[Page 425]

117. Memorandum of Conversation1

PARTICIPANTS

  • Prime Minister Pierre Elliot Trudeau
  • Ambassador Thomas O. Enders

Trudeau: You’re even bigger than they say.

Enders: From now on we’ll send only 6-foot Ambassadors and over to Canada.

Trudeau: You’ve been touching the right bases around the country. I’m getting good feedback.

Enders: A lot of Americans know a lot about Canada, but not enough of them are in the government. Part of my mission is to see whether we can’t do a lot better in understanding what’s happening here.

Trudeau: I don’t want to discourage you, but I don’t see how you can. I don’t understand the milk producers; I don’t understand the West, and I’m Prime Minister. Maybe you mean you want to sensitize yourself.

Enders: That of course. Any American Ambassador must. But you don’t have to understand the milk producers or the West in order to grasp how they interact, do you? It’s the dynamics we don’t always get, that I’m looking for.

Trudeau: But how can you? I mean, so many of our decisions are irrational here. Don’t quote me on this, but they can go anyway. I hope most are positive but a lot of it’s just junk.

Enders: Then allow for a random element. But the basic structure should be predictable.

Trudeau: O.K. I can see that.

[Page 426]

Enders: Let me give you an example. Time is not an issue between us as governments. One of the jobs of an American Ambassador should be to have gone to Time headquarters say two or three years ago and pointed out that the grandfather clause business is great, but it would end sometime and if they did this or that they might survive as Time Canada.

Trudeau: But how could you know? Sure, the Liberal party every year passed a resolution calling for an end to the advertising clause, but generally it was low on my priorities. How would you know when I might want to trade it off to get Ontario nationalist support for, say, something I wanted to do in the West? I didn’t even know myself.

Enders: That’s just it. I couldn’t know when you would do it, or whether it would be you or another Prime Minister. But given the structure of relationships between Ontario and Ottawa, it could have been predicted. Whether Time would have changed its way of doing business is another thing. Maybe they would have taken their chances.

Trudeau: They probably would have said let’s tough it out and see whether the SOB’s have the guts to go through with it.

Enders: Maybe. Maybe also they would have calculated that they come out better this way, with a lower circulation but good advertising.

Trudeau: Maybe they do.

Enders: As I say, this is not an issue between us. But you have Andy Heiskell running around the States campaigning against Canada.

Trudeau: Andy High School?

Enders: Heiskell. Time publisher.

Trudeau: That doesn’t help. It’s not the best outcome from my point of view. I see what you mean. I think that is what the American Ambassador, or any Ambassador should be doing. But it’s not easy. I’m sure you don’t want to try to run our internal affairs. But there are always people in the Conservative party who say I am mismanaging relations with the U.S., screwing up Cuba or something like that, and in NDP to say I’m selling out to the U.S. Somebody’s always trying to score points. In politics you have to know how not to be impressed by all that. If you’re a good Ambassador, you’ll see the reality, and tell Washington. And I should be able to count on you to tell us which issues are really important.

Enders: You know, a lot of the issues that have caused turbulence between us are the result of the great economic shocks of the last five years—the devaluation of the U.S. dollar, the energy crisis, inflation and the recession. Now we are in the expansive leg of the cycle. I think we will find less problems, more solutions.

Trudeau: That’s helpful. But still there are a lot of guys campaigning around here against me for screwing up relations with Washington.

[Page 427]

Enders: One of the results of the economic troubles of the last years is what you might call an equality of sensitivity. Americans have felt vulnerable to Canadian actions in ways I guess you’ve felt vulnerable to us in the past. I’m not going around Washington saying this, but this parity may be a healthy development. I leave aside the substance of the disputes. They may be rather small objects in historical terms, but there’s so much economic insecurity on both sides of the border they loom pretty large now.

Trudeau: I wouldn’t want to display it in public, or use it, but I don’t mind saying this new power we have over you gives me a lot of gratification.

