June 7, 1904

LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

These figures, which will be found in very much more detail in the diagrams which will be distributed, give very gratifying evidence of the great increase in trade and wealth which has taken place in Canada and of which hon. members on 'both sides of the House are, I am sure, equally proud. While the condition of the country generally has been good, we have reason to be particularly grateful for the splendid prosperity which has come to the great Northwest. All portions of our Dominion have equal demands upon us, and all portions are, I trust, receiving from the government and parliament their fair share of consideration ; but all portions have not equal inducements to offer to the immigrants who are seeking for homes. The vast territories of the Northwest offer inducements to the land hungry such as the eastern provinces cannot be expected to hold out, and naturally the efforts of my hon. friend the Minister of the Interior (Mr. Sifton) and the officers of his department are chiefly turned to the important duty of filling up the vacant lands of the Northwest. 4I wonder if we are able to appreciate the vast extent of land still available in these Territories. Canada is a country of such magnificent distances that sometimes it is difficult for us to understand and appreciate the vastness of that territory.

Dr. Wm. Saunders, of the Experimental Farm, in an admirable article in the April number of the ' Canadian Magazine,' has discussed the question of wheat-growing in Canada, and he has given some estimate of the available land in the Northwest Territories for that branch of farming. The figures that he gives are as follows :

Acres.

Manitoba 27,000,000

Assiniboia 50,000,000

Saskatchewan 52,000,000

Alberta 42,000,000

Total 171,000,000

It is thus estimated-

Says Dr. Saunders,

-that there are within the limits referred to, after making allowance for lands unfit for agriculture, about 171,000,000 acres suitable for cultivation, by which is meant land of such degree of fertility as to admit of profitable farming.

Further on Dr. Saunders deals with the question of the ability of Canada to supply food for the mother country, and the statement he makes on that question-perhaps hon. gentlemen have had their attention already drawn to it-is well worthy of being-repeated. It is headed in the publication I have mentioned, ' A Reasonable Prophecy ' :

The total imports of wheat and flour into Great Britain in 1902 were equivalent in all to about 200,000,000 bushels of wheat. Were one-fourth of the land said to be suitable for cultivation in Manitoba and the three provisional

territories under crop with wheat annually, and the average production equal to that of Manitoba for the past ten years, the total crop would be over 812,000,000 bushels. This would be ample to supply the home demand for 30,000,000 of inhabitants (supposing the population of Canada should by that time reach that figure) and meet the present re-uirements of Great Britain three times over. This estimate deals only with a portion of the west, and it leaves the large eastern provinces out of consideration altogether. Prom this it would seem to be quite possible that Canada may be in a position within comparatively few years, after supplying all home demands, to furnish Great Britain with all the wheat and flour she requires and leave a. surplus for export to other countries. With a rural population on the western plains in 1902 of about 400,000, over 67,000,000 bushels of wheat were produced. Add to this the wheat grown in Ontario and the other eastern provinces and we already have a total of over 93,000,000 bushels. These figures are full of promise for the future of Canada as a great wheat-producing country.

It is natural to conclude that, with such-i territory to offer to the people, all that is necessary is that its resources and character be made known, when it must attract people from all parts of the world. For a long time the hopes of the Canadian people with regard to the Northwest were hardly realized, although they had spent vast sums in opening up that territory, and every effort was made no doubt to bring people in. But for one cause or another, whatever it may have been, the rate of progress for some years was slow and unsatisfactory. But in recent years we have nothing to complain of on that score ; there has been a very gratifying increase in the influx of immigrants to that territory. My hon. friend the Minister of the Interior has spent money freely in advertising Canada, and the time has come when the Dominion is reaping a rich harvest, and when all will admit that the money he has expended for that purpose, and which, at one moment, some were disposed to look upon with doubt, is now bearing rich fruit for the building up of this Dominion. I find that the arrivals of immigrants into Canada during the past eight years appear as follows :

Years. Number.

