Trudeau unfurls flag of Canadian economic nationalism

Liberal Prime Minister Pierre Trudeau unfurled the flag of Canadian economic nationalism once again when he announced his new Cabinet here March 3. Mr. Trudeau, who was sworn in for his fourth term as prime minister, underscored his election promise to wrest control of Canadian industry from nonresident owners by elevating one of his party's staunchest nationalists to a key Cabinet post.

He made Herb Gray, a lawyer from Windsor, Ontario, minister of the Federal Department of Industry, Trade, and Commerce. The appointment of Mr. Gray, the architect of Canada's controversial agency that screens nonresident investment, will raise eyebrows on Wall Street and bring squawks from some of Canada's large foreign-owned corporations, many of which are controlled in the United States.

Mr. Trudeau named one of his closest confidants and toughest negotiators, Quebeker Marc Lalonde, to the post of energy minister. In doing so, Mr. Trudeau signaled to the country's western provinces that the new Liberal government means to drive a hard bargain in the upcoming negotiations on domestic oil prices.

Of all Mr. Trudeau's ministers, Mr. Lalonde, a Montreal lawyer who has been at the top of the Liberal power structure since the mid-60s, is known as the most fervent advocate of a strong central government.

Mr. Lalonde was the Liberal's energy critic during the 9- month government of ousted Progressive Conservative Prime Minister Joe Clark. It was Mr. Lalonde who forged the Liberal's most important campaign position -- the commitment to win from the western provinces an energy pricing deal that would be more advantageous to consumers in Canada's populous but oil-poor eastern provinces.

Mr. Lalonde is intelligent, hard-working, and known for his uncompromising negotiating stance. "He doesn't blink as easily as most," one longtime Ottawa observer says.

The wisdom of sending such a negotiator west to meet Alberta Premier Peter Lougheed, also reknowned for his unbending ways across a conference table, will become evident in the weeks ahead. Ottawa will have to try to get Alberta, the country's major producer of crude oil, to agree to domestic oil prices lower than those negotiated by the previous Clark regime.

"At least Lougheed will know what he's up against" was an often heard comment following Mr. Lalonde's appointment.

Mr. Gray, a left-leaning maverick who fell from Mr. Trudeau's favor and was dropped from the Liberal Cabinet in 1974, was finance critic in the Liberal opposition. His appointment to a key portfolio is seen as confirmation that Mr. Trudeau, who has often blown hot and cold on the issue of economic nationalism, will make that a high priority in his new government.

During the campaign, Mr. Trudeau promised to broaden the duties of the Foreign Investment Review Agency (FIRA). Created in 1974 to examine foreign investments, the agency has been highly criticized by businessmen in the United States and elsewhere as a roadblock to investment in Canada. Canadian nationalists, however, have often faulted the agency for being too lenient in allowing takeovers of Canadian companies.

While campaigning, Mr. Trudeau said he would give "government-backed loans to help provide assistance to Canadian companies who want to compete for foreign takeovers or repatriate foreign ownership of assets."

FIRA's mandate may also be expanded to include periodic review of large foreign firms to assess the performance of these companies in promoting exports from Canada and domestic industrial research and development.

The difficult portfolio of finance minister went to Allan MacEachen, an economist who has held a variety of portfolios under Mr. Trudeau and former Prime Minister Lester Pearson.

And in what came as a surprise to most observers here, Mr. Trudeau named another politician from Windsor, Mark MacGuigan as his minister of external affairs. This is the first portfolio for Mr. MacGuigan who has served in the House of Commons since 1968.