14
AFFLUENCE AND ITS DISCONTENTS, 1960–1980
St. Mary’s Roman Catholic Church, Red Deer, Alberta, designed by prominent Canadian architect Harold Cardinal. Cardinal’s blend of the old and the new recalled Canada’s past and traditions for an anxious and uncertain age.
Writing about the state of Canada in 1980, three historians termed the country’s recent history “a success story.” In many respects it was, but it was a qualified success. Materially there was almost no doubt. The years between 1960 and 1980 were a period of almost unbroken prosperity. Canada was rich. In terms of purchasing power, Canadians earned twice as much in 1985 as they had in 1960.1 In the measurement Canadians always used, how much they earned relative to Americans, they reached an all-time high in the early 1980s—83 percent of American per capita income in 1981.2
There were other measures of success, and in these Canada hadn’t done so well. Canadians reacted to prosperity in the 1960s not by coming together but by coming apart. The problem with affluence, it turned out, was there wasn’t enough of it—or, paradoxically, too much. With so much new-found wealth, impatience mounted over what to do with it, leading to frustration among policy-makers trying to devise and impose rational solutions to what they assumed to be soluble problems.
Generationally, regionally, and linguistically the country struggled over what do with money and the things money could buy. Regions left behind in the 1940s and 1950s demanded the same opportunities as the rest of the country. Ethnic and racial minorities pointed to inequity and discrimination, historical and actual, and demanded that something be done, and quickly. Many of the young questioned why money was so important for a good life, a message that might once have come from the churches but which, in a secularizing age, came from lay prophets rather than religious pulpits. Discontent as much as affluence set the agenda for the 1960s and 1970s.
For most of these decades fortune smiled. Canada’s GDP rose steadily through the 1960s, in fact until 1974, and then after a brief hiccup continued to grow until 1981. Unemployment fell to 3.4 percent in 1966, and then rose and fell in waves, with each successive trough higher than the last—4.4 percent in 1969, 5.3 percent in 1974, and 7.5 percent in 1980, before reaching double digits in 1982. Canadian unemployment rates paralleled those in the United States, but were significantly higher than those in Western Europe and Japan, until the early 1980s.3 By the early 1960s Western Europe had already largely recovered from the war, which meant that incomes and purchasing power increasingly resembled Canada’s. Not surprisingly, immigration to Canada from continental Europe tended to decline; so did that from the United Kingdom.
The prosperity was visible as you crossed the country. Being prosperous was something of a novelty, but even crossing the country by car was something that earlier, poorer generations could not have contemplated. Thanks to the Trans-Canada Highway, a federally funded road completed in 1965, it became possible to travel from Newfoundland to Vancouver Island.4 The highway linked all the provinces, and just in time, as Canada’s transcontinental railway system was beginning to contract: after 1969 it was no longer possible to cross Newfoundland by train.
Across Canada, growing cities sprawled. Farmland vanished into suburbs or industrial parks, linked by four-lane highways. Urban areas grew not only horizontally, but vertically. “Skyscrapers hide the heavens,” a contemporary poet wrote.5 It was literally true, but symbolically true as well, for the concrete office and apartment towers eclipsed the church spires that once dominated Canadian settlements, large and small.
Migration, from the countryside and from abroad, filled the cities. The number of immigrants fluctuated wildly, from a high of 223,000 in 1967 to 72,000 in 1971, and then remained over 100,000 for most of the 1970s. Until 1963 and for a few years after, Canada’s birth rate also played a major role in population growth. Schools bulged and suburbs grew according to the rhythms of family formation, which in the years after 1945 was abundant. The baby boom was on, and in the early 1960s showed no sign of ending. It was in itself a sign of prosperity, the growth in human capital matching the capital investment in concrete and steel.
Urbanization implied a change in the way Canadians thought of themselves, or thought of their society, but cities were hardly the only influences on how society functioned. Canada’s was a youthful society, where the balance of generations was migrating downward. Styles of life, of thought, and of politics shifted with the changing generations, producing a Canada in the early seventies that would have been unimaginable in 1963.
Some articulate Canadians found the country altogether too contented, too quiet, and even too smug, but in the popular imagination they were a minority, confined mostly to socialist-run Saskatchewan or to the larger cities; the latter variety might be expected to move to New York or Europe, where discontented Canadians with the means or the incentive to move on often went. “I had been a failure as a Canadian,” one such wrote. “The patience, the mildness, the taste for conformity that seemed prerequisites for a tolerable life were beyond me.”6
Those who didn’t have the means to move on usually went unnoticed, but they existed in the nation’s system of Indian reserves, or in the slums of Canada’s larger cities, or in distant enclaves of rural poverty. The old or the sick were at risk—and worse still was the plight of the old and sick; the elderly had their health insurance cancelled when they turned sixty-five and became a greater actuarial risk for their insurance companies. Some parts of the country were less prosperous than others— Newfoundland, for instance, and the Maritime provinces, rural Quebec, and marginal farmers on the Prairies or in central Ontario. In Alberta the oil and gas industry had delivered prosperity, but not enough to make the province a northern Texas or Calgary the new Houston. Oil prices were low, and markets uncertain, and the memory of the impoverished 1930s very recent.
The crude population statistics catch the reality of a country of regions—the Atlantic provinces, Quebec, Ontario, Saskatchewan and Manitoba, Alberta and British Columbia. The Atlantic region grew slowly in the 1960s. Newfoundland’s high birth rate had kept its population growing in the 1950s, but in the 1960s the rate of increase fell sharply until, in the early 1980s, it barely grew at all. Quebec’s population grew, but failed to keep pace with Ontario’s. Saskatchewan actually lost population in the 1960s and most of the 1970s, while Manitoba grew very slowly. Alberta, on the other hand, pulled in immigrants from abroad and from other provinces to share in its oil-based prosperity, rising from 1.3 million people in 1961 to 2.2 million in 1981.7 British Columbia didn’t do quite so well, but a steady flow of migrants gave the Pacific province a clear vote of confidence.
