July 24, 1903

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The MINISTER OF JUSTICE.

The hon. member for Lincoln came to me yesterday afternoon and asked me if I was going on with the Bill. I said I was ready to proceed with it. He said that as he had not had an opportunity to examine it since it had been reprinted, he asked me if I would postpone it until next week. I told him that I thought it would be well to have a day fixed for the consideration of the Bill, and he then agreed, as I understood, to fix Tuesday. It is immaterial to me whether we fix Tuesday or Wednesday, so long as we have an understanding beforehand, in order that other business may be brought up in the interval. I move that the committee rise, report progress, and ask leave to sit again.

Progress reported.

Topic:   RAILWAY ACT, 1903.
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BOUNTY ON BINDER TWINE.


House in committee on the following resolution-The Minister of Finance. That it is expedient to enact as follows :- 1. The Governor in Council may authorize the payment of a bounty to any corporation, firm or person manufacturing binder twine in Canada ; such bounty to be equal to the amount paid as export duty In the Philippine Islands, on manilla fibre produced in such islands, and used in the manufacture of binder twine in Canada. Such bounty shall only be payable in respect of binder twine manufactured on or after the first day of September, 1902. Provided, however. that the bounty shall not exceed three-eighths of one cent per pound, on the manilla fibre so used in the manufacture of binder twine. 3. The Governor in Council may make regulations .to carry out the intention of this Act.


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The MINISTER OF FINANCE.

At an earlier stage of the session I intimated that the government, while not willing to make any material change in the tariff in the present session, deeming that such a course would not be expedient, having regard to the general conditions of the country, might find it expedient to invite the attention of the House at a later stage to the condition of one or two industries in connection with some legislation touching the question of bounties. I mentioned at that time two particular industries, the manufacture of binder twine and the lead industry, and since that time we have introduced resolutions with regard to bounties on iron and steel. So that there are now on the notice paper three resolutions touching the question of bounties. The particular motion before us deals with the question of a bounty on binder twine. Binder twine is on our free list, and for some years the business has been carried on under that condition, and on the whole, I believe, has prospered. However, the industry has been placed at a

special disadvantage by certain United States legislation, not touching the question of import duties, but the question of export duties on the raw material which is produced in the Philippine Islands. About a year ago the United States government enacted a law under which, while an export duty of three-eighths of a cent per pound was levied on all manilla fibre exported from the Philippine Islands, and while all shippers of the material would have to pay that export duty, a special provision was made that if the material so exported from the Philippine Islands should be manufactured in the United States, and then shipped abroad, the shippers would get a rebate equivalent to the export duty. The net result is that while the manufacturer of binder twine in the United States has exemption from that duty, and can send the manufactured article into Canada free in competition with the product of our own manufacturers, the Canadian manufacturer, who imports his raw material also from the Philippine Islands, has to pay that export duty. In that way there is a substantial discrimination against the Canadian manufacturer of binder twine and in favour of the American manufacturer. It is not exactly a question of free trade. The Canadian manufacturer is placed in a much worse position than he could fie by the application of free trade principles. We have thought, therefore, that in order that we might compensate the manufacturer of Canada for that special and exceptional disadvantage under which he labours, we would provide for the payment of a bounty to the extent of the export duty. The bounty, of course, will only be paid on that portion of the manilla fibre which is imported into Canada and used in the manufacture of binder twine. Our statistics will easily show the quantity of manilla fibre imported into Canada from the Philippine Islands ; but as all that fibre is not used in the manufacture of binder twine, these statistics will not help us very much in estimating the amount that we shall have to pay under these resolutions. We propose that the bounty shall take effect on all binder twine manufactured in Canada from the 1st of September last. Our reason for fixing that date is that the law of the United States was passed upwards of a year ago, and the manufacture of all binder twine manufactured in Canada from manilla fibre for the present season began last autumn. We therefore propose that all binder twine manufactured in Canada from the 1st of September last shall be entitled to this bounty, on evidence being given that the manilla fibre which entered into its manufacture was imported directly or indirectly from the Philippine Islands and that the export duty was paid thereon. It is difficult to estimate what amount we shall have to pay under this item. It will not, however, toe a very large sum. The limitation is not as to the aggregate amount. It 2291

is as to the amount per pound of manilla fibre imported and used in the manufacture of binder twine.