1896 (calendar)

16,8351897 "

21,9141898 "

31,9001899 "

44,5431900 (1st 6 months)

23,8951901 (fiscal)

49,1491902 "

67,3791903 "

128,3641903 (calendar)

134,370

The origin of these immigrants for the calendar year 1903 appears as follows :

British 50,141

Continental Europe 48,046

United States 46,183

We are glad to know that the immigration work continues actively during the present year, and no doubt at the end of the season a very gratifying story can be told.

Glance now for a moment at the extent to which homestead entries are being taken up :

Calendar Year.

1896

1897

1898

1899

1900

1901

1902

1903

1,857

2,407

4,848

6,899

7,850

9,108

22,215

32,682

As an evidence of the growth of that country, look now at the sales of land by railway companies who have had land grants, and by the Hudson Bay Company :

Year. Acres. Amount.1896.. .. .. .. 108,016 361,3381903 (fiscal).. .. 1,229,011 14,651,757

Last year, Mr. Speaker, we introduced, in connection with our tariff legislation, an important change, which we believed was rendered necessary for the defence of Canadian interests. We thought that one of the great nations of the world had not treated us as fairly as we ought to be treated, and in self defence we adopted what was called the German surtax. I have nothing now to add on that subject, except to call the attention of the House to the effect that that surtax has had upon trade between the two countries. Prior to the adoption of the surtax the imports from Germany to Canada were increasing ; under the operation of the surtax, not only has the increase been arrested, but there has been a very considerable diminution. For the ten months from the 1st of July, 1892, to the end of April, 1903, the total dutiable imports for consumption from Germany amounted to S8,-

048.000, while for the corresponding ten months of the current fiscal year they only amounted -to $5,367,162-a falling off of $3,281,438, or a decline of 38 per cent. To illustrate in a concrete way the result of the surtax, the importations of raw sugar might properly be referred to. During the last fiscal year 174,000,000 pounds of this commodity were imported from Germany, but since the surtax was applied not a pound has been imported under it from Germany. All that trade has been diverted to the British West Indies, including British Guiana. The importations o-f raw sugar from the British West Indies, including British Guiana, for the ten months ending with April of the current fiscal year, amounted to 188,000,000 pounds. For the corresponding period of the previous year the imports from the British West Indies amounted to 46,515,355 pounds ; estimated from British Guiana, 23,000,000 pounds-in all, 69,000,000, as compared with

188.000. 000 pounds for the same period of the curi'ent fiscal year. Statistics show that

the surtax has resulted also in reducing the Importations of woollens, cottons and silk goods, and articles of iron and steel. There is nothing new to be said on that question. We regret that we felt obliged to take that step, and we think that on the whole it has operated to the advantage of Canada, and it has certainly commanded the attention of the wide world. I think that the almost universal opinion has been that the action of the government of Canada was fully justified.

It is now seven years since we had a revision of the tariff. Some changes have been made, but nothing very material. That tariff, I venture to say, has on the whole proved most satisfactory. It has proved a good revenue tariff, as we are bound to conclude from the figures I have given to the House. It has included a considerable measure of incidental protection, and in that respect it will command the admiration perhaps of some hon. gentlemen opposite, who are more anxious for protection than some of us on this side of the House.

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CON

James Clancy

Conservative (1867-1942)

Mr. CLANCY.

What an abomination that measure of protection is.

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

be unseemly on our part if we were to attempt to throw ourselves between the two political parties over there, and take any active part in the movement. We must be content with stating our position, as it has been stated in the past. We on this side of the House accept the principle of preferential trade. We believe that, while differing in some details, hon. gentlemen opposite will not differ from us on the principle, and therefore we say to the English people that Canada is practically a unit in support of the principle of preferential trade. We must be content to leave the matter at that for the present.

We have some tariff changes to propose this session, but we have no intention of making any extensive tariff revision. Many items in the tariff, I might be almost justified in saying that almost every item in the tariff, bears a relation to some other item, and it becomes necessary to have a very careful inquiry before any detailed revision be undertaken. Before the last revision of the tariff, a commisison composed of members of the administration held a very extensive and thorough inquiry among the business men of the country ; all interests were heard and I am sure much valuable information was obtained. Before we could attempt to deal with all the details of the tariff, it will probably be the part of wisdom to have that commission or some such body make some such inquiry. The ministers in one way or another will have to make a thorough investigation before any detailed tariff revision can be undertaken.

