May 20, 1921

VICTORIA DAY


On the Orders of the Day:


UNI L

William Stevens Fielding

Unionist (Liberal)

Hon. W. S. FIELDING (Shelburne and Queen's) :

Is it intended that the House

shall sit on May 24?

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UNION

Arthur Meighen (Prime Minister; Secretary of State for External Affairs)

Unionist

Right Hon. ARTHUR MEIGHEN (Prime Minister) :

It is not the intention to sit on May 24.

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WAYS AND MEANS

CUSTOMS TARIFF, 1907, AMENDMENT


The House in Committee of Ways and Means, Mr. Boivin in the Chair: 1. Resolved, That lit is expedient to amend The Customs Tariff, 1907, -by inserting the following section immediately after section 8: 8a. Notwithstanding anything in this Act, goods, other than tobacco, cigars, cigarettes, spirituous or alcoholic liquors and articles specified in Schedule A of The West Indies Trade Agreement Act, the produce or manufacture of British Honduras; Bermuda; the Bahamas; J amaica; Turks and Caicos Islands ; the Leeward Islands (Antigua, St. Chr-isto-pher-JNevis, Dominica, Montserrat, and the Virgin Islands) ; the Windward Islands (Grenada, St. Vincent and St. Lucia) ; Barbados; Trinidad and Tobago; and British Guiana when (imported direct therefrom shall not be subject at any time to more 'than fifty per centum of the duties imposed on similar goods as set forth in the General Tariff under regulations by the Minister of Customs and Inland - Revenue. Mr. DuTREMBLAY: As regards the duty on tobacco and manufactured cigars, is the duty based on the weight or on the value of the tobacco?


CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

This is not an ad valorem duty, it is a duty based on the pound weight of the leaf tobacco. The duty is 40 cents a pound, fixed, of course, by the pound weight.

Mr. DuTREMBLAY: The quality of the tobacco has nothing whatever to do with the duty?

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Subtopic:   CUSTOMS TARIFF, 1907, AMENDMENT
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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

No.

Mr. DuTREMBLAY: Has the minister not received representations or requests from cigar makers and others, especially the labouring class, in regard to this duty, inasmuch as it affects the price especially of cheap cigars? We do now see on the market as many cigars for five and ten cents as we used to see, and I understand that this is due to the fact that the duty

is based, not upon the value, but upon the weight. In the United States, I am informed, the duty is based upon the value and not upon the weight, so as to allow ordinary people to be able to get a better cigar at the same price. Some years ago I put similar questions to the Minister of Finance and he looked into the matter, and he was to investigate it more fully. Has any progress been made in this direction?

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

There are two duties that are related to the matter to which my hon. friend refers. In the first instance, of course, we have our duty on the leaf tobacco, the raw material, and that duty, which is an excise duty is, as I have stated, 40 cents a pound. As my hon. friend intimates, many requests have been made for a change. Growers of tobacco-and we now grow a great deal of tobacco in Canada,- on the one hand have asked for a customs duty rate of $1 per pound on their product, and on the other hand manufacturers and the cigar makers, to whom my hon. friend has

4 p.m. referred, have made requests looking, not to an increase, but to a very substantial decrease in duties upon tobaccos manufactured in this country. The particular duty to which my hon. friend is referring is the excise duty on manufactured cigars. There is a great deal to be said on both sides, but it has been a subject which we felt, in view of other considerations, we could not at the present time interfere with. No change is made.

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Subtopic:   CUSTOMS TARIFF, 1907, AMENDMENT
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Item agreed to. 2. Resolved, that Schedule A to the Customs Tariff, 1907, as amended by chapter 15 of the Acts of 1913, by chapter 26 of the Acts of 1914. and by chapter 5 of the Acts of 1914 (second session) be further amended by striking thereout tariff items 20, 21, 22, 23, 39fo, 77a, 101, 101a, 103, 104, 110, 111, 113, 134, 135, 150, 151, 153, 156, 159, 160, 162, 163, 164 and 165, the several enumerations of goods respectively, and the several rates of duties of Customs, if any, set opposite each of said items, and to provide that the following items, enumerations and rates of duties be inserted in said Schedule A:


L LIB

Georges Henri Boivin (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Laurier Liberal

The CHAIRMAN:

Shall this resolution be taken item by item? Carried.

Items. Nos. 20 to 113 inclusive agreed to.

On item No. 134:

Tariff Items British Preferential Tariff.

Tariff. Tariff.

134 All sugar above number sixteen Dutch standard in colour, and all refined sugars of whatever kinds, grades or standards, not covered by tariff item No. 135, when not exceeding eighty-eight degrees of $2.00 $2.00polarization, per one hundred pounds

when exceeding eighty-eight degrees but not ex- *1.50 ceeding eighty-nine degrees, per one hundred pounds when exceeding eighty-nine degrees but not exceed- *1.52 *2.03 $2.03ing ninety degrees, per one hundred pounds

when exceeding ninety degrees but not exceeding $1.54 $2.06 $2.06ninety-one degrees, per one hundred pounds

when exceeding ninety-one degrees but not exceeding $1.56 $2.08 $2.08ninety-two degrees, per one hundred pounds

when exceeding ninety-two degrees but not exceed- $1.59 $2.12 $2.12ing ninety-three degrees, per one hundred pounds... when exceeding ninety-three degrees but not exceed- $1.61 $2.15 $2.15ing ninety-four degrees, per one hundred pounds

when exceeding ninety-four degrees but not exceed- $1.63 $2.18 $2.18ing ninety-five degrees, per one hundred pounds.. when exceeding ninety-five degrees but not exceeding $1.65 $2.20 $2.20ninety-six degrees, per one hundred pounds

when exceeding ninety-six degrees but not exceed- $1.68 $2.24 $2.24ing ninety-seven degrees, per one hundred pounds... when exceeding ninety-seven degrees but not exceed- $1.70 $2.27 $2.27ing ninety-eight degrees per one hundred pounds,... when exceeding ninety-eight degrees but not exceed- $1.72 $2.30 $2.30ing ninety-nine degrees, per one hundred pounds.... when exceeding ninety-nine degrees, per one hundred $1.79 $2.39 $2.39pounds