Topic:   BOUNTY ON BINDER TWINE.
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CON

George Taylor (Chief Opposition Whip; Whip of the Conservative Party (1867-1942))

Conservative (1867-1942)

Mr. TAYLOR.

Can the hon. minister inform me how many pounds of binder twine were imported into Canada from the United States last year, and the value of the same ; also, the quantity in pounds exported from Canada to the United States ? As I understand, there is an arrangement by which binder twine can be exported to the United States free of duty, though I believe there are some conditions in their law, the practical effect of which is to exclude our 'binder twine.

Topic:   BOUNTY ON BINDER TWINE.
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The MINISTER OP FINANCE.

The total imports in 1902 were 14,927,302, I think practically all from the United States. The value of it was $1,507,344. Practically we have no exports to the United States. Binder twine under certain conditions is on the Americon free list. I think this refers to binder twine made of certain material which practically shuts out twine of our manufacture.

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CON

George Taylor (Chief Opposition Whip; Whip of the Conservative Party (1867-1942))

Conservative (1867-1942)

Mr. TAYLOR.

I understand the hon. minister to say that under conditions that have existed during the past year the binder twine industry of Canada flourished?

Topic:   BOUNTY ON BINDER TWINE.
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The MINISTER OF FINANCE.

For

several years-since the tariff was adopted.

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CON

George Taylor (Chief Opposition Whip; Whip of the Conservative Party (1867-1942))

Conservative (1867-1942)

Mr. TAYLOR.

Since binder twine was put on the free list?

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The MINISTER OF FINANCE.

Yes.

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CON

George Taylor (Chief Opposition Whip; Whip of the Conservative Party (1867-1942))

Conservative (1867-1942)

Mr. TAYLOR.

I do not see how the hon. minister can say that when he tells us just now that we have imported nearly 1,500,000 pounds at a value of $1,507,000. This was all manufactured by American labour, and was sold to the Canadian farmer at higher prices than the farmer was able to buy it for before the binder twine was put on the free list. With a great flourish of trumpets the duty was taken off and some arrangement was announced to have been made under which it was said the Canadian manufacturer would have access to the markets of the United States. And to-day the minister admits that they made such conditions-and the figures prove it-that the Canadian manufacturer cannot export a pound of binder twine to the United States, though we import such a large quantity. Why does not the government protect the binder twine industry and establish this manufacture in Canada as it was before, so that Canadian labour may be employed and still the Canadian farmer get his binder twine cheaper than he can buy it today from the American trust? Instead of a vigorous policy of that kind the minister comes down and gives a little bounty, making it equivalent to what the Americans have, still leaving our market to the Americans, and gaining no chance for us to sell to them, putting about a million and a half

of Canadian money into the United States, a great portion of which is paid for labour, and leaving our farmers still subject to the extortion of trust prices for their binder twine. I understand that our binder twine factories have been practically closed for the last two or three years. They have been before the government asking for relief and this is the relief they7 are given.

Topic:   BOUNTY ON BINDER TWINE.
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LIB

Joseph Israël Tarte

Liberal

Hon. Mr. TARTE.

My hon. friend the Minister of Finance (Hon. Mr. Fielding) perhaps, is not aware that, during the last couple of years the Canadian manufacturers of binder twine have been able to carry on operations only by the favour of their American rivals. I make this statement because I have undoubted evidence that it is true. The American manufacturers of binder twine came over to this country and told the Canadian manufacturers : Unless you

limit your product, we will slaughter the market, and you will not. be allowed to manufacture at all. If the Minister of Finance wishes to hold an inquiry into the case, he will find that every word of my statement is true. Under these circumstances, the minister has no right to say that the manufacture of binder twine in Canada is prospering. I say it again: The American manufacturers told the Canadian manufacturers that unless they limited their product they would be slaughtered

Mr. CLARIvE. The Americans fixed the price. -

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LIB

Joseph Israël Tarte

Liberal

Mr. TARTE.

Of course. We are practically in the hands of the American trust. That is an unfair position. My hon. friend the Minister of Finance says he proposes this bounty on account of special circumstances in the binder twine industry, as it is protected in the United States. But he has no right to take that stand, in my humble opinion ; because while he invokes that pretext in his action in regard to binder twine, he intends also to ask parliament to give bounties in the case of lead and in the case of iron and steel, though these special circumstances do not exist in these industries in the United States. The principle we are asked to sanction to-day is not a fair principle. We are asked to take out of the pockets of the tax-payers of this country large sums of money to pay to the manufacturers of binder twine in Canada. If, instead of this, we had a protective policy, a straight Canadian policy, the taxpayer would not be called upon to contribute money to individuals or to firms.

