May 3, 1910

WAYS AND MEANS-TRADE RELATIONS WITH THE UNITED STATES.


House resumed adjourned debate on the motion of Mr. Fielding to go into Committee on Ways and 'Means.


CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

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

Free 396,208,008

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,

1905-1909.

Dutiable $ 269,898,081

Free 89,143,368

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.

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?

An hon. MEMBER.

Hear, hear.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

And we ought not to place ourselves by such negotiations in any position which would hamper our future fiscal action with regard to any country in the world. Especially we ought not to enter into any such negotiations as will prevent the consummation of that great ideal which Mr. Chamberlain presented to the people of the British Isles and to the people of the empire some few years ago, and which I hope may have its consummation and realization before many years are passed. I think it would be a fatal mistake for the government of this country, whatever party might be in power, to embark upon any such negotiations as would hamper or prevent the consummation of that great ideal. I desire as much as any man may desire the extension of the trade of this country, but I desire also the maintenance of our own fiscal autonomy, the maintenance of our own industries in this country, agricultural, industrial, and of every other description. I desire last, but not least, that the fiscal freedom of this country shall be so maintainea that Canada shall be at liberty at all times in the future to enter into the great scheme, or mutual trade preferences between the

mother country and all the dominions of the empire by -which the whole empire will be bound'together not only by ties of sentiment, but by ties of interest and of trade to the great good, not only of the mother country, but to the great good of every dominion of the empire and to the enormous advantage of this great Dominion of ours.

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LIB

William Paterson (Minister of Customs)

Liberal

Hon. WM. PATERSON (Minister of Customs).

I will endeavour to take a very few minutes in making a few remarks upon the subject that is before us. At the outset I would say that I regret the position that has been taken by the leader of the opposition and I Tegret his utterances with reference to the negotiations that took place between the United States and Canada to their effect. I -will not argue the question with him. I content myself with saying that the fiscal autonomy of Canada remains with Canada unabbreviated in any direction by any negotiations that have taken place. There is no danger of Canada's hands being tied unless there was a government in Canada which sympathized with his views. That might be the danger but there is not at present that government in power. Now what are the facts with reference to this case. Let us just get down to the facts and then we will understand the situation, and the leader of the opposition seems to take the same position as other speakers that President Taft, President of the United States, had the power to make a tariff which is recited in so many figures with 25 per cent plus added and that any negotiations that we had were with a view not of having Mr. Taft enact this 25 per cent but of his being allowed to take it off. The United States Congress made the ISw. President Taft did not make the law. President Taft could not make the law, and the law to-day in the United States is this: that, they have a schedule commonly called their minimum tariff with 25 per cent ad valorem added. That is the tariff of the United States today. The power that President Taft was entrusted with was that, of looking over the tariff of other nations and if he^ in his judgment determined that the relations between a particular country and the United States were favourable then he had the power to declare that the 25 per cent should be deducted from any imports from that country. President Taft did not make the law; the congress made it. The power in President Taft's hands was not to put on the maximum tariff; that is on to-day. The power put into his hands was under certain circumstances to reduce the tariff by 25 per cent ad valorem. They recognized that the tariff imposed by congress involved a consideration of the trade relations between the United States and the other nations of the world, Canada included. I

am not arguing the question. I am not disposed to disagree with the leader of the opposition that Canada has certainly greater freedom and a lower tariff than the United States. That is not the question. The leader of the opposition is not to determine the question whether Canada shall come under the maximum tariff or not. That was a question for the President of the United States to determine, and the President of the United States said that he saw that there was discrimination, that we had in some way given to some other nations more than we had given to them; and therefore he felt that he would have to have negotiations with Canada just as he had with France, Germany and other countries. I need not detail the circumstances of what took place. You know how parties came from the United States authorized to have a conference with this government; you know how that conference resulted; you know how President Taft solicited an interview with the Finance Minister. You know how he went to the United States and discussed this question with the President. I need not tell you the position the Finance Minister took nor the position the President took. The President ultimately suggested that if certain concessions were made in the Canadian tariff, the United States in return would grant to Canada the concessions of her minmum tariff. The concessions made by the Minister of Finance are now before us for consideration. What are they? What is their effect? They affect articles imported from the United States to the value of $4,814,293 on which the revenue undeT the proposed tariff amounts to $927,861.94. The estimated reduction in the duties on these articles amounts to $192,814.03. This is the amount of the concessions asked by the United States and granted by the Minister of Finance of Canada. The question has been asked: What concessions do you get in return for that? You have given away something; what do you get? Why, what a question that is to ask' Canada sent into the United States in 1909, $43,072,010 worth of dutiable goods, on which we get a 25 per cent reduction amounting to $10,768,000 in return for the concession by Canada to the United States of a reduction of $192,814.

