the world's most remarkable system of waterways,
providing natural thoroughfares which lead in every direction.
Starting from Lake Winnipeg, just west of the middle of the
country,, one can travel by canoe east to the Atlantic, west
to the Pacific, north to the Arctic, north—east to Hudson
Bay, or south to the Gulf of Mexico.
Canada is a beautiful country. The Canadian landscape artist
is born to a rich—heritage of the most varied motifs.
From the peach—covered hillsides of the Niagara Peninsula
to the tundra of the Arctic, from the great Atlantic breakers
on the coast of Nova Scotia, across the pastoral and industrial
central provinces to the dry clean air of the Prairies, and
over the Rockies to the moist Pacific slope, the various atmospheric
conditions are associated with a landscape equally varied
in its physical characteristics. Add to these the dramatic
differences in seasonal environment, and the painter has inexhaustible
resources of material. These qualities make Canada irresistible
to the tourist. In pre—war years caring for tourists
was one of the country's great service industries, catering
to love of natural beauty set in an invigorating climate,
with opportunities for summer and winter sports of all kinds.
Before the gasoline shortage there was a steady stream of
cars north and south across the United States border. Due
to the war emergency, it was necessary for the government
to restrict Canadian pleasure travelling involving the expenditure
of United States dollars, every last cent of exchange being
needed to purchase implements of war for ourselves and for
Britain. It is thought by many that one of the first foreign
exchange regulations to be relaxed at the end of war with
Germany will be this limit upon Canadian travel in the United
States. It was a remarkable fact of the friendship between
these two countries that not only was there a greater volume
of trade across their borders than between any other two countries
in the world, but their nationals crossed in hundreds of thousands
annually, without formality and in the greatest freedom.
Like the United States, Canada has had its political ups—and—downs,
but has achieved stable responsible government. Casual readers
of newspapers in these two democracies around election time
might be pardoned for thinking that they had reached their
present stature by doing everything wrong. There is, however.
a certain logic to be traced through their history, and their
development was made inevitable by the composition of their
people. The very freedom with which they criticize their institutions
is indicative of the wideness of their democracy.
The British North America Act, passed in 1867, is the basic
document of the constitution of Canada, designed to knit together
two great races, geographically distant territories with opposing
economic interests, and many widely divergent viewpoints.
This federal union was a plan whereby, through mutual concession,
cultural and local loyalties could be preserved. That union
was possible, and that it evolved into what Canada is today,
illustrate the genius of the British in developing colonies
into nations. The whole evolution of the Empire, except in
mere fortresses or trading stations, is in the direction of
responsible government. Self—government is extended in
proportion to the growing capacities of the people, brought
to maturity by education and the example of just administration."
Through the years up to 1931 Canada developed toward full
nationhood. First there was undeniable gaining of equal status
within the Empire, and then followed in the Statute of Westminster,
the legal step which capped the arch. This Act declared the
dominions to be equal in status, in no way subordinate...in
any aspect of their domestic or external affairs.
The Canadian Parliament is composed of the King (represented
by the Governor—General), the Senate and the House of
Commons. As in Britain, the part played by the King's representative
and the upper chamber has been steadily decreasing, with chief
responsibilities involved in legislation being assumed by
the House of Commons members of which are elected directly
by the people.
The political party in power selects a cabinet, or ministry,
which is responsible to parliament and holds office while
it enjoys the confidence of the people's representatives;
a ministry resigns when it becomes apparent that it is not
supported by a majority in the House of Commons. All British
subjects, men and women, who have attained the age of 21 years
and have been ordinarily resident m Canada for 12 months,
and in the electoral district when the election is called,
have the franchise. Canadians on active service, irrespective
of age, are entitled to vote. Each of the nine provinces has
a legislature; each province has a Lieutenant—Governor.
Modern Canada is a child of the last century, of free trade,
liberal institutions, and the Pax Britannica. It seeks peace
above everything, and would suffer intensely in a nationalistic
world. It shapes its international course autonomously, but
it must at all times integrate it with the world policies
of the United Kingdom and the United States. Before the war
broke out, Canada and the United States were already committed
to joint action for defence of this northern hemisphere and
the co—operation of national economies in time of war.
