Mr. R. L. BORDEN (Halifax).
I do not
intend, at this stage of the session, to make any extended remarks with regard to the
matters that were brought to the attention of the House by the Finance Minister earlier in the session. The concessions which have been granted by the government as a result of negotiations with the government of the United States are not, of themselves, of great moment, although, of course, a certain importance is to be attached to tariff changes involving, I think, about $5,000,000 worth of business. I thoroughly agree that we should use every possible effort to maintain the best possible relations with the United States with respect to the tariff and all other matters, and I think that Canada is to be congratulated upon the fact that those now in authority in the United States of America evince the most friendly possible disposition towards this country.
The attitude of this government in November and December last was a very pronounced attitude indeed. I will not quote at length from the debates which then took place, but I may say that the position taken by the government at that time was substantially this: That the negotiation and acceptance of commercial treaties with other countries by Canada was a matter with which the United States, or the government of the United States, was in no wise concerned, and that, for this reason, it was not proper or prudent for the government to make any attempt whatever to discover what would be the action of the United States government under the Tariff Act of last year. Certain possible difficulties were pointed out by hon. members on this side of the House, but they were waved aside by my right hon. friend the Prime Minister (Sir Wilfrid Laurier) and the Minister of Finance (Mr. Fielding). We observe, in look-[DOT] ing at the debate, that the Minister of Customs (Mr. Paterson) took ground on behalf of the government which, perhaps, was a little more definite than that taken by the Prime Minister and the Minister of Finance. He said, as reported on page 210 of unrevised 'Hansard:'
The United States, as I understand it, have always held that it is not to be considered a violation of the favoured-nation doctrine, if they considered themselves under it, when they choose to give to another nation certain favours for certain favours received. They have always taken that ground. In my judgment they will have to change their whole past procedure if they decide to penalize us because we have made a treaty with France in which we get advantage for advantage. They have their treaties. Would they ask from other nations, would they take away from other nations the liberty that they claim for themselves? They have a treaty with Cuba at the present time, I believe; they have had treaties that we did not participate in, a limited number, a treaty with Germany, and with France also. That has been their course all through. They have always taken Mr. R. L. BORDEN.
that stand, and I see no reason why they should depart from that policy at the present time.
So far as I understand the attitude of the United States government in the past, the language that was used on that occasion by the Minister of Customs was thoroughly justified. Any hon. gentleman who is desirous of examining the attitude and record of the United States government with respect to such matters will find them very fully set forth in a volume I have here, House documents, volume 132, part 1, No. 551; Digest of International Law, vol. 5; 56th Congress, 2nd session, 1900-1. Beginning at page 257 of this volume, the whole subject is very elaborately dealt with, and at pages 272-3, I find the attitude and record of the United States government set out precisely as indicated by my hon. friend the Minister of Customs. Therefore, the position, so far as the United States government is concerned, is this: they have held, and, I assume, they still hold, that a favour granted for a favour received is not, per se, a discrimination. More than that, they have held, even under the most favoured-nation clause that a favour given for a favour received cannot be legitimately taken into consideration; in other words they hold that any country claiming concessions from the United States under the most favoured-nation clause must be prepared to give to the United States the same favours which are granted to the United States by the third country with which the United States negotiates a treaty. The principle is, favour for favour, and that principle has characterized the attitude of the United States throughout negotiations of this kind. Now, the Minister of Finance, in dealing with this question in this debate on the 30th of March, put the action of this government upon the ground of magnanimity. He said, as reported at page 6101 of unrevised ' Hansard -
But there are victories that are dearly bought. If we bad achieved such a triumph over the United States government as I have spoken of, while, for the moment, it might have been a cause for congratulation, yet it would not make for the future advantage of the relations between these two peoples.
My hon. friend the Prime Minister (Sir Wilfrid Laurier) was a little more explicit as reported at page 6130. He said:-
Sir, the answer we had to give to the American commissioners was easy for us. We have been requested to place upon the table the correspondence which embodied our answer to the question. Their was no correspondence on this point. The answer -we had to give was known by the House even before we uttered it. The answer we gave the American commissioners was the same as we have given to parliament-that the relations be-
tween Canada and France as embodied in that treaty had nothing to do with the United States, and the United States had nothing to do with them, and could not be concerned in them.
