First Published: Canadian Revolution, No. 2, August-September 1975
Transcription, Editing and Markup: Malcolm and Paul Saba
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Workers Unity is a small collective of Marxist-Leninists in Toronto. We have been working together as a collective for two years. Our view is that building of a Marxist-Leninist Communist Party constitutes the central task for communists in Canada at this time. We think there are three component parts to carrying out this task: (1) concrete analysis of Canada, (2) developing strong links with the working class, and (3) building the unity of Marxist-Leninists. The formation of a Marxist-Leninist organization is an essential step in carrying out this task. Our position on party-building will be elaborated in the next issue of Canadian Revolution.
This is the last part of a two part article on monopoly capitalism and the Canadian economy. If you have not read part I, we recommend that you do so, as the parts were not meant to stand seperately from one another. As Part I already outlined the general analysis of what characterizes an imperialist or monopoly capitalist economy, in Part II we will attempt to apply these characteristics to an examination of the mode of production in Canada. Specifically we will argue that Canada is a monopoly capitalist or imperialist country of a particular type; that is a developed country of the second world.
In beginning this process we feel it is important to examine previous attempts to analyze the Canadian economy from a M-L viewpoint on imperialism, and assess what is scientific in that analysis. Consequently we have taken as a starting point the C.P.C.’s analysis in the ’30’s (advanced most articulately by Tim Buck), examined their method and conclusions, and developed furthur our own conclusions based on an application of this work and Lenin’s analysis of imperialism to present-day Canadian society. It should be made clear from the start that we feel the C.P.’s concrete analysis of Canada in the 1930’s as an imperialist country, characterised by a highly developed, monopoly capitalist mode of production, to have been essentially correct. Moreover we feel the method used to demonstrate the characteristics of Canadian monopoly capitalism, was also scientific and politically accurate. In other words there are important lessons to be drawn from an examination of this early work. At the same time there are errors and omissions in this work which should be pointed out. Foremost is that the examination of the Canadian political economy in relation to imperialism avoids an analysis of the development and changes in the class structure in Canada. While points that are made about the fundamental characteristics of the economy are accurate, obvious developments in class relations, that are tied to an imperialist mode of production, such as a developing labour aristocracy, increasing use of immigration as a source of cheap labour, and changes in size and composition of the working class, are ignored.
Another major problem in this early analysis is that in dealing with the increasing control of U.S. monopoly capitalism in Canada, the Leninist concept of contradictions between competing groups of monopoly capitalists, is thrown out the window. Rather than explain the class interests of the Canadian bourgeoisie in siding with the U.S. monopoly capitalists (around the end of WWII) Tim Buck in particular, describes the ’betrayal of the nation’ and the ’anti-democratic, anti-Canadian’ nature ( the Canadian bourgeoisie, and develops quite rapidly the all class alliance theory and bourgeois nationalism which the CP. has carried forward right up until presently in the form of the ’anti monopoly coalition’. In other words the revisionist policies and principles which characterise the CP. today are to be found in the analytic and, more so, strategic conclusions of the CP. in those days. These features must be kept in mind in drawing out what was accurate and scientific in their analysis.
Finally, the last part of Part II will draw some conclusion about the forces and relations of production in Canada, Canada’ position in the present world situation today and the implication: of both of the above to Canadian revolutionaries.
We would like to repeat that the purpose of this article was to establish a Marxist-Leninist framework from which to begin to further analyse and debate the concrete conditions of Canadian society, so as to determine the character of the revolution in Canada and the principal contradiction within the Canadian monopoly capitalist system. We realise this article is only a beginning in that direction and welcome further additions and criticisms which help to advance the understanding and the unity of Marxist-Leninists engaged in analysing and discussing these questions.
In analysing Canada’s political economy, Lenin’s analysis of the features and characteristics of imperialism can serve as a guideline to pinpointing the fundamental nature of the economy and, in the overall system of world economics, the type of nation Canada is. In particular the five essential features, characterising the changes in the forces and relations of production under monopoly capitalism, are very important to apply concretely to the realities of the mode of production in Canada.
A point by point application of Lenin’s analysis to the Canadian economy was developed in approximately 1930 by the Communist Party of Canada. This was the first analysis to approach the concrete conditions of Canadian political economy from a Marxist-Leninist method and viewpoint. This analysis is detailed by Buck in his book Canada the Communist Viewpoint and in part also in Lenin and Canada. Although Buck developed and put forward the positions, he was not the initiator of the C.P.’s study of the Canadian economy in the light of Leninist principles. In 1925 Buck had stated that Canada was a colony of Great Britain. The form of the struggle at that time was to be an anti-imperialist struggle, uniting with sections of the Canadian bourgeoisie who were opposed to British domination, to finish the bourgeois-democratic stage of the revolution. It was in this sense that McKenzie-King was supported in his stands against Britain, but not in policies which brought Canada closer to the U.S.A. Throughout this period no attempts were made by the C.P.C. to define concepts like ’nation’, ’colony’ etc. from a Marxist-Leninist viewpoint, and definition of these concepts were primarily based on the then very popular arguments of a nationalist lawyer named Ewart.
These views of Buck’s were generally the views of the Central Committee at that time including M. Spector and (appointed in 1926) Stewart Smith. The change began to take place at the time of the 6th Congress of the Communist International in 1928, at which a resolution was adopted on the colonial question which made it very clear that ’the Dominion of Canada’ was a sovereign independent state, part of the system of world-wide imperialism, and not a part of the colonial world. This view was resisted by Buck and others in the Party, resulting in tension between the Comintern and the C.P.C. on this question. Then in 1928 a group of Canadian communists selected to study at the Lenin School in Moscow, developed the position that all the ’decisive features, the emergence of which transform the classical capitalism of ’free’ competition into monopoly capitalism, that is to say imperialism, had matured in Canada’. Sam Carr, John Wier and Leslie Morris developed their position with the aid of the Anglo/American Committee within the Comintern and specifically directed it against the line which Buck and the others continued to support. Their position was circulated before the 6th convention of the C.P.C. in 1929 under the title ’The Right Danger in the CP.’. By this time, although Buck was still in opposition to the Comintern and later denounced its line as wrong vis a vis the raising of Canadian independence, his original position had changed to stressing the importance of fighting both English and American imperialism. Buck remarks on the changes in their understanding of imperialism in this way:
Their paper forced us, indeed it impelled the party as a whole, to study Lenin’s classic Imperialism the Highest Stage of Capitalism and to re-assess our estimation of the character of the Canadian state.
