Year book of motion pictures (1951)

CANADA IN 19S0 By FRED C. DILLON Executive-Director, Canadian Motion Picture Distributors Association OR CANADA, 1950 has been a year of economic expansion, with high levels of business activity in both the domestic and international field. The year has marked a continuance of the steady rise in employment, income and capital formation that has been successively increasing for the past five years. The past five years have seen phenomenal economic growth for Canada despite prophetic nuitterings at the close of World War II that had the world earmarked for a lengthy period of depression and declining economic activity. In the field of trade, one of the outstanding developments in the past year has been the decided improvement in trade balances between different countries and the more satisfactory balance of international payments position. The effect of sterling devaluation and the general revaluation of currencies in September 1949 added stimulus to economic activity in other countries. The Korean war and the expectation of heavy defense orders intensified the upward swing in international trade. Of paramount importance to Canada was the vast improvement in gold and dollar reserves during 1950. A heavy flow of speculative capital moved into Canada in expectation of revaluation in the Canadian dollar. This created an inflationary tendency which was met by the decision to let the Canadian dollar find its own level in world exchange markets. The fact that the Canadian dollar has remained steady and is now closer to par with the U. S. dollar shows the fundamental strength of the Canadian economy. During June official reserves of gold and U. S. dollars increased $73 millions. By September the movement, provoked largely by the purchases of Canadian securities by nonresidents, reached flood proportions and the total inflow rose to figures in excess of ,1^335 millions. A comparable indication of the magnitude of this increase in gold and dollar reserves would be one in which the Government of the United States would be called upon to buy more than 10 billion dollars worth of gold in four months. Trade with the United States showed a great increase during the past year— some 40 per cent greater tlian in 1949. At the same time imports from the U. S. increased, but at a lower rate. The result has been that the deficit with the U. S. on merchandise trade was reduced to manageable proportions. The important fact is that this more favorable trade balance manifests a fundamental ad justment in trade by expansive rather than restrictive measures. Trade with the United Kingdom and the sterling area also improved. Exports and imports were brought almost into balance. This balance, as against the traditional position of a heavy export surplus, was created hy an increase in imports from the U. K. and a lessening of exports due to import restrictions on dollar goods imposed by the sterling areas. All in all, the trade pattern has smoothed out very favorably and there is every indication of continuance along those lines. Naturally, everything depends upon the war situation which could, at any time, precipitate drastic measures to ensure North American defense. Export controls, harmonizing with those of the United States, were introduced in 1950. One restricts exports if domestic supplies are inadequate. The other requires export permits on a list of strategic goods for all destinations other than the United States. This latter control order prevents abnormal movement of goods detrimental to the defense requirements of North America. Focusing down from the international level to the solely Canadian or domestic level, the economic picture is encouraging. During 1950 new records were established in employment, production and income. At yearend, economic prospects favored a continuance of general prosperity, a multiplication of inflationary pressures, and the continuance of a high level of capital formation in 1951 —the firm notes. Sales of Canadian bonds in 1950, excluding issues with a term to maturity of less than one year, amounted to $2,100 million, 87 per cent higher than 1949's total sales. Over 90 per cent of sales of new issues of bonds by Canadian debtors were sold in Canada with the balance going at time of issue to investors in the United States. The general picture for 1950 was one of recording-setting increase. Gross national production reached a record total of |17.7 billions, eight per cent greater than 1949. A substantial part of this rise was due to price increases, but nearly 750