That is a perfectly definite attitude, easy to be understood, and, in fact, it was the same attitude that was taken by this government in November and December last when this question was mooted in this House. But the Prime Minister went further. After entering into certain conjectures as to what would have been the attitude of the President of the United States if Canada had not made certain concessions, the Prime Minister continued as follows:-
Will anybody refuse to approve my words when I say that if we could avoid the possibility of such a result without the sacrifice of Canadian dignity oi interest, it was our duty to take the course which would bring about that result? At any rate, I take the position in the name of the government and in the presence of the Canadian people, with regard to the United States and every other nation we will do everything possible to maintain in the case of one and all the best rela tions consistent with the maintenance of the dignity and the interest of Canada. It was represented to us that if we would make certain concessions we should avoid the possibility of any difficulty with our neighbours, we should avoid the possibility of having this maximum tariff enforced against us. Very well, our answer was easy. We were asked: Cannot you make it easy for us, cannot you make some concessions? We asked: What are these concessions? We were told a moment ago by the hon. member for North Simcoe (Mr. J. A. Currie) that we had made a surrender. What have we surrendered? In this discussion with the United States representatives we were told: All difficulties will be overcome, all danger will be averted if you will give some concessions.
Now let us look for a moment at the tariff relations between Canada and the United States up to the time when these negotiations were entered into. We had made a treaty with France many years ago, we had made a further treaty with France which was ratified in the early part of the session. Both these treaties were in the nature of reciprocal concessions. Cana'da made certain concessions to France and France made certain concessions to Canada. According to the principle laid down by the Prime Minister, that was a matter purely and exclusively for the consideration of France on the one hand, and of Canada on the other hand, it was a matter with which the government of the United States was in no wise concerned.
Well, that is one consideration. Ttie other consideration is concerned with the respective tariff conditions between the United States and Canada. How had trade developed between the United 277 ,
States and this country, and were the duties of customs imposed by the United States against Canada higher or lower -in the aggregate than the duties imposed by Canada against the United States? Let us look for -a moment at -the two tariffs, and you will find that on every important item of merchandise or agricultural products which -might reasonably be expected to pass from -the United States into Canada or from Canada into the United States, the duties imposed by the United States upon Canadian products under the Payne-Aldrich Act were from 25 per cent to 100 per cent higher than the duties imposed by the Canadian tariff upon the products of the United States entering Canada. There cannot be any doubt about that. I do not think any man in this House would for a moment dispute that. If it were seriously disouted 1 have here a comparative statement of the duties imposed by, the United States on the one hand and by Canada on the other hand, and I would be prepared to lay it before the House in support of what I have just said. Let us look further at the figures of trade between the two countries from 1905 to 1909 :
Total imports from United States for five years, 1905-1909.
Dutiable $ 448,253,118
Total $ 844,533,126
Duty collected $ 111,511,493
Average rate of duty on dutiable goods 24-88
Average rate of duty on total imports '.. .. 13-20
Exports to United States during same period.. ..$ 392,303,187 Excess of imports over exports 452,229,939
So that the* United States imported into Canada and Canada bought from the United States during -that period of five years, no less than $452,229,939 in excess of the amount which the United States purchased from Canada during that same period. On referring to the items of the tariff, on referring to the relative duties in the two tariffs, on referring to the development of trade, certainly it doeis not seem that under the circumstances any reasonable man can find the slightest room for argument that there was any discrimination by Canada against the United States. If there is any discrimination at all in the tariff relations between the two countries, the discrimination is certainly not on the part of Canada. Now let us look at the trade returns in another respect, and to our imports from Great Britain during the same period:
Imports from Great Britain for five years,
Dutiable $ 269,898,081
Total $ 359,041,449
Duty collected $ 66,653,091
Average rate of duty oil
dutiable goods 24-70
Average rate of duty on total imports 18-87
Exports to Great Britain during same period.. ..$ 575,841,366 Excess of exports over imports 216,799,917
So we observe that the rate on dutiable goods imported from Great Britain is practically the same, just a trifle lower than the rate on dutiable goods imported from the United States; while on the total imports from Great Britain the rate is about 50 per cent higher than on the total imports from the United States. Now look at our trade relations with Great Britain during the same period in another aspect. We exported to Great Britain during that five year period $575,841,355, and we imported from that country $359,041,449. So Great Britain purchased from us during that period no less an amount than $216,799,917 in excess of the amount which we purchased from Great Britain dur-that same five year period. If any country in the world would have the right to complain of discrimination in regard to development and progress of trade, it seems to be that Great Britain would rather have that right than the United States, in view of the figures I have just read. Now look at our imports from and our exports to the United States during the past year. Our imports from the United States during the fiscal year, ending 31st MaTch, 1909, were $170,066,178 ; * our exports were $68,008,501, leaving an excess of $102,047,677 of goods purchased by Canada from the United States oveT goods purchased by the United States from Canada. During the same fiscal year our exports to Great Britain were $124,395,037; our imports from Great Britain were $70,-! 555,895, showing an excess in goods purchased by Great Britain from us of $53,839,142 over goods purchased by us from Great, Britain. In that computation goldbearing quartz nuggets, dust and silver concentrates and ore are excluded, because these go to pay the balance of trade which exists between this country and the United States or Great Britain. .
