Canada: The Amazing Mendicant

At election time last June. Canada was in a mess. The country’s stock markets plunged downward in Wall Street’s wake; the once proud Canadian dollar fell to 92½ U.S. cents, and Canada’s foreign exchange holdings fell nearly 50% to a scary low of $1.1 billion. Six days after the election, in which the Conservatives remained in power, but as a minority government. Prime Minister John Diefenbaker suddenly put on the country’s most stringent austerity since 1947. Canadian Historian Bruce Hutchison mourned that Canada was “brought to the rim of ruin . . . and became a mendicant.”

The mendicant has since done pretty well for himself. By arranging loans and credits of $1.05 billion from such friends as the U.S. and the International Mone tary Fund, by cutting back luxury imports and pushing bargain-priced exports, and by slapping surcharges on tariffs at a time when most other nations are lowering theirs, Canada has done a considerable job of turning its economy around. Totting up accounts. Trade and Commerce Minister George Hees cited evidence as cheerful as his salesman’s smile:

∙Gross national product grew 9% to $39 billion for the year—a brighter performance than that of the U.S.. Britain or the miracle nations of Europe.

∙Unemployment fell from an average 7.2% of the labor force in 1961 to 5.9%. — Corporate profits, fattened by 13.9% over the first nine months of 1961, figured to reach $3.8 billion by year’s end.

∙Exports, nudged by a devalued dollar, rose by 9% to $6.3 billion.

Said Professor Scott Gordon of Ottawa’s Carleton University: “It’s quite obvious that the financial crisis is well and truly over. The time is ripe, in fact overdue, for the government to take strong expansionist measures.”