Political thought and economic capacity changed as well. The two were closely related, for prosperity fed, or at least coddled, ideology. The early sixties were a time of hope and expansiveness. The industrial economy that had matured in North America during the Second World War reached its apogee—large factories, huge workforces, and perpetual profitability characterized companies like Ford or Chrysler or General Motors (“the Big Three”), each with its Canadian branch plants. Canada in many ways was a smaller replica of American capitalism—including the “international” trade unions like the United Auto Workers that organized labour in Canadian car plants.
Economic life appeared to be dominated by great corporations based in the gleaming towers of Manhattan. (One of the most impressive, the Seagram Building, designed by Mies van der Rohe and erected in 1958, bore the name of a Canadian liquor company that was headquartered at the time in Montreal.) It was familiar and foreign, enviable and envied.
In terms of income, capitalism American-style was raising the American working class into the middle class. It was industrial workers who were leaving the cities and moving to the suburbs and sending their children to college. And with a certain time lag, it was happening in Canada as well. Prosperity dampened opposition and homogenized American politics and then Canadian politics, and to a remarkable degree. Socialism became a variety of welfarism, and welfarism characterized not merely the political left but also large businesses, which could afford to pay out not only higher wages but, increasingly, benefits for their workers.
There was some doubt whether the old categories of “left” and “right” applied any more. In the United States one academic, an ex-socialist, argued that society had reached “The End of Ideology.”8 The CCF party abandoned socialism as its political objective in 1956, and then in 1961 transmuted itself into a more centrist political formation, the New Democratic Party. New Democrats didn’t demand the wholesale nationalization of large enterprises; instead, they concentrated on government organization and regulation of social welfare—for which, needless to say, prosperity would pay.
Government, too, enjoyed a good reputation. Government had organized the last war (meaning the Second World War), and the Cold War as well. The Cold War no longer seemed as urgent after the Cuban Missile Crisis of 1962, the Test Ban Treaty of 1963, and the gradual decompression of confrontation in Europe. Government could turn its attention elsewhere. Now it could reform health care and pensions for those too old or too sick to share fully in the good times and high incomes of the 1960s. It could look to the margins of society, and to problems that prosperity had ignored or by itself couldn’t solve.
To these ideas, which weren’t new or unique to Canada, there was also a tinge of nationalism. The Americans’ tendency to blithely equate Canadian life with their own offended some, perhaps many, in Canada. Their country, they argued, was “taken for granted,” its identity obscured, its concerns unheard. During the 1950s the United States embassy in Ottawa had maintained a regular file on Canadian nationalism in its routine reports to Washington, and kept a wary eye on the Canadian predilection for finding fault with the United States.
In the 1960s there was plenty to report. Nationalism had become effectively synonymous with anti-Americanism, though it differed from the views of older generations because it no longer had much of an “imperial” or British tinge. But what did anti-Americanism mean? In the largest sense, it was almost the same as a complaint against the homogenizing effects of modern life. The philosopher George Grant, in his 1965 book Lament for a Nation,9 deplored the fact, as he saw it, that middle- and upper-class Canadians had abandoned their heritage for the glittering prizes offered by American (or American-style) business and technology.10 Others, like the prominent Toronto businessman Walter Gordon, resented the fact that executive jobs, and with them the capacity for executive decision-making, were transferred out of Canada. Canada, in Gordon’s view, couldn’t be an independent country unless it also had an autonomous business sector.
These ideas, like Canada’s prosperity, were distributed by region and by age. It was all very well for Canadians in prosperous, industrial Ontario to reject the fruits of American investment. (Ontario already had lots of American investment, which was unlikely to decamp any time soon.) The hinterland craved investment of any kind, and American money looked as good as any other. (In fact there were complaints that unadventurous Canadian money was hard to get, and that foreigners’ funds were the only kind on offer.) Older Canadians, remembering depression and war, were less inclined to reject investment, industry, and jobs.
Younger Canadians proved to be different from their elders. It wasn’t just a question of nationalism, though the generation of the 1960s was a nationalistic generation. They dressed differently—blue jeans first became universal in this decade. They followed different styles of music, of which their parents, like their parents before them, ritually disapproved. They called their lifestyle a “counterculture”—the counterculture—and attributed to it the usual romantic traits of authenticity and spontaneity and, of course, generational exclusiveness. “Don’t trust anyone over thirty” was the watchword.11
The boomers (an American term, freely adapted) took job security and a prosperous economy for granted, never having experienced anything else. They were self-consciously Canadian, and immediately identified with the new Canadian flag that the Pearson government adopted in 1965. They were not, however, all that different from young Americans or Europeans or Australians, in culture, ideas, or general lifestyle.12 Nationalist in politics, international in style, the baby boom set the tone for the last third of the twentieth century.
Lester Pearson was remembered, after his death, for his role in international security, but his government is best remembered for its provision of national security—personal security, meaning the expansion of the Canadian social safety net. Though a minority in two Parliaments, elected in 1963 and 1965, the Liberal government between 1963 and 1968 enacted and implemented fundamental reforms to Canada’s old-age pension system and designed a comprehensive and universal health-care system. Because neither of these programs fell in federal jurisdiction, Pearson, his ministers, and officials negotiated ceaselessly with the provinces to secure their consent and cooperation and, miraculously, they usually got both.
Pensions, private and public, were a continuing irritant in Canadian politics. A federal-provincial pension scheme was put into place in 1927, very much at the insistence of two Labour members of Parliament.13 It was reformed and considerably expanded by the St. Laurent government in 1951. Nevertheless, Canadians continued to look enviously across the border at the American Social Security program, which provided both contributory pensions and unemployment insurance.
Health care—its availability, affordability, and efficacy—had been an issue in most Western societies since the late nineteenth century. Public health—disease prevention, sanitation, and the quarantine of infectious diseases—had always been a responsibility of government, usually provincial or municipal. (The federal government had responsibilities in its own jurisdiction, such as the military forces and veterans, and immigration.) The phrase “catastrophic illness” had real meaning in Canada, beyond its effect on the body or mind. Some sicknesses, both acute and chronic, could undermine a family’s finances. Although there was medical insurance, private and voluntary, it wasn’t enough for most Canadians. The St. Laurent government, in its last year, did implement a hospital insurance scheme, with the support of the provinces: Canadians need no longer pay for basic hospital services (interpreted as ward care), though private health insurance continued to pay for “frills” such as semi-private or private rooms.