Now let us look for a moment at the; Payne-Aldrich Bill of 1909, and let ns consider what right the United States government would have to urge that the maximum rates to be iound in the Payne-Aldrich Bill could legitimately be imposed on this, country, having regard to the figures I have quoted, and having regard to any, Mr. R. L. BORDEN.
other condition which by any possibility might be brought into consideration of the whole matter. I will take section 2 of the Payne-Aldrich Bill, and I will consider what are the circumstances and conditions as set out in that Bill which could justify the United States government in imposing its maximum tariff against Canada. I will leave out the immaterial words and I will apply the various branches of this clause to the tariff relations between Canada and the United States. There are three branches of the section which are important for this consideration. In the first place, the United States would be justified, under the terms of this section, in imposing its maximum tariff against Canada if the government of Canada had imposed any terms or restrictions either in the way of tariff rates or provisions, trade or other regulations, charges, exactions, or in any other manner, directly or indirectly, upon the importation int-o or the sale in Canada of any agricultural, manufactured or other product of the United States which should unduly discriminate against the United States or the products thereof. That is the proposition, and I will ask any hon. gentleman in this House, having regard to that language, whether the United States could reasonably say that there was in the tariff conditions to which I have alluded any such discrimination as that which is embodied and referred to in the section from which I have just quoted. The second-branch of section 2 is as follows. The maximum tariff could be imposed by the United States if Canada:
Pays any export bounty or imposes any export duty or prohibition upon the exportation of any article to the XTnited States which unduly discriminates against the United States or the products thereof.
Can any hon. gentleman in this House say that there was in the tariff of Canada, in the French treaty or in anything affecting the tariff conditions between the two countries any provision which could reasonably be held by the government of the United States to come within the condition set out- in that branch of the section which I have just now quoted? Having read it over carefully and having given the best possible consideration to it, I must say that in so far as I am concerned, I cannot find anything that would have justified the United States in imposing its maximum tariff under that branch of section 2. The third branch is this. The maximum tariff could be imposed by the United States unless Canada:
Accords to the agricultural, manufactured or other products of the United States treatment which is reciprocal and equivalent.
I venture to say that the treatment which we had accorded to the United States upon the statement of the Prime Minister and of
the Minister of Finance was in every respect reciprocal and equivalent. Why was ix not equivalent? In so far as that is concerned, we do impose to-day upon the products of the United States entering Canada very much lower rates of duty than those to which the products of Canada entering the United States are subjected. The word ' reciprocal ' may be quoted. Again I take mv stand not only upon the attitude of the government in November and December last, but upon their attitude in March in this very debate. I also take my stand on the attitude of the government of the United States as set forth in their own congressional records with respect to their policy on such matters. The only possible argument which might be made on the part of the United States in justifying an attempt to impose the maximum tariff, would be the argument that there was a discrimination by reason of our having entered into the treaty with France which was confirmed at the commencement of this session. That could not justify such possible action by the United States if the attitude of this government were a correct one, and I have already quoted their words in that regard. The government of the United States would not be justified, having regard .to their own action and to the principles upon which they bad acted in such matters in the past. So that, so far as I am concerned, I am not convinced that the government of the United States were at all serious in suggesting to the government of Canada that the maximum tariff must be applied as against this country unless some concessions were made.
