CANADA FOR THE CANADIANS SIR,-Mr. Davenport in the Spectator on
August 23 complains in his final paragraph that whenever he makes a friendly criticism of Canadian financial affairs he gets into hot water. May I suggest that a first step towards avoiding that parboiled condition would be for that gentleman to engage in a little research of the facts before writing?
Any person with even a superficial familiarity with recent Canadian public affairs must be wondering what relationship 'Mr. Joseph Coyne' reputed to be 'the last Governor of the Bank of Canada' bears to Mr. James Coyne who has a somewhat better claim to the same title. Again I am sure that the stock- broking firms in Toronto from which two of Mr. Gordon's advisers were recruited would be interested in knowing that they are 'academic' institutions (and therefore tax-exempt perhaps?).
The allegation that Mr. Gordon sought the advice of a firm of industrial consultants before presenting the Budget is a fabrication by Mr. Davenport and a falsehood. Not even the Opposition, who have shown no hesitation in insinuating the most heinous things about Mr. Gordon, ever accused him of that.
On a more fundamental plane, how are Canadians to have any opportunity to buy back Canadian equities from foreign control unleSs by tax measures those equities may be pried loose from their foreign owners? The withholding tax and accelerated depre- ciation provisions constitute incentives to foreign- controlled firms to make their Canadian subsidiaries' shares available to Canadians.
As to the Kennedy tax on foreign investment, the US administration recognised, what apparently Mr. Davenport does not, that a reduction in investment, particularly in Canadian funded debt, would necessi- tate currency control and a restriction on merchan- dise transactions between the countries. Since the balance was substantially in favour of the US, Mr. Davenport's sentence in all, accuracy would have been : 'Washington could not allow the Canadians to save their own dollar at the expense of American exporters!'
DONALD S. MACDONALD MP for Rosedale House of Commons, Canada
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