June 2, 1921

L LIB

Isaac Ellis Pedlow

Laurier Liberal

Mr. PEDLOW:

The writer is referring

to this particular item and to the other item of branding merchandise, and so on.

The letter is fairly lengthy, and therefore I shall read only the paragraph that bears more particularly on the subject under discussion. The letter is here for the perusal of any hon. member who may wish to read the whole of it; I shall quote only the following extract from it:

All these minor hindrances to importing, such as labelling, increased sales tax on importations, the question of charging duty on adverse exchange, etc., etc., is really giving as much extra protection to Canadian manufacturers as if the tariff had been increased, satisfying the Canadian manufacturer, and not raising the ire of the class of consumers who are outspoken for a tariff even lower than the existing one.

This firm was kind enough to say:

We entirely agree with your attitude in relation to ''branding and labelling imports". It looks on the surface as if the Government did not want to go on record as increasing the tariff, at the same time wanted to satisfy the Canadian manufacturers in protecting them from the competition of imports, by making the importation of merchandise as difficult as possible.

Now, there is the key to the whole situation. I have another letter from a Toronto firm, and the reading of a short extract from it will emphasize the claim which I have made and which is supported by the hon. member for Halifax and the hon. member for Red Deer. It says:

A certificate might be necessary where suspicions are aroused about importations, but speaking in a general way, are the customs authorities not going a little too far in the number of certificates that they require of a man importing a small bill of goods?

Now, these letters are, I think, from friends of the Government.

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UNION
L LIB

Isaac Ellis Pedlow

Laurier Liberal

Mr. PEDLOW:

I think it is more in line with the subject under consideration than a good deal I have listened to from hon. members on the Government side. The member for Simcoe says that trade is falling off. Why is trade falling off? Many large factories are declining business and yet their plants are lying idle. Do these manufacturers require trade agents in the United States to sell their products when they have a market at their own door and yet prefer to let their plants remain idle and their workingmen walk the streets? Mr. Chairman, I would urge strongly upon the minister the advisability of delaying this item for further consideration.

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?

An hon. MEMBER:

Carried.

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L LIB

Isaac Ellis Pedlow

Laurier Liberal

Mr. PEDLOW:

I shall gladly give the floor to the member for Simcoe if he wishes

to address the committee, but I do not wish to be interrupted in that way while I am discussing this matter. I support most heartily the motion of the hon. member for Halifax, Which has been so ably supported by other hon. members. The amendment which the Minister of Trade and Commerce has submitted really makes matters worse. Uncertainty is one of the worst things that can happen to the manufacturers and retailers of this country; we must have something definite to work on. If the clause passes as amended this provision may be brought into force by Order in Council to-morrow or the next day or any day-nobody knows when it may come into force. Let us have something definite. If the minister insists upon making this provision law, let him do so, but I appeal to him once more not to press this measure through.

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L LIB

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

Laurier Liberal

The CHAIRMAN:

The question before the committee is the adoption of clause 6. The amendment moved by the hon. member for Halifax (Mr. Maclean) is, of course, out of order, as being a negative motion. The question is on the amendment moved by Sir George Foster. All those who think that the amendment will improve the clause should of course, vote for the amendment, reserving their right to vote against the clause if they so desire when the question is put on the main motion.

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Amendment agreed to, and section as amended agreed to. On section 7-valuation for duty at not less than wholesale price.


UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

When this clause was before the committee at an earlier stage I pointed out what I thought were well-grounded objections to it. The clause provides that in valuing the goods there must be taken into consideration the cost of production in the country of origin, plus reasonable profit. I pointed out that the minister has no machinery for establishing the cost of production in a foreign country. The minister claimed that they had some machinery for doing that. Now, I have in my hand an article from the Montreal Gazette which deals with that question. I need not remind the committee that the Montreal Gazette is a strong protectionist paper and is thoroughly consistent in that respect. It does not object to any duty on the ground that it is too high; you could hardly make it so high that the Gazette would object to it. It has always been a protectionist paper,

280i

and I suppose they would not object to my saying that it will likely continue to be so. The Gazette is edited by a gentleman of large commercial experience; it is generally understood that he was the collector of customs in Montreal for many years, and in that capacity-a most excellent and capable collector he was, 1 do not hesitate to say-he obtained a large knowledge of what is practicable in the administration of customs laws. In article 7 he recognizes a tendency to increased protection and to that extent he commends it. He goes on to say:

The intent of the amendment is commendable. There will, however, be difficulty in giving1 it effect. "Actual cost of production" of goods in a foreign country at specified dates is not easy to ascertain, because the authority of Canadian Customs officers does not extend beyond this country, and only by detaining suspected importations until the exporter voluntarily establishes production cost at date of shipment can the case be disposed of. There is also the question of what constitutes "a reasonable profit" on goods suspected to have been dumped, the decision being committed solely to the Minister of Customs, a question liable to lead to conflict and controversy.