Through that study, under impact of the students criticisms, Lenin freed us from the then popular Kautskyite conception that the decisive characteristic of imperialism was a ’striving for annexations’, that what constituted imperialism was solely possession of colonies and the oppression of their peoples. For the first time we recognised clearly the significance of Lenin’s repeated emphasis upon the fact that imperialism is a specific historical stage of capitalism which:
’. . . emerged as the development and direct continuation of the fundamental characteristics of capitalism in general. But capitalism only became capitalist imperialism at a definite and very high stage of its development, when certain of its fundamental characteristics began to change into their opposites, when the features of the epoch of transition from capitalism to a higher social and economic system had taken shape and revealed themselves in all spheres. . . . Monopoly is the transition from capitalism to a higher system.’ (Vol. 22, pp265-6)
Even today, as I copy that quotation, I feel a desire to underline every clause. Study of that statement opened out eyes and marked the beginning of our understanding. Belatedly, we realised that the political oppression and double exploitation of the hundreds of millions of people in India, Africa, the Phillipines, China, and other colonial and semi-colonial countries, the glaring and repulsive evils which democratic people denounced and considered as constituting imperialism, were not the essence of imperialism nor its source. At last, with the help of Lenin and the ideological ’kick in the pants’ from our student comrades, we came to understand that capitalist imperialism is the noxious fruit of the operation of the inherent laws of motion of capitalism. The character of a state, the question of whether it is part of the system of capitalist imperialism and its exploitation and oppression, or part of the exploited and oppressed majority of mankind, is determined by the level of development in the capitalist society which maintains and operates it – not simply by whether it annexes colonial territories. Astonishing as it sounds today, that was a revelation which revolutionized our understanding of imperialism. (Lenin and Canada, pp74-75, Progress Publishers.)
Writing in 1948 Buck points out that the main characteristics of imperialism which Lenin outlined are all essential features of developing monopoly capitalism in Canada.
In his illuminating exposition Lenin showed that the source and foundation of imperialist policies are to be found in five specific features which characterise and distinguish the economy of finance-capitalist imperialism. These are also the features by which it is able to distinguish with exactitude between the exploiting imperialist group of countries and the non-imperialist countries of the world . . . the extent to which each of these developments is now an essential feature of Canadian economy is remarkable. (Canada, the Communist Viewpoint, 1948, Progress Publishers, pp 70-71.)
Buck then traces down the development of the essential characteristics of imperialism in Canada. Under the first point that Lenin makes, namely that concentration of production and capital is developed to such a high degree that monopolies are created which dominate and control the economy, he points out the change in the Canadian economy from one dominated by free competition to a situation in which monopolies have arisen and taken charge. Buck’s first table shows the rise of manufacturing interests between 1870-1890, the years of the great depression of the ’70’s, the national policy and protective tariff system of McDonald and expansion into the West. Although imports and exports did not grow rapidly and exports even declined in this period, Buck argues that the young Canadian bourgeoisie did benefit from the protective tarrifs and that manufacturing (and concentration of production and capital) was developing. His second table points out that the increasing concentration, through mergers and takeovers, which accompanied the general growth of industry over these years up until 1940.
[charts not reproducible – MIA]
Between 1896 and 1912 there were 67 mergers in Canada. Fifty-eight of them, affecting 275 individual concerns, were consummated during the last five years of that period. Out of those mergers there arose, among others, the bicycle monopoly, the cement monopoly, the asbestos monopoly, the tobacco monopoly, the textile monopoly, and near monopolies in steel, paper, flour-milling, meat packing, canning, brewing, machinery, rubber products and banking. The numerous other mergers which have taken place since that cycle have extended the list and have intensified greatly the degree of concentration. The above list shows, however, that by 1912 concentration of Canadian industry by the process of mergers was already well under way.
Those mergers established several of the powerful monopolies which still share in the domination of our national economy, but they were only the beginning. The process continued with increasing momentum until 1930. In the last eight years of that period, 1922-1930, there were 120 mergers consolidating 550 firms. Through the development as a whole, Canada’s economy was transformed from one characterized by tens of thousands of freely competing small establishments, headed by manufacturers who had ’come up from five dollars’, expanding by the simple increase in the number of firms, to a highly centralized economy dominated by a few score great monopolistic concerns. (Ibid.)
Buck goes on to point out the growth of other essential characteristics of monopoly capitalism in Canada. He points out that among the 11 chartered banks and the Traders Finance Corporation that between them their directors held more than 1200 directorates of various corporations, thus showing the merger of bank capital with industrial capital and the creation on this basis of a financial oligarchy. Buck argues that through their inter-locking directorates the finance-capitalists control “a large proportion of the total assets of all Canadian enterprises” and more importantly the largest monopolies in the country. He then outlines who he consideres to be the financial oligarchy, or controlling core of Canadian finance capitalism.
By far the greater part of the financial and economic power of the entire system is concentrated in four of the 11 banks. These four, the Royal Bank, Bank of Montreal, Bank of Commerce, and Bank of Nova Scotia, dominate considerably more than half our national economy. The merging of bank and industrial capital and the dominating role of the finance-capitalist oligarchy in Canada are illustrated vividly by the role of 16 men representing the big banks and co-ordinating their interests. This oligarchy, the members of which are rarely changed except by death, reflects both the varied interests of finance-capital in Canada and the interlocking of the groups of interests which share control of the banks. . . .
The oligarchy includes J.Y. Murdoch of the Bank of Nova Scotia, and illustrating how thorough is the interlocking of the interests and representation in the finance capitalist oligarchy, it includes H.E. Sellars, a member of the board of directors of the relatively small Imperial Bank. This group of 16 men held, in addition to their bank directorates no less than 266 seats on the boards of directors of the largest and most important industrial, commercial and financial corporations in Canada. Their 226 places on boards of directors included no less than 116 presidencies or vice-presidencies of the dominant corporations in the country from Cape Breton to Vancouver Island. Truly did Lenin write: “the banks have developed from modest intermediary enterprises into the monopolists of finance-capital. Some three or five of the biggest banks in each of the foremost capitalist countries have achieved the ’personal union’ of industrial and bank capital, and have concentrated in their hands the disposal of thousands upon thousands of millions which form the greater part of the capital and income of entire countries’.” (Ibid., pp75-76.)