The question had arisen whether Canada should go a step farther
and join the Pan—American Union, but this at once raised
questions affecting its position as a member of the British
Commonwealth and its status as an American nation. A speaker
at the Study Conference of the Canadian Institute of International
Affairs put it this way: "To go in might commit Canada to
the affairs of this hemisphere more deeply than its traditions
and interest require. To remain out may render it suspect
as a responsible American nation, and forfeit opportunities
for goodwill and trade with other American states...Ideal
from the Canadian point of view would be the inclusion of
the Pan—American Union as a regional association in a
global organization of nations. In such an organization, Canada
could at once be a good American and serve its extra—hemispheric
interests."
Economically, Canada has made steady progress. The long—term
trend of the national income had been slightly upward throughout
the twenty years leading up to this world war in spite of
the unprecedented setback of the thirties, and if the period
of observation were extended back to before the first world
war the upward trend would be much more pronounced. The national
income reached a high level of $4,600 million in 1920, and
fell off 24 per cent in the following year. Recovery was continuous
until 1929, when a maximum of $5,273 million was reached.
The depression low point was 1933, when the national income
was only 52 per cent of the 1929 total. There was a temporary
setback to recovery in 1938, and the subsequent advance has
been greatly accelerated during the war years, with a total
reached in the twelve months ended September of practically
$9 billion.
The vast increase in the national income carries with it
capacity to bear a much enlarged debt. Canada's net debt today
is nearly three times the prewar figure. In 1913 the net debt
per capita was $41; in 1919, $189; in 1939, $279; and in March
this year $774. Annual interest charge on the funded debt
at the end of the last fiscal year was $274 million, or an
average rate of 2.57 per cent, compared with 3.52 per cent
in 1939 and 5 per cent in 1919.
Prior to the first world war the Canadian government was
able to finance its expenditures through the imposition of
such indirect taxes as customs and excise duties. During that
war only 10 to 15 per cent of Canada's economic resources
was used for war ends. In the present struggle Canada is using
about 50 per cent of its entire resources solely for military
purposes, and all war costs have been, and are being, met
inside Canada. This, and the new policy of endeavouring to
finance current expenditures as far as possible out of current
revenue, have led to significant increases in taxation systems
and amounts. Direct taxation collected by the Dominion Government
now accounts for about 64 per cent of the total. Payment of
the high income taxes was made easier by adoption of the "pay—as—you—go"
plan, a break with the traditional method of tax collection
that Canada was the first country to make. Nevertheless, the
enormous outlays of government funds necessitated by the war
have been a heavy drain on the income of the ordinary tax—paying
citizen, and have curtailed the resources of corporations.
Under the excess profits tax act, corporations which have
profits exceeding 1162/3 per cent of their standard
profits (average 1936/39) pay a tax at the rate of 100 per
cent on the excess, and no corporation is permitted to retain,
after tax, profits equal to more than 70 per cent of its standard.
Provision was made, however, for a 20 per cent refund after
the war for corporations to which the 100 per cent rate of
tax applies.
In addition to paying extremely heavy income taxes, Canadians
have invested more than $8 billion in war loans. The latest
loan was supported by more than 3¼ million individual subscriptions,
and purchases of bonds totalled over $1½ billion.
Despite the impact of two great depressions (1873 and 1930)
the standard of living in Canada has improved steadily, and
government expenditures for the general good of the country
have increased proportionately. Between 1874 and 1937 total
per capita government expenditures increased by eleven times,
and the portion of the national income spent by governments
rose from less than one—tenth to more than one—fourth
of the total. Collective efforts to promote economic development,
and collective assumption of responsibility for alleviation
of individual distress and for tile provision of rising standards
of public welfare and education have come to play an important
part in the economic affairs of the country. Just this summer
parliament made Canada the most recent of 38 countries to
adopt a family allowance bill. This is expected to cost $200
million a year, and will provide from $5 to $8 a month for
each child under 16 up to a family of four, with decreasing
benefits to succeeding children. In addition, Canada has made
provision for tile blind and the aged, and has unemployment
insurance and workmen's compensation for injuries. Many other
schemes of a social security nature are under discussion.