Now, that is the opinion of a gentleman who, I think it is no impropriety to say, was a most capable and experienced customs official, and everything I said the other day against this clause is confirmed by the views here expressed. The Minister of Customs has no machinery by which he can establish the cost of production in a foreign country. He has machinery by which he may establish the fair market value, but he cannot successfully ascertain the cost of production. Then comes, as the writer points out, the question of what is a reasonable profit. I think I must again urge upon the Minister of Customs that this clause is not workable.

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CON

Rupert Wilson Wigmore (Minister of Customs and Inland Revenue)

Conservative (1867-1942)

Mr. WIGMORE:

It is quite true that we had a lengthy discussion on this matter when the resolution was introduced; but further discussion will, perhaps, throw a little more light on the subject. I realize quite well that the working out of this will probably be quite a difficult matter; but, as I stated before-and I repeat it now- we have at the present time certain machinery whereby this can be worked out. We have our own officers in certain parts of the United States to-day, and if it were not possible for them to put this machinery into operation, we could send some of our expert officers from Canada. There is no question, of course, that some delay would be caused. But during the last year large quantities of goods have been shipped into Canada at a cost to the merchant in this

country very much below the cost of manufacture in the United States and very much below what the goods could be manufactured for in Canada. I think this is a Bill that should be passed. We have been working under this Act for some time.

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UNI L
CON

Rupert Wilson Wigmore (Minister of Customs and Inland Revenue)

Conservative (1867-1942)

Mr. WIGMORE:

We had the same power under sections 46 and 47 of the Customs Act, I think. It is a protection to our Canadian manufacturers and merchants, and I see no reason why it cannot be worked out satisfactorily.

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UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

There is no doubt, as my hon. friend says, it is protection. It is additional protection and the misfortune is that it is not openly avowed as such. Ir is an attempt to correct a valuation and to give a new valuation which is not the real valuation at all.

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CON

Rupert Wilson Wigmore (Minister of Customs and Inland Revenue)

Conservative (1867-1942)

Mr. WIGMORE:

It is a great protection to our Canadian labour against those goods being shipped into Canada and competing with Canadian manufactured goods.

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UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

My hon. friend has the Dumping Act to do that. By that Act he has ample machinery to give him all the protection that Parliament has ever intended to give.

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UNION

John Allister Currie

Unionist

Mr. CURRIE:

There is on the docks in Boston, New York and other places a vast quantity of goods that are being put up for auction by the banks and sold at whatever they will bring. Under the law as it stands, the price at which the goods se.l is the fair market price, although it may be only half the cost of the goods. Does the hon. gentleman think it fair that the law should be so construed as to admit goods of that kind into Canada? That is largely what is causing factories throughout this country to close. Fair market values can be established by the sales of these goods in the auctioneer's hands. The banks have seized consignments of goods that are not taken abroad, and they have' been dumped into Canada. I think the Customs Act should be changed so as 11 say that not only the fair market value but the cost of production should rule; that is to say, if we are going to give any protection to our working men, and surely we do not want to starve our working men.

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UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

The question of fair market value is one which the Customs Department of Canada has been dealing with for fifty years, and I am not aware that there is any trouble. The Dumping

[Mr. Wigmore.l

Act applies when goods are sold at other than the fair market value in the country of production. If events, no matter what they may be, cheapen the fair market value in the country of production, we have a right to share in that cheapness, so long as the price at which we buy them is the same price as that charged at home.