But, while we may not be prepared to deal with the details now, there is no reason why we cannot foreshadow the lines upon which the tariff revision might take place. We have to-day practically three tariffs'. We have the British preference, we have our general tariff and we have the Gen-man surtax. I think it would be found wise in any revision of the tariff that may take place, to continue these distinctions, and to perhaps deal with them more in detail. I think it would be the part of wisdom that we should still have separate tariffs to apply to separate countries, in order that we may be able to deal fairly with the countries that want to trade with us, and to deal less generously with those countries which pursue a somewhat hostile course towards us. We have to-day practically a maximum and a minimum tariff if I may so describe it, and then we have the British preference below that again. It would be well that in the revision that may take place, we should adopt that principle as it now exists and deal with it more in detail. I| think it would be well for us to have a maximum general tariff and a minimum general tariff, and the British preference below that as we have it to-day. The maximum tariff would only be applied to those countries which pursue, if I may Mr. FIELDING.

so call it, a hostile policy-I do not mean to say that they have any hostility to us, but simply that in the carrying out of their own affairs they adopt a trade policy which discourages trade with us. In that case, they cannot complain if we have a maximum tariff, and though we should guard against having an extreme tariff, we would be justified in saying that this tariff should be materially higher than the tariff which we are prepared to extend to other countries which are willing to trade with us on fair and reasonable terms. The minimum general tariff, which would correspond to the general tariff to-day, would apply to such countries as do not legislate commercially in a spirit of hostility to us-perhaps that is not happily expressed ; let me say, to countries that adopt more moderate tariff views; low tariff countries. Of course where there are favoured nation treaties in existence they have to be considered, but the principal nations which to-day adopt a high tariff policy have not any favoured nation arrangement, and therefore I think our Hands will be free in that respect. So, we would have a maximum tariff as we have the German tariff to-day, to apply to such countries as do not manifest a disposition to trade with us. We would have a minimum general tariff to apply to countries that are disposed to trade with us, and then below that we would have the British preferential tariff to apply to the mother country and to such colonies of the empire as it may be expedient to extend the benefit of that tariff to. I think, Sir, that on this line, guarding carefully against extortionate duties, but also making a distinction between the countries which wish to trade with us and the countries that do not wish to trade with us, I think we can devise a tariff which will be in all its details fairly satisfactory to the country.

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LIB

Frederick William Borden (Minister of Militia and Defence)

Liberal

Mr. K. L. BORDEN.

I do not know whether I quite follow the hon. gentleman. Is it his suggestion that we should apply a higher tariff to other countries which have high tariffs against us, although they may treat us exactly in the same way they treat all other countries.

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

Yes, I think we should do that. Although, if there be special cases of countries which treat us with exceptional unfairness, we would still have to deal with them by special legislation as we have done in the past.

One advantage which we might derive from the treatment of the question as I have suggested, is, that we could deal with separate articles. Very often a general rule will work out some disadvantages when applied. Under our present system, our British preference is one-third off everything, and there may be cases in which that works unequally. There may be cases in which we could afford the one-third off ; there may be cases in which we can afford more than

435S

one-third off. There would consequently be some advantage to us in having in our tariff columns a maximum general tariff, a minimum general tariff and a preferential tariff; with each individual item stating in each case what the preference should be, and what the difference is to be. This would strike me as being the line upon which a tariff revision might properly be undertaken.

But, Sir, though we speak of that as an outline of the method by which there might be a detailed tariff change, w>e have to consider the question of things as they are today. We desire to deal with certain things as they present themselves to us to-day ; we desire to deal with matters of urgency, reserving the question of a more general and more detailed tariff revision until an early date-I would say hopefully next session, but at all events as soon as a proper inquiry can be made.

