The Debate on Canadian
The 1973 Resolution
This Resolution was drafted by the Political Committee of the League
for Socialist Action / Ligue Socialiste Ouvrière in the fall of 1972, and
adopted by a majority of the Central Committee at a plenary meeting in
January 1973. Following an organization-wide discussion, it was adopted at
the April 1973 LSA/LSO convention.
Canada and the Crisis of World Imperialism
1. The past decade has been marked by a growing instability and
crisis in the world imperialist system. The extended postwar expansion of
capitalism has flagged. Long-standing economic accords have ceased to
function efficiently; previous economic and political alignments have
become unhinged; the painfully constructed world monetary structure is in
shambles. A simultaneous rise of class struggles and of interimperialist
competition has challenged bourgeois stability in each country.
Canada has proven particularly vulnerable to the growing instability of
world imperialism. A wide-ranging debate has opened up in the bourgeoisie,
and also in the left and the working-class movement, over the problems
flowing from Canada’s place in the world imperialist system. A correct
orientation on this question is vital to the building of the revolutionary
socialist vanguard, and to its correct orientation to the class struggle.
This resolution will outline the present situation of Canadian
capitalism in the world imperialist system, discuss the questions this
relationship poses to the working-class movement, and examine the tasks
that result for the revolutionary vanguard. Such an analysis must begin by
identifying the main tendencies of imperialism operating on an
international level, which set the framework for the particular problems
of Canadian capitalism today.
Internationalized production and national states
—a contradiction of world imperialism
2. Capitalism is an economic system of restless expansion, of
the ceaseless search for new markets for production, new fields for
investment, and new sources of raw materials. The opening up of a new wave
of capitalist expansion after 1945, sometimes called the third industrial
revolution, set loose in turn a new drive toward the extension of the
world capitalist market and of the world division of labor.
Imperialist investment has not pierced the defenses of the fast-growing
economies of the workers’ states. The colonial and semicolonial world,
apart from resource industries, has offered only limited opportunities for
profitable investment. The predominant form of international expansion has
been the interpenetration of trade and investment among the imperialist
powers. These developments have profound implications for Canada, and
constitute the main objective process underlying the present debate on
Canada’s relationship to U.S. and world imperialism.
3. Postwar capitalism has been characterized by a vast expansion
of interimperialist trade, increasing not only absolutely but as a
proportion of total production. Furthermore, imperialist corporations have
multiplied their investments in countries outside their main base of
operations. U.S. corporate investment in Western Europe, Canada, and
Japan, for example, increased from $7 billion to $60 billion between 1949
and 1965. A new wave of concentration of capital has produced a world
market dominated by corporate giants with yearly turnovers in the billions
of dollars; investments and production have spread throughout the
capitalist world. However, ownership of these so-called multinational
corporations normally remains rooted in particular national states.
Increasing trade, international investment, and the rise of
"multinational" monopolies have all served to exacerbate interimperialist
competition. The ebbing of the long postwar expansion in the late 1960s
has intensified this process. Corresponding to and flowing from the
increasing competition and concentration of capital on an international
scale has been the deepening of competition among the national capitalist
economies. This is reflected both in the drive toward new international
alignments like the European Common Market, and in the rise of "economic
nationalism" as seen in the protectionist policies of the Nixon
administration in the United States.
4. Both the internationalization of production and increasing
interimperialist competition have challenged the self-sufficiency and
stability of national capitalism, particularly of countries like Canada
that are relatively dependent on world trade. In self-defense, imperialist
powers have worked to establish closer trade alliances and agreements,
international trading blocs, and delicately elaborated world monetary
accords. This process has been carried furthest in the European Common
Market. Substantial continental economic integration in North America is
another example, as are generalized negotiations for international tariff
reductions and monetary accords.
But an equally central feature of modern capitalism is increased
dependence on the intervention of the national state. It has assumed the
role of guarantor of the profits of the great monopolies, both through
various forms of subsidy, and through its means of control of the economy.
It plays a new role of economic regulation through monetary and fiscal
policy, engineering doses of inflation and unemployment required to keep
the corporations in the black. It intervenes with growing directness in
the daily life of the class struggle to shore up monopolists under attack,
through repressive measures ranging from interference in individual strike
struggles to generalized wage controls. Further, it has an increased role
as protector of national capitalism against the tides of international
competition, whether through subsidization of exports and export
industries or through tariffs and other protectionist policies.
Thus the contemporary capitalist is torn between his widened
international horizon of operations (the product of the growth of
productive relations beyond the national framework), and his continued and
increasing reliance on the power and mechanisms of the national state in
which his holdings are concentrated.
The national state—indispensable instrument of bourgeois rule
5. The development of the European Common Market has aroused
speculation that it may be the embryo of a new pan-European state
structure. The establishment of a Common Market currency, much discussed,
would pose this question, as it would require the establishment of a
supranational governmental structure to regulate it. To be effective the
latter would have to be able to intervene in defense of the European
currency in the economic life and class struggle of the Common Market’s
national components. Will this be the beginning of the assimilation of
these national components into a pan-European superstate?
Is the Canadian capitalist class becoming so assimilated into the
continental framework that it will soon have no properly "national
interests requiring the defense of the Canadian state—with the result that
Ottawa would become only a puppet regime for the commonly worked-out
policies of an integrated continental ruling class (where, of course, U.S.
capital would predominate as the stronger capital)?
These speculations flow from a general question of no little
importance. Will the international interpenetration of capital proceed to
the point where the decisive layers of the bourgeoisie in each country no
longer find the national state to be an adequate instrument for their
protection? Will it proceed to the point where these layers no longer have
any particular concentration of their investment in the nation of their
origin, and thus have no "national" interests left to defend? If this were
the case, the international monopolies would mount pressure for the
establishment of new, supranational state forms, and for the political
integration of smaller imperialist powers into their more powerful
There is no evidence that this is happening in any country. Never to
this day has a national bourgeoisie lost or given up control of its nation
state except where defeated through war or revolution. Nor is any
mechanism evident through which such a qualitative change could take place
on a gradual basis. On the contrary, all evidence points to the
bourgeoisie’s continuing reliance on the national state—capitalism is
unable to jump out of its national skin, even to form continental unions,
let alone fuse on a world scale.
Despite rising international investment, the capitalist class that
controls each national state retains its decisive holdings within the
jurisdiction of that state. As long as this remains true, they will cling
to the national state to defend these holdings against all competition.
Canadian direct investment in the U.S., for example, reached over $2
billion in 1967. This remained only a small fraction of the holdings of
Canadian monopolies in Canada itself; it would represent only 4 percent of
the assets of Canada’s banks. The national bourgeoisie fear leaving their
state-fortresses, which they have painstakingly constructed, know
intimately, and whose weapons they can wield with skill and confidence,
for the shelter of the unknown and uncertain framework of new state forms.
The rise of world revolution, which noisily announced its return to the
imperialist heartland in May 1968, introduces a powerful political
consideration. A period of mounting challenges to capitalist rule, a
period in which the workers’ states have proven the viability of another
form of economic organization—this is no time to launch hazardous
experiments which infringe on the authority and power of the existing
national state. For the same reason, the imperialist giants like the U.S.
have every reason to shore up the stability of the state structures of
their weaker rivals.
The specter of an international economic downturn, in a period of
increasing international competition, tends to force the bourgeoisie back
into its national ramparts, striking out with measures to protect its
markets. In this way Nixon’s protectionist "new economic policy" is a rude
shock to believers in harmonious North American economic integration, or
in trans-Atlantic imperialist harmony.
All evidence testifies to the inability of capitalism to surmount the
contradiction between the growing international division of labor and
internationalization of production, and its continuing and growing
reliance on the power of the national state. This contradiction is the
reflection, on a world scale, of the fundamental contradiction between the
increasing socialization of production and continuing private ownership of
the means of production.
This contradiction has quite tangible and unpleasant results for the
capitalists of each country, particularly of highly trade-dependent
countries like Canada—results whose costs they are quick to try to pass on
to the working class.
6. This contradiction has produced problems in different forms
for the various national bourgeoisie. The "Commonwealth," for example, has
been broken apart by a rapid shift in the relationship of forces and the
weakening of British imperialism. British imperialism has sought to
reorient itself to the Common Market, and other "Commonwealth" members
have looked for new orientations as best they could. With the rise of
Japanese competition with U.S. capitalism, both Japan and the U.S. have
been balancing the wisdom of protectionist measures against foreign
competition with the concept of an aggressive orientation to conquer
foreign markets. The smaller imperialist powers (in the case of Canada, a
rather substantial imperialist power overshadowed by a mighty neighbor)
have had to seek some shelter from international competition, by searching
for international associations that could widen the markets accessible to
7. In imperialism’s economic wars, as in its military conflicts,
the working class provides the cannon fodder. The working class bears the
brunt of recessions, economic dislocation, unemployment, and antilabor
drives that result from the crisis of imperialism.
The revolutionary vanguard must propose a program to defend the working
class against all attacks on its interests, including those attacks
flowing out of interimperialist economic wars. This program is not
directed against the imperialist power, however strong, that is portrayed
by the bourgeoisie as the "aggressor" and the cause of the problems.
Rather it must combat the capitalist system as a whole, which is the real
source of the problem. This means combating the capitalist ruling class of
their own country. In interimperialist economic conflicts, as in military
wars, the revolutionary vanguard is "defeatist"; it looks to the defeat of
its own ruling class as its own objective. For revolutionists, "the enemy
is at home."