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CON

George Eulas Foster

Conservative (1867-1942)

Mr. FOSTER.

It, is a pity the surtax had not been 50 per cent.

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LIB

William Paterson (Minister of Customs)

Liberal

Mr. PATERSON.

If the surtax had been 50 per cent and the imports had been the same, there would have been so much more reduction.

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CON

Andrew Broder

Conservative (1867-1942)

Mr. BRODER.

You do not pretend to say that .the shipper pays the duty?

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LIB

William Paterson (Minister of Customs)

Liberal

Mr. PATERSON.

Not always. Will the hon. gentleman say that the importer or the consumer always pays the duty? The

hon. gentleman knows my view about the payment of the taxation-that in some cases it is paid by the importer and in some cases it is divided. But the net result of this transaction is that there is a reduction proposed in our tariff to the United States amounting to $192,814 and in return we get from the United States a reduction in their tariff amounting to $10,768,000. If any one can cite an instance in the history of diplomacy between nations, where one nation conceded so little and gained so much, I will yield the floor to him.

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CON

Edmund James Bristol

Conservative (1867-1942)

Mr. BRISTOL.

Does the hon. gentleman consider that we could at the present time raise the duty on manufactured and other goods coming in from the United States other than the articles that 'have been dealt with under this concession?

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LIB

William Paterson (Minister of Customs)

Liberal

Mr. PATERSON.

Certainly. I understand that Canada is in a position to do what she chooses.

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CON

Edmund James Bristol

Conservative (1867-1942)

Mr. BRISTOL.

Without any risk of having the United States tariff changed?

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LIB

William Paterson (Minister of Customs)

Liberal

Mr. PATERSON.

They can judge for themselves. We do what we like and the united States will do what they like.

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IND

William Findlay Maclean

Independent Conservative

Mr. W. F. MACLEAN.

One suggestior occurs to me m connection with this matter, and I regard it as a mast important point The Lmted States is attempting tc assert a supremacy on this continent II has taken under its control all the South American republics and is more or leas dictating their policy, and is trying tc organize them into a great commercial and other union of America. It would like tc include the Dominion of Canada -in that policy, and it will steadily try in some way to assert supremacy over the tariff arrangements of Canada.

President Taft, whose name has been mentioned to-day in a speech at Buffalo on Saturday night, used the term * commercial union with Canada,' saying that it was now the policy of his government to enter upon negotiations that would look to commercial union with Canada. Commercial union with the United States means to the Canadian people, as we found out years ago, some kind of control of the Canadian tariff by the government and the Congress of the Lnited States. Canadians want nothing of that kind nor do they want anyi negotiations with the United States which will end in commercial union, or in any disruption or dislocation of Canada's present tariff policy, which is based on what? Canada s policy to-day is a national policy for Canada, and it is based on east and west lines. Our policy and our tariff has in view that in some way our object must be to make our trade move east and west. We have built all our railroads to make our trade move east and west. We have

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LIB

William Paterson (Minister of Customs)

Liberal

Mr. PATERSON.

entered into or have in view an imperial trade policy which is also based on lines of latitude, east and west lines, and the object of the United States to-day is to divert that movement and t-o have our trade move north and south. If we enter into negotiations with the United States, it will 'be to in some way change those trade lines which we have established and intend to perfect. So I regard it as a matter of the highest moment that we maintain in the fullest sense of the term our tariff independence, our fiscal independence, and that we have few if any negotiations with them on the lines of what the president said yesterday would end in commercial union. We want commercial independence in Canada, and a policy that in some way will make trade move east and west instead of north and south. The American nation sees to-day that a large portion of their population has started to move north into Canada. They wrnuld not object greatly to that it they could get a trade policy that) would make trade move north and south. They have that in view, and I trust the' government will be very careful in regard to any negotiations they may enter into with the United States for commercial! union, because the people of Canada will have nothing of that. We want our own fiscal independence asserted at all times, and never to be in the position of the South American republics, that in some way our policy may be dominated by the United States. The Secretary of State of the United States to-day is being lauded for the letter that he wrote to the government of Nicaragua not long ago. It -was the most, dictatorial piece of diplomacy I -have ever seen in connection with the history of America. That- small republic was lectured, told what it ought to do and was threatened and bullied in every way. That same thing will be attempted in regard to Canada if they think they can do it. They are lecturing all the republics to the south, and would like to dictate to U3 as to our policy, and they do wish to anticipate and to side-track if they possibly can what I call imperial trade relations between the mother country and the various dominions that make up the empire. They have as- . serted what they call the Monroe doctrine in regard to the whole of this continent. They would like to extend that- Monroe doc-, trine, whatever it is, for it is difficult to define, to trade matters as well, and, therefore, again I say our policy ought to be framed and directed to this end of con-) stantly maintaining our fiscal independence, to be very careful in regard to any relations that would end in anything like commercial union, because, as I said, the people of Canada will not tolerate anvthing of the kind, and the whole future of Canada and her relations with the empire de-

