April 18, 1916

BOUNTIES ON ZINC.


On motion of Sir Thomas White (Minister of Finance), the House went into committee, Mr. Rhodes in the chair, to consider the following proposed resolution: Resolved, that it is expedient to authorize the payment out of the Consolidated Revenue Fund of a bounty of two cents per pound on zinc or spelter, containing not more than two per cent of impurities, produced in Canada from zinc ores mined in Canada; provided the standard price of zinc or spelter in London, England, at the time of production is less than £36.19.3 sterling per ton of two thousand two hundred and forty (2,240)pounds, when the bounty payable shall be an amount equal to the difference between such standard price per ton and £36.19.3 per ton. Further provided, that in no



event shall bounty be payable when the price received for zinc or spelter by the producer is eight cents or more per pound, and that no bounty shall be payable on zinc or spelter to the producer during the continuation of the war, and in no event on zinc or spelter produced after July 31, 1917. Further resolved, that the total amount payable under the provisions of any Act founded on these resolutions shall not exceed the sum of 3400.000. iSir THOMAS WHITE: It may be helpful to the committee if I give a brief explanation. Provision ie made for the payment of a bounty not exceeding two cents a pound on zinc or spelter produced in Canada from zinc ores mined in Canada. The legislation will not apply when the price received for zinc by the producer is eight cents or more per pound. It will not apply during the period of the war, or after July 31, 1917. That is to say, the legislation is confined to the period between the termination of the war and July 31, 1917. This legislation is in pursuance of a promise which was given by the Government in August of last year to producers of zinc in Canada with the object of providing for the refining of pure zinc in the Dominion. An extraordinary condition prevailed at that time, and, as a matter of fact, still prevails. After the outbreak of the war an unusual demand arose for zinc. To give the committee an idea of the character of that demand, I may say that in 1914 the export of zinc in pigs, bars, plates, and sheets from the United States amounted to only 4,000.000 pounds, whereas, in 1915, the exports had risen to 256.000. 000 pounds; that is to say, the demand for zinc from the United States, where the zinc of this continent has been refined, was increased sixty-fold in a period of one year. The price rose from about 8 cents a pound, which was, I think, the price prevailing before the war broke out, to 40 cents a pound in 1915. It was brought to our attention last summer by the Shell Committee that the Canadian manufacturers of brass cartridge cases were unable to obtain pure zinc for their purposes. At that time no- zinc was being refined in Canada, with the exception of that being produced by a small experimental electro-lithic plant at Trail. The output of that plant was about one thousand pounds, or half a ton a day. As the result of the shortage in zinc, and of the inability of our manufacturers to obtain the necessary supplies for the manufacture of brass cartridge cases, there was a great delay in their output, and the matter became quite serious. We took it up with the view of seeing whether any action on our part would prove an incentive to the zinc producers of Canada, the Consolidated Mining and Smelting Company at Trail, and the Weedon Mining Company of Quebec, and others, to establish plants to provide zinc in Canada at reasonable prices for the purposes of the Shell Committee. After several1 conferences the Government determined upon this legislation, and, accordingly, a promise was given to the zinc producers in Canada. As the result of that promise, the Shell Committee was enabled to make a contract with the Consolidated Mining and Smelting Company of Trail for 8,000 tons at t'he price of 15 cents per pound, with an option upon 8,000 additional tons at a price of 12J cents per pound. In consideration of the undertaking which the Government gave to introduce this legislation providing for a bounty, the Consolidated Mining and Smelting Company undertook to put in the necessary plant to produce zinc at the rate of 25 tons per day, beginning not later than five months from the date of the acceptance of their offer by the Shell Committee. In a word, therefore, the result of the promise which was given by the Government to introduce this bounty legislation, is ' that the Shell Committee, and the manufacturers of brass, cartridge cases in Canada, have been enabled to obtain domestically a supply of pure zinc at 15 cents per pound at a time when pure zinc was selling in the United States at 40 cents per pound. I think that the price of pure zinc in the United States to-day is about 30 cents per pound. I do not think that any further explanation is necessary, as the resolution is fairly plain in its terms.


LIB

Emmanuel Berchmans Devlin

Liberal

Mr. DEVLIN:

In view of the promise of the bounty, have many manufacturers given the assurance that they will manufacture this smelting zinc?

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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

There were two companies I have mentioned, the Consolidated Alining and Smelting Company at Trail, and the Weedon Mining Company in the province ,of Quebec. I am not aware at present of any others, but we made the announcement broadcast through the press, and sent a copy to all those engaged in the zinc mining industry in Canada.

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LIB

George Perry Graham

Liberal

Mr. GRAHAM:

There will not be much paid under this legislation at present?