The revolutionary vanguard opposes specific interimperialist deals that
threaten the workers’ interests, such as the Common Market. The fight
against such measures typically brings together diverse class forces,
including segments of the bourgeoisie, whose ideology—nationalism—is
normally a powerful factor in such movements. The working class must
intervene independently in defense of its own interests, and must fight
the nationalist ideology which, in the last analysis, always serves to
line up the working class in support of its own imperialist robber barons.
The revolutionary vanguard does not support the weaker party in these
conflicts, whatever indignities the smaller or weaker nation may suffer at
the hands of powerful opponents. As Trotsky said, the role of the
revolutionary party is not that of nurse to the "crippled gangsters of
imperialism" (Writings, 1938-39, p. 15). To the crisis of
imperialism, as a world system, it counterposes a series of anticapitalist
transitional demands, which point the way to the only solution: workers’
power, and the building of a socialist world economy.
Canada—an imperialist power
8. By every criterion, Canada must be placed squarely in the
ranks of the imperialist powers. Canada is a highly industrialized
country. The population is overwhelmingly urban, and the productivity of
Canadian industry puts it in the first rank of capitalist economies.
The Canadian bourgeoisie holds a massive block of highly monopolized
capital, concentrated in highly advanced and profitable sectors of the
Canadian economy, and competitive on the world’s markets. Its holdings are
characterized by a level of technological development close to the highest
in the world.
The Canadian bourgeoisie has forged a strong, centralized state
apparatus, independent of foreign imperialist rule, and constituting a
powerful instrument for the defense of its class interests. Canada has
gained and maintained political independence. It is economically dependent
on the world market, as are all imperialist powers in varying degrees.
The imperialist character of Canada is confirmed by the participation
of the Canadian ruling class in the imperialist exploitation of the
colonial and semicolonial world. In addition, the national subjugation and
imperialist superexploitation of Quebec is a central component of Canadian
bourgeois power and profits.
9. Over the past century, the United States has replaced Great
Britain as the imperialist power with which Canada has its closest ties.
American capital has replaced British as the predominant foreign investor
in the Canadian economy, but with a difference—the U.S. bourgeoisie has
concentrated on direct rather than portfolio investment, giving it direct
control of substantial sectors of the economy.
The overall extent of this investment has been widely publicized. The
Gray Report on foreign ownership in the Canadian economy, commissioned by
the federal government and submitted in 1971, evaluated the share of
foreign-owned firms in 1968 in the profits of all industries at 41.3
percent—an increase of 1.2 percent over three years. Measured by assets,
the share of foreign-owned firms was 26.8 percent. Foreign-owned firms
were defined as firms with more than 50 percent ownership by nonresidents
of Canada. In fact, many firms with a considerably smaller percentage of
foreign shareholders are effectively controlled by foreign-based
Four-fifths of this foreign ownership is U.S.-based. U.S. investment
has tended to increase more rapidly than Canada’s gross national product,
rising 71 percent, for example, in the boom years between 1963 and 1968.
Canada therefore has the highest level of foreign ownership of the world’s
major imperialist economies.
Foreign ownership is concentrated in Canada’s manufacturing industry,
where, according to the Gray Report, foreign capital controls 58.1 percent
of total assets. Other industries are characterized by a predominance of
Canadian ownership; the Gray Report’s statistics are as follows:
construction—13.8 percent foreign ownership; transportation—8.4 percent;
communications—0.4 percent; public utilities—15.7 percent; wholesale
trade—31.4 percent; retail trade—21.2 percent; financial industries—12.6
Canadian capitalism is highly dependent on foreign trade, with more
than 20 percent of production destined for export. The Canadian economy is
closely linked to that of the U.S., and a substantial division of labor on
a continental basis has been developed. More than two-thirds of Canada’s
trade is conducted with the United States.
Canada’s most successful monopolies have established important foreign
operations, and Canadian investment in the U.S. has risen rapidly.
Canadian monopolies have close ties with foreign, and particularly U.S.
counterparts, reflected not only in interlocking directorates but in
shared ownership ventures. (One major "multinational corporation" of
Canadian origin, Massey-Ferguson, now has two-thirds of its investments in
the U.S., raising the question whether it can still be said to be
"Canadian," in the sense that its owners’ interests are concentrated
within Canada’s borders.)
The web of close economic ties is rounded out by special trade
agreements like that establishing free trade (among producers) in the auto
industry. Canada has received occasional exemptions from U.S.
protectionist and monetary control measures. Canada is not only a member
of NATO, it is tied to the U.S. by a separate air "defense" treaty (NORAD),
and its war production industry is tied into a continental framework by
the Defense Production Sharing Agreement with the U.S.
All these tendencies have been accelerated in the period of rapid
concentration of capital and of interpenetrating imperialist investment
that followed World War Two. More recently, with the relative
strengthening of U.S. imperialism’s main rivals, Western European and
Japanese capital have rapidly extended their holdings in Canada, and
expanded exports to Canada at a rapid pace. Even as the auto pact
established an integrated North American automobile market, for example,
it was challenged by European and Japanese competition, which began to
move into Canada and invest in Canadian manufacturing plants. At the same
time the harmony of the Canada-U.S. capitalist relationship has been
shaken by Washington’s protectionist measures.
Canadian capitalist circles have shown interest in trying to take
advantage of these trends to reorient Canadian trade to some degree in the
direction of lesser reliance on U.S. markets. But no significant component
of the Canadian capitalist class has proposed a break with the overall
framework based on close economic ties with the United States.
Toward a "superimperialism’’? The reality of imperialist rivalry
10. Have these developments fundamentally transformed Canada’s
relationship to world imperialism, or do they have the capacity to do so
in the near future? Several concepts have been advanced in recent years
which would imply that this is the case. The first is that the U.S. has
become some kind of "superimperialist" power, dominating and subjugating
all other imperialist countries. This view, based on a false projection of
the tendencies of the 1950s and early 1960s when U.S. hegemony was at its
peak, found expression in the LSA/LSO’s 1968 resolution, "Canada-U.S.
Relations." This resolution, the LSA/LSO’s first attempt to analyze the
new and complex problem of opposition in Canada to "U.S. domination,"
spoke of U.S. predominance in the following terms:
"The rising forces of the world socialist revolution, together with the
declining position of all other capitalist powers and their weak position,
both in absolute terms and relative to the U.S. colossus—their
deteriorating position in world trade, their inability to sustain an
effective military force in the era of super-costly intercontinental
ballistic missiles and nuclear devices to promote and defend their own
particular interests—has forced them to become, if not completely
subservient, reluctant, but nonetheless compliant tools, or at best junior
partners of Wall Street and its imperialist interests. This is true in the
case of the biggest and most solvent capitalist powers including those
where U.S. investment plays little direct role in their economy."
In general, the history of imperialism shows a constantly shifting
relationship of forces. The second-rank imperialist power of yesterday has
frequently surged forward to catch up with and bypass its earlier
developed neighbor. The predominance of one power (Britain in the
nineteenth century, the U.S. after 1945) has not altered the laws of
interimperialist competition. Revolutionary Marxists cannot base their
politics on the assumption that the trends of the moment will continue
indefinitely, or that the relationship of forces established at any moment
will not change.
The recent development of world capitalism has verified these general
concepts. U.S. hegemony after World War II has been followed by some two
decades during which Japanese and continental European capital have gained
ground relative to the U.S. giant, in terms of the rate of growth of their
productive base, their growing share of world trade, and their inroads on
the U.S. market. Far from insolvent, these powers have pushed the U.S.
into its balance of payments crises and forced two devaluations of the
dollar, as well as forcing Washington to a series of energetic defensive
measures against increasingly threatening foreign competition.
Economic and political assimilation?
11. A second concept projects the Canadian capitalist class as
undergoing a process of economic and political assimilation into a broader
North American framework, through which it has lost any distinctive
national interests, or any capacity to defend such interests.
The 1968 resolution on Canada-U.S. relations spoke in these terms:
"If at other times there were conflicting antagonistic interests
which caused the Canadian capitalist class to pursue or attempt to
pursue policies that took it into real conflict with the U.S. ruling
class, this is no longer the situation. It is now apparent that the
Canadian capitalist class has arrived at a mutually agreeable
relationship with U.S. capital in their common exploitation of the work
force of this country and its vast natural resources."
Like all deals between far-sighted bandit chieftains, the agreements of
Washington and Ottawa are worked out to adjust interests for mutual
benefit, with the larger share of the benefits of course going to the more
powerful of the bandit gangs. The agreements and understandings do not
eliminate the conflicting antagonistic interests or underlying frictions.
The factors standing in the way of assimilation of one national
capitalism into another have already been examined. Canadian capital
continues to exist as a distinct entity, with its holdings concentrated
within Canada’s borders, and with a strong objective interest in promoting
economic conditions favorable to capital within Canada—a matter of
strictly secondary concern to American capitalists, despite their
substantial Canadian holdings. The Canadian state promotes the interests
of big business in Canada, and thus of the Canadian bourgeoisie, ‘through
such measures as manipulation of the economy to maximize corporate
profits, direct and indirect subsidy to big business, intervention in the
class struggle to press back the labor movement, and negotiation to
maximize opportunities and advantages on the world market. All these
measures are direct or indirect means to further the interests of Canadian
capitalism in its competition with other imperialist powers, including the
Any doubts about Wall Street’s capacity to distinguish between its
interests and those of Canadian capitalism have surely been eliminated by
the events of the past few years. U.S.-Canadian trade accounts for one
quarter of the U.S. trade deficit; Washington has sought means to shift
the trade balance, if not to achieve an export surplus, then at least to
achieve equality. Canada received no blanket exemption from the Nixon 10
percent import surcharge. Nor has it been spared the effects of the DISC
program, by which Washington promotes the international competitiveness of
firms producing in the U.S., through a tax write-off scheme.
