April 28, 1967
Expo ’67 opens in Montreal amid sour US-Canada relations
Expo 67 officially opened to the public this morning in Montreal, Quebec. Yesterday, journalists and dignitaries from around the world attended the opening ceremonies, which were officially opened by recently-appointed Governor General Roland Michener. The Expo flame was lit by Prime Minister Lester Pearson, an event broadcast worldwide in full-color. The Expo presents an optimistic future of prosperity, advanced technology and international cooperation. It offers a glimpse of the future: a monorail train, a geodesic dome, and Habitat 67, a modernist housing concept. [1]
Despite the fanfare and patriotic pomp, looming over the festivities was the ongoing Mercantile Bank controversy and compensation issue for those affected by the Fermi meltdown. Just how independent of the U.S. can Canada really afford to be without inviting economic disaster? What could, or would, a really angry United States do to impair the economy of Canada?
While no one expects that American troops will occupy Canada, the mighty economic power of the United States could be used to cripple the Canadian economy. Canada’s trade deficit is sustained by the steady inflow of American capital. If anything blocks or sharply reduces this flow of investment, Canada would be immediately thrown into an immediate financial crisis that devalues the Canadian dollar — as happened in 1962. Several Canadian industries depend directly on American goodwill, including oil and lumber. The auto industry is wholly owned by American parent companies and is heavily dependent on a free trade agreement enacted in 1965.
The dispute over the American-owned Mercantile Bank has exposed a split in the Pearson cabinet and the Liberal Party. Walter Gordon, former Minister of Finance and outspoken economic nationalist, leads the more defiant school of thought. His chief rival, Mitchell Sharp, Minister of Finance, is the voice of caution. The Prime Minister tries to walk a fine line in the middle of a dispute between these two cabinet men, wanting to stay on good terms with the United States, but hesitant to alienate his populist base.
Sharp is cautious about offending the United States. His fear is that if Canada is perceived as being hostile to foreign investors, they may be wary of spending or lending money in Canada. His belief is that it is imperative that the Canadian government remains on amicable terms with the American financial community.
Gordon, on the other hand, downplays the threat that the economic giant to the south poses. His special task is to make a survey of American ownership in Canada (consistent with his belief that American ownership jeopardizes the independence if not the very existence of Canada). “I thought we behaved like scared children when we talked about reprisals in the Mercantile Bank affair. The Americans aren’t going to do any of these things, and we shouldn’t scare ourselves by thinking they will. Canadians underestimate the strength of our own position. The Americans have as much to gain as we have, if not more, from continued friendship with us. Sure, they could ruin us if they wanted to — but the country they’d be ruining is one where they've already got about $25 billion invested. Their direct personal interest in Canadian prosperity is very high.”
The fundamental difference between Sharp and Gordon is unlikely to be resolved by any mere form of words, as they have almost opposite views on what is good for Canada. The next few weeks will show whether these contradictory views can be reconciled. If they cannot, the Liberal government's days of greatest strain still lie ahead. [2]