As I said, we propose to deal with some, articles to-day. One of the first matters to which I wish to make reference is the wool industry. Very much of the criticism of the tariff respecting the wool industry, is, I am inclined to think, unjustified. What I mean is that as respects some of these industries no amount of tariff could save them from trouble. From the information I have received, I may say that in every one of these industries there has not been the perfection of management which is necessary in these days of keen competition. I am afraid that they are not all equipped with the most modern machinery ; I am afraid that they have not all put themselves in a condition which would enable them to fully enjoy the benefits which the tariff already holds out to them. But, while .there may be cases of that kind-and my information is that there are such cases-still the representations that have been made to us lead us to the belief that the woollen industry is suffering severely from competition, and we propose to deal by a special item in our tariff with that industry.

The complaint is made very largely by our woollen manufacturers and by various public men who sympathize with them that although on the better grades of goods they can fairly compete with all persons, even the British manufacturer, a very large proportion of the imports of British woollen goods coming into Canada are really shoddy, goods of an inferior character, against which we ought to legislate ; and it is alleged that any increase which we might make in the woollen duties would have the effect of shutting out, not the purer woollen goods, but the shoddy goods. That is argued with much force, and I am inclined to believe that there is something in it. However, we propose to deal with the matter in this way. Our present duty on the class of goods which I may describe as cloths, tweeds, overcoatings, wearing apparel, and goods of that character, is 35 per cent, subject to the preference, which 139

brings the duty on British goods down to 23i per cent. We do not propose to increase the general tariff, but we propose to put a limit on the extent to which the preference shall apply to these goods. We propose to fix a minimum tariff of 30 per cent on this class of goods coining in under the preferential tariff. This change will apply to all woollen goods mentioned in the tariff item 394, with the exception of blankets, flannels/ bed comforters and counterpanes, which are placed in a group by themselves.

We deal in a similar manner with the item of twine and cordage. These goods to-day are subject to a 25 per cent tariff, subject to the deduction under the British preference, which brings the rate of duty down to 16f per cent. This is a lower rate of duty than even the most moderate tariff man usually is willing to impose, and we propose to fix a minimum duty of 20 per cent ad valorem, on that class of goods coming in under the British preference. That refers to twine and cordage, but does not touch the privilege already granted to fishermen, and does not touch binder twine.

While in the items I have mentioned the degree of preference we have been giving may work inconveniently, and it may be convenient to grant a less preference than one-third, in other items it may be equally convenient to grant more preference.

On table ware of china, porcelain or other clay, the duty at present is 30 per cent, with one-third off when imported from Great Britain, bringing it down to 20 per cent. We propose to reduce this to 15 per cent, so that in that case the British preference instead of being one-third will be one-half.

We deal in like manner with window glass, the duty on which at present is 20 per cent, with one-third off when imported from Great Britain. We propose that the duty on window glass imported from Great Britain shall be reduced to 7-J per cent. In these two cases the preference to Great Britain is increased, in the cay: of the woollens it is decreased.

In item 330, schedule A, there is a group of articles from which we want to strike out pails and tubs of wood. The effect of that is to throw them into the general classification of wooden goods, so that they will be dutiable at 25 per cent instead of 20 per cent, as they now are.

In item 323 of schedule A we propose to add a qualification. The item refers to the duties on carriages. We propose to put a minimum value of $40 on an open buggy and a minimum value of $50 on a covered buggy.

We propose to insert in the list of prohibited goods an item to exclude stallions and mares of less value than $50 each.

In item 203 of schedule A we deal with the duties on glass imported in certain conditions. At present there are three rates on that class of goods. I am referring

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CON

David Henderson

Conservative (1867-1942)

Mr. HENDERSON.