The LSA/LSO’s 1968 convention also took up the question of Canada-U.S.
relations in its Political Resolution, which pointed out the existence of
antagonistic interests, and predicted the conflicts of the last two years:
"Canadian capitalism is highly vulnerable because of its place in the
world system. As an imperialist power, part of the increasingly integrated
North American economy, it must share the impact of all the shocks and
crises which befall U.S. imperialism. As a smaller power highly dependent
on world trade, Canada is already extremely susceptible to international
economic disturbances. If the Canadian economy is today protected in part
by the special concern of its U.S. guardians, it is certain that the
growing pressure of world events on Washington will force the latter to
cut back its commitments to bolster up the Canadian economy ..."
The Canadian ruling class is both partner and competitor of its
southern counterparts. It is tied to U.S. and world imperialism in the
defense of the imperialist system. It is tied to U.S. imperialism by close
trade relationships and trading agreements. It is a competitor of U.S. and
world imperialism in a constant struggle to improve its relative position
on the world market.
Is Canada becoming a semicolony?
12. Is U.S. investment reducing Canada to the status of a
semicolony? It has become fashionable on the Canadian left to talk of
Canada’s "colonization" by American imperialism, arguing by analogy with
the impact of U.S. investment in Latin America, Africa, and Asia. It has
been argued that even in formally independent imperialist countries, when
the key industries come to be owned or controlled by foreign capitalists,
a process is set in motion that reduces a once independent imperialist
power to semicolonial status—and that this is the case in Canada.
No example exists of this process taking place in an advanced country.
Nor is any such process underway in Canada today.
What is a colony? In the colonial and semicolonial world, imperialist
domination has blocked the completion of the bourgeois-democratic
revolution: the freeing of the country from foreign control, the creation
of a unified national market, the establishment of a centralized state
controlled by the ruling class of that nation, etc. Imperialist domination
has blocked the establishment of the political, social, and economic
preconditions for the development of the local economy through
industrialization. The result is economic backwardness and imperialist
The term "semicolony" is normally used in reference to colonies that
have achieved formal political independence, but remain subject to the
stranglehold of foreign imperialism. In a semicolony, the national
bourgeoisie normally has only a very weak economic base; it is largely
excluded from the modern, industrialized sector of the economy. It has
typically not been able to establish firm control of the state, or to use
the state as an effective means of controlling the economy, of defending
its interests against imperialism. It is unable to drive through the
changes necessary to lay the basis for the self-sustaining growth of local
capitalism. Frequently, the land question remains unresolved, and feudal
conditions persist in the countryside. There is no cumulative growth, no
diffusion of industrial techniques to increasingly large sectors of the
economy, no increase in the autonomy of economic policy.
None of this is true in Canada. The Canadian bourgeoisie has full
control of its state, and this state possesses all the normal powers of an
imperialist government for control of its economy. The Canadian
bourgeoisie has not been driven from its decisive holdings; they are not
marginal, but concentrated in the monopolized sector of the economy. No
process of structural change is underway through which foreign investment
would "de-industrialize" Canada. Canada is not a semicolony, but a highly
developed imperialist power.
13. The considerable publicity around the degree of U.S.
ownership in Canada has tended to obscure another highly relevant fact:
the vast holdings of the Canadian bourgeoisie. They are by no means
limited to marginal side-pockets of the economy. They include such giants
as the Canadian Pacific interests and the Power Corporation empire. The
chartered banks are Canadian-owned (with the exception of Mercantile, a
small U.S.-owned bank). They rank among the largest in the capitalist
world and total over $60 billion in assets, more than the total of U.S.
holdings in Canada. Canadian holdings in manufacturing and mining, while
minority, are substantial, and highly concentrated; they include an 86
percent share in Canada’s iron and steel industry. Canadian capitalism has
launched such monopolies of world stature as Massey-Ferguson, the Garfield
Weston empire, and Brascan.
Canadian capitalists have substantial foreign holdings. In 1967,
Canadian direct investment abroad amounted to $4,030 million, having more
than doubled during the preceding decade. Just over half of this is held
by Canadian-owned firms. While more than half of this foreign investment
is in the United States, the proportion of investments in the U.S. is
dropping; holdings in the West Indies, where Canadian investment bulks
large, have risen rapidly over past decades.
Developing relatively late, the Canadian bourgeoisie nonetheless
overcame the hindrances imposed by geography, history, and the small size
of the internal market relative to that of the U.S., to forge a strong,
centralized state apparatus; an effective weapon of defense of its class
interests. Beginning with the protective tariffs of Macdonald’s "National
Policy" and the vast public funds poured into the pockets of railway
promoters, the Canadian bourgeoisie has used the state energetically to
intervene in the economy to promote the accumulation of capital in Canada.
The state has acquired industrial holdings nearly equal to the total of
U.S. holdings in nonfinancial industry (Kari Levitt, Silent Surrender,
p. 120). These holdings are concentrated in transportation and public
utilities, thus utilizing public ownership to supply efficient and
low-cost services to industry in Canada.
A further characteristic of the Canadian ruling class is its
tightly-knit and substantially homogeneous character. Sociologist John
Porter described in The Vertical Mosaic how fewer than 1,000 men
shared between them 81 percent of the directorships in the "dominant
corporations," as well as 58 percent of the directorships in the chartered
banks and life insurance companies.
A high degree of state intervention, and of monopolization and
concentration of capital: these characteristics of the Canadian
bourgeoisie point to its vast political power—a power vividly underscored
in October 1970 with the federal government’s occupation of Quebec by
10,000 federal troops, and suspension of democratic rights throughout
Canada under the War Measures Act.
In short, Canada has a powerful, homogeneous, highly conscious
capitalist ruling class, firmly in control of its own state power, ruling
in its own name.
Despite all their professions of commitment to defend "Canadian
independence," Liberal and Tory regimes alike have done very little to
slow the tide of foreign investment in Canada. Indeed, it is not clear why
they should be expected to take such actions, since foreign investment
challenges neither the profits nor the state power of the Canadian
bourgeoisie. Measures to block U.S. investment and U.S. takeovers have
been concentrated in sectors of the economy associated with the power and
functioning of the state itself: the chartered banks, other financial
institutions, radio and television. Ottawa has also acted on occasion to
block foreign takeovers in strategic industries like uranium (the Denison
mines case), or to preserve a Canadian toehold in a key industry dominated
by foreign capital (the Home Oil case).
The Canadian state represents the interests of the Canadian ruling
class in ongoing disputes and frictions arising from interimperialist
competition. It negotiates to obtain the best possible circumstances for
capital accumulation in Canada, through tariff and monetary agreements,
subsidies to Canadian industry, etc. The tangible hesitation of Ottawa in
energy resource negotiations testifies to the Canadian bourgeoisie’s clear
understanding of its particular interests vis-a-vis U.S. capital.
Canada’s substantial stocks of already scarce resources are a trump card
that the Canadian bourgeoisie is not anxious to play until assured of a
A key factor in the competition of imperialist corporations is the
social and economic conditions in each country—the degree of inflation,
the price of labor power, etc. Canadian and U.S. capital compete to create
more favorable conditions for the maximization of profits in the
respective countries where their holdings are concentrated. A particularly
alarming development for Canadian capital has been the relatively more
rapid rise of Canadian workers’ wages in recent years, which has reduced
the wage gap between Canada and the U.S. from 27 percent to 8.5 percent
since 1961. This poses the need for energetic countermeasures.
In summary, while a considerable degree of integration has taken place
between the Canadian and United States economies, particularly in respect
to trade and investment, this process has not altered the fundamental
character of Canadian capitalism, the Canadian state, or its relationship
to world imperialism. This character can be summarized in three
propositions: The Canadian ruling class is an imperialist bourgeoisie,
with highly monopolized holdings concentrated in Canada. It controls the
Canadian state, a highly centralized and efficient mechanism for the
defense of its class interests. It has its own national interests,
distinct from those of the U.S. and other bourgeoisies, and utilizes the
Canadian state energetically as an instrument to defend its national
interests against all comers. Canada is not "dominated" or "oppressed" or
"exploited" by foreign capital investment. It is not a colony or a
semicolony, but an independent capitalist state—an imperialist and
The limits of continental integration
14. The Canadian ruling class’s general policy in
interimperialist conflicts since the Second World War has been to develop
and maintain close economic and political ties with U.S. imperialism,
while using the Canadian state as the vehicle to defend its own particular
interests. If this policy has brought many gains, it has provided no
permanent solution to the problems posed by interimperialist conflicts.
U.S. capital is not prepared to let the Canadian ruling class "have its
cake and eat it too"—that is, to enjoy simultaneously all the benefits of
continental integration and all those of independent statehood. Washington
has proven very aware of the existence of the border, of its competition
with Canadian capitalists, and capable of taking effective measures to
defend its interests in this contest.
