November 30, 1909

CO-OPERATION.


Mr. LLOYD HARRISS (Brantford) moved for leave to introduce Bill (No. 50) respecting co-operation.


LIB
LIB

Lloyd Harris

Liberal

Mr. HARRIS.

I am introducing this Bill for the reason that our present laws do not appear to provide for the incorporation and supervision of co-operative societies. My hon. friend from Jacques Cartier (Mr. Monk) introduced the other day a Bill for the purpose of providing for the incorporation and supervision of co-operative societies confined solely to the loan and credit aspect. I had intended providing in my Bill for the incorporation and supervision of trading societies only. However, after consideration and consultation with my hon. friend, I thought it better to introduce a Bill which would cover both kinds of societies. Therefore the Bill I am introducing provides for the incorporation and supervision of all kinds of co-operative societies.

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Motion agreed to, and Bill read the first time.


THE FRANCO-CANADIAN TREATY.

?

Hon. W. S.@

FIELDING moved second reading of Bill (No. 12), respecting a certain supplementary convention between His Majesty and the president of the French Republic. He said: Mr. Speaker, the purpose of this Bill is to obtain parliamentary approval of a small amendment which the government have agreed to make to the Franco-Canadian Treaty of 1907; an amendment which, from the Canadian point of view, is not of very great importance, though I will not say it is of no importance, but which nevertheless is somewhat important from the point of view of the French authorities, inasmuch as it served to disarm hostility which was manifested in the French Senate towards the approval of the treaty. I do not deem it necessary to discuss the merits of the main treaty. That measure was brought before parliament in the session before last, it was fully considered and fully discussed, and the House, by something approaching a unanimous vote, decided that it should receive approval. In due course that treaty was approved by the Senate of Canada, and an Act of parliament was passed accordingly. The treaty was approved within a reasonably short time by the French Chamber of Deputies, a body which corresponds to our own House of Commons. It then 23

passed to the French Senate, and there considerable opposition arose, particularly from prominent gentlemen identified with the agricultural interest of France. They were very much alarmed by the concessions which were being granted by France to the Canadian farmer-possibly needlessly alarmed, certainly in some respects. At all events, the agricultural interest of France is one of the utmost importance, and any suggestion that the French government were agreeing to measures which would prejudice the agricultural interest found many listeners, and for some considerable time the treaty was delayed in the Senate. The French government were most loyal to the treaty which they themselves had made. By every reasonable effort within their power they were willing to have that treaty approved; but they had to realize the difficulties which were encountered in the French Senate. When I had the opnortunity of discussing the matter with the French authorities in Paris, it was suggested by the French ministers that if we could make material concessions in the agricultural schedule, it would help them very much to obtain the approval of the treaty. I did not feel that I would be justified in consenting to any considerable change. As the negotiations proceeded, it became apparent that the item of cattle was one as respects which our French friends were particularly alarmed. Some paragraphs appeared in the French press about that time to the effect that certain American organizations were about to establish huge slaughter houses at one of the French ports, and it was expected that there would be a large importation of fat cattle ready for the butchers, and this would affect materially the French agricultural interest.

In the discussion, finding that the point was one which was regarded by the opponents of the treaty in the Senate as of the utmost importance, I thought we could find in it a solution of the difficulties between France and Canada in the matter. I found on inquiry that Canada had not been doing any considerable cattle . trade with France, practically none, and that whatever we might hope for the future, it was not likely that we could in the early future send fat cattle to France ready for the butcher. And so, after duq consideration, finding that the concession in regard to that particular class of things, would help to secure the French approval of the treaty, would be very agreeable to the French government, and would disarm to a very large extent, though not wholly, the opposition which had arisen in the French Senate, after communicating with my colleagues, I agreed that to the four items in the treaty which dealt with cattle we should add the qualifying words, ' to the exclusion of fat cattle ready for the butcher.' That is

to say, we still reserve the right to send in under the French treaty cattle which are not ready for the butcher, but which are to be finished in France before they pass to the slaughter house. The concession, as I have said, was one of only moderate importance from the Canadian point of view, but was regarded as a very important one by the French authorities, and was the means of disarming hostility to the treaty and ultimately obtaining the consent to the Senate thereto. We having consented to make this concession, a question arose as to what should bevthe method of determining the line of demarcation between fat cattle, which should be excluded and other cattle, which would be entitled to the privilege of .the treaty. Our French friends proposed that the line of demarcation should be found by indicating what they called a percentage of neat meat, that is to say, the percentage of meat which an animal would produce ready to be placed in the butcher's stall, and excluding hides, horns and the various other elements which hon. gentlemen more familiar with the cattle industry will readily understand. While the proposal was not unreasonable in itself, I felt that it was a method not understood by our Canadian farmers, and that perhaps it would not be the best method of establishing the line of demarcation. Besides there was this further difficulty which arose in our minds, that if we should make a mistake by having a percentage of neat meat established which experience would show was not a correct one, which would be perhaps unfair to Canada, it would nevertheless be so definitely fixed in the treaty that we would have no right to revise it.