Enders: But things are changing again. The new economic problems as we expand will be different. Maybe the big one will be capital formation. The thing is that attitudes lag behind reality. We’re going into an upbeat situation. But we have more guys in politics who find it useful to run against Canada. We are drawing towards parity in that regard also. Let me give you an example. Making my calls around Congress, I get guys who have nothing to do with border TV mentioning the deletion issue. It’s only $20 million, but it grabs people.

Trudeau: That’s funny. I had a good relation with Nixon. And I think I have a good relation with Ford.

Enders: I know you do.

Trudeau: I had a word with him privately in December 1974 about publication. Henry was there. He said nothing about TV.

Enders: C–58 (the bill removing tax exemptions for Time, Reader’s Digest, and border TV) isn’t the issue. The border guys will scream, but they’ll adjust to taxation of advertising revenues if they have to, with one possible exception in the West. But its the CRTC deletion of commercials on TV programming that really grabs people. They don’t see what that has to do with Canadian culture. I didn’t mean to make a pitch to you the first time we met, but this issue has some topspin on it.

Trudeau: This is the first I hear about it. Tell me.

Enders: The cable distributors under CRTC license renewal rules will be required to delete U.S. commercials from the signals they retransmit. Now maybe our commercials aren’t the greatest thing . . .

Trudeau: People will say “piracy”.

Enders: Exactly.

Trudeau: That gives me an idea. Suppose we want people in Canada to spend less for bleach. All bleaches are chemically the same, say. Why advertise 17 or 18 different brands. Let’s have lower prices. What do I do?

Enders: You tax advertising.

[Page 428]

Trudeau: O.K. But then people read in U.S. publications and see in U.S. TV about competing U.S. bleaches. The U.S. bleaches sell better. Trade swings to you. I am defeated.

Enders: You of course don’t want to tax incoming publications; you will want freedom of information. But when you put in your tax on domestic advertising you, if you’re really afraid about U.S. consumer goods imports, you get to GATT and negotiate an increase in the tariffs on them.

Trudeau: It would cost me something.

Enders: Yes.

Trudeau: And a lot of public fuss. You know, it’s this kind of constraint rather than cultural nationalism that concerns me. I’m not quite sure, but I think we are finally getting over our inferiority complex in culture.

Enders: When I came to Washington 17 years ago, people could still sell books about how we were really O.K. with all that money and power, even though the Europeans had all the finesse and savoir-vivre. Then, suddenly the market disappeared.

Trudeau: Like here, last year they could sell, now the market’s off.

Enders: Maybe you’ve reached the critical mass.

Trudeau: I think we may have. No, its not culture that will cause the problems between us. If not now then soon we’ll have enough self-confidence. Rather it may be the ideological issues that will set us against each other in the future. Suppose I want to move Canada towards smaller cars, to save energy. But all the time Canada is flooded with U.S. advertising on the joys of big cars. How can I succeed? Won’t we come into conflict?

Enders: Actually we may be ahead of you on that. The one major accomplishment in two years of domestic debate on energy policy has been a set of auto efficiency standards that will bring average gas consumption of new cars down by 45% in five years. They’re tough enough so that people are already wondering whether a black market in big cars won’t emerge. This was tough to get. But you may have even more difficulty than we. Your distances are bigger. You have the cold to contend with. And of course cars are as important as houses to the middle-class.

Trudeau: You’re probably right. Cars are not a good example. At least you’re moving fast enough so that you won’t be a constraint on us. And I am running into a lot of opposition here. But I still think my point about ideology holds. Take public ownership. We have socialist governments in some provinces here, and public ownership is something we will probably have more of than you. I seriously considered putting the whole energy sector into public hands. Don’t get the idea we’re [Page 429]going socialist—we’re not—but I can see us in conflict over the ideology of ownership.

Enders: I wonder whether private vs public ownership will be a primary discussion of debate in either of our countries. It’s probably true that neither of us is getting the kind of collective consumption goods—transit systems, inner city renovation—that we want. But I wonder whether ownership is the reason. With the pressure on our budgets both of us give priority to such things as transfer payments . . .

Trudeau: And that causes inflation. You’re right that ownership won’t liberate additional resources. But suppose I do want to find those resources and tax consumption: Won’t American goods flood in?

