he Canadian government, attempting to avert a clash with the Reagan administration, today disavowed a previous commitment to extend its nationalistic energy policies to other areas of the economy.
The government of Prime Minister Pierre Trudeau, however, gave no indication it would modify any of the controversial measures in its national energy program, under which Canada is using selective tax grants to reduce the presence of American and other foreign companies in the domestic oil industry.
The Liberal Party government's budget message thus probably will be greeted with mixed feelings by the Reagan administration, which has been pressing the Trudeau government privately to curb its Canada-first development initiatives.
U.S. officials have been particularly alarmed by Trudeau's previously stated intention to complement his energy program with a set of nationalistic industrial policies based on tougher scrutiny of foreign investors.
This strategy was conspicuously absent from an industrial development plan announced by Finance Minister Allan MacEachen today. MacEachen avoided this topic altogether in his budget speech before Parliament, but official papers amplifying his verbal message ruled out more nationalistic policies.
The budget message, in which the government lays out its economic program for the next year, contained little to stimulate the economy, even though unemployment has risen to a near-record high of 8.3 percent. MacEachen predicted that the Canadian economy, which recorded no real growth in 1980, would expand at a rate of 3 1/2 percent this year.
In a move to alleviate one of the Trudeau government's worst political problems, the budget offered limited financial help for the home owners who are hardest hit by this country's mortgage rates, now running at 19 percent to 20 percent.
MacEachen received some help on this issue today when it was announced that the Bank of Canada rate, equivalent to the U.S. Federal Reserve rate, fell to 16.13 percent, the lowest this year.
The budget included a wide-ranging overhaul of the income tax system which will raise an additional $2.1 billion in federal revenues from corporations and high-income earners.
Despite continuing high inflation--now 12 1/2 percent and projected to drop only slightly to 11.7 percent next year--MacEachen ruled out income and price controls, which were used in the mid 1970s.