Indicative of the general living standard are the latest
available figures of motor vehicles (7.6 persons per vehicle);
and telephones per 100 population (14), ranking Canada third
among the nations. The index of wage rates rose 85 points
between 1913 and 1944, while the cost of living increase was
only 39 points.
Education is assigned by the constitution to provincial
governments, and a system of public elementary and secondary
education, financed mainly by local school authorities but
assisted by provincial allowances, has developed in every
province. For thirty years the Dominion Government has provided
grants for agricultural instruction, technical education and
for the training of youth for employment, activities which
are likely to be greatly enlarged on demobilization of the
armed forces. In the realm of higher education, six provinces
have each a university receiving government financial support,
and the remaining three provinces have each one or more colleges
helped by provincial funds.
The judiciary in Canada is not elected, but appointed, and
judges hold office for life or until retirement age. The Royal
Canadian Mounted Police is a constabulary maintained by the
Dominion Government. Organized as the North West Mounted Police
in 1873 to keep order in the Northwest Territories, it has
grown from a force of 300 to a strength of about 5,000, and
is one of the most highly regarded law forces in the world.
Broadcasting in Canada is under jurisdiction of the Canadian
13roadeasting Corporation, which, in addition to supervising
the 100 private stations in the country, operates powerful
stations of its own which provide two national networks. Latest
expansion is into shortwave transmission, with two 50,000—watt
transmitters operating from Sackville, N.B. to reach all parts
of the world. Canada has more than 100 daily newspapers and
900 weekly newspapers, of which there is no censorship except
of war news for security reasons in wartime. The post office
serves a territory more extensive than any other country except
the United States and the U.S.S.R., with a relatively small
population. Its railway mail service is one of the largest
in the world, and it has a very rapidly developing air mail
system.
Canada is noted the world over for the strength of its commercial
banking system. No Canadian bank failed throughout the depression;
in fact, only one bank has failed since 1914, and that was
a small bank of no great significance in the economic life
of the country. Even then, every noteholder was paid in full.
There are ten chartered banks, with 3,200 branches, and they
have the complete confidence of the public. Security of deposits
in the difficult years begot a corresponding security of mind
and sense of trust, and today the banks have in deposits by
the public in Canada $4,264 million. Because they operate
on a nation—wide scale, the banks have been in position
to provide great support to Canada's war effort. Their experience,
resources and organization have been placed unreservedly at
disposal of the government, and they have been of great assistance
in carrying out much of the administrative work connected
with controls, rationing, and the sale of war securities.
The banks administer the regulations dealing with foreign
exchange.
The Bank of Canada, a central bank, commenced operations
in 1935. It acts as a stabilizing influence upon the economy
of the country; it is the fiscal agent of the Dominion Government,
and it does not accept deposits from the public or compete
with the chartered banks. Just recently, there was established
the Industrial Development Bank, under management of the Board
of Directors of the Bank of Canada, to lend or guarantee loans
to industrial enterprises. Main purpose of this bank is to
afford credit to businesses which could not obtain it from
established institutions, because, of long—term requirements.
Insurance is an important factor in Canadian life. The amount
of life insurance per capita has increased from $10 in 1869
to about $710 today, a spread of 71 times in the amount of
insurance held compared with less than a fourfold increase
in population. The growth in property is indicated by the
expansion of fire insurance from $412 million in 1880 to $14
billion at the end of 1942.
The average Canadian farmer owns more property, is in better
cash position, and owes less in debts than ever before in
our history. This is of paramount importance in an industry
which is the most important in the country. It employs, according
to the 1941 census, 25 per cent of the total gainfully occupied
population, and 30 per cent of the gainfully occupied males.
Agriculture provides raw material for many factories, and
its products in raw or manufactured form constitute a very
large percentage of exports. The total cash income to farmers
from the sale of farm products during the twelve months which
ended in June was more than $1½ billion, while gross agricultural
production in 1943 amounted to $2,223 million.
(This article will be concluded next month.)
Published by RBC Financial Group. All editions from the RBC
Letter collection are available on our web site at www.rbc.com/responsibility/letter.
Our e-mail address is: rbcletter@rbc.com.
Publié aussi en francais.
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