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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

I am glad my hon. friend has raised that point. I overlooked

mentioning the reason why it was considered necessary that this bounty should be given. It was this: the producers of zinc were unwilling to establish an expensive, plant in view of the possibility of the war coming to an end soon. They were quite content with the price which could be obtained during the war, but what they feared was that if the war should come to an end in the early future, the price of zinc would at once drop and an expensive plant would become unprofitable. They were content to establish their plant should the war last as long as the 1st of July, 1917; so that the contingencies which they had in mind have been provided for in the resolution before the Committee./

Mr, DEVLIN: Did they ask for any advance on their contract?

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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

At the outset-I am speaking now from recollection, but I am certain that I recall accurately-there was a proposal that the Government should make an advance for the purpose of defraying a part of the cost of the plant. That was not regarded favourably, and the bounty resolution took its place as being more satisfactory.

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LIB

John Howard Sinclair

Liberal

Mr. SINCLAIR:

Is it understood that the output of the mines, or the product of this industry, will be confined to Canada or to the use of the Allies during the war?

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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

The legislation is general in character, but the Shell Committee was, as I stated, able to make a contract for 8,000 tons at 15 cents per pound at a time when the price in the United States was 40 cents per pound, with an option upon a further 8,000 tons at a price of 12i cents per pound. I was assured by the Shell Committee at the time that the arrangement which they had made was perfectly satisfactory to them, and, so far as I have been able to learn, there is now no danger of the manufacturers of' brass cartridge cases being short of pure zinc.

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LIB

Wilfrid Laurier (Leader of the Official Opposition)

Liberal

Sir WILFRID LAURIER:

We had legislation of this nature some years ago. Has it expired?

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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

My right lion, friend is probably thinking of lead.

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LIB

Wilfrid Laurier (Leader of the Official Opposition)

Liberal

Sir WILFRID LAURIER:

Did that legislation not apply to zinc also?

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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

My right hon. friend may be right, as his memory is usually good, but I do not recall that it

applied to zinc. There is legislation relating to lead very similar in character to this; that is to say, it provides for a bounty on a sliding scale.

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LIB

George Perry Graham

Liberal

Mr. GRAHAM:

As I understand it, this merely guarantees to the producer a certain price to a certain date; that is, that the zinc will not go below a certain price. If it remains at a price of over 8 cents per pound, the producer will get no bounty, but should the war cease before 1917, and the price recede to 6 or 7 cents per pound, he would get a bounty.

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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

Yes.

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LIB

John Gillanders Turriff

Liberal

Mr. J. G. TURRIFF (Assiniboia):

I would ask if this is the beginning of a movement on the part of the Government of Canada to deal with the question of handling Canadian ores in Canada, or is it merely a small matter dealing with the production of zinc and guaranteeing a certain price to the zinc manufacturers. It seems to me that this war has shown us that we are very much behind the times in Canada in our general methods of dealing with our mineral products. There is no question that Canada is one of the richest countries in the world in respect to minerals, and there is no doubt also that during the years that we have been mining and shipping our ores abroad, chiefly to the United States, to be handled, we have lost millions and tens of millions, and, I suppose, hundreds of millions of dollars.

Consider what has occurred in the Cobalt country since the camp was discovered some twelve or thirteen years ago. There was charged, on the average Cobalt ore, over $200 per ton to the men who took out the ore and shipped it. There were no proper facilities for dealing with the ore in Canada. The mine owners had to pay the freight on the ore to New York and he had to take practically what was given to him. All the Cobalt ore carried a large percentage of nickel and cobalt, both of them extremely valuable metals, and in most cases the owner of the ore not only did not get anything for the nickel or the cobalt, hut if there was more cobalt than nickel, or more nickel than cobalt, he was paid nothing for either, but he was fined so much a ton because the refiners claimed that it cost more to smelt or refine the silver product on account of the presence of these other metals. In many cases the loss of nickel and cobalt amounted to a great many dollars per ton. There is absolutely no shadow of a question that the two big smelt-

ing concerns in the United States saved all these by-product's and got an extra profit out of them over and above the large amount that they charged the owner of the ore for taking out the silver. In most cases the ore would run from 1.500 to 6,000 ounces of silver to the ton, but the owner only got 93 or 94 per cent of the silver, and he did not get anything at all for the by-products in the ore, which in many cases amounted to $5 or $10 per ton.