Doing something about pensions and health care was the program of the CCF/NDP, but Canada’s socialist party (after 1956, semi-socialist) was never going to attract enough support to form a national government. The CCF did have power in Saskatchewan, however, and under Premier Tommy Douglas in 1961 it implemented a government health insurance scheme that was both compulsory and universal. After a vivid and much televised skirmish with the province’s medical association and its supporters, Douglas successfully put health insurance on the agenda of national politics. The fact that a province could take the lead, could pioneer an important national initiative, was a point that should have been remembered. It was also a boost for the federal NDP, to which Douglas now moved as national leader.14
The national Liberal party platform promised to reform both pensions and health insurance. Party support for such reform was strong but not unanimous; as it happened, though, the reformers held most of the levers of power and policy. Walter Gordon as finance minister and Tom Kent as Pearson’s main policy adviser were determined to proceed, and they carried a sometimes wavering prime minister with them. With Kent in particular, the ideas of the Canadian-born Harvard economist, John Kenneth Galbraith, may be said to have come home.15
Pensions came first. Pearson proposed a “Canada Pension Plan” (CPP), which would be portable but not universal. Its principles were negotiable and its financing at first cloudy. It encroached on provincial jurisdiction, and so depended on enough of the provinces coming on board. And as it turned out, the federal proposals weren’t exactly what were adopted as the basis for the future CPP.
Quebec, rather to Ottawa’s surprise, was first in the field, with a comprehensive and practicable contributory pension scheme. Pension reform was certainly attractive to Quebec, but what made it especially so was the prospect of harvesting contributions. The pension fund would accumulate hundreds of millions of dollars in a relatively short time, and that money could be available to the Quebec government to invest. Pensions, or rather pension contributions, were the key to the Quebec government’s desire to build a “modern” economy—autonomously. So in order to get to its objective of a national pension plan, the federal government had first to negotiate with the provinces, and negotiate seriously.
As it finally emerged in 1964, the Canada Pension Plan was contributory, universal, and portable. But it was bifurcated, one plan for Quebec, the QPP, and one for the rest of the country. This was a hard pill for the Conservative government of Ontario to swallow, but eventually, and after appeals to national unity, it did.
Next came health care. There was considerable debate in the more conservative provinces like Ontario and Alberta as to whether a government plan was desirable, and whether viable private and voluntary schemes weren’t sufficient. Nor was it forgotten that Saskatchewan’s adoption of health insurance—medicare—had provoked a doctors’ strike and much public ill feeling. On the other hand, the Saskatchewan doctors’ tactics and extreme language had helped to discredit opposition to medicare, not just in the province but across the country.16
In the summer of 1965 officials in Ottawa under the overall supervision of Tom Kent devised a plan that was administratively simple and politically workable. Ottawa would pay half the cost of doctors’ services17 if the provinces would pay the other half, subject to provincial acceptance of four basic principles: universality of coverage; a comprehensive definition of what doctors’ services were; transferability of benefits from province to province; and public administration. The ensemble was labelled “medicare.”
Medicare’s timing was directly related to the Liberal government’s need for a platform in the 1965 election, which Pearson called in a desperate attempt to secure a majority in the House of Commons. He failed to get his majority, but that failure made no difference to medicare. The federal terms were so attractive that Quebec overcame its opposition to shared-cost programs with the federal government, Ontario its preference for private insurance, and Alberta its objections to universal coverage.18 By the end of the 1960s, Canada had a universal, portable, and publicly funded and administered medicare system, which Tom Kent correctly identified as “the most important of all the social reforms introduced by the Pearson administration.”19
The development of a social welfare system fundamentally changed the way “Canada” did business. During the 1940s and 1950s the business of “Canada” was, essentially, war and external security, and “Canada” meant the federal government. But government, especially in Canada, is a collective noun. Because defence was urgent, and because defence was expensive, the provinces and their priorities were shoved to one side. From the perspective of international affairs, Canada was a small actor, and so it needed to concentrate its resources if it was to make a contribution to the collective defence and have a corresponding weight in an alliance system. The needs of Canadian defence, as much as anything else, left little room for an expansive social welfare program.
After 1968, however, Canada had just such a program. Its size and cost were sufficiently large that Mitchell Sharp, Gordon’s successor as minister of finance, got his colleagues to postpone implementing medicare for a whole year, until 1968. Meanwhile, defence and mutual aid descended from 23.45 percent of federal government expenditure in 1961 to 13.7 percent in 1969; by 1975 it was 7.1 percent. Social welfare, on the other hand, rose from 20 percent of federal government expenditure in 1961 to 23 percent in 1969 and to 33 percent in 1975. Ministers and most other politicians did not remind the electorate that government was about choices, and that what was spent in one area would not be spent in another. But so it was: Canadians might well be better off at home, and in their daily lives, because through their governments that was where they had chosen to spend their money. As a consequence, they would spend less on defence, and the industries and programs related to defence, and Canada was bound to play a lesser role in its alliances and to be more reticent in its international engagements.
THE TERMS OF TRADE
While the Pearson government was redefining Canadian society, it was also altering Canada’s economic geography by reworking the country’s trade policy. Pearson and his government might have seemed ill-equipped by both experience and ideology to do much about trade. Pearson was primarily a political diplomat, most comfortable in alliance negotiations or debates at the United Nations. Ideologically, the government’s minister of finance, Walter Gordon, was a fervent Canadian nationalist who was anxious to enhance local control over the economy, a principle that was apparently at odds with a cooperative trade policy.
Principles had little to do with circumstances. The political environment of Canadian trade had changed considerably. Whereas before 1939 Canadian trade was balanced between Great Britain and the United States, after 1945 the trend shifted south. Under the General Agreement on Tariffs and Trade (GATT) Canada participated in periodic tariff-lowering exercises, but these GATT “rounds” did not fundamentally affect the high tariff wall that protected Canadian industry from competition. What the GATT did do, however, was to limit the ability of the nations of the British Commonwealth to create their own economic or trading zone. All nations belonging to the GATT must have the same rules and offer the same tariff levels—though existing arrangements, like British preference, were “grandfathered.” The only exception allowed countries or groups of countries to form free trade zones.