An alliance with U.S. capital brings with it all the weaknesses and
problems of the American giant. Continental integration has brought more
than inflation and recessions over the border; it has also encompassed
Canada in the relative decline of North American competitiveness relative
to European and Japanese competition. In context of rising
interimperialist competition, this can only raise the question, in time,
of some degree of reorientation of Canadian capitalism toward closer ties
with the other imperialist powers.
Nationalism is the main ideological cement of bourgeois rule in Canada,
and a central instrument to promote popular identification with the
institutions of the state. The task of protecting, developing, and
enhancing the prestige of these state institutions therefore cuts against
any course of economic and political integration with the U.S.
The controversy over Canada-U.S. relations during the past few years
has revealed a considerable amount of pushing and shoving by various
bourgeois currents who aim to steer Canada toward closer or less close
continental integration (e.g., the controversy over the Gray Report; the
debate on energy resources deals). A debate is underway around the degree
to which anti-U.S. feelings should be developed as a means to promote
pan-Canadian patriotism, which can then be used to support wage controls,
or buttress Canadian unity against Quebec.
A period of rising class struggles generally produces divisions in the
bourgeoisie, which deepen with the approach of a revolutionary challenge.
The present radicalization underway in Canada should therefore tend to
deepen these divisions in the ruling class over Canada’s orientation in
the imperialist world system, and its relationship to U.S. capitalism.
Full political and economic integration of Canadian capitalism into a
North American framework, which would maximize access of Canadian industry
into the North American market, would cost Canadian capitalists the vital
protection of their own state power. Defending the main concentration of
Canadian capital, within Canada’s borders, demands a strong and
authoritative Canadian state, acting energetically to promote the health
of Canada’s economy and of the Canadian-based monopolies, vis-a-vis
their U.S. and other foreign rivals. But as an independent power, Canadian
capitalism is buffeted by all the contradictions and crises of world
imperialism today. It feels the impact of these contradictions with
heightened severity in view of its small size relative to the unified
markets of the U.S. and Western Europe. (In this sense the Economic
Council of Canada glumly described Canada’s position in world trade as
"the outer one.") Further, it is doubly vulnerable due to its dependence
This hard choice before Canadian capitalism is a particular case of the
general contradiction discussed earlier: the contradiction between the
international character of capitalist production and the national limits
of the capitalist state.
Canadian capitalism cannot resolve this contradiction.
Nationalism—a weapon of Canadian bourgeois rule
15. Nationalism was born in the epoch of rising capitalism. It
reflected the need of the new capitalist class to establish large,
independent, unified nation states as the basis of the capitalist market.
In the imperialist countries, these "national tasks" were accomplished
long ago—for the dominant nationalities. For these nations today,
nationalist concepts do not correspond to any progressive national tasks.
On the contrary, in the imperialist countries, nationalism is the
ideology of the ruling class, of class collaboration. Here nationalism has
served the ruling classes well, lining up the working class behind
imperialist exploitation and wars, pitting one section of the oppressed
against another. Nationalism is the recruiting drum for imperialist war,
calling on the workers to "die for their country," and slaughter their
brothers and sisters who live under a different flag. Nationalism is the
classic justification for imperialist exploitation of colonial peoples,
the "lesser breeds without the law." In fulfilling this function, it takes
the particular form of racism—the ideological justification of the pillage
and enslavement of the nonwhite world by the "master race."
In its most virulent form, nationalism is the ideological weapon of
fascism, the method of rule the capitalist class has resorted to in order
to destroy the gains and organizations of the working class. The
nationalist illusions of the working class, fostered by Social Democratic
and Stalinist misleaderships, can serve as the bridge to break them from
their allegiance to working-class organizations and line them up behind
the fascist gangs.
Matters stand completely differently for nations where the expansion of
imperialism has cut off the completion of the bourgeois-national
revolution and has subjugated, oppressed, and colonized entire peoples.
Not only do national tasks of a progressive character remain to be
accomplished here, but they can be carried out completely only through the
victory of a socialist revolution. In such situations, national
consciousness can play a profoundly progressive role, because it
stimulates and propels forward the struggle for national liberation. This,
for example, is the case in Quebec.
Into which category does English Canada fall? Clearly there are no
progressive national tasks to be carried out in the English-Canadian
nation. Canada is an independent capitalist nation state—and it is an
imperialist oppressor nation. So long as it remains so, English-Canadian
nationalism will be a fundamentally reactionary ideology.
16. The fascist form of nationalism has been seen as yet only in
embryonic form in Canada—one reason why so much of the left has embraced
Canadian nationalism with such light-minded irresponsibility. But all the
other functions of nationalism have been seen in Canadian history.
Nationalist feelings have been built up to justify Canadian
participation in imperialist wars. More recently, it is the belief in the
unique character of Canada, free from the unsavory features of U.S.
imperialism, that has been used to justify Canada’s counterrevolutionary
role in the Indochina ICC [International Control Commission] and in UN
peacekeeping forces. If Canada is a "prison house of peoples," nationalism
is the religion of the jail guards; anti-Québécois chauvinism is a major
bourgeois weapon in dividing the working class and winning support for the
Rising class struggles across Canada today combine with the actions of
Québécois and other oppressed nationalities to mount a growing challenge
to Canadian bourgeois rule. The ruling class grasps increasingly to
nationalism as a weapon of self-defense: to mobilize support for bourgeois
Confederation and promote class collaboration. It is quick to tip its hat
to the "struggle for Canadian independence from the U.S." A significant
current of bourgeois opinion, which speaks through such authoritative
voices as the bourgeoisie’s largest daily paper, The Toronto Star, and its
leading monthly magazine, Maclean’s, urge the bourgeoisie to go
much further. This "anti-U.S." current in the ruling class promotes a
demagogic campaign against U.S. influence and U.S. "domination," aimed at
mobilizing support for the institutions of capitalist Canada.
One likely future task of this nationalism is to provide the rationale
for wage controls and antilabor measures. As the narrowing Canada-U.S.
wage gap shows, the intractability of Canadian labor is a major threat to
Bay Street in its competition with U.S. producers. How better to motivate
wage controls than as an urgent measure of national defense against the
wage-cutting Yankee corporations and against Washington’s anti-Canadian
17. The 1968 resolution on Canada-U.S. relations was published
together with five articles expanding and elaborating its main theses. One
of these articles seems to challenge the existence of Canadian nationalism
as an ideology with real social roots. Referring to an issue of
Canadian Dimension featuring "An Open Letter on Canadian Nationalism"
it said: "The sad fact of the matter, one of the authors admits in a
supplementary article—there is no doctrine of Canadian nationalism," The
article continued: "There is no class, and ideology is always an
instrument of class interests, there is no class whose interests a
Pan-Canadian nationalism reflects."
The Canada-U.S. relations resolution, however, accurately portrayed the
threat of nationalism. "Nationalism in advanced capitalist countries such
as Canada has traditionally been a tool of the ruling class. In 1939 the
banner of national unity was raised in order to gear the nation,
specifically the working class, to sacrifice their lives in an imperialist
world war. It is now being raised to mobilize English-speaking Canada
against the legitimate struggle of the Québécois for their national
rights. This bourgeois nationalism stands in the way of a class
differentiation in society—in particular, the development of class
consciousness amongst the workers and, where the workers are already
organized along class lines, is designed to fracture them."
A "new," "progressive" Canadian nationalism?
18. Is there a "new nationalism" in Canada today—a nationalism
of a new type, distinct from bourgeois nationalism? Can this "new
nationalism" be said to possess an anti-imperialist character, developing
toward anticapitalist consciousness?
In general terms, nationalism is an identification with the integrity,
independence, values, culture, or language of the nation; the belief that
the nation as a whole has common problems, goals, or tasks; and the
concept that a struggle or common endeavor in pursuit of these goals is
In a national struggle or movement, different social classes tend to
stress different aspects of nationalism, to connect the struggle with
their own specific objectives. But this does not mean that several
distinct "nationalisms" coexist, one for each major social class. The
pursuit of national goals by elements of every social class will have a
common point of reference: the situation of the nation as a whole and the
tasks that flow from this.
Nationalism has a progressive character only where it promotes the
struggle against real aspects of national oppression suffered by a
people—that is, where it corresponds to real national tasks (winning of
national independence, establishment of national language, etc.) left
unachieved by the bourgeois revolution, and which can now be achieved in
their totality only through socialist revolution. In such struggles of
oppressed nationalities, the working class does not develop a "different"
nationalism from the bourgeoisie. Rather it is the most thorough-going and
revolutionary advocate of the full achievement of the tasks bf national
emancipation, and has the most consistent interest in carrying through
such tasks. In contrast, in imperialist nations where such tasks are
already realized, nationalism serves only the bourgeoisie.
To argue that Canadian nationalism is progressive, one must prove first
that Canada has been changed from an imperialist oppressor nation into an
oppressed nation and a semicolony. No one has been able to do this. But
even if it were so, Canadian nationalism would not be a "new" phenomenon,
but would be similar to the nationalism of other oppressed nations.
To assert the existence of a progressive new nationalism in a
nonoppressed, imperialist nation, a nationalism without national tasks but
with an anticapitalist thrust, a nationalism coexisting with but separate
from reactionary bourgeois nationalism—this would require a series of
innovations in the Marxist analysis of nationalism.