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L LIB

Andrew Ross McMaster

Laurier Liberal

Mr. McMASTER:

The remarks of the hon. member for Simcoe North (Mr. Currie) show with what dread the protectionist mind regards cheapness. That goods should be abundant and cheap is abhorrent to the protectionist mind. That is, however, not what I wish to insist upon to-night. This section is of a -most vicious character; it practically puts in the hands of the- Minister of Customs the right to raise a tariff whenever he likes. We know what protection is. Protection is a matter of -principle; it is a matter of appetite, and the Minister of Customs is put in a position, under this Act, whereby if sufficient pressure is brought to bear upon him by people of strong acquisitive appetites, with the desire to shut out entirely goods from abroad, the minister, if he wishes to give way to that pressure, is the so.e judge of how the tariff is to be raised. I protest against this legislation. It is protectionism run mad. It is such protectionism as the Minister of Trade and Commerce (Sir George Foster), in the days when he was Minister of Finance in this country, would have been ashamed to be responsible for.

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UNION

Fred Langdon Davis

Unionist

Mr. DAVIS:

I have no hope whatever of convincing such a protectionist as the hon. member for Simcoe North (Mr. Currie), but I think it might shed a little light and, perhaps, give a new point of view if I were to quote from " English Bankers on Trade Restrictions ". This appears in the Economist of the 14th May, and is signed by such economists as Hon. R. H. Brand, Hon. Reginald McKenna, Lord Inchcape and Lord Avebury, and, therefore, should command some respect:

The policy of trying to exclude the productions of other countries, with the well-meant design of encouraging our own, cannot increase the volume of commerce or the total volume of employment here. But it may well compel the consumers, who form the bulk of our population, to submit to privations in the quality or quantity of the goods they buy. The importation of foreign goods does not diminish the activities of our people, because such goods can only be paid for by the produce of British capital and labour. The advocates of a restrictive system are too apt to lose sight of the elementary fact that nations, or rather individual members of nations, buy foreign goods

because they need them, not to benefit others, but to benefit themselves, and pay for them by producing goods which the foreigner in his turn requires.

The greatest disadvantage that this clause has is that trade does not know what it is going to meet. These regulations are changed from time to time; they are uncertain, and with all the uncertainties that there are at present, with changing markets, changes in the direction of trade, changes in the value of money and then changes in the Government regulations on top of that, it leads me to think of what was said by Sir Alfred Mond the other day in discussing the situation, and, indeed, in supporting what was done in the British House when he referred to business as being a Bedlam at present, and further saying that some of its doctors should certainly be put in padded cells. I would commend that to the attention of some of the members of the Cabinet who are at present advising such legislation as this, to restrict and condemn to further difficulties, trade. Lest it should provoke the hon. member for Brantford (Mr. Cockshutt) to rise again, who seems to have that exalted notion of a business man, which we have heard him express to-night and which we have seen ad nauseum in trade magazines, I may say that I am a lawyer, but that I tried to understand questions of this sort in some measure and that this question of trade restriction is only bothering and increasing the difficulties of keeping our trade on a fair and sound basis. We all know to-day that we are seeking markets with avidity and anxiety for the produce of our farms. We do not know where we are going to get a market for our wheat the coming year, if we have a large crop. We know that with German exchange as it is to-day, it would cost them $23, $25 or $26 a bushel to buy our wheat. How can we expect to sell them wheat at that price? Owing to the exchange situation in Italy also, our wheat would be at a prohibitive price there. The idea seems to be that these countries are at a very great advantage as compared with us through printing notes, but exactly the opposite is the case, and by this measure we are only adding to the very great difficulties that we are facing at the present time. I can see no defence whatever for this. It is impracticable, as I pointed out in a previous debate, for the minister to determine the actual cost of production in a foreign country or what would be a fair profit upon the goods, and if he does not admit that, we shall have to take it for stubbornness and for his recognition of the

impracticable position in which he is. He can produce no information to support his position. I have two journals before me which have been seeking to get hold of the cost of production of goods in Germany. The Mining Journal has been inquiring into the rates of wages, and the way in which their exchange is changing the cost of goods. I have also before me the London Economist, which has been making an investigation of these matters, and it shows that within the course of a year there has been a change of 400 per cent in the wholesale index price of German goods. How in the face of these facts the minister is going to keep track of the price of goods ordered to-day and coming forward to us six or twelve months from now, I leave it for him to say. I know that it is impracticable. Any man in this House with any practical sense at all knows that it is impossible.

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UNION

John Alexander Stewart

Unionist

Mr. STEWART (Lanark):

As I understand the position taken by the hon. member for Shelburne and Queen's to-night, and also when the resolution with reference to this matter was before the House, it was that the dumping clause was never intended to prevent the Canadian people from getting cheap goods so long as the price at which they were sold in this country was the price charged to the people in the country from which those goods came.

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UNI L

June 2, 1921