I would like to take this opportunity to point out that something should be done to improve this situation. It is a matter worthy of consideration as to whether the Government should not give some assistance to put the necessary plants up in Canada where all Canadian ores could be treated without having to send them abroad. The same thing applies to nickel, only very very much more so. I 4 p.m. was taken to task in this House because I make' the statement some weeks ago that our nickel ore produced by the Canada Copper Company, a subsidiary of the American Nickel Company, was sent in the form of matte to New Jersey and there refined by the International Nickel Company, which is largely a German concern, and that a great deal of our nickel was going to our enemies during this period of war. I pointed out that we had no possible control and that we could not control the nickel once the ore, or matte, went outside the boundaries of Canada. The hon. the Solicitor General (Mr. Meighen) took me to task for the statements I had made, sayng that they were all wrong and that I was wrong in particular as to the amount of money that the International Nickel Company was making. My hon. friend the Minister of Finance (Sir Thomas White), a few days after that, confirmed to a large extent my words, because he showed that the International Nickel Company was making twice as much as the Solicitor General had stated. I want to draw the attention of the House to something that was said in the British House of Commons on this subject' at that time. I have here a sessional paper containing speeches delivered in the British House of Commons dated January 18, 1916. I want to read one or two-short extracts from a speech made by Mr. Hewins, who is a very prominent member of the British House, and who was a member of a commission appointed to look into this matter some time ago. Here is what he says in part about the way in which our ores are handled:

Let me take one important question which plays a very important part in the whole scheme of German finance-I mean the control of our raw material and especially of the shipment of the ore produced in the British Empire. X do not wish to go into any lengthy details about this important scheme, but whether you take the zinc concentrates in Australia, nickel in Canada, or the whole series of metals, I am really giving way no secret when I say they are virtually controlled by German syndicates and have been for years. One of the most effective branches from that point of view of German activity for many years past, in support of the European system which I have described, has been to provide for the security of her manufactures by securing this control, and everybody knows at the present time that, if you once smash the power of these German syndicates, you inflict a most severe blow, not only upon the economic power of Germany, but in particular on those financial methods which they have applied and still apply to support ' their policy.

I believe the Government are fully acquainted with the development of this important question in the Empire. If I am not mistaken, as long ago as last December twelve months, the Australian Commonwealth approached the Government on the subj >ct. I am speaking entirely from memory, but it certainly was something like that. In Canada measures have been taken in regard to this particular case, and I do suggest that one of the first things the Government might do is not to act alone but to act in consultation and collaboration with the Dominion Government to see that these resources of the British Empire, of which in many cases we have almost a monopoly, are no longer exploited in the interests of our enemies, and we should tell the Germans quite frankly that this state of things is going to cease once and for all. I agree no nation can say, or would dream of saying, that we will for all time make a monopoly of the raw materials which we produce in our Empire. We cannot say that but I think we are entitled to say that the resources of the British Empire shall be held, controlled, manipulated and used by Britishers first and foremost. Very few things would excite more interest and enthusiasm in the Empire than a definite resolve on the part of the Government that at once and forthwith steps shall be taken to secure that result.

If that does not confirm every word, and more than every word, that I spoke in regard to our nickel going to the United States, its going to Germany, and its being controlled by Germans, then I do not know where you could get more confirmation. I thought that when we were on this subject it would be a good time to bring this matter to the attention of the Government. I am doing it partly for the. purpose of proving that what I said a month ago was practically correct, but more particularly, that a better state of affairs might be brought about in Canada, so that in the event of another such war as 'this breaking out we should not be in the position we are in to-day. Minerals are of the utmost importance in manufacturing war material of different kinds, and

if, when this war broke out, we had prevented our Canadian nickel going to Germany, prevented them from using it in making battleships, big guns, small guns, and rifles, we should have been in a position aflmost to cripple Germany. But we were not in that position until a month or so ago, when after I brought this matter up in -the House the Government stopped, to a certain extent, the export of nickel to the United States. But the Government should go further. This war will be over, I hope, in the near future; it will be over before very long, anyway, and we could take this step now as a war measure. Now is the time, wh&n we have an' absolute monopoly of nickel, to see that .it shall be refined in Canada, and if all' our nickel was refined in this country we should be able to control its export in time of war. Assistance of this kind could be given, by the Government at a very small cost, and I trust the Minister of Finance will take the matter up with his colleagues, and see if the Government cannot make a beginning along the lines I have suggested.

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CON

Robert Francis Green

Conservative (1867-1942)

Mr. R. F. GREEN (Kootenay):

I desira to say just a word or two an connection with the proposal for giving a bounty on zinc produced in the Dominion of Canada. Some twelve years ago, I think it was, the Government then in po-wer, under the leadership of Sir Wilfrid Laurier,were wise enough to introduce a measure granting a bounty on lead produced within the Dominion. The giving of that bounty has had a very beneficial effect on the lead industry of our country. It has given the producer the assurance of stability so far as the market is concerned, and it has not cost the Government a great deal. If my memory serves me right, the amount that was originally set aside for bounty purposes was $5,000,000, and the period within which it could be earned was five years. At the end of the five years during which the lead producer was probably experiencing the worst time since the bounty was first given, something like half the $5,000,000 Was still unearned. The period was extended for another five years, and at the end of that time there was -still left just a little short of $1,000,000. The present Government extended the period still further, until the balance of the bounty should have been earned. I repeat, the bounty has been of great benefit to the lead industry in this country. The -Government's promise to give -a bounty upon zinc has also had a beneficial effect, enabling zinc producers to establish works for the production of zinc in Canada. I trust the -Government will see its way clear at the expiration of this period, if not before, to devise some scheme to enable us to establish zinc production works in 'Canada large enough to refine all the zinc produced within the country. When those works are established we shall, if they are of the proper kind, be able to compete in the markets of the world. We are producing to-day a certain amount of refined zinc in 'Canada, and will -continue to produce it just as long as the prices remain high, -say over eight cents a pound. I am sorry to say, however, the present method of producing zinc in -Canada is not so economical as the method in which it is produced in the United States. It has been produced in the past in the United States, Belgium and Germany, by what is generally known as the Belgian process.