In 1957 six continental European nations, France, West Germany, the three Low Countries, and Italy, formed a Common Market. Britain chose not to join, and was later excluded by France. The Common Market, led by France, proved to be highly protectionist, especially in the use of subsidies to encourage European agriculture. The results could be bizarre—a butter mountain, or a wine lake, could have been constructed out of subsidized European agricultural products. And of course Europe, a temperate continent, produced many of the same crops as Canada. Canadian agricultural exports—like wheat, apples, and cheese—to Europe were gradually strangled. Though these still had entry to Britain, a traditional market, it was clear in the 1960s that British accession to the Common Market was merely a matter of time. So when it came to trade and economics generally, Canada had increasingly little choice: the United States was the only game in town.
The Canadian government was unwilling to lower trade barriers to the larger and more productive American economy, but at the same time it was uneasily aware that the Canadian economy, with its limited domestic market, was insufficient. Canadians’ prices were higher, and their choices more limited, than were the Americans’. This was especially true in automobiles, where Canada’s American-owned car industry was notoriously inefficient. Canada ran a large deficit in its automotive trade with the United States, year after year, with depressing results for Canada’s balance of payments.
From time to time the Canadian government toyed with the idea of adjusting the auto industry. Walter Gordon took up the issue, seeking more production and investment in Canada and offering incentives in return. His first attempts ran into American opposition, and threats of retaliation; but they weren’t fruitless. The notion of fixing the auto industry in a way that would keep the Canadians happy stimulated thought inside the American government and in the Big Three car companies.20
The solution was a Canadian–American agreement (the Autopact of 1965) that created a system of managed trade in the industry. The auto companies got free trade for parts and cars in return for guaranteed levels of production and investment in Canada. They used their new-found freedom to rationalize the car industry. Instead of duplicating production in Canada to make small numbers of high-priced vehicles for the Canadian market, they could service all of North America from a single plant. In 1964, 7 percent of Canada’s automobile production was exported; in 2002, the figure was 60 percent. On the other side, 40 percent of vehicles purchased in Canada were U.S.-made, another quite significant increase. In Canada, investment rose; employment rose too, from 75,000 in the mid-1960s to 491,000 by 2002; and prices dropped. Production rose so far that by 1970 Canada had, for the first time, a small surplus on the auto trade. Automobiles moved to first place in Canada’s manufactures—12 percent of manufacturing GDP by 2002—and in its exports, displacing forest products.
Some Americans noticed. The Autopact became an item on a list of U.S. grievances centred on the increasing American imbalance of payments, and in the early 1970s it several times came close to being unilaterally cancelled. But it was not. As a result, Canadian–American trade increased, and Ontario’s economy, in particular, was reoriented— north–south as well as east–west.
There was an irony in the Autopact. Its main progenitor, Walter Gordon, wished to recapture the Canadian economy. Yet he also wanted the country to prosper, by expanding, in this case, high-paying manufacturing jobs. In this he succeeded, but in terms of strict economic nationalism he did less well. Before 1965 the Canadian automobile companies were American subsidiaries, but because they dealt with a separate Canadian market they had a high degree of autonomy. That was no longer necessary under the Autopact, and effective decision-making—indeed a whole variety of executive functions—moved to head office in the United States.
The Autopact experience illustrated the workings of the Law of Unintended Consequences. It pulled the United States and Canada closer together, changing the balance of the economy in the process. (Multilateral trade negotiations under the GATT, the Kennedy Round of 1964–67, reinforced this tendency, reducing or abolishing tariffs on billions of dollars’ worth of trade between Canada and the United States.) Most Canadians, however, would have been surprised to learn how successful, and how important, the Autopact was to the country, and, if they lived in Ontario, to their daily lives. As far as most Canadians were concerned, relations with the United States were actually entering a decline in the 1960s and, as far as political and cultural relations were concerned, they were right.
THE SHADOW OF VIETNAM
Situated beside the United States, Canadians had always been in an excellent position to absorb what was happening across the border, in the country’s backyard, so to speak. Through exposure to the American media, especially television, American presidents and other prominent politicians became known in Canada too. Truman, Eisenhower, and John F. Kennedy were popular in Canada, the handsome and youthful Kennedy immensely so; and when Kennedy was assassinated in Dallas in November 1963, Canadians shared their neighbours’ grief.
They weren’t sure what to make of Lyndon Johnson, the veteran Texas politician who succeeded Kennedy. Handsome and photogenic he was not, but he was politically skilful—enough to override scattered opposition to the Autopact with Canada in 1964–65. That was a minor triumph for Johnson, and he celebrated by inviting Pearson and his external affairs minister, Paul Martin, down to his ranch for a signing ceremony. It was a rough and tumble occasion which Pearson did not greatly enjoy—his sense of informality tended more to a quiet glass of Canadian Club whisky in front of a cozy fire.
The Johnson ranch visit involved a terrifying car ride, piloted by Johnson himself; urinating by the side of the road at the president’s insistence; and mounds of indigestible food. The noise and confusion that surrounded Johnson were not to Pearson’s taste. It was, however, the pleasantest meeting the two men would have. They would soon clash, and when they did, it was over international affairs; in the broadest sense, it was a difference over where the United States and Canada stood in the world.
One thing that distinguished Pearson from Johnson was a sense of limitations—he saw American power and American resources, political and economic, as more limited and more fragile than did Johnson. Their contrasting visions clashed over South Vietnam, where a Communist insurgency and an invasion from its Communist twin, North Vietnam, threatened to overturn a pro-American government in the early 1960s. South Vietnam became, for Johnson and his supporters, a symbol of American determination to resist Communist subversion. Should it fall to the Communists, Johnson decided, American credibility worldwide would be undermined. In 1965 he committed American troops to save South Vietnam; by 1968, Johnson’s army in Southeast Asia was 500,000 strong, most of them conscripts.