-Mr. E. L. BOEDEN. Is this test capable of ascertainment while the animal is alive?

' Mr. FIELDING. Yes. Expert buyers in the French market are accustomed to estimate, from the general appearance of the animal as it passes before them, and I have no doubt with a fair degree of accuracy, what percentage of neat meat that animal will realize. It is done in practice in France; but, as I thought the method was not understood by our Canadian people, and there was a bare possibility that in fixing the percentage at that time an error should be m&de, I thought it well that the percentage should not be definitely fixed in the treaty. And so, I proposed to the French authorities that instead of defining it in the treaty, we should declare in general terms that what was meant was that fat cattle ready for the butcher should be excluded, and that we would leave the interpretation of that to the French government. Necessarily each case would have to be determined promptly. If a shipment of cattle should arrive, it would be neces-Mr. FIELDING.

sary to determine that point at once, and we recognized the right and propriety of the French government deciding that at once, and that their decision should be final. But, we said, if it should appear at any time that the decisions you are giving on that question were unreasonable and unfair and at variance with the spirit of the treaty, then we shall ask the privilege of going over to your French office and making our representations and relying on the French government to correct any error that may be found. The French authorities agreed to accept the amendment in that way, and we were strongly of the opinion that, while we are leaving the matter for the moment absolutely to the judgment of the Department of Agriculture of France, we might rely on the French government receiving our representations and correcting any error that might be found in the conclusions reached. Added to the treaty there will be found an exchange of letters which practically form part of the treaty. I beg to be permitted to read these two, because they contain the whole case on that point. The first is from myself to Mr. Euau, Minister of Agriculture of the French Eepublic.

Paris, February 8, 1909.

Sir,-As a result of the recent negotiations between members of the French government and myself with a view to the recasting of schedule A of the Franco-Canadian Commercial Convention of the 19th September, 1907, by the, exclusion, from the list of the Canadian products enjoying the benefit of the minimum tariff, of animals in fat condition for butchering, I have considered your suggestion to adopt a percentage of neat meat as a line of demarcation between animals to be admitted under the minimum tariff and those three excluded therefrom. I am of opinion that it would not he expedient to include this modus operandi in the convention itself, as it touches only the methods of carrying out what is proposed.

I would prefer that the proposed formula be inscribed in our agreement in general terms indicating our mutual understanding, and I would leave with the French government the duty of giving to this complementary clause a fair and reasonable interpretation by means of customs regulations. We would have no objection whatever to the adoption by the French authorities of the percentage method, should they prefer that method, as it could he changed or modified in case a trial of it were to demonstrate that it did not give satisfaction, and the Canadian government would reserve then to itself the right of making necessary representations to your government.

I am, sir, with the highest regards,

Yours very truly,

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W. S. FIELDING.


That letter was replied to in the following terms by the French Minister of Agriculture, Mr. Euau: Paris, January 8, 1909. Excellency,-The object of the negotiations which have been proceeded with for these last fen- days between yourself and the French government was as far as my own department is concerned, to modify schedule A of the Franco-Canadian convention of September 19, 1907, by the exclusion from items 4, 5, 6 and 7 of the list of the Canadian products admitted to the benefits of the minimum tariff, of animals in fat condition for butchering. By your letter dated January 8, 1909, you were good enough to let me know that, without rejecting the suggested system of a fixed percentage of neat meat as a fair line of demarcation between animals enjoying minimum tariff and those submitted to the general tariff, you will prefer that the proposed change should be inscribed in our agreement in general terms; and you add to this that you would leave to the French government the duty of interpreting this clause as fairly and reasonably as possible by means of regulations. In case of the adoption by the French authorities of the percentage system above mentioned, the Canadian government would make no objection to said adoption, it being understood that should the experiment be found unsatisfactory, your government would reserve to itself the right of making the necessary representations to the French government. In answer to your communication, I have the honour to inform you that we are fully in accord as to the following formula to be used in schedule A of the convention of September 19, 1907, as to the Canadian products enjoying the minimum tariff:



No. of the French tariff products. 4. Oxen (1). 5. Cows (1). 6. Bulls (1). 7. Bullocks, steers and heiffers (1). To the exclusion of animals in fat condition for butchering. With regard to the system to be applied in order to ascertain what animals are to be subject to the minimum tariff and what to the general tariff the French government reserves to itself the right to follow the method of the percentage of neat meat or any other fair and equitable method, it being *well understood, that, in order to avoid any dispute between the importers and the French government, the condition of the animals, as to the matter in hand, shall be determined by duly sworn special agents of the ministry of agriculture, whose findings shall be final. I beg to add that, in the unlikely event of experience founded on a series of well authenticated instances, demonstrating to our two governments that the method adopted by the French government is defective, the governments of Canada and France would jointly seek another modus operandi. May I beg you kindly accept, Excellency, the assurance of my high esteen. (Sgd.) J. RUATT, The Minister of Agriculture. So it was agreed that we should make this concession and that, rather than adopt at once the French system of percentage of neat meat, we should agree to leave the matter in the hands of the French government, accepting their assurance that it would be administered in good faith, and that, should any difference arise, we might. 23} rely on a friendly adjustment between the two nations. So far I have dealt with all that is in the treaty. The treaty itself contains only a few lines, and these letters annexed are to be read as part of it. There is another point to which attention was drawn and which was dealt with, not in the treaty itself, but in a friendly correspondence. It touches the question of direct importation. In the main treaty, article 8 reads as follows: To enjoy the benefits of the aforementioned tariff advantages, products originating in France, Algeria, the French colonies and possessions and the territories of the protectorate of Indo-China, shall be conveyed without transhipment from a port of those territories. That is from a French port-or from a port of a territory enjoying the preferential tariff or intermediate tariff into a sea or river port of Canada. The latter part of the clause corresponds exactly, in reversing the order, and provides that a Canadian product shall be conveyed for transhipment from a Canadian port or from a port in a country enjoying the French minimum tariff to a port in France. When the main treaty was under consideration, myJion. friend from Jacques Cartier (Mr. Monk) asked what interpretation we put on that clause, and my answer was to the effect that, in the absence of any qualifying or modifying words, where reference was made to a country enjoying the intermediate tariff or a country enjoying the preferential tariff, we thought it would be held to mean a country enjoying the whole of such tariff.


CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

What article is that?

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

Article No. 8. We did not take any formal legal opinion on the point, but I gave at the time what seemed to be the general impression and what seemed to he the ground we, acting for Canada, should properly take. The question became of interest to Switzerland. Switzerland was a little impatient, hardly willing to wait until the treaty was ratified in due course, and desiring that an interpretation should be given the clause at an early date, made application, through the diplomatic channels, to know the Canadian interpretation. Switzerland is an inland country, ultimately determined to be one of the nations entitled to favoured nation treatment, and she was interested in knowing from what ports she should send her goods, these goods being of the same class as mentioned in the treaty. We did not, at that time, think it was desirable that we should undertake to interpret that in any formal and official way. We thought that if the matter was in doubt it ought to he the subject of negotiation with the French authorities before we should give any final

interpretation. What we understood from the reading of the treaty was that Switzerland might send her goods to Canada by way of England, because England enjoyed the whole preferential tariff. We were asked if we would care to give an expression of opinion. Having first pointed out that *as the treaty had not been completed, was not yet ratified and had not gone into operation, we were indisposed to come to any official determination on that point and lay it before a third party, yet, in answer to the request of the imperial authorities, we stated the view which we had expressed in parliament in answer, if I recollect correctly, to the question of my hon. friend from Jacques Cartier (Mr. Monk). That interpretation was accepted and approved by the British government with, however, the remark that the point was not free from [DOT]doubt.

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LIB

Frederick William Borden (Minister of Militia and Defence)

Liberal

Mr. E. L. BORDEN.

What was the nature of the answer to the hon. member for Jacques Cartier?

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

The answer was to the effect that the words 'a country enjoying the benefits of the preferential tariff'-or the intermediate tariff or the minimum tariff-would mean in each case a country enjoying the full tariff. We gave the interpretation that we thought, from the Canadian point of view at the time, we should uphold, and the imperial authorities concurred in that interpretation, but with the remark that the matter was not free from doubt.

The treaty having been disposed of by the French Senate, it had to go back to the French Chamber of Deputies which had passed the main treaty, but had to deal with the supplementary treaty. Again some difficulty arose with regard to the position of the treaty. Although the Chamber of Deputies had accepted the main treaty, the discussions which had taken place in the Senate had attracted attention. Very influential members of the Senate had taken strong ground against the treaty, and when the supplementary treaty had to come before the Chamber of Deputies considerable opposition was developed there. That opposition was, however, ultimately overcome, and the Chamber of Deputies passed the treaty. So that all that remains is that the parliament of Canada shall give its approval to the supplementary treaty, and then will follow formal ratification.