Our zinc has been produced by the elec-trolytiq process, -which will always be more expensive than the Belgian process. The Belgian process is the cheapest known process in the world to-day. As I understand it, the zinc is driven off in fumes; those fumes are gathered in long flues of one description or another, and the old bag process enters very largely into it, the flues being choked with ordinary bagging, in which the zinc is collected as the fumes cool. That is a very economical way, and will always be cheaper than the electrolytic process. I hope the Government will find some way of assisting the refining of zinc in this country, so that eventually all the zinc we produce will be refined in Canada, and I trust with the hon. member for Assiniboia that the same policy will be followed with regard to nickel, copper and other metals. The hon. gentleman mentioned that producer^ at Cobalt lost when a certain percentage of different ores were present in their first raw product. I am afraid that will always enter into the question. Most of the lead, silver, zinc and other ores produced in my part of the country were at one time treated at the large smelters in the United States, where they were treated on the same basis as the United States ores, and the situation, so far as zinc ores are concerned, is very similar to that outlined by the hon. member for Assiniboia. I might say that our lead ores contain a certain percentage of zinc, iron, silver-lead, and other metals, and any of these lead ores containing over 10 per cent of zinc are penalized to the extent of 50 cents a unit per ton, and as

the hon. member for Assiniboia pointed out with regard ,to nickel, not only are they penalized for the zinc contained in the ore, but they get nothing for the zinc contents and are paid only for the silver-lead contents. The same practice is followed with regard to American ores, mined in American mines and smelted in American smelters. Therefore, any assistance that this Government would give would not do away with that particular handicap, because that is a condition that must be overcome. If there is a certain percentage of material that is foreign to the one that is being treated or to the bulk of the material of which the ore consists, that must necessarily be removed in some way before the ore can be treated, and therefore there must of necessity be a penalty after that maximum percentage has been reached. Another reason why I think the Government should encourage the reduction of ores within this Dominion is because in my opinion, we should take care of all our natural re-cources that we can possibly handle; that we should polish them up and put them in the highest possible state of perfection so that we can market the finished product, thus getting the greatest value out of them. In that way not only would we obtain a higher price, but the -money spent in refining and finishing -the ore would be spent in the Dominion amongst our own people and would be the means of establishing large industries in this country, and after the refining process was completed, we could sell the finished product in the markets of the world. I hope that the Government will take steps to ensure that every pound of crude metal produced in Canada is refined in the Dominion and placed on the markets of the world as the finished product.

-Mr. NESBITT: Apparently, by the resolution, the hon. gentleman is proposing to give a bounty only when the price is below a certain fixed figure, which means that below that figure the smelting company or corporation that proposes to undertake smelting can not make the business pay. My hon. friend (Mr. Green) has told us about using up the raw' material in this country. Everyone in the mining business wants to use the raw material in this country if he can get a market for the finished product. Our natural resources have been in existence since the glacial period, and what the people want before they put their money into these industries is a market for the product. The Govern-[M-. Grean.]

rnent, as I understand it, canno-t afford to build up a market for zinc or spelter; the smelting companies have to find their own markets all over the world. I would like to ask the minister why, if we have zinc ores in the West, it is necessary to give a bounty so as to enable those who mine zinc ores to make a profit. My hon. friend (Mr. Green) and my hon. friend from Assiniboia (Mr. Turriff) talk about the enormous quantities of raw material in this country. Why is it necessary to give ^ bounty if there is such a profit on these things, because we all know that this year spelter has reached an enormous figure? We all know that spelter has risen in price from six cents to twenty-eight cents a pound. I want to -see if I am right in my proposition that the reason the minister proposes this resolution is that the corporation or whoever is going to go into the manufacture of spelter cannot make a profit under a certain price, and that to guard against the spelter going below that price he is going to give them a bounty of two cents a pound so that they will be in a position to mine at a profit.

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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

I am sorry my hon. friend was not in the House when I made what I regarded as a very full explanation. I shall, however, be glad to go over the same ground again.

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LIB

April 18, 1916