Pearson did not question the administration’s anti-communism, but its choice of time and place. He thought that waging distant wars with conscript armies was not a proven formula for success, as the Korean War and especially France’s recent experience in Algeria showed. Through Canadian diplomats serving on a futile truce supervisory commission in Vietnam, he understood that the Communists would not compromise and were ready for virtually any sacrifice. He dreaded the effect on the United States, where his liberal friends begged him to say something that would deter Johnson from his disastrous course.
Pearson tried, in a speech in Philadelphia in April 1965. Today the speech makes curious reading. It went to great lengths to praise the United States, its motivation, and its policies. But it also suggested a pause in the American air offensive in Vietnam.
Since the suggestion of dissent, of an alternative policy, played to Johnson’s opposition in the United States, Johnson saw Pearson’s act as a betrayal. He suspected that Pearson was in cahoots with his domestic opposition, and he resented it. He knew that a pause was insufficient, unless it was followed by American withdrawal and the recognition that South Vietnam must be left to a Communist future. That was for Johnson political suicide, though he suspected that military action might be a costly mistake—also politically fatal. A sulphurous meeting at the president’s rural retreat at Camp David followed. “You pissed on my rug,” Johnson snarled, grasping the prime minister by the lapels of his suit. Back in Ottawa, Pearson wrote a cringing letter to Johnson, which didn’t help. The American president went on his way.
Johnson’s fireworks were mostly verbal. He had enough to cope with in Vietnam, and left the Europeans, and the Canadians, alone. The Australians did join his war, and paid the price of political disruption at home, with no ability to influence American policy or military strategy. But Australia was distant and isolated, and couldn’t count on American support if it were attacked by its Asian neighbours. Canada, right beside the United States, had no such strategic dilemma.
The Vietnam War divided American society. The young, who had to fight the war, were generally against it. Even the children of conservatives, like the future U.S. president George W. Bush, managed to stay out of Vietnam. Demonstrations and riots swept American campuses. Draftees into the U.S. military refused induction, and perhaps fifty thousand draft dodgers and their supporters fled to Canada. American opinion gradually turned against the war, followed by Canadian opinion. Assailed on all fronts, Johnson’s Democratic administration crumbled; and in the presidential election of 1968 Americans elected the Republican political warhorse Richard Nixon. Nixon might not be exactly fresh, but he was different. He would still try to win in Vietnam, but, a more ruthless politician than Johnson, he was willing to make peace if he couldn’t. As for Canada, all he asked was that it not make trouble.
TIMES OUT OF JOINT
In 1968 Lester Pearson, frustrated and tired by his turn as prime minister, announced his resignation. The Liberals’ choice to replace him was unusual but not unexpected—Pierre Elliott Trudeau, the minister of justice. Trudeau promptly called an election for June, and the Liberals headed out on the campaign trail under a leader and prime minister who was, to say the least, untried.
In politics for only three years, Trudeau had been a public figure in his home province of Quebec for much longer. He’d been educated at the University of Montreal, Harvard, the London School of Economics, and the Sorbonne, and was also a world traveller, a public intellectual, and, most recently, a law professor. Unmarried, very fit, mysterious (as far as most English Canadians were concerned), and apparently romantic, he appealed to youth—though he was a mature forty-eight.
What Canadians saw was a man who defied convention—wearing turtlenecks and sandals, driving his own Mercedes convertible, sporting a rose in his buttonhole or between his teeth. “The state has no business in the bedrooms of the nation,” he quipped, taking homosexual practices out of the Criminal Code. On television, his natural medium, Trudeau was alternately bold and defiant, or utterly charming, with the hint of a shy smile.
Trudeau’s place on the ideological spectrum was equally a mystery. He was a liberal before he was a Liberal, but he was realistic enough to be willing to make the compromises that party leadership demanded. In his speeches Trudeau talked of a “Just Society,” words that fitted broadly in the spectrum of late-sixties liberalism. That didn’t really distinguish Trudeau or the Liberals from either the NDP or the Progressive Conservatives; in effect the three parties competed to show who was more caring, more just, and more competent to fit “the liberal moment” in Canadian history.
There was one point on which Trudeau’s position was known and perfectly clear. He would have no truck with Quebec nationalists, and he had no regard for Quebec separatists. The one thing led to the other, as far as he was concerned. All nationalisms were to be regarded suspiciously. He may have drawn on his own experience, for in his youth Trudeau had flirted with extreme French-Canadian, Catholic nationalism, only to drop it in the mid-1940s as his experience broadened and his mind matured. Now he was the head of Canada’s government, the executive in charge of the Canadian nation. Governments, even Trudeau’s, were fuelled by nationalism, and by force of circumstance if not official ideological conversion, Trudeau became a promoter of Canadian nationalism.
It was a particular kind of nationalism—and in some respects it wasn’t especially or uniquely Canadian. It can be seen, from a much later perspective, as the first instalment in the culture wars that in the 1990s and after dominated politics and society. Trudeau’s “Just Society” reflected the urban and the progressive, and the self-consciously modern. It would be open and tolerant and, if someone could figure out how to manage it, caring. It was a philosophy that suited a country that was about to change, and change radically; its openness masked the fact that, in many ways, it didn’t work.
Trudeau won a mandate from the Canadian electorate in June 1968. The Liberals won a majority in the House of Commons, and seats in every part of the country. The prime minister did particularly well in his home province, where the main opposition wasn’t so much the Conservatives as the bucolic and nationalist-tinged Créditistes.21 The night before the election, Canadians saw the prime minister stand his ground in front of a mob of rock-throwing separatist thugs in Montreal while the mayor of Montreal and the premier of Quebec scuttled for cover.
Trudeau then settled in to govern. There was a flurry of minor social programs suitable for a youth-oriented society—Opportunities for Youth, for example, which funded projects designed by and for young Canadians. There was the question of what to do about the West, where there were complaints that the prosperity of central Canada, especially Ontario, was not shared. There was the problem of the East and rural Canada, lagging behind the prosperous industrial cities of the centre. The Trudeau government did what it could, confident that it had the money, the time, and the expertise to manage society.
