The British Restrictive Trade Practices Act, 1956, states, in Section 21, that “a restriction accepted in pursuance of any agreement shall be deemed to be contrary to the public interest unless the Court is satisfied” of one or more of certain specified circumstances. Thus, the onus of refuting the general presumption that restrictions on competition are against the public interest is placed on the parties to a restrictive agreement, and the arguments they may employ (or circumstances they may seek to prove) are stated in the legislation. One such argument or circumstance is given in Section 21 (1) (b): “That the removal of the restriction would deny to the public as purchasers, consumers or users of any goods specific and substantial benefits or advantages enjoyed or likely to be enjoyed by them as such, whether by virtue of the restriction itself or of any arrangements or operations resulting therefrom.” If the restriction passes through this, or any other, “gateway,” the “tailpiece,” or balancing procedure must still be faced, as the Court must be “further satisfied (in any such case) that the restriction is not unreasonable having regard to the balance between those circumstances and any detriment to the public or to persons not parties to the agreement (being purchasers, consumers or users of goods produced or sold by such parties, or persons engaged or seeking to become engaged in the trade or business of selling such goods or of producing or selling similar goods) resulting or likely to result from the operation of the restriction.” Thus, if an agreement, for example, convinces the court that it meets the “specific and substantial benefits or advantages” requirement of 21 (1) (b), it will be found not contrary to the public interest only if it also survives the balancing test in which any public detriments resulting from the agreement may be taken into consideration. These, in brief, are the guide-lines given the Restrictive Practices Court by means of which it performs its obligation to pluck, from the class of all restrictive agreements, those presumably few agreements from which the public derives, on balance, a benefit.

The purpose of this study is to develop a procedure for estimating changes in the coefficients of an inter-industry input-output matrix. Every attempt to prolong the useful life of such a set of coefficients carries an obvious practical interest. We desire to find a procedure which does not call for large quantities of supplementary data, and which does not require more than a reasonable volume of calculations.

The method is applied to a sixteen-industry Canadian input-output matrix for the year 1949. This matrix is an aggregation of the forty-two-industry table published by the Dominion Bureau of Statistics. The adjustment of the coefficients (i.e., their up-dating) is done for 1956. Thus, the objective of the study is to estimate the 1956 matrix of input coefficients.

Projections of the output of each of the sixteen industries for the years 1950–59 using the unadjusted 1949 matrix of input coefficients and estimates of the actual final demand for these years produce discrepancies between the projected outputs and estimates of actual output which quickly become too large to be tolerated. The projection errors for 1957–59 are shown in columns 3, 7, and 11 of Table I, where the 1949 matrix is referred to as matrix A. It is the fact that the quality of these projections deteriorates as one moves away from the base year that led us to examine various methods of up-dating the base-period coefficients. Although at first glance it may seem inappropriate to use a matrix for projections eight to ten years away from the year to which it refers, it should be kept in mind that input-output tables are frequently at least five years out of date by the time they are published. For example, it is unlikely that the table for 1961 presently being constructed by the Dominion Bureau of Statistics will be published before 1967.

This paper presents estimates of the relative importance of Canadian-controlled and non-resident-controlled firms in the exploration for and discovery of petroleum (including natural gas) in western Canada for the years 1946 to 1954, and offers a tentative explanation of the difference in performance of the two groups in terms of the relative sizes of the firms involved. This hypothesis tends to minimize the importance of non-resident control per se in explaining the dominant role of foreign-controlled firms in the early postwar expansion of this industry. If it provides a valid interpretation of this particularly important case it would lend limited support to a more general thesis, namely, that the apparently leading role played by non-resident-controlled firms in Canadian resource developments in the late 1940's and 1950's was due in the main, not to superior entrepreneurial talent or access to superior technological skills, but rather to readier access to massive capital resources. The study therefore has a twofold interest. It is primarily a study of the relationship between size and economic performance in one type of economic activity generally recognized as inherently highly risky. At the same time, however, it makes a minor contribution to the analysis of the role of non-resident-controlled firms in the expansion of the Canadian economy in the late 1940's and early 1950's.