Enders: You have tax then on the same basis.

Trudeau: But that’s just the point! Canadians will see that their living standard is lower than that across the border. They won’t accept that. As long as there is all this communication, I can’t put it across. That’s why maybe it comes in handy to do a little deletion now and then.

Enders: Then you should delete the whole signal. What grabs people is the selective deletion.

Trudeau: I see that.

Enders: Maybe, though, there’s some positive way to do it. The border TV people on our side suggest transferring tax revenue to Canada which could then be used for supporting Canadian TV. We’re not peddling that idea as a government, but maybe it’s worth looking at.

Trudeau: I think it is.

Enders: I’m not trying to give you technical assistance, but another way to approach your consumption point is depreciation of the Canadian dollar. That reduces somewhat the living standard of the population, would lessen the need for imported capital.

Trudeau: But that could be inflationary also.

Enders: No doubt. The general point, though, is that there are many more ways to adjust the big industrial economies to each other than we’ve used, when the purpose is to assert separate national policies without destroying joint interests. Look at the floating exchange rate—we had it between Canada and the United States at your initiative for years. But elsewhere we had the fixed rate system. That meant you had to inflate and deflate to adjust, and we had to talk about federal institutions in the Atlantic area to manage the interdependence. Now we don’t.

Trudeau: I agree with that. But to go back to ownership, isn’t Saskatchewan potash a good case in point. Aren’t you bound to fight the expropriation?

[Page 430]

Enders: A lot of Americans don’t like it, but as a government we’ve always maintained that we would not contest expropriation for authentic public purposes, provided there was full and effective payment. What hits people is the idea that a Saskatchewan political entity, however benign, might control a big piece of our supply of a critical material. It’s the OPEC syndrome.

Trudeau: Are you sure it isn’t ownership? What about all the Neanderthals down there? And won’t a lot of investors say that you can’t count on Canada so let’s not go there?

Enders: They might well. But the government’s position is not to contest the buy-in or expropriation side of it.

Trudeau: I have to suspend now, but I want to continue this conversation. This is why I came into politics—to develop ideas. I want you to put these things up to me so that I can react. That’s what I need to keep on top of things, even if my reactions are sketchy and off the top of my head. I need to conceptualize.

Enders: In general I think we should attempt to conceptualize our relationship somewhat more. One can get beaten to death on day-to-day issues without it. If we don’t cooperate on the whole scenario, then individual actions can be unmanageable and you get a build-up of resentments, as these last years in the States. But I’m told that conceptualization is not always a paying proposition in politics.

Trudeau: So I’m told—constantly by my cabinet. For heaven’s sakes don’t tell them we’ve been conceptualizing together. I have the cabinet for the specific issues. Talk to them when you have an individual problem. But you and I should address the overview, and above all the direction; where we’ll be three to five years from now. Whenever you want help in sorting out where we’re going, call me up and we’ll have lunch together. Or whenever I need help in thinking I’ll call you up and we’ll have lunch together.

Enders: O.K. I’ll do that.

Trudeau: Please do. But don’t tell my cabinet.

  1. Summary: Enders and Trudeau discussed U.S.-Canadian relations.

    Source: Ford Library, National Security Adviser, Presidential Country Files for Europe and Canada, Box 2, Canada (11). Secret; Nodis. Drafted by Enders on March 25; and approved by Newsom in S/S–S. The meeting took place in the Prime Minister’s Parliamentary Office. In telegram 1187 from Ottawa, March 24, Enders reported: “Trudeau was as advertised: elegant, contrary, brittle, unable to resist intellectualizing, preoccupied with Galbraithian thoughts that few in Canada share with him. He was also very friendly. Chances are that he will not have the power to move very far towards implementing those thoughts (he has made no move to do so since New Year’s) and his particular scenario for US/Canadian clashes is unlikely to be a big headache for a while. More interesting is his assessment that further action protective of Canadian culture may not be needed. If true, that could avoid some of the most prickly and unmanageable disputes.” (Ibid., Box 3, Canada—State Department Telegrams TO SECSTATENODIS (2))