And it did have the money, for the economy was producing regular budgetary surpluses. All that was required was to redirect some of it into the new social programs established by the Pearson government and expanded under Trudeau. It promoted regional economic expansion, with a particular eye to Cape Breton Island. It fiddled with unemployment insurance and poverty. It mused about cities, and it contemplated the mysteries of research and development, lagging in Canada.
The obvious source of funds, apart from rising tax revenues, was defence. Fortune favoured the government. Vietnam was distant, and no significant group in Canada favoured going into the war. (That did not prevent thousands of young Canadians from enlisting in the U.S. military and fighting for Uncle Sam.) Europe was stable. The United States and its allies in NATO, including Canada, would defend their existing space if attacked, but accepted that that was unlikely. Western communists were disillusioned by the Soviet repression of rebellion in Hungary in 1956, and became still more disillusioned in 1968 when the Soviets did the same thing in Czechoslovakia.
Though there were still revolutionary festivities on the campuses and in the streets and squares of Western cities, with accompanying arson and looting, the self-proclaimed revolutionaries were either bought off or settled into a posture of principled irrelevance. They did not, in any case, take the Soviet Union for their model. It was corrupt, grey, and stodgy. More romantic were Mao Zedong’s “cultural revolutionaries” in China; better still the Albanian communist tyrant Enver Hoxha. People knew little about China, and less about Albania, and so they became natural attractions for the science-fiction politics of the extreme left in Canada and elsewhere. In this, Canada was not especially different from other Western countries. There was one advantage about China, though not quite what its admirers touted. Mao Zedong’s regime was so ruinous economically and so preoccupied with its internal revolutionary struggles that it posed no serious threat to anybody outside China’s own borders.
The Soviet Union, though militarily formidable, was beginning to decay economically as well, and its leaders were inclined to seek stability over confrontation. (Its agents abroad, including a few spies in Canada, no longer worked for the revolution, but for cash.) NATO had already approved undertaking discussions with the Soviets in Europe, and in the early seventies this process resulted in a Conference on Security and Cooperation in Europe (CSCE) as well as discussions on various forms of arms limitation. The Americans, led by Nixon’s foreign policy guru Henry Kissinger, pursued “détente” with the Soviet Union, while the Germans, who had emerged as the most economically powerful and politically stable of the European allies, tried out a formula for constructive engagement with the Eastern Bloc, and especially its evil twin, the German Democratic Republic, or East Germany. This policy, labelled “Ostpolitik,” eventually accomplished its objective, buying off the East Germans with increasingly expensive gifts and subsidies while reassuring the Soviets that West Germany would not seek to overthrow the settlement of 1945.
Whatever was required in the Europe of the 1970s, it wasn’t Canadian military power. The Canadian garrison in Europe was more symbolic than practical—a symbol of transatlantic connections more than a bulwark between the Communists and the Rhine. (A Canadian general who had commanded Canada’s brigade group in Europe once observed to the author that in the event of a war he assumed his troops would get in their Volkswagens with their families and head for the nearest port.) The Trudeau government, after a lengthy and painful self-examination, announced in early 1969 that it would pull out half of Canada’s European garrison, army and air force. The Europeans, especially the British, took the news badly, and there is no doubt that Canada’s voice in NATO was as a result considerably reduced. Trudeau did not especially care. He viewed NATO as not much more than a forum for set speeches and frozen positions, and a place where the military voice was excessively loud.22
In fields other than the military, Canada played little role in the continent’s consciousness, and none at all in terms of its priorities.23 These facts applied as much if not more to Great Britain as to France and Germany.24 The British could do little to protect Canada’s trade, and Canadian exports sank steadily as Great Britain adjusted its tariffs to abolish Imperial Preference while opening its market to European goods.
CHANGING CANADA
There was another reason to be sceptical of the Europeans. Canada was changing, and so was Europe—as Europe faced east toward the Soviet Union, and inward toward its own Common Market or Economic Community, Canada was finding alternatives to the Europeans. European links were dwindling, especially in immigration. The comparative statistics were telling. Between 1946 and 1966, out of 2.7 million immigrants to Canada, well over 80 percent came from Europe; immigration from China and India totalled around fifty thousand, while Korea wasn’t even listed as a separate source of immigrants. Anyone looking at Canadian migration patterns or at Canadian ethnicity in the late 1960s might have been pardoned for concluding that Canada was likely to carry on as it had been for the previous 150 years—an overwhelmingly white country whose culture reflected its ethnicity.
In terms of North American migration, the principal event of 1966 wasn’t Canadian, but American: the revision of American legislation that altered that country’s traditional preference for immigrants from the Americas—including Canadians—while ending discrimination against immigrants from other parts of the world. After 1967, Canadians could no longer move freely across the border in search of greener pastures. But Canada was prosperous, and the standard of living was rising, and so the constriction of what had been a traditional Canadian option was little noticed.
Canadian discrimination against non-Europeans followed much the same pattern as American. As prejudices against non-white races abated in the 1950s and 1960s, immigration practice changed in Canada as elsewhere. For the first time non-whites outnumbered Europeans as immigrants to Canada in 1971. Non-European immigration was assisted by racial tensions in some of the Commonwealth countries of East Africa, where citizens of Indian origin were made unwelcome by local governments, especially the homicidal regime of Idi Amin in Uganda. This experience, coupled with earlier inflows of Hungarian (1956) and Czechoslovak (1968) refugees, influenced the revision of Canada’s immigration legislation in 1978.
Changes also occurred in Canada’s own ethnic pockets. The 1951 census recorded fewer than 10,000 Inuit and about 150,000 status (officially recognized) Indians. By 1981 their numbers had more than doubled, and by 2001 would double again, to 675,000; of these, 283,000 lived off reserves. In some parts of the country, notably the territories plus the northern parts of Quebec, Ontario, Manitoba, Saskatchewan, and British Columbia, Indians and Inuit were an increasingly important and increasingly noticed section of the population. Yet they were still governed according to the standards and practices of the eighteenth century, as wards of the crown, subsidized but subordinate and governed by civil servants out of the federal department of Indian affairs. Two hundred years of trusteeship had resulted in a constellation of (mostly) rural slums whose inhabitants enjoyed much less than the standard of living of their white compatriots.