In analysing the export of capital and its significance in Canada, Buck estimates that by the end of the thirties Canadian finance capitalists had exported, through direct and indirect investments approximately 1.5 billion dollars. His examples range from involvement of the Royal Bank in Cuba and Brazilian Traction in Latin America, to the granting of export credits and a 1.25 billion post war credit loan to Great Britain, France, Belgium, Holland and other countries.
As well he points out the development of co-operation in the form of cartels and international associations, between Canadian monopoly capitalists and the monopoly capitalists of other countries involved in similiar enterprises. In particular he notes the development of ’cartelisation’ and cartel agreements for the division of world and domestic markets between the U.S. finance-capitalists and Canadian; as well the co-operation of Canadian monopolies in a pre-war German combine, Farben Industries. It is interesting to note that Buck describes already in 1941 the tendency for these cartels to “ignore or deliberately act contrary to the trade policies of the Dominion government.”
In closing Buck deals with the final point Lenin makes about the characteristics of monopoly capitalism, that of territorial division among the greatest capitalist powers. Buck does not go into particulars, but relies on Lenin to state:
But, argue some people, Canada cannot be characterized as an imperialist state because she doesn’t possess or exploit any colonies.
That attitude is based upon a fundamentally erroneous conception of the basis, the political character, and the driving forces of finance-capitalist imperialism. Possession of colonies is not the test of whether or not any state is imperialist – the sole test is the structure and the level of development which characterizes its national economy. Lenin showed that finance-capitalist imperialism is a specific historical stage of imperialism. Just as industrial capital typified a distinct, and higher stage than merchant capital out of which it evolved, so finance capital typified a higher and distinct stage of development than the free competition, with separation of bank and industrial capital, out of which it evolved. The merger, or the marriage as it is apdy described, was a necessary accompaniment of the rise of monopolies, and the monopolies that it made possible have speeded up the concentration of investment capital into huge impersonal aggreggations which press ever more heavily upon the direction of government policy and for possibilities of safe and profitable investment abroad.
Finally Buck goes into some analysis of the growing effect of U.S. imperialism in Canada, and the plans of Canadian finance capitalism to develop partnership with the U.S. finance capitalists. He then sums up his overall views:
Canada has evolved, from a group of isolated British colonies in North America to an imperialist state. Winning national sovereignty as a result of growing strength, plus the economic and political contradictions between Britain and the United States, Canada was transformed from a country with national economy and state policies characterised by free capitalist competition, to a highly monopolistic economy with state policies which reflect the merging of the policies and power of the state with the interests and policies of the finance-capitalist oligarchy. . . .
In light of developments since the 40’s, many facts, statistics and data need to be re-examined or adjusted within the analysis Tim Buck puts forward. It is also important to note again what was done in the last 30 years with the basic analysis developed by Buck and the CP. and how very quickly it evolved as the basis for the revisionist theories of the “anti-monopoly coalition”, unity with the national bourgeoisie and betrayal of revolutionary struggle and principles. But in spite of the political conclusions drawn by the revisionists (with Buck himself leading the way) the basic analysis which has been outlined remains an accurate view of the characteristics of the mode of capitalist production in Canada. Although important quantitative changes have taken place in the Canadian economy and in particular in the area of foreign, primarily American, investment, no qualitative change in the political economy of this country has taken place to indicate that any of the characteristics or features of imperialism which Lenin outlined (and Buck described) have done anything but intensify, consolidate and furthur develop. For example, has concentration of production and capital ceased to advance? Are we in a situation in which the growth, power and control of monopolies and of the finance capitalists who own them has lessened? We would argue obviously not. All the characteristics of an imperialist mode of production exist in Canadian society today.
Under monopoly capitalism the process of concentration of production and capital in fewer and fewer hands, is rapidly increased. Since Lenin analysed the world imperialist system and Buck analysed the Canadian economy, concentration of production and capital has continued to develop in the Canadian economy, leading, through mergers, takeovers and amalgamations , to the economy being controlled by fewer, larger and more powerful monopoly capitalist associations. That monopolies (both foreign and domestic) play a decisive role in Canadian society need hardly be proven. Both through the state (in legal and illegal channels) and in direct exploitation of the working class in production and distribution, monopoly corporations are daily increasing their oppression of the working class. However it is perhaps interesting to note how the process of concentration of production and capital by the leading banks and corporations in the ’40’s compares to todays situation, (see Appendix l)[not copied here – MIA]
Many recent examples clearly show the ongoing process of concentration, the emergence of more and more powerful monopoly corporations and the struggle between various financial and monopoly-capitalist groupings to concentrate increasing amounts of capital and productive power in their hands. Jannock Corporation and Acklands Ltd. are currently involved in amalgamation valued at 67.6 million dollars. In 1973 Jannock and Acklands were respectively 90th and 96th out of 200 top corporations in Canada listed by Canadian Business (based on sales). Their combined profits for the year were $11 million. Essentially this ’merger’ is Jannocks buying out Acklands for the increased profits and markets afforded both by the formation of a new and larger corporation. It wouldn’t have made ’business sense’ for Acklands not to agree. As summed up by Acklands Executive V.P. “Acklands has undertaken to pledge to Jannocks that we won’tcontrol the Board of the newfirm. We only want control of Acklands’ own operations within the new company.”
Another example, again within the last few months, is the take over of Cambridge Leaseholds Ltd. of Toronto, by Oxford Development Group Ltd. of Edmonton. Cambridge is one of the largest shopping centre developers in Canada, with ownership or controlling interests in 25 centres throughout Ontario and the Maritimes. Oxford Developments is a developing company with assets of $150 million and is jointly owned by Canada Trust Co. of London, Ontario, Great West Life of Winnipeg and Confederation Life Ins. Co. of Toronto. Out of this deal Cambridge was to become the ’shopping centre arm’ or division of Oxford, increasing the company’s holdings in Eastern Canada. The role of the banks in the concentration of production and capital can be seen here. When questioned about financing a Vice-president of Oxford responded “. . .the purchase of Cambridge will be financed through equities issued in Oxford and borrowings; the company’s main banker is the Toronto-Dominion bank, with some business being done with the Imperial Bank of Commerce and the Royal Bank of Canada.”