19. An important aspect of the developing radicalization of the
past ten years has been a growing understanding of, and opposition to,
various manifestations of imperialism around the world. The Cuban
revolution, the nonwhite resistance in South Africa, the Vietnamese
liberation struggle, the Black revolt in the U.S., the Québécois revolt in
Canada, the nationalist movement in Ireland—each in turn has awakened a
significant sentiment of solidarity, particularly in student circles, and
has sparked powerful actions in opposition to imperialist wars and
examples of imperialist oppression.
As the U.S. stepped forward as "world cop" for world imperialism in
Vietnam and elsewhere, powerful actions developed against the crimes of
U.S. imperialism around the world. This helped press forward the break of
millions of Canadians with the Cold War ideology, built up in part around
identification with the U.S. "establishment" as defenders of democracy.
Opposition to U.S. aggression in Vietnam has attained particularly massive
A significant range of English-Canadian radicals have concluded that
actions against U.S. domination of Southeast Asia must be extended by
launching a campaign against what is thought to be U.S. domination of
Canada. Just as the Québécois must fight Ottawa, just as Latin Americans
must fight Yankee imperialism, so, it is claimed, Canadians must fight
U.S. penetration of Canada in its various forms.
This view confuses U.S. imperialism with the world imperialist system.
The U.S. acts on behalf of world imperialism in Vietnam and elsewhere in
the colonial world—and thus acts on behalf of Canada’s capitalists.
The real enemy in Canada is not U.S. imperialism, but imperialism
itself, as a world system. The battle against imperialism can only be
joined by combating the Canadian ruling class and its state. The enemy is
at home. This view also slips into the error of assuming that U.S.
imperialism has established the same form of superexploitation and
oppression in its dealings with advanced capitalist countries like Canada
that it imposes on its colonial and semicolonial subjects.
To generalize from opposition to U.S. imperialist domination of the
colonial world to opposition to U.S. domination of Canada is a step
backwards, a step away from anti-imperialist consciousness, which leads
into a nationalist dead end. The Canadian revolutionary Marxists fight to
lead elemental opposition to the crimes of U.S. imperialism forward to an
understanding of the character of imperialism as a world system, and to
the imperialist character of the Canadian ruling class. A central means of
achieving this has been to lead actions against the crimes of U.S.
imperialism which expose the complicity of the Canadian ruling class, and
combine demands on U.S. and other imperialists with demands on Ottawa.
Who rules Canada?
20. Three aspects of the debate on Canada’s relationship to U.S.
and world imperialism deserve special attention: the question of Canadian
"sovereignty," the impact of U.S. corporate ownership in Canada, and the
concept of "anti-imperialist sentiment" advanced by the 1968 resolution on
"Does U.S. capital dominate the Canadian economy through control of
what might be described as its strategic or decisive sectors? This
question has been posed in an attempt to settle the somewhat formalistic
question—Does the Canadian capitalist class actually rule Canada or does
the U.S. capitalist class in effect own and rule Canada?" ("Canada-U.S.
The 1968 resolution on Canada-U.S. relations posed these questions but
declined to answer them. It stated they were largely irrelevant in view of
the harmony of interests between the Canadian and U.S. ruling classes.
This harmony is superficial. And the questions posed call for precise
Do U.S. corporations own Canada? To assert this is false to the core.
Ownership of Canadian industry is shared among capitalists of several
nationalities (the Canadian plutocrats have the largest share). The
statement, moreover, is misleading, as it implies that U.S. ownership and
control of a substantial sector of capital in Canada necessarily brings
with it a corresponding control of the Canadian state. Marxists have
always rejected the mechanical view that shifts in the economic base are
automatically and directly reflected in the political superstructure.
Do U.S. corporations "dominate" the Canadian economy? Do they "control"
the economy? There is no question that U.S. capital has a heavy stake in
the Canadian economy, concentrated in vital sectors. But to speak of U.S."
domination" or "control" implies more than merely an attempt to weigh the
quantity of U.S. investment in Canada against Canadian capitalist
holdings—a test whose result would be of dubious significance. Still less
does it mean weighing the absolute strength of U.S. holdings. To speak of
"U.S. domination" or "U.S. control" is to raise the question of power; to
propose an answer to the question, "Who rules Canada?"
Who rules Canada? As the 1968 Canada-U.S. relations document stated,
"The Canadian capitalist class is a powerful, tightly integrated, highly
conscious and cohesive force, firmly in control of the state apparatus
which it has constructed and shaped to serve its interests. The position
of the Canadian capitalist class in control of the Canadian state
apparatus is not challenged by U.S. capitalist interests."
This correct assessment, however, is undercut by the following
sentence: "But while in control of the state, the Canadian capitalist
class is by no means in control of the Canadian economy ... ," as well as
the reference to "the myth of Canadian ‘sovereignty and independence’" and
the statement, in an article printed to round out the 1968 Canada-U.S.
resolution, that Canada is controlled by "board rooms twice removed—on
Wall Street and their political power-house, Washington." ("Watkins Report
Filed Into Govt’s Morgue," in Canada- U.S. Relations, A Socialist
A capitalist economy is fundamentally anarchic; its blind forces do not
submit readily to the control of bourgeois states. Although means of
governmental control of the economy have been greatly refined since the
1930s, they are so inadequate as to leave the state unable to halt the
dislocating waves of the capitalist business cycle, to regulate inflation,
or establish unemployment at "desired" levels. The economies of smaller
imperialist powers are particularly difficult to control because they are
strongly shaken by the economic tides generated inside their more weighty
neighbors, and because of the sheer bulk of the international monopolies
operating within their borders.
Within these limits, however, the Canadian state possesses all the
tools of a modern capitalist state for controlling the economy, and has
not hesitated to employ them.
Canada is not ruled by Wall Street board rooms or Washington
governmental offices; it is ruled by the Canadian bourgeoisie and their
state, headed by the governmental cabinet, "the executive committee of the
Myths and fallacies on the role of U.S. investment
21. What is the impact of U.S. investment on Canada? Much of the
Canadian left has made a fundamental error in assuming that U.S.
investment plays the same role in Canada as it does in the semicoIonial
world: that of cutting off possibilities of industrial development,
carting away a substantial part of the economic surplus available for
investment, and holding the economy as a whole in a state of economic
In fact these effects are seen where there is the combination of two
factors: foreign imperialist economic domination, and a backward and
largely preindustrial society. Imperialism typically allies itself with
the most backward and reactionary social layers, and blocks any movements
that might carry through the social transformation necessary as a
precondition to industrialization. Lacking sufficient opportunities for
profitable investment, it exports most of its profits for investment in
advanced countries. In this way, it blocks economic development, cutting
short its own possibilities for expansion in the country concerned. None
of these processes takes place in imperialist countries, which for this
reason have become the main area of imperialist investment.
Pronationalist radicals have proposed a variety of arguments to
demonstrate that U.S. corporations are more damaging to the interests of
Canadian working people than corporations owned in Canada. Some of these
arguments deserve examination.
a) "The U.S. exploits Canada by shipping home the profits of its
Canadian holdings, which slows Canadian economic growth."
Statistics show that U.S. corporations are expanding their Canadian
holdings, in balance, with capital generated in Canada, rather than with
substantial net in- vestment from the U.S. This fact argues strongly that
Canada does not need injections of foreign capital to prosper, that a
nationalized and planned Canadian economy could flourish without foreign
Recent government statistics indicate that U.S. corporations continue
to import more capital into Canada than they export from Canada to the
U.S. These statistics are suspect; they probably overlook hidden forms of
capital repatriation. But even if U.S. corporations are indeed, in
balance, shipping profits out of Canada, it has not qualitatively affected
the expansion of Canadian capitalism, which has proceeded since World War
II at a rate close to that of its U.S. counterparts.
b) "Unemployment in Canada is consistently higher than in the U.S.
and other advanced capitalist countries. This shows that the uniquely high
level of foreign investment in Canada is generating unemployment."
Large-scale foreign investment tends to increase Canada’s vulnerability
to shifts in international trade and investment patterns, as does
investment by Canadian corporations abroad. But as far as investment
policies are concerned, and they are the main factor governing
unemployment, there is no evidence that those of U.S.-owned firms are
different from those of Canadian-owned corporations. A number of studies,
from A. E. Safarian’s Foreign Ownership of Canadian Industry to the
government’s Gray Report, document that the "performance" of foreign-owned
firms is similar to that of Canadian corporations.
c) "The wage gap between Canadian and American workers means that
U.S. corporations are superexploiting Canadian workers; in this way U.S.
ownership damages the interests of Canadian workers."
The 8.5 percent gap in the average wage rate (1972) is small compared
to the wage gaps within the U.S. and within Canada: the gap between
Ontario and Francophone workers in Quebec is 40 percent. Yet it can be
said that, in balance, U.S. and Canadian corporations with operations on
both sides of the border tend to superexploit Canadian workers relative to
American workers. But this is not an argument against U.S. ownership. U.S.
corporations do not in any sense cause the wage gap, or generate it; they
merely take advantage of it. (The U.S.-Japan wage gap is much larger, but
is in no sense caused by U.S. investment in Japan, which remains quite
In general, while the wage gap between imperialist nations and
semicolonies is widening, the wage differential among the various
imperialist countries is tending to decline. Rapidly rising U.S.
investment in Canada has accompanied a swift decline in the wage gap from
27 percent in 1962 to 8.5 percent today.