Theoretically. '

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

Not only theoretically, but absolutely certain, because if the price

comes down in the one and not in the other, the other will not be consumed, so that the effect of this reduction will be an Immediate reduction in the price of oil at the refineries in Canada, and from the refiner to the various distributing companies, and from these to the shop-keepers, and in due season it will reach* the consumer. If it be true that the consumer pays the duty, I presume he will pay this as well as others, and there is not much doubt that the consumer pays an increased price, under the present system, not only on the imported oil, but on the Canadian as well. We have a consumption in Canada of 25,755.450 gallons. The saving to the people of 24 cents per gallon on that quantity will amount to $643,886. We will pay a, bounty only on the crude oil produced in Canada, which amounted last year to 16,852,640 gallons. Observe that the bounty being paid only on the Canadian crude will apply only to a limited quantity, whereas the reduction of price will applv to the whole consumption, whether Canadian or American. We find then the saving to the people by this policy of $043,886 in the shape of reduced price on oil. On the other side of the account, the people will pay out through the treasury, $225,789 in the way of bounties. Deducting the amount which the people will pay from the sum which they will receive, there is a net gain to the consumer on the year's operations of $390,097. Besides, the people will receive further advantages by having fuel oil placed on the free list, and that is an important item to manufacturers who use oil as a fuel. There will toe a further advantage in a reduction of the duties on all the products of petroleum. Thus, paraffin wax candles are reduced from 30 per cent to 25 per cent ad valorem, and paraffin wax is also reduced from 30 per cent to 25 per cent ad valorem. Illuminating oils of the highest grades are reduced from 25 per cent to 20 per cent ad valorem. Crude petroleum of the highest character, the duty on which is now 24 cents per gallon, will be reduced to 14 cents pe1 gallon, while petroleum in the cruder forms will be on the free list.

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CON

Edmund Boyd Osler

Conservative (1867-1942)

Mr. OSLER.

Will oil used by gas companies for the manufacture of gas be on the free list ?

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIEDDING.

or kind not made in Canada for drilling for water or oil : this is not to include motive power.

We made provision last year for the placing on the free list of certain machinery of a kind not made in Canada for use exclusively in alluvial gold mining for one year; we propose to extend that fo'r one year.

There are one or two changes which do not affect the duties but relate solely to the administration of the department. In item 608 we propose to strike out all the words after the ' United Kingdom ' in the third line. The item refers to the importation of tea. It now requires that there shall he an English certificate as to the character of the tea. We are advised that this certificate is of no substantial value, but impose-; some charge upon our importers, and our own Customs regulations for the examining of tea are ample. We therefore propose to strike out the requirement for the English certificate.

There is an amendment to the item in the tariff respecting the duty on spirits. It does not. however relate to the rate of duty in any way ; it is simply a matter in the administration of the department, an amendment to the form of the item, and therefore I shall pass it over.

Item 462 of Schedule ' B,' that is, on the free list, related to philosophical apparatus, for the use of universities,, schools, &c. We repeal that item, and re-enact it in a larger and more ample form as follows :

462. Philosophical and scientific apparatus, utensils, instruments, and preparations, including boxes and bottles containing the

same, of a class or kind not manufactured in Canada, when specially imported in good faith for the use and by order of any society or institution incorporated or established

solely for religious, philosophical, educational, scientific or literary purposes, or for the encouragement of the fine arts, or for the use

or by order of any college, academy, school, or seminary of learning in Canada, and not for sale, subject to such regulations as the Minister of Customs shall prescribe.

We have had some representations from the manufacturers of neckwear who have made it clear that they suffer some disadvantage, very much of the same nature as that which I have mentioned in connection with certain classes of imports, that is to say that the finished article comes in under the British preference while they are obliged to get the raw material from countries to which the British preference does not apply. We therefore propose to provide a special rate of 10 per cent for silk fabrics when imported by manufacturers of men's neckwear for use in their factories under regulations to be made by the Minister of Customs.