Examples are many and varied, especially within the last year, of the ongoing process of concentration of capital and production. Many important facts concerning monopoly development came out in the trail of Atlantic, St. Lawrence and Red Path Sugar who were charged with conspiring to fix prices and lessen competition from 1960-1973 in six Eastern provinces. Specifically the three corporations developed a consortium of Canadian sugar refineries and attempted to both interfere with the production and sales of Carrier Sugar Ltd. and block its development in the first place. The comments of directors of these companies when on trial, are very revealing concerning the attempts to deliberately eliminate rival producers, sabotage their markets and furthur concentrate production and capital in their own circles.
The following examples, all within the last six months, demonstrate the intensity of concentration currently within the Canadian economy: Dominion Textiles buying out DHJ Industries; the Loblaws, Kelly-Douglas, Westfair merger (controlled by George Weston Ltd.); the takeover of Acres Ltd. by Traders Group Ltd. and its ’resale’ to Canadian Securities Ltd. (a holding company that controls Traders); Standard Broadcasting Corporations takeover of Bushnell Communications, and the attempted takeover of Argus Corporation Ltd., the second largest holding company in Canada, by Power Corporation of Montreal, the largest holding company in Canada. This struggle in itself, which proceeded through most of April 1975, revealed a great deal about conflicts between competing financial capitalist groupings and the degree to which concentration is a driving force even within such already heavily concentrated developments as Argus and Power (separate work on developments between the Argus and Power groupings is being prepared). It is interesting to note in the above examples, that two corporations (Standard Boardcasting and Argus) are controlled by the same circles of finance capitalists.
In looking at the characteristics of monopoly capitalism in Canada, the second feature which Lenin points out, of the creation of a financial capitalist oligarchy, based on the merger of bank and industrial capital (finance capital) is more and more evident. Lenin describes the situation as one where “the banks have developed from modest middlemen enterprises into the monopolists of finance capital. Some 3 to 5 of the foremost capitalist countries have achieved the ’personal link-up’ between industry and bank capital and concentrated in their hands the control of thousands upon thousands of millions which form the greater part of the capital and income of entire countries.” (Imperialism. . . . pg 16.)
In Canada today the power and influence of finance capital, the “net of dependency relationships” which they spread over the country is very clear. Since Bucks analysis of this phenomenon the banks and finance capital in general have taken on an ever more prominent and important role. One need only glance at Appendix 1(A) [not copied here – MIA]to see the incredible growth of concentration of capital evident in the 30 years between 1945-75. This concentration has taken place not only in terms of straight growth of capital but also through mergers, and amalgamations. Although part of the picture can be seen in this data, many of the important developments in the banks since 1945 can be observed only through closer examination of their Boards of Directors and the actual interests of the individual groupings of finance-capitalists represented there and through an examination of their direct activity in ’banking’. In Appendix II [not copied here – MIA] part of the finance-capitalist oligarchy in Canada is examined and their positions of control highlighted. This list is as relatively complete as is possible to compile from available sources, but unfortunately due to the space limitations on this article we can only include a partial list. We would stress however that the example provided is an accurate reflection of the conditions in the five major banks in the country. As to the history and activities of the various major banks again due to space limitations it is not possible to give a thorough examination of all of them within this article. However, by using a particular example it is perhaps possible to give a general picture of what has transpired in their development.
Starting with the 5th largest bank in Canada, the Toronto-Dominion Bank, as mentioned in Appendix 1(A)[not copied here – MIA] it was formed as a result of a merger in 1955 by an order of the Governor-in-Council in Ottawa. The following table will give some idea of its assets from 1968 on (in millions).
|1974 (Feb. 28)||12,914,500,000|
From 1974 to 1975 in the first quarter there was a 32% rise in total assets which is attributed to an 86% growth in earnings by the banks international division (which is responsible for 25% of the bank’s overall earnings). The Toronto-Dominion Bank has three wholly-owned subsidiaries: the Toronto-Dominion Bank of California, which was incorporated in 1971 to operate as an “independent bank” in the U.S.; the Toronto-Dominion Bank Investments Ltd. (U.K.), which was set up in 1973 to extend the T.D. bank’s international financial network and the T.D. Investments Ltd. (Hong Kong) which was formed in 1972, to extend the bank’s business in the East. At the same time the T.D. Bank controls a number of corporations directly, either as a majority stock holder or through outright ownership.
Toronto-Dominion Bank Trust Company, which is wholly-owned was begun in 1960, and is set up in New York to function as a trust for T.D. “clients” doing business there. All stock is owned by the T.D. bank and assets of this trust in 1973 were $3,189,391,000.
Toronto Dominion Reality Co. Ltd., is also wholly-owned by the bank and was set up in 1965 to manage leased and bank owned properties ’ its assets in 1973 were $41,843,142,000.
Other interests which Toronto-Dominion is involved in areas follows:
Toronto-Dominion Centre Ltd.: this company owns and operates the three-tower T.D. Centre in downtown Toronto. Stock is owned in equal parts by Fairview Corporation of Canada and the T.D. Bank.
T.D. Realty Investments: this is an unincorporated trust designed to run as a mortgage and real estate financing outlet, encouraging investments in real estate and mortgage loans and managing the investments.
T.D.R.I. Ltd. originally Eastbourne Credit Company, it operates as a finance company for T.D. Realty. T.D. Bank has a 50% interest.
T.D. Capital Group: this group was formed by the bank in 1972 to take responsibility for the T.D. Banks participation in the venture capital (financing small businesses and/or independent ventures).
Scotia-Toronto-Dominion Leasing Ltd.: formed in early 1973 with the Bank of Nova Scotia to lease equipment to Canadian industries on a national basis.
Arbuthnot Latham Holdings Ltd. (U.K.): a merchant banking firm with assorted interests; T.D. Bank acquired 5% of its non-preferred shares in 1972.
Midland and International Banks Ltd.: T.D. Bank joined with the Midland Bank Ltd., the Standard Bank Ltd. (operating in Africa) and the Commerical Bank of Australia Ltd., to form an international banking association in 1( tit, T.D. Bank has a 26% interest.