Topic:   BOUNTY ON BINDER TWINE.
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CON

Edward Frederick Clarke

Conservative (1867-1942)

Mr. CLARKE.

And the farmers would get that binder twine cheaper.

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LIB

Joseph Israël Tarte

Liberal

Hon. Mr. TARTE.

Yes, because, as I said, we are practically in the hands of the American trust to-day and have been for a year or more. Of course, I speak independently, for I am responsible for the very policy that has been followed. I do not say that it had my approval-very far from it. i Mr. TAYLOR.

But I remained a member of the government while that policy was adopted and carried out. I am fully responsible. So, I do not speak in a party spirit at all. Not by any means. But I say again that the principle we are asked to sanction to-day is not a proper remedy. It is unfair to the tax-payer ; and it will not inspire confidence among the manufacturers or induce them to invest more capital in this industry. It is, as I said on another occasion, an expedient ; and expedients have never, to my knowledge, produced permanent good results. However, those of us who do not share the views of the Minister of Finance and his colleagues are obliged to accept the remedy that is offered. We cannot get everything we want; we are bound to accept what we can get.

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IND

William Findlay Maclean

Independent Conservative

Mr. MACLEAN.

The House and the country will hear with great regret the announcement of the hon. minister (Hon. Mr. Fielding) here to-day. In substance he has told us that the efforts of the government in the direction of the revision of the tariff and increased protection have no results, but the granting of bounty on iron and steel, on lead and on binder twine. I have been studying the question rather closely of late, anil watching the signs of the times on the other side of the boundray line. If there is anything in view at the present day, it is that we have in America reached ' the crest of the wave, ' as the Minister of Finance called it some time ago. The people of the United States, as a nation and a manufacturing nation, are preparing themselves to make a slaughter house of Canada. I believe that the present financial disturbance on the other side of the line is merely precursory of a movement which is spreading all over the union which seeks wider markets, and I believe that before the day is out we shall hear something of a movement that has been inaugurated in the North-western states, with its centre in Minneapolis, which looks forward to some arrangement as a result of the coming meeting of the commission which will increase the markets of the Americans at the expense of Canadians. I believe that that movement is widespread, and that every effort will be made, when the commission meets, to break down the barriers we have and turn the Canadian market over to the American manufacturer. I believe the country views this with alarm, which will not be made less by the policy announced by the Finance Minister, limiting the action of the government to the granting of bounties to the extent he has named. If there ever was a time when we should have an up-and-up, forward protectionist policy it is to-day. We propose to go into extensive expenditure on railways in this country ; we propose to grant millions and millions of money to build railways : and yet we have not the courage in this House, and this government has not

tlie courage, to adopt a protectionist policy with regard to steel and iron. If that were the case we would have rolling mills established in this country to build all these railways, we would have, as we are likely to have, the Steel Association of the United States coming over into this country-but I am not quite sure that is the case. But we do know this, that the prospects of reciprocal trade relations between the mother country and Canada have already compelled a large number of American concerns to consider the advisability of locating their export trade arrangements in Canada. We know what has happened in the town of Peterborough. A large cereal company in the United States saw what was coming, and they organized to do all their export business from Canada, and are now establishing large works in this country. So with the steel industry, with a vigorous protectionist policy to bring it about. It is being brought about now in England because they are becoming protectionists there.

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LIB

Peter Macdonald (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. DEPUTY SPEAKER.

We are not discussing the general question of the tariff.

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IND

William Findlay Maclean

Independent Conservative

Mr. MACLEAN.

But the Finance Minister opened up the whole question, and that is my excuse.

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LIB

Peter Macdonald (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. DEPUTY SPEAKER.

Because the Finance Minister or some other minister has opened up an irrelevant matter, that does not make it in order. The question before us is the propriety of giving a bounty on the manufacture of binder twine. Under this resolution we cannot discuss the general tariff.

ilr. BORDEN (Halifax). But the hon. gentleman is perfectly in order, in criticising this resolution, to show to the House that a protective tariff would be a better protection.

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The MINISTER OF FINANCE.

I did not open up the whole question of steel, though I have no objection, if the Chairman will permit us to do so, to these three resolutions all being considered at once, if any body desires to do so.

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July 24, 1903