I have now given you. Sir. a statement of all the details wherein we propose to change the tariff. But we have some fur-Mr. FIELDING.

ther proposals to make which although they may not relate to details are of the utmost importance. As time rolls on, changing conditions arise, and it is the duty of the government and of all men in parliament to observe these changing conditions and adapt their tariff legislation to the conditions jvhich may confront us. In the world's trade, many new conditions have grown up, and we are particularly interested in the conditions which have arisen in the great high tariff countries. We cannot meet these by mere academic discussions of the principles of free trade or protection. Mr. Cleveland, on a memorable occasion, used an expression which is very frequently quoted, ' It is a condition and not a theory which confronts us.' We recognize that fact in tariff matters as in many other matters, and we say that many new conditions have arisen and are arising of which we are obliged to take notice. In low tariff countries or in free trade countries, Great Britain for example, these disturbing conditions seldom exist. England conducts her business generally upon rational lines. She sells at a profit, and what is known as the system of dumping or slaughtering is hardly known in connection with British trade. But, Sir, in the case of all High tariff countries these objectionable conditions arise. It seems, to be the inevitable result of high tariff policy that monopolies, trusts and combines will flourish. They may possibly exist in low tariff countries, but they flourish under a high tariff policy as they could mot possibly flourish under other conditions. We find to-day that the high tariff countries have adopted that method of trade which has now come to be known as slaughtering, or perhaps the word more frequently used is dumping ; that is to say, that the trust or combine. having obtained command and control of its own market and finding that it will have a surplus of goods, sets out to obtain command of a neighbouring market, and for the purpose of obtaining control of a neighbouring market will put aside all reasonable considerations with regard to the cost or fair price of the goods ; the only principle recognized is that the goods must be sold and the market obtained. I quite realize that what I may call the extreme free-trader, that is the theoretical free trader, if there be such a man, who attaches more importance to a theory than to the practical things of this life, may ask: 'Why should we

care about that ; do we not get the benefit of cheap goods ? Well, if we could be guaranteed for ever or for a long period that we would obtain cheap goods under that system the question would be a very fair one. If these trusts and combines in the high tariff countries would come under obligations, with sufficient bonds, to supply us with these goods at the lowest prices for the next 50 years, it would probably be the

part of wisdom for us to close up some of our industries and turn tlie energies of our people to other branches. But surely none of us imagine that when these high tariff trusts and combines send goods into Canada at sacrifice prices they do it for any benevolent purpose. They are not worrying about the good of the people of Canada. They send the goods here with the hope and the exirectation that they will crush out the native Canadian industries. And with the Canadian industry crushed out what would happen ? The end of cheapness would come, and the beginning of dearness would be at hands. Artificial cheapness obtained to-day under such conditions, at the expense of dearness at a very near day in the future, is not a system of which we could approve or which any of us on either side of the House could encourage. This dumping then is an evil and we propose to deal with it. Perhaps it would not be too much to say that ninety per cent of the complaints that are made to us by our manufacturers are not that the tariff is too low, speaking generally, but that this dumping and slaughtering condition exists, and that the tariff under such conditions fails to give them the protection they would desire. Well, if ninety per cent of these grievances result from dumping, we shall be prepared to deal with it to-day. We think it is in the interest of legitimate trade that this question should be dealt with. It is not the first time that Canada has set an example in matters of this kind and possibly the step we are about to take will be followed by other countries.' Our friends on the other side of the House will recognize this dumping evil as fully as and perhaps more fully than even gentlemen on this side of the House. We differ from them as to the manner in which it should be dealt with. Their remedy is a general increase of the tariff all along the line. Perhaps the}' would not go quite so far as to increase all duties, but that is the principle they suggest. A high tariff is their remedy for this evil. We object to that because we think it is unscientific. The dumping condition is not a permanent condition, it is a temporary condition and therefore it needs only a temporary remedy, that can be applied whenever the necessity for it arises.

