August 4, 1903

INTERCOLONIAL CONFERENCE.

CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN (Halifax).

Before the Orders of the Day are called, I would ask the Prime Minister whether or not there is any truth in the report that has been made public in the press here in Canada that the imperial government have asked the various colonial governments, including that of Canada, for permission to make public certain proceedings before the colonial conference which have hitherto been regarded as of a private nature ? Has such a communication been received by this government, and have the government come to any conclusion as to the reply they will give to the communication ?

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The PRIME MINISTER (Rt. Hon. Sir Wilfrid Laurier).

These are questions as to which I can give no answer until I have had communication with His Excellency the Governor General. I shall communicate with His Excellency at the earliest possible moment, and shall give my hon. friend (Mr. Borden, Halifax) the answers to his questions tomorrow or the day after.

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IRON AND STEEL BOUNTIES.


House in committee on the following resolution : That it is expedient to enact as follows : 1. The Governor in Council may authorize payment of the following bounties on the undermentioned articles manufactured in Canada from steel produced in Canada from ingredients of which not less than fifty per cent of the weight (thereof consists of pig-iron made in Canada, viz. : (a.) On rolled, round wire rods not over three-eighths of an inch in diameter, when sold to wire manufacturers for use in making wire in their own factories in Canada, a bounty of six dollars per ton ; (b.) On rolled angles, tees, channels, beams, joists, girders, or bridge, building or structural rolled sections, and on other rolled shapes not round, oval, square or flat, weighing not less than thirty-five pounds per lineal yard, and also on flat eye bar blanks, when sold for consumption in Canada, a bounty of three dollars per ton ; (c.) On rolled plates not less than thirty inches in width and not less than one-quarter of an inch in thickness, when sold for consumption Sir WILFRID LAURIER. in Canada for manufacturing purposes for which such plates are usually required and not to include plates sheared into plates of less width, a bounty of three dollars per ton. 2. The Governor in Council may make regulations to carry out the intentions of the foregoing section. 3. That chapter 8 of the statutes of 1899 be so amended as to provide that the bounties on steel and iron authorized by chapter 6 of the statutes of 1897 shall be continued until the thirtieth day of June, one thousand nine hundred and seven, and that the rates of such bounties shall be as follows : (a.) From the first day of July, one thousand nine hundred and three, to the thirtieth day of June, one thousand nine hundred and four, both inclusive, the bounties shall be ninety per centum of the 'amount fixed by the said chapter 6 of the statutes of 1897 ; (b.) From the first day of July, one thousand nine hundred and four, to the thirtieth day of June, one thousand nine hundred and five, both inclusive, the bounties shall he seventy-five per centum of the amount fixed by the said chapter; (c.) From the first day of July, one thousand nine hundred and five, to the thirtieth day of June, one thousand nine hundred and six, both inclusive, the bounties shall he fifty-five per centum of the amount fixed by the said chapter ; (d.) From the first day of July, one thousand nine hundred and six, to the thirtieth day of June, one thousand nine hundred and seven, both inclusive, the bounties shall be thirty-five per centum of the amount fixed by the said chapter.-The Minister of Finance.


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The MINISTER OF FINANCE (Hon. W. S. Fielding).

The House has had before it from time to time during the present session the question of granting some aid to the iron and steel industry. The government have come to the conclusion to propose certain legislation as set forth in the resolution now before the committee. The reasons which have led the government to prefer to grant aid in this shape rather than by making material changes in the customs tariff have been explained in previous discussions on the question of bounties. The resolutions now before the committee deal with the bounty question in two forms. First, we have certain resolutions dealing with the bounties which are already on the statute-book, and then we have a further resolution by which we propose to grant bounties for new forms of the steel industry which are not at present in operation in Canada. Dealing first with the question of the bounty as provided by existing legislation, I may remind the House that in the year 1897, the bounties were fixed at $3 per ton on steel, $3 per ton on pig-iron made from native ore, and $2 per ton on pig-iron made from imported ore. By subsequent legislation, a sliding scale of bounties was provided whereby the bounties fixed in 1897 should begin to diminish. That sliding scale took effect last year, and last year the bounties were payable on the basis of 90 per cent of the bounties as established by the Act of 1897. Provision was made that these bounties should be further decreased in the follow-

ing year to 75 per cent, then to 55 per cent, then to 35 per cent and then to 25 per cent. What is proposed in the present legislation touching bounties on pig-iron and steel is that we shall suspend for a year the operation of the sliding scale, so that, for the present year, instead of paying on the basis of 75 per cent of the bounties as at first established, we shall continue to pay for this year 90 per cent of the, bounties fixed in 1897, the same as last year. The manufacturers will thus receive for two years 90 per cent, instead of one year 90 per cent and the other 75 per cent. As a means of forming some estimate of the probable difference this will make to the steel industry in the current year