Canada Permanent Mort. Corp.: T.D. Bank has a 10% interest. A .E. LePage Ltd.: Toronto real estate brokerage, the T.D. Bank has a 10% interest acquired from Can. Perm. Mort. Corp. in 1968.
World Banking Corporation (Nassau): T.D. Bank holds one third interest in this corporation which is engaged in financing U.S. exports and projects of multinational corporations. It serves as a general bank with assets of more than $400 million (in 1973).
Allied Irish Banking Group (Ireland): T.D. Bank has 15% interest in this group, which provides international financing to industry in Ireland.
Leamor Holdings Ltd.: a holding company jointly owned by T.D. Bank, C.P.T.C., and the pension fund of T.D. Bank. Tordom Corporation: Mortgage investment operation; jointly controlled by T.D. Bank and Leamor H. Ltd. Pacific Centre Ltd.: owned by T. Eaton Co. Ltd., Fairview Corporation of Canada and the T.D. Bank-constructing a $100 million complex in downtown Vancouver, (including a 30 story T.D. Bank building).
Edmonton Centre Ltd.: owned by T.D. Bank (30%), Woodwords Stores and Oxlea Investments Ltd. – will construct office and shopping complexes in Edmonton.
Torcred Development Ltd.: T.D. Bank has 50% interest in this company, constructing office complex and T.D. Bank tower in Regina.
International Consolidated Investments Ltd. (Hong Kong): formed by the T.D. Bank in 1969 with the Chang Ming-Thien group of ’businessmen’, the T.D. Bank holds 40% interest, with about 6.7 million invested as of 1971. This company has major interests in Overseas Trust Bank Ltd., Hang Lung Bank Ltd. and Hong Kong Industrial and Commercial Ltd. and has diversified investments in South East Asian countries. Its functions include debt financing for major projects in South East Asia. United Malayan Banking Corporation; BHD (Kuala Lumpur): has assets of $236 million, is established throughout Thailand, Burma and in Singapore and is associated with I.C.I. Ltd. The T.D. Bank acquired a 10% interest in this company in 1971, for 1.4 million (Can.)
Commercial Pacific Trust Company Ltd. (COMPACT) (Port-Vila, New Hebridies): T.D. Bank acquired a 12 1/2% interest in this corporation in 1973 to further its activities in the Pacific region.
Wobaco Holding Company (Luxembourg) International Trust and Finance Company Ltd. (Bangkok, Thailand)
The above holdings all represent new developments since 1955 for the Toronto-Dominion Bank, especially in the field of international associations and real estate ventures. When Buck was analysing finance-capital in Canada in 1945 the Toronto-Dominion Bank had not yet emerged out of the separate groupings of capital, represented by the Bank of Toronto and the Dominion Bank of Canada. Now it has concentrated within its operations “control of thousands of millions” and from this more powerful position its directors fully participate in the operations of finance capital and of the financial capitalist class. Two things should be remembered however in viewing the T.D. Bank as an example of the growing influence of finance capital today. Firstly, its development cannot be seen in isolation from the general development of monopoly and finance capitalism in Canada after the II World War, which has produced a situation of increasing amounts of capital being concentrated in the hands of Canadian financial capitalists. It must be remembered that the T.D. Bank represents only one group among a number of groups , of financial capitalists and as such is not necessarily the most powerful or most organised (in fact the groups represented by the Royal Bank have twice the capital at their disposal). The second point is that although the banks are no longer “modest middlemen”, and are large and powerful in their own right (as can be seen from T.D.’s holdings, assets etc.), it is not because they are “big financial companies” or large industries whose product is capital (Statistics Canada viewpoint) which means that they control the economy. It is that they are the arm of finance capital, the vehicle of the various financial capitalist groupings in Canadian society, and as such unite and concentrate in themselves all the power of industry and finance in Canada. This point is illustrated most importantly by analysing the boards of directors of the “3 to 5 biggest banks” and observing what power is collectively concentrated there, through the “personal link-ups” between industrial and banking capital which Lenin refers to. (see Appendix II) [not copied here – MIA]
As Buck noted in 1945-46 Canada has been exporting capital for a considerable period of time. However a number of changes have occured in this area since that time. Foremost is the greater co-operation between the state and private finance capital to place safe investments abroad for Canadian business. The state (public sector) has taken a much larger role in loans, grants and foreign aid programmes to Third World countries and has developed greater commitments to other O.E.C.D. capital-exporting countries, through world monetary associations (I.M.F., World Bank) and international “development” funding. Much of this information has been documented in studies of the Canadian International Development Association (C.I.D.A.), and the role of the Export Development Corporation and other government established vehicles to insure and enhance safe and profitable investment for Canadian monopoly capitalism. Some examples of Canada’s contribution can be seen in the ongoing financial committments to the Asian Development Bank, the Inter-American Development Bank, the International Finance Corporation and the International Development Association, to name a few.
On the whole investments abroad from Canada have increased over 11 times from 1926 to 1969 ($926 million in 1926 to $10,356 million in 1969). Most of these capital exports have been in private direct investment, to a large degree in the U.S. and the U.K. The remainder of long-term investments is in loans, and commitments to the investment and world banking agencies mentioned above.
According to Statistics Canada in “Canada’s International Investment Position 1926-1967” “. . . the total book value of Canadian long-term direct investment abroad in subsidiaries, controlled companies, affiliates and branches at the end of 1969 amounted to $5,040 million, an increase over 1968 of $423 million . . . since the end of the Second World War Canadian long term direct investment abroad has increased sevenfold.”
Statistics Canada mentions in passing “Direct investment in other commonwealth countries and all other countries taken together represents a fairly sizable proportion. Such investment amounted to 29% of the total at the end of 1945, declined to 16% at the end of the ’40’s and since then it has risen steadily to about one third of total direct investment abroad at the end of 1969.”
Many arguments have been advanced in the past, stressing that most of Canada’s direct investment (capital exports) to the U.S. were simply repatriation of profits from American subsidiaries in Canada and do not represent Canadian controlled capital. This argument has generally been coupled with the approach that most of Canada’s direct investment abroad is simply the re-channeling of U.S. capital. Although in part this phenomenon does occur within the export of capital from Canada and other secondary monopoly capitalist countries, tables 16 and 17 from “Direct Investment Abroad by Canada 1946-1967 – Amendment List for 1968-1969,” points out that between the U.S. and other countries a little over one third of the $5,040 million exported from Canada represented foreign control of the enterprises exporting capital. 61.9% or $3,122 million was exported from Canada by Canadian monopoly capitalists in 1969. From the percentage increases between 1965-1969 of capital exports there is no reason to expect that this phenomenon has not been continuing through the years 1969-1975.