We propose therefore to impose a special duty upon dumped goods. That special duty, subject to a limitation which I will mention, will be the difference between the price at which the goods are sold, the sacrifice price, and the fair market value of those goods as established under the customs law of the country. But this is subject to a qualification, they are subject to a limitation. If an article is sold at a lower price in Canada than it is sold in the country of production, then that will be the evidence of dumping, and the difference between the fair market

value in the country of production and the price at which it is sold-or if bon. gentlemen prefer, dumped-that difference shall constitute the special duty, within the limitations. As regards certain articles upon which our duties are low and upon which we grant protection in the form of bounties as well as in the form of duties, as respects certain of these items in the iron schedule chiefly, the limitation shall be 15 per cent ad valorem ; that is to say, that special duty shall be the difference between the fair price and the dumping price provided it shall not exceed 15 per cent ad valorem. The additional duty over and above the present duty I call the special duty, and it is so called in our resolutions. Then in case of other articles, the limit is 50 per cent of the present duty. It is a duty over and above the existing duty, and it is limited by these two conditions : In one case, or in a few cases of like character, the limitation is that it shall not exceed 15 jier cent, and in the other case it shall not exceed one-half of the duty.

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?

Mr. I@

Will the hon. gentleman state what the law is now V I thought there was some provision as to charging a duty upon the regular price in the foreign country. I am not familiar with that, and I only ask for information.

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

I shall be glad to explain to the hon. gentleman the difference between the present law and what we propose, There is a provision in the existing law that where there is ah undervaluation you can levy duty upon the true valuation. Suppose, for illustration, that an article of which the 'truevalue is if 100 is entered at $80. you can impose the duty on the whole $100. Youget therefore an extra duty in that case, if you care to look at it in thatway, to the extent of the rate of duty on the difference in value. In what we propose, you get the whole difference itself. Ifthe article is sold at $80 and if the fair market value is $100, under the lawas it stands to-day you get your duty of say 30 per cent on that extra $20.Under what we now propose yon not only get the duty on the full one hundred dollars, but an extra duty, which means the $20 itself, subject to the limitation that it shall not be greater than one-half of the duty. Thus, if the duty is 30 per cent, the extra duty, or the special duty as I describe it, cannot exceed 15 per cent, and the whole duty could not exceed 45 per cent. The principle is that we will impose as a special duty the difference between the true value and the unfair value. But we put a limitation on that, as limitations are put upon all forms of taxation. Our information is that the average of dumping in Canada represents about 15 per cent. There are some cases in which the dumping may be more and some

in which it may be less ; but from the best information we can obtain we think that the dumping averages a cut price, an unfair-price, an illegitimate price, to the extent of about 15 per cent. With the limitation that we are putting on. it is a special duty corresponding with what we believe to be the average amount of dumping. I may say there is also a special clause with regard to a possible evasion of the provision by the consignee of the goods. Under the first clause of the resolutions we empower the Minister of Customs or the collector of customs, or any other officer-my hon. friend the Minister of Customs suggests that I had better read the provision so that it may go on the ' Hansard ' at once :

That whenever it shall appear to the satisfaction of the Minister of Customs or of any officer of customs authorized to collect customs duties, that the export price or the actual selling price to the importer in Canada of any imported dutiable article, of a class or kind made or produced in Canada, is less than the fair market value thereof, as determined according to the basis of value for duty provided in the Customs Act in respect of imported goods subject to an ad valorem duty, such article shall, in addition to the duty otherwise established, be subject to a special duty of customs equal to the difference between such fair market value and said selling price : provided, however, that the special

customs duty on any article shall not exceed one-half of the customs duty otherwise established in respect of the article, except in regard to the articles mentioned in items 224, 226, 228 and 231 of schedule A, the special duty of customs on which shall not exceed fifteen per cent ad valorem.

The expression ' export price ' or ' selling price ' herein shall be held to mean and include the exporter's price for the goods, exclusive of all charges thereon after their shipment from the place whence exported directly to Canada.

The foregoing provisions respecting a special duty of customs shall apply to imported round rolled wire rods not over three-eighths of an inch in diameter, notwithstanding that such rods are on the customs free list : provided, however, that the special duty of customs on such wire rodsi shall not exceed fifteen per cent ad valorem.

