Canada And The United States, A Centennial Retrospective


King was succeeded by a French Canadian from the Quebec isolationist belt who was nevertheless an outright internationalist. Louis St. Laurent, who looked and behaved like a grand seigneur of the ancien régime, had a mind much clearer than King’s, with more candor and warmth but less subtlety. To this man of facts the interdependence not only of the United States and Canada but of the whole North Atlantic region was obvious. Before NATO had become practical politics in Washington, St. Laurent proposed a Western alliance against communism, and when it was framed he stationed Canadian troops in Europe, took his country into the Korean War, and committed its commercial policy to the General Agreement on Tariffs and Trade.

St. Laurent’s brisk, pragmatic approach to the problems of the continent was emphatically approved in Washington. Yet as his articulate foreign minister, Lester Bowles Pearson, remarked in a speech resented and misunderstood there, Canada’s relations with the United States could never again be “easy or automatic” as in older, simpler times.

Their complexity was given a vivid, though hazardous, demonstration in the Suez crisis of 1956. Pearson, now a kind of smooth universal joint in Western diplomacy, devised a settlement, helped to reconcile the quarrelling American and British governments, and won a Nobel Peace Prize. Canada had reached the peak of its international influence.

But shortly after Suez a new and prickly factor entered the continental equation. In John George Diefenbaker the Conservative party of Canada chose as its leader the ablest campaigner that the nation had ever known. No one seemed to observe at the time that he was not really a conservative. Raised on the prairies and scarred by the Great Depression, he was an agrarian radical, filled with pity for little men like himself and living in his own steaming private world of contradictory emotions. He voiced them with horrendous passion and unfailing courage, but they were never realized in a workable policy. Like King, he had sure intimations of immortality, considered himself an instrument of Providence, and yearned to do its will without knowing exactly how to do it in the public world of politics.

These virtues and defects were not yet known to the Canadian electorate and would have been of minor concern to foreigners if they had not included an instinctive, unalterable distrust of the United States, later to issue in some ugly consequences.

Meanwhile Diefenbaker’s tall, lean, twitching body, the black, metallic curls, the grooved and mobile actor’s face—a living portrait of the prairie earth— the hoarse and moving rhetoric, and the boundless pledges of good government, offered the nation a dramatic change from St. Laurent’s plain, homespun methods.

As the election of 1957 began, perhaps nobody except Diefenbaker believed that the regnant Liberal party could be defeated. Singlehanded, he miraculously defeated it and, though he lacked a majority in Parliament, formed the first Conservative ministry since 1935. The following year, a second election gave him the biggest majority on record. These were astounding feats that the American government had not expected, and now seriously misconstrued.

Soon, however, Washington guessed that something more than accident had occurred north of the border, especially when Diefenbaker announced a plan to divert about fifteen per cent of Canada’s foreign trade from the United States to Britain and, in a speech at Dartmouth College, openly voiced the apprehension that for a long time had haunted the Canadian people and colored their national policies: the menace of peaceful American penetration. Diefenbaker declared that “there is an intangible sense of disquiet in Canada over the political implications of large-scale and continuing external ownership and control of Canadian industry. The question is being asked: ‘Can a country have a meaningful independent existence in a situation where nonresidents [i.e. , Americans] own an important part of that country’s basic resources and industry and are, therefore, in a position to make important decisions affecting the operation and development of the country’s economy?’ ”

The menace had been brought into the open. But geography and economics were sure to frustrate Diefenbaker. Inevitably he failed to divert the currents of trade from North America. Buying more than half its imports from its neighbor, and selling about the same proportion of its own products in the American market, Canada could not extricate itself, even marginally, from the continental economy.

A country small in population had become the United States’ largest customer, supplier, and area of foreign investment. The largest volume of business flowing across any frontier had forced Canada to accumulate an excessively high deficit—almost two billion dollars a year, equivalent to about thirty billion dollars in the American economy.

Since the deficit had to be financed mainly by capital imports from the United States, a massive fraction of Canadian industry was sold to Americans. Struggling with this problem, the Diefenbaker government worsened it by budgetary deficits and huge borrowings. They raised interest rates and drove private Canadian borrowers to Wall Street for cheaper money, thus increasing American investment still further.