Linder later negotiations which, in some cases, did not take the form of correspondence, though in some cases they did, our French friends raised the same question that had been raised by Switzerland. We presented the same view that we presented to the parliament of Canada-that shipment of goods by way of a country under the preferential tariff would mean a country Mr. FIELDING.

enjoying the whole preferential tariff, and so with respect to the other tariffs. But the French authorities took a different view. They pointed to provisions in their own customs regulations, founded,_ necessarily, upon the French statutes, showing that they were in the habit of interpreting a substantially similar clause, so that where a third country enjoyed a favourable tariff as respects the particular article to be exported, that covered all the conditions. In other words, they argued that if, for example, France wished to send her products by way of any other country which had the benefit of the Canadian intermediate tariff as respects the particular item referred to, she should be free to do so.

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CON
LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

Yes, that was the point. Our contention, up to a certain point, was that, unless the country had the whole tariff, it could not claim that privilege. As I have said, they were able to show that, under somewhat similar conditions in the administration of their own custom laws, they recognized the principle that if there was favourable treatment as respects that one article the privilege should be given in relation to that article as though they had the benefit of the whole tariff. They urged us very strongly to agree to that. From our own point of view it did not seem a matter of very much importance. What we were aiming at was the cultivation of direct transatlantic trade. We desired the French goods to come direct from France to Canada. If they were to come through any other country, we would naturally prefer that they should come through Great Britain. But if the goods should come through the ports of any European country having a treaty with Canada, they would still be direct trans-atlantic shipments. While we preferred they should come by Britain, the vital matter, according to our views, was that the goods should come direct across the Atlantic to a Canadian port. According to our interpretation, Switzerland, being entitled to the benefit of the treaty, could only send her goods by way of Great Britain, because Great Britain alone had the complete preferential tariff. Under the interpretation which the French claimed, and which Switzerland was anxious to have, Switzerland could send any article under the treaty by way of Havre, a French port, because under our treaty France would have the benefit of the intermediate tariff as regards that article. If, for instance, Switzerland wanted_ to send a parcel of silks, under our first interpretation she would have to send it to a British port; under the later interpretation she could send it to a French port, because France has the benefit of our intermediate tariff as regards that article. Under either

interpretation, that would be accomplished which we principally desired-direct trade with Canada. As France thought it important, and as it did not seem to affect our policy in any material way, we came to the conclusion that we would accept the French interpretation. But I thought that, in view of what had occurred in this parliament, I should point out to the French government that we had given a different interpretation in parliament and that therefore the agreement I was disposed to make with them would be subject to the reservation that if on inquiry we found further legislation was necessary we should make the matter subject to revision by the parliament of Canada. However, on my return from France, having brought the matter to the notice of the Department of Justice in a more formal way, we asked if further legislation was necessary to enable _ us to accept the interpretation of that clause respecting direct shipment. AfteT consideration, the department advised that it was not necessary to legislate on the question, that if the customs authorities saw fit to give that interpretation, they could do so and still be within their legal rights. Therefore, we have not. proposed legislation on this point. It will be observed that the British government accepted our interpretation of the clause given in the first place as the correct one, though, at the same time, intimating that the' point was not free from doubt. Seeing that it was a point to which our French friends attached importance, and that it did not affect, our chief purpose of having direct transatlantic trade with Canada, we decided to accept that, interpretation, and, under the advice of the Department of Justice, we have concluded that that can be done without further legislation.

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CON

George Eulas Foster

Conservative (1867-1942)

Mr. FOSTER.

One word before the minister sits down. He has given the theoretical part of it, will he kindly make the argument concrete and show us in how many wavs, that'is. bv how manv routes, French goods can get into Canada,*- and by how many routes Swiss goods can get into Canada and still come under the treaty?

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

Bv a route through any country which has a favoured-nation treaty with Great Britain, and a list of such countries has been given to the House. Practically it is onlv the countries having well known sea-ports, but any countries possessing a favoured-nation treaty with Great Britain will receive the benefit of the French treaty.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

I understand that a favoured-nation treaty with Great Britain would' be of no importance at all in connection with this treaty unless it extended to Canada, would it?

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

Although we go through the form of passing legislation to give

effect to it, it has been held by the imperial authorities that these favoured-nation treaties apply to the whole British empire, and consequently apply to Canada.

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November 30, 1909