342. Telegram From the Embassy in Canada to the Department of State1

504. 1. There has been a steady accumulation of evidence in the past few months that the Pearson govt has been working out more policies, at variance with US views and harmful to US interests, which spell a general outlook which, if not anti-American in inspiration, is certainly anti-American in result. Some of these policies have some realistic relationship to Canadian interests; others reflect little more than a yen to yank Uncle Sam’s beard, to strike a theatrical and supposedly popular pose at US expense in the leadership race and to embarrass the US by highlighting embarrassing problems, partly with the view to papering over controversy with Quebec.2

2. On the political side, there is supporting evidence in Canada’s recent actions regarding Vietnam, abandonment of private diplomacy, [Page 722] China, and ABM’s. The Pearson govt’s failure to make NORAD as cooperative a military arrangement as it could have been and its notification it would nationalize certain international waters even over our objections are long-time irritants and will not be further noted.

Vietnam. For the first time, FonMin Martin called for unilateral cessation of bombing of North Vietnam by US in his speech at UNGA Sept 27.3 He even twisted the stiletto, once inserted, by saying in Parliament in response to question that he had advised us beforehand. In fact, he had only given preview of his speech to US officials in the UN in “general terms.” To add insult to injury, he said in speech on Oct. 13 when questioned about Secretary’s remarks, expressing concern over what might happen if bombing stopped and Hanoi did nothing, that he could not discuss a hypothetical situation. Of course he had no hesitancy in calling on us to create a hypothetical situation, consequences of which would not be forecast and which Martin has already advised Secretary he would do nothing to meet. In CBC TV interview Oct. 11, he even fixed blame on US in Vietnam by saying “if the bombing stops, I think then the onus will be on the North. Now the onus is on the US to explain its position to the people of the world.”
Public diplomacy. In the same TV interview, FonMin Martin also stated that he was, in effect, abandoning his advertised policy of private diplomacy about Vietnam vis-á-vis US. He said Canada had been mistaken in thinking it should not “speak up” to US on subject. Canada had responsibility for action in its capacity as member of ICC.
China. In connection with abortive centennial visit to Ottawa of China’s VP Yen, FonMin Martin, even while GOC was trying to put visit by some substitute (eventually Deputy Premier Huang) back on rails, made embarrassing comments to press in Halifax Oct. 1 and 2 on Formosa’s not having been Chinese for hundred years and reiterating his one China-one Taiwan policy. This was symptomatic of his present penchant raise embarrassing subject to capitalize upon neutralist public opinion he exploits and encourages.
ABM’s. After Secretary McNamara announced US decision to establish thin ABM defense line,4 question was put to PriMin Pearson in Parliament whether GOC was advised in advance. Despite agreement between GOC officialdom and Emb that official line would be that US had “consulted” with GOC (as it had, indeed, throughout previous year), PriMin Pearson said only that GOC had been “notified.” This eased him out of any necessity to explain GOC rationale for participation or nonparticipation in system, but gave US cold comfort in permitting belief it had acted somewhat cavalierly in so vital a matter.
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3. There are number of indications in economic area which may represent a reinforcing trend toward more divergence between US and Canadian policies.

The insistence of GOC that it would, despite compelling nature of evidence gathered to prove that passage of Bank Act would retroactively discriminate against small American bank in Canada, proceed to limit bank’s growth notwithstanding is one example of this trend.
Similarly, the leftist-oriented economic nationalists of Canada have also placed significant restrictions on advertising of US sources in publications circulated in Canada in effort to weaken bonds of cultural affinity.
GOC now seems bent on introducing discriminatory postal rates against Time and Reader’s Digest to same end.
Proposed changes in regulation of radio and television in Canada follow similar course, further strengthening Canadian content requirements and regulating cable vision facilities.
The Carter Commission report5 (on which GOC has yet to take a stand), which would revolutionize Canadian tax policy and practice, may also be seen as attempt to stem rising tide of integration of US-Canadian capital markets by establishing disincentives to both US capital investment in Canada and Canadian capital investment in US. Report also urges elimination special incentives to mining and petroleum industries controlled largely by US corporations and points out that this move will shift burden taxation from Canadian to foreign taxpayers.
Canada’s foreign trade policy has for considerable period of time been at substantial variance with that of US as regards trading with Communist countries and particularly with Castro’s Cuba.
Another evidence of thrust of Canadian economic nationalists appeared in Oct. 14 column of well-informed journalist Peter Newman under title “A Test for English Canadians Nationalist Urges.” According to Newman, the special task force under Walter Gordon’s chairmanship set up to look into the problems of foreign investment (particularly American), “may become the basis both for a tough new era in Canadian-American relations and a major plank in the Liberal govt’s next election platform.” The “senior liberal politicians” cited by Newman as his sources, “see economic nationalism as the kind of issue which might give this country a post-centennial set of objectives on which both French and English politicians could agree.” While Emb [Page 724] has reported that Newman article contains inaccuracies and is discounted by some officials, article is at least representative of views of economic nationalists in govt.

4. Comment: There is then this recent record of GOC’s giving US and US interests sandpaper treatment to point where it begins to hurt and be obvious to many, not to Americans only, that Pearson govt is fanning, whether purposely or not, anti-Americanism in country. Best known and most visible evidence of this development is in govt Crown Corporation CBC’s TV public affairs program Sunday night (formerly This Hour Has Seven Days, now The Way It Is) continues to carry slanted and venomous attacks on US policy and US society. Recent shocker was half-hour US-made documentary film of race riots in US cities this past summer which has psychedelic presentation attempting show American society as welter of fear, hate, depravity, rot, and disintegration. Individual Canadians are still expressing their concern to Emb over this particular program, but CBC (and GOC) can be expected carry on mote-less.

  1. Source: National Archives and Records Administration, RG 59, Central Files 1967-69, POL CAN-US. Secret.
  2. Reference is to the Quebec separatist movement.
  3. For text, see UN doc. A/PV 1569.
  4. For text of the September 18 speech, see American Foreign Policy: Current Documents, 1967, pp. 16-25.
  5. The report, presented on February 24, called for a complete overhaul of the Canadian taxation system.