In statement 33 and 34 it can be observed that the U.S. and the U.K. are areas of most concentrated growth of Canadian direct investment. It is important to note however that direct investment in the U.S. has relatively declined over the last twenty years, and a much larger percentage of Canada’s direct investment is being taken up by the Third World and other capitalist countries.
|Canadian Industrial Sectors supported through loans made between 1961 and 1971 under Sections 29 and 31 of the Act|
As a further example of the export of capital as distinguished from the export of commodities acquiring exceptional importance and the facilitation of the latter by the former, within a monopoly-capitalist mode of production, a brief look at some features of the Export Development Corporation may highlight recent trends between the state and the policies of Canadian finance capital. The E.D.C. is a $2.45 billion crown corporation which was established in the early sixties to develop export trade on a profitable basis, by providing insurance, guarantees and financial backing for Canadian investors. As J.F. Grandy puts it in a letter to Pepin (Minister of Ind., Trade and Commerce) dated March 31,1972 “...during 1971 the corporation signed financing agreements totaling a record $340 million tied to the purchase of high technology capital goods and services from Canada, insured export credits totaling $481 million, and in a new area of activity, provided insurance support totaling $14 million to cover investments abroad made by Canadians”.
Foreign Investment insurance, in fact has acquired pronounced importance in recent years for Canadian monopoly capitalists who wish stronger guarantees of safe returns on capital invested in areas of the world where revolutionary movements for independence and national liberation are liable to cut short ongoing and potential super-profits.
The Export Development Corporation may insure Canadian investors against certain political risks of loss of their investments abroad. Investments may vary from that of the investor acquiring the right to share in the assets of a business carried on in a foreign country to that of the investor lending money to a person in a foreign country for the purpose of establishing a business...coverage may be extended only to new investments and is presently limited to those made in developing countries. Export Development Corporation foreign investment insurance covers three broad political risks: insurrection, revolution and war; expropriation; inconvertability, or inability, to repatriate earnings or capital. The investor can elect to take out a policy covering any, or all, or any combination of the three political risks. Coverage is restricted to a maximum of 15 years. E.D.C. does not cover risks which can and normally are insured with commercial insurers. (From E.D.C. Annual Report, 1971).
From the following tables it is generally evident where some of these new investments are going and what sectors of Canadian business are involved and benefiting from these arrangements.
|Analysis Of Queries Received From Canadian Investors For Insurance Of Proposed Investments Abroad|
|By geographic region||Percentage of queries|
|Caribbean and Latin America||39%|
|Africa and the Middle East||17%|
|By industrial sector|
|Food and Beverage||13%|
It should be remembered that a percentage of these benefits would be shared by U.S. multinationals operating in Canada, in particular those in which Canadian finance capitalists have significant majority holdings (though not necessarily control) i.e. Brascan, Inco, Alcan, etc. For a more detailed breakdown of corporations involved see Export Dev. Corp. Annual Report 1971.
That Canadian finance capitalists participate in international associations, cartels, syndicats and trusts is evident in part through some of the preceding analysis. Leaving aside the question of organizations such as the I.M.F., O.E.C.D., I.D.A., N.A.T.O., S.E.A.T.O., NORAD, etc., Canadian monopoly capitalists are active in many investment syndicats, trusts and international capital pools which jointly serve the interests of monopoly capitalists from many countries. Some examples of these syndicats which Canadian capitalists have both initiated and participate in include:
The Orion Group: owned jointly by the Royal Bank of Canada, Chase-Manhatten Bank of U.S., Credito Italiano of Italy, National Westminster Bank of Great Britain, WestDeutsche Landesbank Gironzentrale of W. Germany and Mitsubishi Bank of Japan.
Trans Atlantic Trust Corporation: formed by the Canadian Imperial Bank of Commerce to act on behalf of an unnamed international “management group” in the handling of trust business. Private Investment Company for Asia S.A. (PICA) Singapore Private Development Finance Company of Indonesia both of the above are multinational development consortiums International Capital Corporation International Consolidated Investments Ltd.
COMPACT – a trust consortium for capital ventures in the Pacific Rim, owned jointly by: Commercial Bank of Australia (25%); Euro-Pacific Finance Corporation (15%); T.D. Bank (12 1/2%); Fuji Bank Ltd. (12 1/2%); United Calif. Bank (12 1/2%); European Asian Bank (12 1/4%); Trustees Executors and Agency Co. Ltd. (10%). EuroFinance S.A.: a research and financial consultant group which is jointly owned by 10 banks in Europe, 5 in the US, Sanwa Bank of Japan and the Bank of Nova Scotia.
Further examples of consortiums in which Canadian monopoly and finance capitalists play both major and secondary roles in are too many to detail here. In many areas of the world particularly in South and Central America, the Caribbean islands, South-East Asia and the Pacific Rim, the pattern of monopolist associations established for the division of markets, resources and capital investments follows the example of the mining consortium operating in Ireland (see chart).
[charts not reproducible – MIA]
These type of associations are sometimes very obvious but for the most part are hidden within the structures of international monopoly corporations. The pattern of dividing up markets and resources between, in this case, indigenous Irish capital and the capital of large international firms is one which Canadian finance capitalists are very used to participating in both from minority positions (especially vis a vis associations and consortiums with US monopoly capitalists), and from positions of substantial influence and control (see chart).