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CON

William Humphrey Bennett

Conservative (1867-1942)

Mr. BENNETT.

May I ask the hon. Finance Minister if it makes any difference whether it is manufactured entirely from Canadian ore ?

The MINISTER OF FINANCE, The bounties on iron established in 1897, as I have said, were at certain fixed rates, one on native and one on imported ore ; but the reduction was on the basis of a percentage which applied to all. From a statement made a short time ago as to the amount paid in bounties in the past year, it appears that that amount was $1,098,359. This was on the basis of 90 per cent of the bounty fixed in 1897. Some accounts will probably come In later which will increase that sum, but we are speaking now entirely of the approximate estimate which I had the privilege of presenting to the House some days ago.

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CON

Uriah Wilson

Conservative (1867-1942)

Mr. WILSON.

That is not the statement that appears in ' Hansard ' in answer to the question asked.

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The MINISTER OF FINANCE.

Yes, but my hon. friend (Mr. Wilson), will find that the figures given in ' Hansard ' included some balance from the previous year. Am I not correct ?

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CON
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The MINISTER OF FINANCE.

I am dealing with the operations of last year with a view to getting an approximate estimate of what the difference is to be. As shown in ' Hansard ' the payments are somewhat larger than I have given, and they include some bounties earned in the previous year. And it is only fair to say that there will be some later payments to add to the figures I have given for the past year. All I can give now is an approximate statement. On the assumption that the sliding scale would remain without change, and that the output would be the same, we should pay to the companies for the coming year, on the basis of 75 per cent, $915,299. But, instead of paying them on the basis of 75 per cent, we pay on the basis of 90 per cent; and, assuming that the output is substantially the same, they will receive for the present year the same as they received for last

year. If the output should increase, the amount they will receive will increase proportionately. On the basis of the figures I have given, the difference would amount to $183,059, that being the difference between paying on the basis of 90 per cent, as paid last year, and 75 per cent, as would have been paid this year had we made no change in the regulation. We do not by this resolution increase the period of bounties, but we change the percentage in the way I have described. So much then with reference to the difference it will make for the present year.

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CON

James Clancy

Conservative (1867-1942)

Mr. CLANCY.

Does the hon. gentleman not increase it one year by reason of repeating the 90 per cent, and then continuing the balance of the year on the sliding scale, as was formerly provided under the statute? Is there not an increase of one year by that ?

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The MINISTER OF FINANCE.

No, not of time, there is an increase in the amount payable, because in the original arrangement the five years would end with a payment on the basis of 25 per cent ; as it stands now, by the suspension of the operation of the sliding scale for one year, in the final year they will receive a payment on 35 per cent. For the present year and for each of the succeeding years, payments will be made at a higher percentage than was contemplated by existing legislation. I have given the whole difference it will make for the current year, it will make for each of the succeeding years a difference to the extent of the variation of the percentage in each case. By moving the sliding scale forward you pay them at a higher percentage than you would pay them by adhering to the present sliding scale.

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CON

John Graham Haggart

Conservative (1867-1942)

Hon. Mr. HAGGART.

For the subsequent years then there will be an increase of the bounty to what was proposed under the statute.

The MINISTER OB' FINANCE. There will be in the percentage. But while the starting period remains the same, we will this year pay them 90 per cent of the total instead of 75 per cent, as now provided ; we will next year pay them 75 per cent of the total instead of 55 per cent ; in the following year we will pay 55 per cent instead of 35 per cent ; and in the final year we will pay them 35 per cent instead of 25 per cent. The effect therefore is that you move forward the sliding scale one year. You give them, during each year, a higher rate of percentage than you would otherwise, terminating with 35 per cent instead of with 25 per cent as provided in the existing legislation.