pend upon trade lines that run east and west, and not trade lines on this continent^ that run north and south. If we assert that principle Canada will continue to grow, the national policy will be vindicated and this country will be united. The moment you cause the trade lines to

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Motion agreed to, and House went into committee on the resolution.


CON

David Henderson

Conservative (1867-1942)

Mr. HENDERSON.

I hoped that the Minister of Finance would give some information as to who selected the special items which are found in this resolution for negotiations between this country and the United States. Were these special items suggested by President Taft or those acting with him or were they suggested by the Canadian government? I think the committee should be informed as to why these particular items were selected above all others to be dealt with. I am not complaining, as has been well said by the hon. the leader of the opposition (Mr. R. L. Borden) of the changes proposed, I shall not take exception to more than one or two of them. The changes, it is true, are slight. They may be important to some industries with which I am not familiar, but I have had no representations in regard to any except one, and therefore I do not propose to discuss them. Going back to 1895, before the present government came into power, hon. gentlemen opposite were fond ,of proclaiming that they were the low tariff party. Well, at last, after the lapse of fourteen or fifteen years, we find them proposing a reduction in the tariff, the first substantial reduction they have ever proposed. Their first step in relation to the tariff, after coming into power, was to increase the tariff very largely and on many items. But now we actually have a reduction proposed. And I am free to say that, after all the increases in the tariff that have been made time and again by the present government, I believe that these slight concessions will be welcomed, with the exception of one or two cases.

At one o'clock, committee took recess.

Committee resumed at three o'clock.

604. Dongola, cordovan, calf, sheep, lamb, kid or goat, kangaroo, alligator, and all leather dressed, waxed, glazed, or further finished than tanned, n.o.p., harness leather, and chamois skin reduced from 17J per cent to 15 per cent.

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CON

David Henderson

Conservative (1867-1942)

Mr. HENDERSON.

I notice that harness leather is included in this item. Only three years ago the government increased the duty on harness leather from 15 to 17i per cent. I am not authorized by any one to make any complaint with reference to this item, but I draw the attention of the government to something that I consider peculiar in this matter. Only three years ago it was determined that the proper duty on harness leather should be 17J per cent. During those three years, I have no doubt that men engaged in the production of harness leather have largely increased their plant, and gone to a considerable expense with a view to larger production. I know that is the case in the village in which I live, where a large harness leather industry is carried on. I have had no communication from any one, but I apprehend that a good deal of feeling will be created when those people learn that the government, without notice, has again reduced the duty from 17i to 15 per cent. I am not complaining about the reduction of duty, but in a special case like this where the duty was increased only three years ago, and where men were encouraged to increase their business with the expectation of a wider market for their output, it seems to be rather a hardship that they should, without notice, be called upon to carry on their operations in a market that is Very much limited. I do not know the extent of the imports of harness leather into this country, but I remember a tanner in my riding telling me years ago with regard to sole leather, that if the American tanners were to throw into Canada two per cent of their output it would take up the entire market of the Canadian people for sole leather. If that should be the case, or anything approximating to it, with harness leather, it might be a very serious matter.

711. All goods not enumerated in this schedule as subject to any other rate of duty, and not otherwise declared free of duty, and not being goods the importation whereof is by law prohibited, 20 per cent to 17| per cent.

Provided that duty shall not be deemed to be provided for by this item upon dutiable goods mentioned as ' n.o.p.' in any preceding tariff item.

Provided further that when the component material of chief value in any non-enumer-ated article consists of dutiable material enumerated in this schedule as bearing a higher rate of duty than is specified in this tariff item, such noil-enumerated article shall be subject to the highest duty which would be chargeable thereon if it were composed wholly of the component material thereof of chief value, such ' component material of chief value ' being that component material which shall exceed in value any other single component material in its condition as found in the article.

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May 3, 1910