If the wage gap signifies that the economic relationship of the U.S. to
Canada is exploitative we would equally have to assert that Swedish
imperialism exploits Germany, that German imperialism exploits France,
that French imperialism exploits Belgium, that Belgian imperialism
exploits Britain, whose imperialists in turn exploit Japan. Rather than
clarifying the question, such statements only serve to obscure the real
relationships between these countries.
d) "U.S.-owned corporations tend to shut down, and to lay off
workers, more frequently than Canadian corporations do."
There is no reason to think that this should be true. To the degree
that U.S.-owned corporations are concentrated in manufacturing and mining,
they will tend to suffer from the marked cyclical swings in employment in
these sectors, in exactly the same manner as the Canadian corporations in
these fields. A study of recent plant closures in Ontario by the Ontario
Federation of Labor found that just over 50 percent of layoffs are by U.S.
firms; this is roughly equivalent to the U.S. stake in Ontario’s
manufacturing and mining.
e) "U.S. capital is biased toward investing in resource industries,
which are more capital-intensive and do not generate much complementary
employment; thus they employ fewer Canadians. In this way Canada is forced
into the role of resource hinterland to U.S. industry."
Since long before U.S. corporations acquired their Canadian holdings,
Canadian exports have been largely made up of resources and foodstuffs;
Canadian imports have been primarily manufactured goods. This continuing
reality has nothing to do with U.S. ownership, but flows from the shape of
world imperialism. Relative to the United States, Canada is a country rich
in resources but with a small market for manufactured goods. Canadian
economic development centers on the areas that provide the greatest
profits; resources are prominent among them. Manufacturing enterprises
center where the market is richest; 90 percent of the North American
market is in the U.S. Only a nationalized, planned economy can reverse
Efforts by some to demonstrate that U.S. investment in Canadian
resources is producing a net decline in industrial employment in Canada
are unconvincing. While the percentage of the Canadian work force employed
in secondary manufacturing has shown a small decline in recent years,
similar trends have been observed in other imperialist countries,
including the United States itself.
In general, imperialist foreign investment today is orienting away from
concentration in resource industries; there is no reason to think that the
same tendency will not be seen in the investment of U.S. corporations in
f) "U.S. ownership in Canada is a vehicle for implementing U.S.
economic nationalist and protectionist policies. In particular, U.S.
corporations will tend to shift operations south of the border in order to
improve the U.S. balance-of-payments situation."
This is the main argument in the "deindustrialization" thesis of the
Movement for an Independent and Socialist Canada (MISC). The MISC’s belief
that the struggle to save single-industry and resource-based towns from
extinction would give rise to a powerful movement for Canadian
independence was the fundamental projection underlying its split from the
New Democratic Party.
There is no doubt that Washington’s protectionist measures aim to
"shift production south of the border," in the limited sense of aiming to
increase U.S. exports and decrease imports. Many U.S. corporations whose
main base of operation is south of the border will benefit by such
policies. Similarly, in the interests of stabilizing the U.S.
balance-of-payments position, and thereby the U.S. dollar—the motivations
behind Nixon’s August 15, 1971, wage-freeze decree and protectionist
measures—U.S. imperialism may dictate cutbacks in foreign investments
which can result in industrial closures in Canada as in other countries.
In this sense, U.S. ownership is a vehicle to apply these policies. But to
the degree that U.S. corporations have substantial operations in Canada,
it will be in their interest to seek to have Canada exempted from such
measures in order to maintain the profitability of their Canadian
holdings. In balance, U.S. investment in Canada, far from being the Trojan
Horse of deindustrialization, has tended to limit the full impact of U.S.
protectionist measures on the Canadian economy.
g) "U.S. ownership of the Canadian economy produces an inefficient
‘branch plant economy,’ where three or four branch plants of U.S. giants
do the work that could be done more cheaply by a single, Canadian-owned
The existence of several small and less efficient units in many
industries where one large unit could produce more cheaply is a result of
the existence of a distinct Canadian market in these industries, protected
by a tariff wall—a market much smaller than that of the United States. One
way to eliminate the relative inefficiency is to abolish tariffs between
the U.S. and Canada and create an integrated continental market, as has
been done in the automobile industry. The traditional objection against
continental integration of this sort is that a good part of Canadian
industry exists only because of the tariff wall and is too inefficient to
survive without it.
Bourgeois economists debate the problem in terms of the alternative to
integration vs. tariff walls, and fail to arrive at an adequate solution.
They reject the obviously adequate and satisfactory solution—a
nationalized and planned economy.
Their debate on tariffs, while interesting, has nothing to do with U.S.
investment in Canada.
h) "U.S. ownership tends to concentrate opportunities for
entrepreneurial initiative south of the border."
Opportunities for entrepreneurial initiative translates into plain
language as "chances for capitalists to make killing." It is unclear what
this aspect of the debate has to do with the interests of the working
i) "U.S. firms with Canadian operations do their scientific research
south of the border. As a result, U.S. ownership in Canada blocks the
development of Canadian science, and forces Canadian scientists to leave
the country to seek employment."
The Gray Report on foreign investment in Canada states, "The evidence
does not indicate substantially better Canadian performance by Canadian
controlled firms than by foreign controlled firms with respect to
expenditures on research and development, exports and further processing."
In other words, if scientific research in Canada is weak, this has nothing
to do with the nationality of ownership of Canadian industry.
Expenditure on scientific research per capita is three-five times as
high in the U.S. as in European countries. As a result, tens of thousands
of European scientists have migrated to join better-financed laboratories
in the U.S. But this has nothing to do with the effects of U.S. ownership
abroad. It results from the greater size of U.S. corporations and their
bigger research budgets. The same factors doubtless come into play in
In general, many of the "evils" of U.S. investment turn out to be
damaging to the interests of Canadian capitalists, rather than to Canadian
workers. Many others turn out in fact to flow from the character and shape
of the world imperialist system itself, rather than from the specific
nationality of investment. There is no sign that U.S. investment "underdevelops"
Canada, blocking industrial growth, in the manner it does in the
semicolonial world. And even if it were demonstrated that foreign
capitalists were, in balance, in some way more injurious to the interests
of the Canadian working class than our home-grown variety, there would be
no cause to draw nationalist conclusions—for foreign investment is an
integral part of the imperialist system which Canada is a part.
Canadian workers suffer the effects of the specific weaknesses of
Canadian capitalism. But the problem is not the United States, U.S.
domination, or U.S. ownership, but the character of world imperialism, and
Canada’s position in the world imperialist market.
Are we indifferent to the nationality of the boss?
22. What then is the attitude of revolutionaries to U.S.
investment in Canada? Are we indifferent to the extent of U.S. ownership?
The 1968 resolution on Canada-U.S. relations is at least equivocal on this
The document notes that we have advanced the demand for nationalization
of the CPR in response to its curtailment of services and layoffs. "It was
a matter of indifference whether the CPR was or is now basically
U.S.-owned," the document continues. Yet only three paragraphs earlier the
"Nor are we indifferent to the increasing economic penetration of U.S.
capital into Canada, its increasing control of the economy, and what goes
with that—its determination of Canada’s role in world affairs."
The article on the Watkins Report associated with the resolution,
already cited, seems to advocate that foreign-owned firms be singled out
for nationalization. "Ultimately, what alternative is there to public
ownership of U.S. capital in this country that continues to violate the
interests of the Canadian people?’ It goes on to point out that public
ownership of foreign capital "... opens up the question of public
ownership of Canadian capital," which also "violates the interests of the
Yet the resolution is clearly opposed to raising any general demand for
nationalization of foreign corporations: "Without making public ownership
of U.S. interests a general demand, as U.S. interests violate Canadian law
by refusing to accept orders from Cuba and China, etc., the question of
their nationalization increasingly comes to the fore. This is not the
separating out of ‘bad’ capitalists from ‘good’ capitalists for
‘punishment’ by nationalization, but popularizing the whole concept from
necessity." The question that is left entirely open is whether
foreign-owned corporations "violate the interests of the Canadian people"
in some distinctive manner not shared with Canadian-owned firms.
The rise of international imperialist corporations, the so-called
multinationals, is a feature common to imperialism around the world. Far
from stabilizing imperialism, they have introduced a series of new
contradictions which imperialism is powerless to solve. They are a chief
agency through which an imperialist economy is shaken by waves of
inflation, recession, or sharp turns in investment policy originating far
from its borders. Smaller imperialist economies with large foreign-owned
sectors are particularly susceptible to these unsettling effects. A wave
of retrenchment by world giants can provoke serious economic difficulties
within their borders. In a multitude of ways, international imperialist
corporations threaten the interests of working people. But the problem is
not the particular nationality of their owners.
We are not indifferent to the impact on Canadian workers of these
developments in world imperialism. We point to the nationalized and
planned socialist world economy as the alternative to the crisis-wracked
economy of imperialism, and we advance transitional demands to press
forward the struggle against the capitalist order.
Are we indifferent to U.S. ownership in Canada? As scientific
socialists, we are concerned with gaining a precise understanding of the
structure and dynamics of Canadian capitalism. But we hold no brief for
Canadian in place of U.S. ownership.
Revolutionary socialists are indifferent to the nationality of the
boss. If 100 corporations are to rule Canada, we are indifferent as to
whether their head offices are in Canada or in the United States. We
believe that Canadian bosses are in no way preferable to their American
counterparts. The problem is not U.S. imperialism, but imperialism per
se; not U.S. corporations, but corporate power.