Then, Sir, beyond that we have made some proposals with respect to articles which are not now manufactured in Canada. It was thought desirable that, if we were to grant further aid to the iron and 'steel industry, we should not only have

regard to the manufactures -which are now in progress, but we should endeavour to secure some advance in the manufacturing industry by the production of lines of goods not at present produced in Canada. We have therefore proposed to grant additional bounties to the extent set forth in these resolutions on three classes of goods, one upon wire rods, an article which is used largely in making wire, and ultimately in making wire nails and manufactures of that character ; and also on certain structural steel and steel plates. These things are not no-w made in Canada. They are consumed to a large extent, and the manufacturers have been very desirous that we should so frame our legislation as to encourage the development of these lines of industry. Therefore, instead of dealing with the tariff as already mentioned, we propose to make grants of bounties on the articles which I have named : On

rolled round wire rods not over three-eights of an inch in diameter, when sold to wire manufacturers for use in making wire in their own factories in Canada, a bounty of $6 per ton. Then we proceed : On rolled angles and other forms of structural steel and large steel plates a bounty of $3 per ton. In the adjustment of these bounties regard is had to the existing conditions of the tariff. Whatever differences of opinion we may have as to the effect of duties, I suppose it will be generally acknowledged that the duty is an advantage to the manufacturer, and if he does not get it in the form of a duty but in the form of a bounty, he certainly receives considerable advantage. If he is already receiving a large advantage in the shape of the tariff, then there would be less reason for giving him a large advantage in the shape of bounties. In dealing with these articles we are dealing with items which are either on the free-list, as in the case of wire rods for the manufacture of wire and wire nails, or as in the case of structural steel and plates where the duty is a low one of ten per cent. We have reason to believe these grants in aid of the iron and steel industry, while they may fall short of what some manufacturers desire- for it is too much I suppose to hope that we should be able entirely to satisfy applicants who come to us in matters of this sort-we have some reason to believe that these grants will be regarded by the manufacturers as a moderately satisfactory encouragement. At all events they will serve the purpose of enabling industries whose position was somewhat in question a short time ago, to continue their operations, and not only to produce pig-iron and steel as they have been producing in the past, but als ) to make some progress in the more advanced operations by turning out these wire rods and the other Items mentioned In the resolution.

I have already indicated what the charge upon the treasury will probably be by reason

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Hon. Mr. FIELDING.

of the change which we are making in the bounties as respects pig-iron and steel. What the charge will be for these new bounties which we are providing, is not easy of determination. The best we can do is to call attention to the imports of these articles, and perhaps we can form some estimate of the quantity of the goods which are likely to be manufactured in Canada.

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CON

Richard Blain

Conservative (1867-1942)

Mr. BLAIN.

[DOT] Might I ask the Minister of Finance if that includes every thickness of wire and steel ?

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The MINISTER OF FINANCE.

No, if my hon. friend will read the resolution he will see it is very carefully drawn in that respect; it is drawn, as I have already said, with regard to existing tariff legislation. There are some forms of steel which have a considerable duty upon them, and we do not in that case propose to allow any bounties. There are others which are either on the free list or subject to quite a low duty, and it is in such eases that we are allowing these bounties. There is a difference in the matter of plates as to the size. Now, as to what the probable charge will be, the only method that we can have of forming an opinion is by taking the imports of the articles in question, and forming, if we can, some estimate as to what proportion of these articles will be made in Canada instead of being imported. I have prepared a statement of the imports of these articles which will show approximately the probable amount we might make in Canada. The imports last year of wire rods amounted to 55,182 tons ; the imports of structural iron and plates amounted to 47,512 tons. What proportion of this we might be able to manufacture in Canada is of course a matter of conjecture, it is difficult to form any understanding.

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CON
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The MINISTER OF FINANCE.

No, the wire rod is the first form towards the production of nails. We pay no bounty except upon the wire rod itself.

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CON

Albert Edward Kemp

Conservative (1867-1942)

Mr. KEMP.

May I ask the bon. Minister of Finance to give us the values as well as the tonnage of these articles imported ?

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August 4, 1903