This situation seemed at variance with the mood of the times—against discrimination, racial categorization, and second-class status. The solution seemed obvious: abolish the special status of the Indians, and integrate them into the larger Canadian community. A federal White Paper, sponsored by the Indian Affairs minister, Jean Chrétien, recommended as much in 1969.25
The White Paper ignored another trend of the times, and some of the results of federal policy. Inadequate though federal Indian policies may have been, they had produced a small, active, and better-educated group of Native leaders, far less willing than their predecessors to accept direction from Ottawa. To these leaders, the federal proposals were nothing more than a prescription for assimilation and absorption while letting the federal government off the hook for generations of neglect and abuse. They resisted Chrétien’s policy, and aborted his proposed reforms. Whatever the fate of the Native peoples of Canada was to be, they demanded to control their own destinies.
The reaction to the White Paper sent Native–white relations into an entirely different direction. For the Indian leadership, it was no longer a question of poverty or equality in a larger society. Questions of autonomy, self-government, nationality, and even independence bubbled up. While the White Paper had discredited the old system of government control over Native bands, the government had nothing to put in its place. Instead, various Indian organizations grew up—some ad hoc, directed at a particular region or established for some special cause, others more general and more heavily institutionalized, like the National Indian Brotherhood, which in 1980 morphed into the Assembly of First Nations. The Assembly in turn was recognized by the federal government for some purposes and on some occasions, without conceding the Native sovereignty that some more radical Indian spokespeople were demanding. To complete the confusion, the federal department of Indian affairs continued to act as a funnel for subsidies to the various Indian bands.
FEDERAL–PROVINCIAL HORRORS
The partial devolution of authority to Indian bands mirrored a trend to decentralization in other parts of Canadian government. As the Depression and the Second World War receded in memory, so did some of the justification for constructing a powerful central government. As time passed, the provinces acquired larger and better civil services, ending Ottawa’s near-monopoly of bureaucratic skills. It followed that the provinces could advance better arguments when they negotiated with Ottawa, either bilaterally or through the medium of formal federal–provincial conferences, meetings of the prime minister with the provincial premiers that increased markedly in frequency as the 1960s drew on.26 At first commentators drew attention to the diplomatic quality of these meetings;27 later, however, the impression grew that federal–provincial conclaves had become a third order of government. The impression was reinforced as the terminology used to describe these conferences inflated. “Federal–Provincial Conferences” became “Federal–Provincial Conferences of First Ministers” in 1974, and then “First Ministers’ Conferences” in 1985. Where formerly they dealt with special subjects—unemployment insurance or pensions, for example—they became annualized and generalized in that same year, 1985.
The proliferation of high-level political meetings was an indication of the intricate overlapping of jurisdictions in Canadian government. The Pearson government recognized the complication, and contributed money so that the provinces could manage health care and pensions while maintaining the right of all Canadians to interchangeable services from province to province. Federal contributions to provincial needs also insulated Ottawa from the charge that it had too much money, thanks to its broad taxing powers, and avoided any kind of fundamental realignment of taxation. At the same time, Ottawa’s abundant revenues gave it the advantage in dealing with the provinces—even the biggest. If the federal budget was growing, so was the economy, and so did federal surpluses. It was a happy coincidence, and like most coincidences, it did not last.
FREEZING IN THE DARK
It began with an election. Four years into its mandate the Trudeau government headed to the polls, calling an election for 30 October 1972. “The Land Is Strong,” the Liberals fatuously assured the voters. It was one of those occasions when more modesty and less hyperbole might have served the politicians better. Unemployment, after all, was low at 6.3 percent, though higher than in 1968 (4.8 percent). Economists would later blame higher interest rates and a more generous unemployment insurance system for a rise in Canada’s unemployment levels. The baby boom and a more open immigration policy were having an effect too—more and younger workers were looking for work. Often enough, having found work, they went on strike, in numbers not seen since the inflationary days of 1946.28 As for those who hadn’t joined the labour force—for example, students at university—the early seventies were equally a time of disruption approaching chaos, as militants complained of grievances real or fancied and took “action” against complacent or repressive authority.
It wasn’t surprising that Trudeau took the blame. The Liberals’ majority in the House of Commons melted away and the government emerged a scant two seats ahead of the rival Progressive Conservatives. The government’s fate depended on the two minority parties, the NDP and the Créditistes, and on its ability to manoeuvre past what seemed a hopeless political situation. To guide the government, Trudeau appointed a veteran politician from Nova Scotia, Allan MacEachen, as government leader in the House of Commons. To guide his policies, Trudeau turned not to academic experts or management theorists but to his professional political advisers. Not surprisingly, they advised him to do whatever was popular. With an eye to refurbishing his image, the prime minister abandoned philosophy and posed as a street fighter, defying and mocking the opposition by turns. It was an image that suited him, and it too proved popular.
The government was sustained in its first vote of confidence in the House of Commons. The issue was the American bombing of Hanoi and Haiphong over Christmas, 1972. Canadians disapproved. The left was vocal on the issue, and the NDP demanded that Canada take a stand. And so, via a resolution of the House of Commons, Canada did. The NDP had to vote for it. The Créditistes, who shared Quebec’s isolationist traditions, also disapproved of war, and they voted for it too. Trudeau and his ministers, who knew that this was a simple-minded solution to a complex issue, voted for it to keep the government in office. President Nixon was enraged, but he needed Canada’s help in camouflaging American defeat in Vietnam by creating an international peacekeeping force to supervise his troops’ withdrawal. The issue was soon forgotten, and in any case Nixon would shortly be swallowed up by a great domestic scandal, becoming the only American president to resign his office, in 1974.
Nixon’s troubles distracted the United States and a watching world— for it was the television drama of the century—for most of 1973 and 1974. Throughout, Nixon doggedly pursued détente with the Soviet Union and a rapprochement with China, and tried to keep the lid on a Middle East situation that threatened to drag in the Americans and the Russians, thus endangering the peace of the world. A brief Arab–Israeli war in October 1973 was patched up, but not before the Arab world joined forces against the United States and the West, embargoing the shipment of Middle East oil to “unfriendly” Western countries. This action set in motion an energy crisis that would last for most of a decade—that would never, in fact, entirely go away.
