Canadian Crisis
In normal times Canada imports heavily from the United States. A good proportion of the dollars required to pay for these imports was formerly acquired indirectly through sales of Canadian food and raw materials to Great Britain, which normally had dollars to spare as a result of sales of British goods to the United States. This trade triangle has now been completely knobited out of shape. Canada still requires United States goods. Britain still requires Canadian goods. But the link which used to connect these two— British exports to the United States—has been drastically shortened since the war. The fact that this situation has not ended earlier in a bad breakdown of Anglo-Canadian trade has been almost entirely due to the generosity of the people and Government of the Dominion. In return we have been able to offer long contracts for the purchase of Canadian products (which have undoubtedly helped to further the Canadian policy of agricultural stabilisation) and to promise to increase our exports to Canada as soon as possible (a promise which we are now, at last, in a better position to fulfil). But in the meantime Canada is faced with a crucial decision which cannot be postponed. The British mission now in Ottawa has asked that the amounts of livestock products to be supplied by Canada under existing contracts shall be reduced. This is a real blow to the Canadian stabilisation policy, even though it is dictated by the difficulties of Britain's own position, and even though we do not wish the wheat contracts to be affected. To ask Canada to forgo American goods, to resist still longer the temptation to let prices take their inevitable upward course, to risk still further American displeasure for pursuing what is regarded as a discriminating policy, and to forget the essential connection between wheat and livestock policy—is to ask too much. Either the United States Government will take a very broad hint and allow dollars provided uncle} the Marshall plan to be spent in Canada, or many Canadian prices will be drawn irresistibly upwards. If the latter happens, then the effects on this country will be serious.
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