[charts not reproducible – MIA]
As Lenin points out in discussing the economic division of the world: “The capitalists divide the world, not out of any particular malice but because the degree of concentration which has been reached forces them to adopt this method in order to obtain profits. And they divide it ’in proportion to capital’, in ’proportion to strength’, because there cannot be any other method of division under commodity production and capitalism”. (Imperialism, p. 71). This framework is very important for understanding the role and participation of Canadian finance capital in the economic division of the world today. In analyzing the question of the economic division of the world, Lenin further points out that “...certain relations between capitalist associations grow up, based on the economic division of the world; while parallel to and in connection with it, certain relations grow up between political alliances, between states, on the basis of the territorial division of the world, of the struggle for colonies, of the struggle for “spheres of influence”." (Ibid)
The division of the world among the greatest capitalist powers was completed some time ago. No territory in the world has not been carved up by imperialist influence. But as Lenin pointed out the process is never really completed as once the completion of the possession of colonial territory has begun, a re-division and further re-division begins again. Today in analysing the division of the world among the greatest capitalist powers there are many significant and important changes to observe since Lenin’s analysis and Buck’s appraisal of Canada’s role in the world. Firstly, vast territories of the world which were formerly under imperialist domination have liberated themselves through wars of national liberation and are advancing to the building of socialist society, while at the same time safeguarding their national independence from further imperialist influence. Also the size and strength of movements for national independence and proletarian revolution have increased significantly and are currently waging protracted and victorious struggles against imperialism, colonialism and neo-colonialism, throughout Asia, Africa and Latin America. Secondly, the emergence of two countries as super-powers, striving for hegemony and the establishment of spheres of influence throughout the world, definitely is a major feature of the struggle for the re-division of the world today. The Soviet Union, which was the world’s first socialist state, is now a country which has experienced a restoration of capitalist relations of production and is ruled under the dictatorship of a bureaucrat-capitalist class. It has deserted all principles of proletarian internationalism, and has consistently since the end of the second World War followed a course of “socialism in words, and imperialism in deeds”. Both through the “cold war” period and the more recent period of “detente”, the Soviet Union has consistently vied with U.S. Imperialism in carving out territories for markets, and raw materials, in expansion of arms production and in subjecting one country after another to its influence and policies.
The United States, on the other hand, since the end of the second World War has become the strongest of the monopoly capitalist powers. Its aggressive exploitation and oppression of Third world countries and savage suppression of the working class movement through the establishment of fascist puppet regimes in those countries, has intensified the political struggle against imperialism and is hastening its own final and inevitable defeat. Both superpowers, while exploiting Third world countries and competing for territory abroad, and internally oppressing and exploiting their own working classes, are also engaged in the process of competing for hegemony and control of the secondary imperialist and revisionist countries which make up the second world.
How does Canada fit into the present political redivision of the world among the few great powers? Firstly we must situate Canada in the context of the rapidly changing divisions in the world economy. The world, as outlined most clearly by the Chinese Communist Party, consists of three worlds or parts which are inter-related and in contradiction to one another. The First World is made up of the two super-powers, Soviet social-imperialism and U.S. imperialism. As mentioned above these two countries are leading the struggle to redivide the world and in seeking hegemony overall countries and people. As Chou En Lai put it at the 10th Congress of the Communist Party of China in 1973:
“Today it is mainly the two nuclear superpowers that are contending hegemony. While hawking disarmament, they are actually expanding their armaments everyday. Their purpose is to contend for world hegemony. They contend as well as collude, with each other. Their collusion serves the purpose of more intensified contention. Contention is absolute and protracted, whereas collusion is relative and temporary.” Further in relation to the role of the first world, Premier Chou had this to say at the 4th National Peoples Congress, in his report on the work of the government:
... the contention for world hegemony between the two superpowers, the United States and the Soviet Union, is becoming more and more intense. Their contention has extended to every corner of the world, the focus of their contention being Europe. Soviet social-imperialism ’makes a feint to the East while attacking in the West’. The two superpowers, the U.S. and the Soviet Union, are the biggest international oppressors and exploiters today, and they are the source of a new world war. Their fierce contention is bound to lead to war some day. The people of all countries must get prepared.... At present the factors for both war and revolution are increasing. Whether war gives rise to revolution or revolution prevents war, in either case the international situation will develop in a direction favourable to the people and the future of the world will be bright.
The Third world is made up of all those developing countries in Asia, Africa, and Latin America; the oppressed nations who have suffered under colonialism, neo-colonialism and imperialism for many years. It is these countries which have been leading the struggle against imperialism and have scored victory after victory; in Portugal’s former African colonies, in South East Asia, in Latin America and the Middle East, the struggle for national liberation and proletarian revolution is getting sharper. Lenin referred to these areas of the world as “storm-centers of revolution” and this is certainly still the case today.
The developed countries between the first and the Third worlds, make up the second world. This is Canada’s position: a developed monopoly-capialist country of the second world, with all the characteristics and features of imperialist political economy. Not all but some countries of the second world (the secondary imperialist countries like Canada, Britain, Belgium, France, Sweden, Germany, Japan, etc.– roughly the O.E.C.D. countries) maintain an oppressive and exploitative relationship to Third world countries. There is no doubt that Canada participates, both directly and indirectly, in the maintanence of neocolonialism, and competes with both other second world countries and at least one of the superpowers, for “spheres of influence”. At the same time, Canada, along with the other second world countries, is also the object of the “re-division of the world among the greatest capitalist powers”. As Lenin pointed out in discussing the struggle for the re-division of the world “...the characteristic feature of imperialism is precisely that it strives to annex not only agrarian territories, but even most highly industrialized regions.”
Consequently, Canada and other developed 2nd world countries are both the object of hegemonic designs, giving rise to contradictions with the 1st world and are themselves participating in the further re-division of the world; both in relation to each other as competing monopoly-capitalist economies, and in relation to the oppression and exploitation of the Third world.
This anlysis of Canada’s role in the world is an important framework from which to understand the particular nature of Canada’s economy and the contradictions present in Canadian society. It is precisely this lack of framework which is a main factor in producing one-sided analysis of the “either-or” variety, and winds up denying the special features of monopoly capitalism in Canada.
Our conclusions about the Canadian economy are fairly straight-forward. From our analysis, the principle features of monopoly capitalism or imperialism, as Lenin described them initially, do apply to the level of development of the productive forces in Canada. Monopoly capitalism is not a system imposed from the outside on to Canada. Through its own development internally, as a logical outgrowth of the stage of “free” competitive capitalism, Canada has developed to its present monopoly capitalist stage. However, given that the internal factors were the basis for Canada’s growth into a monopoly capitalist country, it is the external factors which have been the condition for shaping the special nature of monopoly capitalism in Canada. Both the trotskyists and the nationalists fail to take these special features into account. The nationalists are content to argue that Canada is a colony or neo-colony without at all analysing the level of the productive forces, the mode of production or the resulting class relations and struggle which exist based on this. The Trotskyists on the other hand, will argue “Canada is an Imperialist power” without stressing the difference between the role of a superpower imperialism and that of a 2nd world imperialist country. They lump all countries together without regard to the particular features or conditions in those countries. Thus any contradiction between Canada or the Canadian working class and US Imperialism is eliminated. For the nationalists it is just the opposite – the contradiction with US imperialism explains everything.