Mid-twentieth-century Canadians, like their American cousins, took energy for granted. North Americans sat on top of apparently unlimited supplies of coal, oil, and natural gas. There was waterpower, channelled and dammed by great engineers. There was nuclear power, fuelled by Canadian uranium and produced in the CANDU series of Canadian-designed and -manufactured reactors. Canada’s energy policy, accordingly, was a policy of plenty and even surplus. Every year, geologists reported that they had discovered more oil and natural gas; and every year the government lobbied the United States to give Canada—secure, safe, and allied Canada—a part of the American energy market. The government did its best to encourage Alberta, reserving most of the Ontario market for more expensive domestic oil, but allowed politically volatile Quebec and the less prosperous Atlantic provinces to import cheaper fuel from the lower-cost international market.
That market was changing. Starting in 1960, American oil reserves began to deplete faster than geologists could find replacements. The Canadian government lobbied harder and faster, only to find that congressional obstruction was more than a match for any argument based on dwindling oil reserves. Eventually, in 1970, Canada also ran into the same problem as the United States: proven petroleum reserves peaked and began to decline. With that development Canadian enthusiasm for unlimited sales to the United States began to decline too.
The Arab oil embargo was only the most visible sign of the oil crisis. Economists and alarmists, represented by the fashionable Club of Rome, had been arguing for years that the world was facing a Malthusian emergency—there was too much demand chasing too few resources. It followed that prices ought to rise, and they did. For several years prior to 1973, the governments of petro-states had been demanding and getting better terms for their product, using their trade association (the Organization of Petroleum Exporting Countries, or OPEC) to organize an oil cartel. The great Western oil companies, known collectively as the Seven Sisters, found that their governments either would not (the Americans) or could not (the British) sustain their market dominance. The international price of oil rose and kept rising.
This was good news and bad news for Canada. It was definitely good news for Alberta, whose most lucrative product, oil, was buoyed by the international price. It almost seemed that Alberta’s resource-based economy, which had so often been the victim of international markets beyond its control, had finally turned the corner; for the first time markets were working for, not against, the province. It was bad news for those parts of Canada that imported oil. Soon the media were promoting images of old ladies freezing in the dark as their energy supply was cut off either by boycott or by unaffordable price hikes. It was popularly believed that the oil companies were behind the oil crisis. And it followed that some good old-fashioned state regulation would bring an artificial emergency smartly under control.
The minority government was not the best instrument to handle a politically volatile situation that affected many if not most Canadians. In a series of ad hoc decisions, the Trudeau government secured Canada’s own energy supply first, and made it available at an affordable price across Canada. The definition of affordable was debatable, but it was also and inevitably political. Americans didn’t vote in Canadian elections, so it followed that Americans could pay the international price and bear the brunt of any reductions in Canadian petroleum output. But Maritimers and Quebeckers did vote, and, given the minority Parliament, would soon be voting again. It followed that they must be protected—and with them Ontario, the country’s largest oil market.
The election came sooner rather than later, in July 1974, following a contrived parliamentary defeat. Trudeau returned with a majority, a majority with a difference. The Liberals had no seats west of Manitoba: the majority was based on a combination of Quebec, Ontario, and the Maritimes. Trudeau proceeded anyway—though fortunately there were no desperately contentious issues to bring to Parliament. (The most important issue of the day, the election of a separatist government in Quebec, will be dealt with in the next chapter.) This was odd, for the later 1970s were the heyday of a new and unexpected economic problem, stagflation, in which the economy defied accepted wisdom and produced both inflation and stagnation at the same time.
Stagflation would eventually prove extremely important in political terms. Unemployment rose, budgets (thanks in part to subsidies designed to prop up the two-price system for oil) went into deficit, and the federal government thrashed around for ways and means to make ends meet and found them, inevitably, in reducing its payments to the provinces for such items as post-secondary education and health care. Unionized Canadians expressed themselves by striking—in record numbers (10,908,810 working days were lost in 1975, more than triple the number lost in 1971, and over ten times the figure for 1963).29 Because many of these strikes were in the public sector, where unions were newly permitted, the public was bound to notice, and it did. Confidence in the government’s ability to manage the economy sagged. Though it wasn’t apparent at the time, this was a fundamental change in public attitudes, and helped set the stage for the politics of the next two decades.
By 1979 it was clear that the prime minister was irritating the electorate, and there was some sense that the feeling might be mutual. Trudeau postponed the election until the last possible moment, in May 1979. Always a good campaigner, Trudeau did his confrontational best, but it failed to deliver. It was the Progressive Conservatives, under a young (thirty-nine) and untried leader, Joe Clark, who bested Trudeau and the Liberals, obtaining a plurality of seats in the House of Commons. After a few months of rest and reflection, Trudeau announced that he would retire from politics and devote himself to his young family. (Like many other Canadians, Trudeau was a divorced single parent.)
Clark lacked only a few seats for a majority, and determined to govern as if he had one. This would show determination and decisiveness and offset his image as an accident-prone political wimp. (“It’s the Year of the Child,” snorted his senior colleague, the unrepentant John Diefenbaker.)30 Clark expected that, once he had established his bona fides with the public, he could go on to call and win another election, as Diefenbaker had in 1957. He presented a budget that raised taxes on gas at the pump. Administratively, it was the right thing to do; politically, it was a disaster.
Even though the Liberals weren’t sure they even had a leader, they knew that Clark’s Conservatives were behind—far behind—in the public opinion polls. Clark with his new gas tax was digging the hole deeper, while energetically thwacking himself on the head with the shovel. Dragging the hapless NDP and Créditistes after them, the Liberals defeated the government on 13 December 1979. A few days later it was announced that Trudeau would not, after all, be leaving.
An election was called for February 1980, which Clark duly lost. In a memorable scene, Trudeau faced the cameras from his headquarters at the Château Laurier hotel in Ottawa. “Well, welcome to the 1980s,” he told Canadians. He did not need to tell them that it would be quite a ride.