Now, I have said that I do not regard the concessions in themselves as of any very great moment. If it werS merely a question of granting these concessions for the time being I would not have one word to say in criticism of the action of the government in that respect. Speaking merely of the amount and value of the concessions, I say that they are of no moment at all compared with the maintenance of good will and cordiality in trade and other relations between tllie two countries. But,: let us look for a moment at the position in which the government . find themselves to-dav. Under the terms of the Pavne-Aldrieh Bill it seems to have been apprehended that the government of the United States would impose the maximum tariff unless Canada were prepared to make concessions. Well, the government did make concessions. What will be the position of this country in the future? I do not desire to use extravagant language in regard to what the outcome may be, but let us just consider one or two possibilities. How will it be possible at any time in the future to deal with these items in our tariff, the duty upon -which has been lowered as the result of these negotiations, unless the 277J
government asks and obtains the consent of the government of the United States? The outcome of these negotiations seems to me to be practically this ; the government of Canada have agreed with the government of the United States that it will not at any time in the future alter the duties of customs imposed upon those articles without the consent of the United States, unless it is prepared to have the United States instantly act against us by imposing the maximum tariff. Is there any reasonable or legitimate conclusions which can be drawn from the negotiations other than that which I have just started? As a condition, in order to avoid the imposition of the maximum tariff, you have agreed to reduce certain enumerated items of our tariff. You have not agreed to that by a formal treaty, but you have agreed to it by negotiations resulting in an informal convention which may not in the future be disregarded any more lightly than a. mere formal treaty or convention. This seems to be the practical result of it. So that, whenever the government of Canada proposes to deal with these items at any time in the future, it must have regard to its understanding with the United States, and it cannot lightly depart from the rates which are now fixed or imposed unless it first consults the United States government. But there is something further than that. I have referred only to the tariff items which have been reduced. The government of the United States has looked at our tariff as a whole. It has said, I assume, that its maximum tariff must be imposed under the terms of its statute unless Canada made certain concessions. These concessions .have been made. I have said that these particular items of the tariff cannot in future be interfered with go as to alter or interfere with the understanding arrived at with the government of the United States. But farther than that, I say that the government has placed in the hands of the United States a very plausible argument that no item in our tariff can be interfered with in future without the consent of the government of the United. States unless we are prepared to have that maximum tariff imposed. It has looked upon our tariff as a whole and has said: Grant us these concessions. How shall the government of this country deal with the tariff as a whole in the future unless it is prepared to invite from the government of the United States an expression of its wishes in that regard.
There is another illustration which I regard as being of an equally serious character with that to which I have already alluded. The government of this country has had complete freedom of action in dealing with other countries in trade matters. It was at liberty to make a treaty with France. That treaty did not involve any such condi-
tion as that which results from the negotiations with the United States. My hon. friend the Minister of Finance made that clear to us when the French treaty was being debated in this parliament. He said this treaty does not fetter us in any way in dealing w7ith our tariff, we can raise our tariff and wre can lower our tariff; the only thing this treaty requires at our hands, so far as France is concerned, is that the intermediate tariff so far as these items are concerned shall be granted to France at all times in the future. That in effect was the argument made. Suppose to-morrow we undertook to make a treaty with Germany or with Italy. The Minister of Finance has spoken of the possibility of our doing so. We may make with Germany a treaty somewhat on 'the same lines as the treaty with France. Will not the United States government the moment that treaty is concluded be in a position to come to the government of Canada and say: You admitted that the treaty with France involved a certain discrimination which would have justified the imposition of our maximum tariff unless you had made some corresponding concessions in your tariff and we likewise demand in respect to this treaty with Germany or with Italy that further concessions shall be granted to the United States. The same reason and just as legitimate grounds could be advanced as those which were urged by the government of the United States in the negotiations which have just taken place. I cannot see any distinction between the two cases. If it was a proper and legitimate argument for the government of the United States to say this treaty with France involved a certain discrimination against the United States, which must be compensated for by certain concessions in your tariff, equally the government of the United States can say, when we make a treaty with Germany or Italy, this treaty involves certain concessions, granted, it is true, for corresponding concessions, but it does involve certain concessions to Germany and Italy which we regard as a discrimination against us just as we regarded the French treaty as a discrimination against us, and therefore we invite you to make further concessions to us in such items of your tariff as may be agreed upon. If that is not the result of the situation to which the government has brought this country by its action, then I am absolutely unable to understand what is the nature of that situation, or in what respect the government have committed the country.
Now, one word more. I have spoken very briefly, and I do not know that I have made my meaning absolutely clear to my hon. friends on the treasury benches or to the House, but there is one other observation which I desire to make in concluding Mr. K, L. BOKDEN.
my remarks. It appears by the correspondence which has been brought down, that negotiations are about to be carried on between the government of this country and the government of the United States looking to the revision of the tariff in both countries with a view to the extension of trade between the two countries. As 1 have already said, no one Is more desirous than 1 am for good relations respecting trade and all other matters between this country or the empire as a whole and the United States of America. But we have otheT considerations. We have the consideration of Canada and of Canada's relations to the empire as a whole. 1 am one who believes that the British empire is not very well organized. It is more a disorganization than an organization to-day, having regard to the utter absence of any effective co-operation up to the present time in trade, and having regard also to the lack of organization up to the present time, or almost up to the present time, in matters of defence. Now, I believe it to be the desire of every man in this country who has considered this subject with any attention that we may at some time in the future, and I hope in the not too distant future, bring about a system of mutual trade preferences within the empire, and I would say to the gentlemen upon the treasury benches that any negotiations which they enter into witli the United States ought to be subject to that consideration above all.