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Everyone expects the statistician to be the foe of easy generalization and glib phrases. Hardheadedness and a sceptical approach are occupational characteristics of those who spend their days measuring the world objectively. In talking to you about statistics of the balance of payments I am therefore going to stay on firm ground by discussing several recent developments in Canada's balance of payments and in the statistical tools which have been devised for observing them.Balance of payments developments have close interrelationships with the internal economy, which, I feel, have never been satisfactorily elucidated. For those interested in studying them further there are two new statistical sources which will facilitate closer analysis. These are new reports soon to be published by the Dominion Bureau of Statistics showing quarterly statements of the national accounts and quarterly statements of the balance of payments in the post-war period. Quarterly statistics of this kind are comparatively new tools and consequently must be used with care, particularly when relationships between internal and external factors are being explored. A thorough knowledge of concepts, definitions, and sources is indispensable before even the obvious steps in comparison may be taken with confidence. Knowledge must also be acquired of the seasonal behaviour of the various series entering into these statistics, in order to distinguish the special and non-recurring from the seasonal. Frequent data on the monetary background published by the Bank of Canada also throw new light on related transactions.

One of the effects of the war upon Canadians has been to make us more conscious of our international financial relations. The rapid changes during the war, bringing with them problems which demanded immediate solutions, have radically altered Canadian economic relations with the rest of the world, and have made for a new awareness of the implications of these changes and the new responsibilities accompanying them. The war showed how adaptable nations can be under the pressure of circumstances, but the ability of human beings under pressure to adapt themselves to their environment often outruns their ability to understand thoroughly what is happening, and to make the more fundamental adjustments which new situations require. The full significance of war-time changes on our balance of payments and international position will probably not be entirely clarified for some time to come, but new potentialities have been revealed of previously unplumbed depths of capacity.Along with the revelations of productive capacity came new experience with the financial aspects of Canada's international economic relations and the currency problems which are inherent in the structure of the Canadian balance of payments. Being closely allied to internal finance and the larger questions of the economic mobilization of total war, these international financial factors may have been overshadowed at times. But the full significance of the war-time international relations of the Canadian economy should not be overlooked, for they clearly show the extent to which full use of Canadian productive facilities is dependent upon external and special demand, and provide further evidence of how closely geared general activity in Canada is to exports. Studies of national income and expenditure show the place which the net export of goods and services has in the maintenance of national economic activity. So long as the Canadian economy maintains its present structure, it will be highly dependent upon the stimulus of external demand, since income generators like internal investment and consumption do not appear to have the potentialities under present circumstances which would permit them in themselves to maintain Canadian production at a high level.

In any study of Canadian industry today, words such as growth and development quickly come into their own. The very scope and rapidity of the changes have introduced a new pace which in many ways is unique. Some of the reasons are not hard to trace. Once growth reaches a certain stage it seems to accumulate momentum. The proximity of Canada to the United States and her access to the industrial technology of that country have also contributed greatly.A large measure of the expansion of Canadian industry has been the result of extensions of United States corporate activity into Canada through the establishment or development of branches and subsidiaries. In this manner, United States industrial technology, supported by abundant sources of financing in that country, has speeded and extended the process of Canadian development. And important parts of the growth which provide sources of supply for United States industry are in turn closely linking Canadian growth to growth in the United States economy. Participation by British and European enterprise and industry to a greater degree than formerly should also be noted, although it is much smaller in scale than the parts sponsored by United States industry. The pace of development would have been much slower had there not been this borrowing of non-resident resources both technological and financial. In the past half-dozen years or so, over half the increase in investment in Canadian industry has been owned by non-residents. That suggests the degree of financial assistance. It would be very difficult to evaluate the borrowing of technology but in some industries it has been very great and has provided the indispensable "know-how" without which ventures would carry much greater risks. Most of this increased investment has taken the form of equity ownership and control which carries with it potential claims to participate in subsequent growth in the rapidly developing, commodity-producing industries—manufacturing and mineral production.