I have mentioned that there might be an attempt to evade the effect of these provisions through what is called a system of consigning goods, that is to say, the manufacturer would not actually sell his goods but he would consign them perhaps to himself or to an agent in Canada. He would comply for a moment with the conditions of the customs law, and then later on the dumping process might be completed. It is thought well to guard against such a contingency from the beginning ; so while we propose in the' first clause that the customs officer shall have the power of levying this extra duty to which I refer, we * have a special clause to provide that if there be any attempt to evade these duties by the Mr. FIELDING.

method of consigning the goods, there may be an inquiry, and the Minister of Customs may be authorized to deal with these as the circumstances may require. That clause reads as follows :

If at any time it shall appear to the satisfaction of the Governor in Council, on a report from the Minister of Customs, that the payment of the special duty herein provided for is being evaded by the shipment of goods on consignment without sale prior to such shipment, the Governor in Council may in any case or class of cases authorize such action as is deemed necessary to collect on such goods or any of them the same special duty as if the goods had been sold to an importer in Canada prior to their shipment to Canada.

If the full amount of any special duty of customs be not paid on goods imported, the customs entry thereof shall be amended and the deficiency paid upon the demand of the collector of customs.

Provision is made that regulations concerning that matter may be made by the Minister of Customs, and there is a clause providing that it shall not apply to articles subject to excise duty, because they do not properly come under the conditions to which I am calling attention.

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Subtopic:   RAILWAY TRAFFIC-TONS CARRIED.
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CON

John Graham Haggart

Conservative (1867-1942)

Mr. HAGGARD.

Before the hon. gentleman leaves that subject I would like him to answer this question. Supposing an importer goes into the States and buys goods, say $100 worth, for $75. He enters them for customs duty in Canada at $100. He has bought these goods at $75, we will say, or $50. How are you going to reach that case ?

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

In that case we will inquire "what is the ordinary selling price in the United States for the consumer in the United States. The ordinary selling price in the United States will demand the true value, and the $75 that he pays will be deemed the sacrifice value, and we will tax him on $25 up to the limit I have mentioned, not exceeding one-half the existing duty.

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CON

John Graham Haggart

Conservative (1867-1942)

Mr. HAGGART.

The minister does not understand me. The importer has bought those goods at a proper price, at one-half the value in the United States. How are you to know that he has purchased them at that price when he enters them here at their full value ?

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

I suppose no system we could possibly devise would not be open to some criticism. There are a thousand things in the Customs Department about which these questions might be asked, but we find the Minister of Customs and his officials have ways of discovering these things. I do not imagine that a clause of this character can be administered without some difficulty, but that is no reason why the clause should not be enacted.

I have now presented to the House all the provisions which we propose to make in relation to the tariff. The tariff is a delicate

and complicated piece of machinery which requires careful handling. It would be very easy by rash and ill-considered changes to create a serious disturbance in the business affairs of the country. We believe that in the changes -we have made, we have dealt with the matters of greatest urgency. We believe that we have gone far to meet the legitimate demands which have been presented to us for revision of the tariff. As respects the other articles in the tariff with which we have not dealt, and of course there are a great many, all I can say is that we do not claim for a moment that the tariff is perfect, but we do say that before we should enter upon a policy of numerous changes, there should be a careful inquiry and that inquiry we are prepared to make so that if there are inequalities or other defects in the tariff we shall be able to remedy them in due course.

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?

John William Bell

Mr. BELL.

In what way is it intended to make the surtax operative ?

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Subtopic:   RAILWAY TRAFFIC-TONS CARRIED.
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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

Does my hon. friend refer to the special duty that I am speaking of ?

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Subtopic:   RAILWAY TRAFFIC-TONS CARRIED.
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?

John William Bell

Mr. BELL.

No, I do not refer to that, but to the general tariff.

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

We have made no change regarding the surtax. It remains as it is at present.

Topic:   WAYS AND MEANS-THE BUDGET.
Subtopic:   RAILWAY TRAFFIC-TONS CARRIED.
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?

John William Bell

Mr. BELL.

That is the German surtax ?

Topic:   WAYS AND MEANS-THE BUDGET.
Subtopic:   RAILWAY TRAFFIC-TONS CARRIED.
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June 7, 1904