The theory of the "anti-imperialist sentiment"
23."The struggle for Canadian independence from the U.S. will
make socialism in Canada relevant." This concept, advanced by Canadian
Dimension in 1967, swept across the Canadian left in the late 1960s as
a wide range of radical currents advanced different strategies for a
"struggle against U.S. domination." This coincided with the early stages
of the present youth radicalization, in which anti-imperialist themes were
central, and found particular expression in actions against the crimes of
U.S. imperialism in Vietnam and elsewhere.
The 1968 resolution, "Canada-U.S. Relations," was an initial attempt
and a first approximation in the analysis by Canadian revolutionists of
some new phenomena. It was contradictory in character. It reaffirmed a
series of basic Marxist concepts, under heavy attack in the Canadian left
at that time: the imperialist character of the Canadian ruling class, its
control of the Canadian state, and the reactionary character of Canadian
nationalism. It also introduced new concepts, which proved to be in error.
A central error, which was to lead to considerable confusion, was the
concept of a progressive "anti-imperialist sentiment." The resolution
reads as follows:
"Ever-widening layers of the Canadian working class and petty
bourgeoisie are developing an understanding and sympathy for the
popular struggles developing across the globe—and they see Washington
as the ruthless and bloody subverter of these struggles. An increasing
number question the whole rationale of the Cold War and its pacts and
alliances such as NATO and NORAD—they are beginning to see the United
States, and not the USSR and the workers’ states, as the aggressive
military force that threatens mankind with a world war and possible
"They see the U.S. as a violent society, a racist society, and a
huckster society, reflected in the TV, radio programs, the books and
the magazines that flood across the border. An increasing number are
developing a concern about the flagrant violation of the law by
U.S.-based corporations in this country which leads to loss of trade
and, of course, jobs for Canadian workers.
"These above tendencies have been designated in some circles as
nationalist—Canadian nationalism. The term is a misnomer, causing
confusion rather than giving insight into the phenomenon, its dynamics
and direction. More correctly, it should be designated as an elemental
anti-imperialist sentiment—developing towards an anticapitalist
consciousness. Because it is essentially antiimperialist, it finds no
basis of support in any sector of the Canadian capitalist class and
its spokesmen, who defend U.S. imperialism not only out of a natural
affinity but with a clear understanding that their fate is
inextricably tied to that of the U.S. ruling class."
24. The concept of the "elemental anti-imperialist sentiment"
approaches a complex phenomenon from the wrong end. Discussing the
"dynamic" of an arbitrarily defined "sentiment" detaches the analysis from
objective reality. The analysis should start by examining real social
movements, their roots in objective reality, their different class
strands, and their direction, leading to proposals for program and action.
The resolution does not relate the "anti-imperialist sentiment" it
describes to the real objective needs of the working class. It does not
show that the anti-U.S. feelings of workers flow from any real damage done
to their interests by U.S. ownership in Canada or by other forms of U.S.
imperialist contact with Canadian life. Anti-U.S. feelings are judged to
have an "anticapitalist thrust" merely because they receive no echo in the
ruling class. This assertion is based on a very large if—the improbable
assumption that no layer, no current of ruling-class opinion, can make
contact with anti-U.S. feelings, an assumption now clearly proven wrong.
The analysis is founded on the undialectical assumptions of the absence of
frictions between the U.S. and Canadian ruling classes, and the unfissured
unity of the Canadian bourgeoisie.
What was the "anti-imperialist sentiment"? No definition was provided.
Was it opposition to imperialism as a system? That, surely, is
progressive, and constituted a key component of the youth radicalization
before and after 1968. But the 1968 document referred exclusively to
American imperialism. So, over time, the formula was altered to read
"anti-U.S.-imperialism." This, in turn, proved imprecise. Did we hold that
opposition to every manifestation of U.S. influence in Canada was
progressive—opposition to U.S. textbooks, to U.S. professors, to U.S. TV
programs? The 1968 resolution seemed to suggest this. In this case, the
formula would more accurately read "anti-U.S.-ism" or "anti-Americanism."
Does such an elemental anti-American sentiment have an anticapitalist
thrust? If all opposition to U.S. influence in Canada was progressive,
then surely "pro-Canadianism," "Canadian nationalism," would be
progressive, too. This path of reasoning posed a barrier to recognizing
and combating concrete manifestations of Canadian nationalism, despite the
1968 resolution’s antinationalist stands. In the last analysis it could
lead to a concept of a progressive "Canadian nationalism."
The 1968 resolution on Canada-U.S. relations described a sentiment, but
projected no movement to which it might give rise. It projected no course
of action, no programmatic proposals to counter U.S. imperialism. (An
exception was the proposal for an "independent foreign policy for
Canada.") The resolution stated that a "clear understanding of the
progressive implications of this rising anti-imperialist sentiment is
necessary so that we can meet the new challenges that it will pose before
us." But it made no proposals which added anything to the body of
programmatic concepts available to meet this challenge. It offered only a
concept of sensitive orientation to an ill-defined sentiment—an
orientation that was to prove sterile and misdirected.
25. The central concept behind the identification of the
"anti-imperialist sentiment" proved to be erroneous. The 1968 resolution
placed an equals sign between opposition to the crimes of U.S. imperialism
around the world, and opposition to U.S. investment in Canada and to other
manifestations of U.S. imperialist presence in Canada. There is no
question about the positive significance of opposition to the imperialist
character of U.S. foreign policy. But what about opposition to U.S.
ownership in the Canadian economy, not to mention opposition to "U.S. TV,
radio programs, books and magazines"? For this to be progressive, it would
have to be clear that Canadian workers suffer particularly and especially
from the U.S. nationality of capital investment, and, further, that
opposition to its various manifestations will develop along class lines.
The first point was unproven; the proof advanced for the second point was
Nationalism’s impact on the labor movement
26. As the Canadian bourgeoisie faces heightened competition in
the world market, increasingly restricted opportunities to expand
investments, and a greater need to attack the wages and living standards
of Canadian workers, nationalism will become an increasingly important
instrument to counter the workers’ struggle, and to cut across developing
class consciousness of Canadian workers. Challenged by the rise of
Québécois independentism, the Canadian ruling class will increasingly
resort to attempts to whip up anti-Quebec phobia and chauvinism among
We have already seen the impact of such moods and such attempts on
reformist layers of the left. We have pointed to the link between Social
Democratic reformism and nationalist support of the existing bourgeois
state, describing the NDP as nationalist, identifying the fate of the
Canadian working class with the fate of the central bourgeois state, and
not internationalist. While the New Democratic Party leadership speaks out
against "U.S. domination" of Canada, an imperialist nation, it refuses to
defend the right of self-determination of Quebec, an oppressed nation.
Support of Canadian nationalism inevitably cuts across support of
Quebec self-determination, as the recent evolution of the Movement for an
Independent Socialist Canada (MISC) indicates. The MISC has spoken of
"self-determination" for both Quebec and English Canada, ignoring the
qualitative distinction between Quebec’s situation as an oppressed nation
and English Canada’s role as oppressor of Quebec. Nationalist politics
gave the leaders of the MISC’S predecessor, the left-wing "Waffle"
grouping, their theoretical rationale for abandoning the NDP, a key arena
of working class political action. MISC charged that the party was
dominated by American unions and had demonstrated its incapacity to move
forward in the struggle for Canadian independence.
The Communist Party has long projected a struggle for Canadian
independence as a keystone in the application of peaceful-coexistence
politics to Canada. The Maoist Communist Party of Canada
(Marxist-Leninist) and the Canadian Liberation Movement see a national
liberation struggle as primary in English Canada. The Canadian Party of
Labor and the Healyite Workers League, on the other hand, while rejecting
Canadian nationalism, show no greater insight into the character of
nationalism—rejecting with equal fervor the national liberation struggle
of the Québécois.
The prevailing disorientation on this question in the Canadian left
only underscores the urgency of a powerful and educational intervention by
the revolutionary vanguard.
The revolutionary socialist intervention
27. How, then, should revolutionary Marxists size up the broad
debate that has developed around Canada’s relationship to the United
States? What do they judge to be its "dynamic"? How do they intervene? In
reality, the diverse forces at work cannot be summed up by the definition
of any "sentiment"; nor can a "sentiment" be singled out within the
discussion which could be said to have a clearly "anticapitalist thrust."
A close examination of what has been loosely termed "Canada’s new
nationalism" reveals a whole series of different forces at play.
First, the development of world imperialism is posing some hard choices
for Canadian capitalism, regarding the degree to which it will prosper
from continental integration, and the degree to which it must establish
other ties, and act to protect specifically Canadian interests.
Revolutionists must show the incapacity of every option within the
capitalist framework to resolve the problems thrown forth in this debate.
Second, there is wide popular apprehension of the impact on Canada of
international imperialist corporations and interimperialist competition,
which is commonly perceived in terms of "U.S. domination." Revolutionists
must demonstrate how real and urgent are the dangers that world
imperialism poses to the livelihood of Canadian workers—but that these
dangers flow from the character of imperialism itself, rather than from
any U.S. "domination" of Canada.
Third, a broadened popular understanding of U.S. imperialism’s
reactionary and exploitative role on the world stage has led many to the
conclusion that it has the same relationship to Canada, that Canada is in
some sense a colony which must struggle for its independence.
Revolutionists must show this proposition to be fundamentally false and
combat the nationalist slogans which flow from the concept of a struggle
for Canadian independence. They must demonstrate the imperialist character
of Canada, and propose a class struggle program leading toward the
overthrow of Canadian capitalism.