Provided that refined sugar shall be entitled to entry under the British Preferential tariff upon evidence satisfactory to the Minister of Customs and Inland Revenue, that such refined sugar has been manufactured wholly from raw sugar produced in the British colonies and possessions, and not otherwise. $1.79 $2.39 $2.39

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UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

Mr. Chairman, this is really the most important item. I wonder if my hon. friend has made any comparative figures showing the relation of the raw sugar to the refined article. The sugar duties are very complicated, I know, varying at every degree of- the polaris-copic test, and it is very difficult for the ordinary reader to comprehend them, and one might easily make errors of calculation. I would be glad if my hon. friend could give the committee any comparative figures showing how far he is changing the duty on the raw material, and how far he is changing the duty as respects the refined article.

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

The matter is, as my hon. friend says, extremely complicated. We have to start with the preference which we are obliged to give the West Indies. Apply that minimum preference of 25 per cent, we start out with a base line, and having made that base line we make our Calculations; accordingly. There is a slight difference between the base line adopted for the British preferential tariff and that adopted for the general tariff. That had to be done in order to give effect to the preference called for

in the Act. The old base line for the British preferential was $1.52. That was the base line for the first of these items in No. 134. That is now being reduced to $1.50. Then for the purpose of carrying out the 25 per cent base line, the general tariff which was $1.93 becomes $2, and the matter works out progressively from that base line. The really important item, so far as the cost of sugar in this country is concerned, is the ninety-nine degree item, which gives us a rate of $1.79 for the British preferential tariff. The margin of protection on raw sugar which results, in the first instance, from item No. 134, and from item No. 135, does not in any way enlarge the protection on refining in Canada. This ninety-nine degree item, which is really the item of importance, resulting in a tax under the British preferential of $1.79, and $2.39 under the general tariff, may he compared to the tax in the United Kingdom for polarization, not under 98 degrees. The equivalent rate under the English law is $5.5763 as compared with our $2.39.

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UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

The matter is extremely complicated, I know. In the case of refined sugar you have to take 99 or 100

degrees, because it is of a high character, but if you take raw sugar at any figure, say, 90 degrees, perhaps the simplest way of explaining the matter would be for the minister to say what has been the duty heretofore on that, and what the new duty will be, and then we will see whether we are or are not having an increase on the raw material. If we make a similar computation with respect to the refined article, we can see how it works out. I am inclined to think, on first view- although I speak with reservation, -because I know how difficult it is to make exact calculations in these matters-that what my hon. friend has done is to reduce the rates of duty on raw material and increase the.duty on the refined article. It looks that way, but I do not wish to assert that too positively, because it would be necessary to make a careful computation before one could speak with absolute certainty. I thought my hon. friend would have some information on that point. Take sugar at 90 degrees; what does it pay now?

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

Ninety-six degrees is the standard on which raw sugar is really purchased.

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UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

Much of it comes below that. A good deal of sugar is imported below 96.

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

The old item for raws under the British preferential tariff was $1.03J for 96 degrees as against 85.7 under the new order. The item which determines the question of protection is the general tariff item, which amounted to $1.37i, and the margin which is required by the agreement in connection with that, in schedule A of the treaty is 86.016 cents. The hon. gentleman will see that we have cut that down very materially in order to get that spread. If we did not cut it down on the British preferential side in order to get that spread there would have been a large increase in the customs duty. We expect to get no more revenue at all, but we hope to be able to hold the present revenue.

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UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

The raw material, practically speaking, will all come in under the West India Treaty, and we get our raw sugar very largely from the West Indies now. The aim of the West India agreement, very properly, is to increase purchases from the West Indies, and therefore I think it would be quite right to assume that the raw material will practically all come in under that agreement. If I understand my hon. friend on sugar of

96 degrees the rate hitherto charged was $1.03, and a fraction, and the new rate will be 85 cents. There is, therefore, a distinct reduction of 18 cents on the raw material. Is that correct?

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

That is perfectly correct so far as the duty on the raw material is concerned. It has been cut down. We had to cut it down, or we should have had to increase the rate very much on the general standard. Although your preference is low, you do not buy at low prices. The exporter from the West Indies meets the competition which is open from the other fields, and I have been fortified in that conclusion by the remarks of my hon. friend in discussing the same question on previous occasions. Of course, human nature being what it is, my hon. friend was perfectly right; the benefit on all these preferences, generally speaking, will not come to the Canadian consumer; the benefit accrues to the exporter from the favoured country, unless, of course, the volume of trade is such that that advantage cannot be taken. But the fact is that the advantage can easily be taken. If I remember rightly, less than 50 per cent of our raw sugar manufactured in Canada comes from the British West Indies. I know I am quite right in saying that not more than 50 per cent comes from the West Indies, and it is perfectly obvious that there is not going to be any sugar bought in Canada at the lower standard having regard to that 50 per cent, and at the higher rate, having regard to the other 50 per cent.

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May 20, 1921