There is only one purpose in analysing the forces and relations of production in Canada, that is to lay the basis for the development of a revolutionary strategy and nothing else. It is simply not possible in any society to develop a correct strategy and programme, separate from developing an understanding, and grasp, of the principal features characterising the mode and relations of production.
The purpose of analysis must be to determine the precise character of the revolution, who are the friends and enemies of the working class, and what alliances can be made.
As the Comintern stated:
The varied conditions and roads of the transition to the proletarian dictatorship in different countries may be reduced schematically to the following three types: in highly developed capitalist countries (the US, Germany, England, etc.) with powerful productive forces, a high degree of centralization of production, relatively insignificant small scale enterprise, and an old and well-established bourgeois-democratic political regime, the principal political demand of the program is the direct transition to the proletarian dictatorship....
Countries at a medium level of capitalist development (Spain, Portugal, Poland, Hungary, the Balkans, etc.( where semi-feudal relationships largely survive in agriculture although the material prerequisites for the construction of socialism are present in some degree, the bourgeois democratic revolution not having been completed: in some of these countries it is possible that the bourgeois-democratic revolution will develop more or less rapidly into the proletarian revolution, while in others there may be types of proletarian revolution which will have many of the tasks of the bourgeois-democratic revolution to accomplish...
Colonial and semi-colonial countries (China, India, etc.) and independent countries (Argentina, Brazil, etc.):...In these countries the struggle against feudalism, against pre-capitalist forms of exploitation, the consistent pursuit of the agrarian peasant revolution, and the struggle against foreign imperialism and for national independence are of decisive importance. Here the transition to the proletarian dictatorship is as a rule possible only through a series of preparatory stages...
In still more backward countries...the struggle for national liberation is the central task....(James Degras, ed., The Communist International 1919-1943 (documents), Volume 2, Oxford University Press, London, 1960, p. 505-7.
In analysing the level of development of the forces and relations of production in Canada, it’s clear that the situation requires a single stage to the revolution, in which monopoly capitalism is crushed as a system and in which the bourgeois state is destroyed and replaced by a proletarian one. The dictatorship of the bourgeoisie will be replaced by proletarian dictatorship. The fact of significant U.S. control of important sectors of the Canadian economy does not alter the basic character of the Canadian revolution as fundamentally about the seizure of state power by the working class and its allies. The overwhelming majority of Canadians who have nothing to sell but their labour power, have nothing to gain from an interim “national-democratic” stage to the revolution. The central enemy of the vast majority of Canadians is not a foreign imperialist power that denies them control of their own land and resources, but rather the entire social and political system of monopoly capitalism in Canada, which both exploits and enslaves them. When we are speaking here of Canadian monopoly capitalism, again we mean by that, not that monopoly capitalism is an imported, imposed political and economic system, foisted on Canada, but that through its own internal development Canada has advanced to the stage of monopoly capitalism, with a clearly developed, indigenous Canadian bourgeoisie, which is in alliance with one of the two superpowers: American imperialism.
The Canadian bourgeosie, although in contradiction to the superpowers, and especially with U.S. imperialism on certain questions, is in no way a potential strategic ally of the Canadian working class or other oppressed strata of the population. Fundamentally its interests are the same as that of any monopoly capitalist class – to continue its drive for profits, and to maintain a bourgeois state apparatus to continue its exploitation of the working class.
This is why fundamentally the task of the Canadian working class is to overthrow the Canadian bourgeoisie and its allies, to destroy the bourgeois state, and to build a society free of exploitation under working class political rule. The nationalist arguments are often very fuzzy on this point – they talk of “nationalist”, “stages and phases” to the revolution, but are not very precise about what this actually means. A national-democratic stage in a two stage revolution? An interim stage of consciousness towards full class consciousness? It’s not clear.
The problems which face the working class: their deteriorating standard of living, layoffs, unemployment, speed-up, price gouging and a generally deepening capitalist economic crisis, will only be solved through a proletarian revolution. “Independence from U.S. Imperialism” will not solve these problems, for it is precisely a generalized crisis of monopoly capitalism we are suffering from not an American economic crisis that drags Canada along because of its dependent status. The answer to the crisis of monopoly capitalism is working class political power. It is only the working class that can lead and win the struggle against all forms of oppression and enslavement suffered by different classes. And lead it must. The working class must fight for the interests of all strata and classes who have contradictions with the monopoly-capitalist class, and attempt to win those classes over. The working class must see class relations in Canadian society, and take the lead in opposing all injustices.
It is indisputable that the Canadian working class suffers at the hands of U.S. Imperialism. The Canadian working class and its organizations must take the lead in exposing the role and nature of the superpowers in the world, through the particular domination of U .S. imperialism in Canada. We must be ever aware of the dangers posed to a revolutionary working class movement in Canada, by the major ally of our own Canadian bourgeoisie.
The working class and its forces must always try to continually increase the contradictions between the Canadian monopoly-capitalists and the U.S., by fighting for Canada to take independent positions in world affairs, from the perspective of allying with Third world positions, to advance the world united front against superpower hegemonism, imperialism and the dangers of world war.
In closing, we feel that although the analysis which has been presented in this position is a step in the right direction, there is analysis of a more particular nature which needs to be furthered. Specifically more study of Canada’s role as a second world power is necessary. We intend to do more work in this area, along with further analysis of the effects of U.S. imperialism in the historical development of Canadian monopoly capitalism. As well more detailed class analysis in the areas of emigration flows,composition and size of the working class, the development of the labour aristocracy and the relationships between the working class and other classes, will be the important areas in which we will attempt to further our basic analysis. It will only be on this basis of deepening and investigating further the relationships among all classes in Canada, that the principal contradiction, among the many contradictions with which we are faced, can be determined. For without accurately defining the principal contradiction at any given time, no revolutionary movement can possibly achieve success.