Fourth, the bourgeoisie, increasingly challenged by a rising tide of
class struggle, seeks to buttress its rule by its traditional means —an
appeal to nationalist feeling, including its anti-U.S. form. Inasmuch as
the ideology of the ruling class is the dominant ideology of the society
as a whole, an appeal to nationalist feelings can count on a significant
response in all social classes.
Revolutionists combat the nationalist illusions of the masses, and
advance a program that cuts against nationalist concepts, deepens the
class struggle, and builds internationalist understanding in the working
class and its vanguard.
Our starting point in developing such a program is the objective
situation, the objective needs of the masses. Our program and our
intervention cannot be founded on the desire to identify with the
immediate sentiments and aspirations of the masses, except insofar as
these correspond to the real objective needs of the working class and its
allies. A program to intervene effectively and adroitly in the debate and
ferment around the question of U.S. investment, Canadian independence,
"U.S. domination," must be developed along these lines:
a) We defend the real class interests of working people. Where
workers have national illusions, or voice their social indignation in a
nationalist form, we do not identify with the nationalism of the
workers, but with the real class interests which underlie their
b) We put forward a class-struggle program, aimed at showing workers
in life that the enemy is at home—the Canadian ruling class—and to lead
and direct their struggle against this ruling class.
c) We oppose Canadian nationalism, including its anti-U.S.
expression: patriotism, the concept that Canadians should unite against
U.S. domination, the concept that Canadians should struggle together for
Canadian independence, defend Canadian culture, build a Canadian
identity. We combat nationalist illusions in the working class.
Nationalism vs. class-struggle slogans
28. The principal slogan of the "Waffle" Caucus of the New
Democratic Party, and of the MISC after its split from the NDP, has been
"For an Independent and Socialist Canada," summarized on their automobile
bumper stickers as "Canadian Independence: Yes!" Its aim was to express
the Waffle-MISC leadership’s concept that the struggle against "U.S.
domination," for Canadian independence, must be led to victory through the
nationalization of the "commanding heights" of the economy. This slogan is
false and misleading. It projects an independence struggle for a state
which, as we have seen, is already independent. It suggests the existence
of tasks of "national liberation" in Canada. It implies that the Canadian
bourgeoisie is not really the ruling class in Canada. It distracts from
the main challenge before Canadian socialists, to project and lead forward
the struggle against the Canadian ruling class.
Other slogans expressing the concept of an "independence" struggle,
such as "For an Independent Foreign Policy" and "Nationalize U.S.
Monopolies" share the same weakness. "For an Independent Foreign Policy"
leaves open the question of what class interests such a policy must serve;
a foreign policy "independent" of Washington could still serve the
interests of world imperialism (e.g., Sweden, Ceylon, South Africa).
Revolutionists must concretize their view of international policy around
concepts of solidarity with the colonial revolution, aid to and trade with
the workers’ states, break with imperialist military pacts, etc., that
express a clear anticapitalist content.
Where specific U.S. corporations damage the interests of Canadian
workers, through layoffs, shutdowns, oil spills, ecological damage,
discrimination against women or against Québécois, etc., we intervene
advancing the same slogans and concepts we would use if the corporation
concerned were Japanese, French, or Canadian. We have frequently called
for the nationalization of specific corporations of various nationalities,
without singling out the capitalists of any nationality for prime
The slogan "Break Canada from the U.S. War Machine," occasionally
advanced in the antiwar movement, reveals the same weakness. It begs the
obvious question: are we opposed to the Canadian war machine? In this it
cuts across a clear principled position on the responsibility of the
Canadian bourgeoisie in the crimes of imperialism, which has been
expressed in the slogan "End Canada’s Complicity."
A campaign against "Americanization of the universities" has been
launched by some nationalist circles, popularized mainly with evidence
that the proportion of foreign-born professors increased during the
massive university expansion of the 1960s. Revolutionary socialists have
correctly opposed proposals for a quota system on foreign-born professors,
pointing out that the nationality of the professors is not the problem,
nor is the nationality of the textbooks—the problem is big business
control of the university. They have centered their intervention on the
concept of student-faculty-support staff control of the university.
The 1968 resolution on Canada-U.S. relations was published together
with a reply to Prof. Robin Matthews on the "Americanization" of the
university. This reply opened up with the establishment of an area of
agreement: "With U.S. capitalism continuing to expand its influence in the
economic structure of Canada it is no wonder that its influence should
find expression in the universities." It continued by identifying U.S.
professors, "some of whom are ignorant and contemptuous of Canadian social
questions," and Canadian-born professors with a "colonialist mentality,"
as agents of this process, and then posed the question: "What is to be
done about this ‘Americanization’ of Canadian universities?"
To argue in this manner is to accept the nationalist framework
established by our opponents. This framework is wrong and must be
challenged. We do not grant that "Americanization" is a correct
description of a problem. Nor does the demand for "Canadian studies,"
advanced by some in the left, contribute in any way to the revolutionary
Marxist projection of a university that serves the interests and struggles
of the exploited and oppressed, in contrast to the "Canadian studies" now
being churned out in the interests of the capitalists.
The culture of any society is the culture of its ruling class. Concepts
that Canadian culture is superior to that of the United States, that it is
less "violent," less "racist," or less "huckster" than U.S. culture, or
that Canada should be protected from the influence of U.S. television,
radio, books, and magazines, are widely held in Canada. But such smug
self-congratulation has nothing in common with the attitude of
revolutionary Marxists. The Canadian bourgeoisie has provided us with some
outstanding examples of their capacities in these fields: the official
"violence" of the War Measures repression, the virulent racism toward
Canada’s native peoples; the jingoism of government billboard slogans like
"Canada: Stand Together, Understand Together."
29. How do revolutionary socialists combat nationalist illusions
in specific struggles relating to Canada’s role in world imperialism?
Where specific pacts or agreements between Canadian and U.S.
capitalists threaten the interests of Canadian workers, we oppose them,
but from an independent class point of view, so that we cut across the
lining up of the working class behind the negotiating stance of the
Canadian bourgeoisie. We have opposed energy resources deals, for example,
on the grounds that they hand over the wealth of energy resources to the
pillage and profiteering of the monopolies, rather than utilizing them for
the benefit of working people in Canada and in the world as a whole. We
have raised the need for planning in the use of scarce resources, and
warned of the ecological danger posed by premature and incautious
development of these resources. We have called for resources to be
developed under public ownership in the framework of a long-range plan
drawn up in the interests of the working people. We have not argued that
Canadian energy resources should be preserved for Canadian use, or that
Canadians must block the theft of "our" resources by foreign interests.
Similarly, we have argued against the proposed Mackenzie Pipeline
primarily on the grounds of Native rights, ecology, and the fact that this
project is conceived for the profit solely of private corporations.
In many cases of conflicts over "U.S. domination," the class content is
minimal, but the opportunity for intervention can still be found. In 1972,
for example, a broad range of citizens of Calgary campaigned successfully
to block the appointment of an American as police chief. This campaign
apparently reflected substantial antagonisms between Canadian citizens and
the American community in Calgary, thought to have better jobs, higher
incomes, etc. We regard such feelings as an expression not of class
consciousness, but of nationalist confusion. We explain that there is
unfortunately no reason to think that a Canadian-born police chief will be
more tolerable than an American. We can however grasp hold of the
progressive essence in this issue—the broad popular fear and distrust of
police forces that are not subject to democratic control, and raise
slogans such as disarming of the police and popular election of the police
30. The fate of the Canadian revolution, like all revolutions,
will be decided in the framework of the world class struggle. In
particular, the strength of the revolutionary forces in the United States,
and the closeness of their ties with the Canadian left, will play a vital
role in the Canadian revolution from its earliest stages. The present
radicalization in the United States has been an inspiration to wide layers
of Canadian radicals, providing them with examples for their struggle, and
a broader perspective in which to judge the historical prospects of its
outcome. A major function of nationalism in Canada today is to blind
Canadians to the potential of the radicalization in the U.S., and to raise
barriers to the alliance of Canadian and American workers. Canadian and
American revolutionary socialists work to cut across such nationalist
prejudices and deepen the ties of the left and the working-class movement
in Canada and the United States.
31. The question of Canada-U.S. relations and the influence of
Canadian nationalism have confused and disoriented almost the entire
Before the revolutionary vanguard lie tasks of major proportions. We
must combat the influence of Canadian nationalism in the working class and
the mass movement as a whole. We must actively defend and seek to advance
the growing struggle of the Quebecois against their national oppression,
and educate the working people of English Canada about the common interest
they share with the Québécois in struggling against the Canadian state
which defends the profits and interests of the Canadian ruling class
against the interests of both English- and French-speaking workers.
The revolutionary vanguard must show how the gathering crisis of world
imperialism affects Canada. It must demonstrate that the attacks on the
conditions of the working people that must inevitably flow from this
crisis can be met only through a class-struggle strategy—based on mass
struggle around a program of democratic and transitional demands rooted in
the objective needs of the working people and their allies, and pointing
toward the creation in Canada of a workers’ and farmers’ government.
It is by expropriating the Canadian bourgeoisie and the establishment
of a planned economy to meet the needs of the vast majority, that the
crises of imperialism will be ended. The only road forward for Canada is
socialism—a socialist Canada in a United Socialist States of North America
as part of a socialist world.
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