June 14, 1922

WHEAT MARKETING

REPORT OP COMMITTEE ON AGRICULTURE AND COLONIZATION

LIB

William Frederic Kay

Liberal

Mr. W. F. KAY (Missisquoi) :

With the consent of the House I beg to move that the fifth report of the select standing committee on Agriculture and Colonization be concurred in.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Under rule 41, this

motion may be made only by unanimous consent. Is the House of opinion that the motion should be put?

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?

Some hon. MEMBERS:

Yes.

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LIB

William Frederic Kay

Liberal

Mr. KAY:

Mr. Speaker, in rising to

move concurrence in the fifth report of the select standing committee on Agriculture and Colonization, I have only a few remarks to make. The question was first brought up on a memorandum presented to the Government by the Canadian Council of Agriculture, asking for the re-establishment of the Wheat Board of 1919. This memorandum was, on the 27th of March, referred to the select standing committee on Agriculture and Colonization. That committee proceeded to hear expert witnesses both for and against the re-establishment of the Wheat Board, amongst those witnesses being representatives of councils of agriculture, elevator companies, millers, grain dealers, the Winnipeg Grain Exchange, boards of trade, and also Messrs. Stewart and Riddell, members of the former Wheat Board. The committee also received telegrams, letters and petitions from various sources, both for and against the re-establishment of the board. The question of the constitutionality of the re-establishment of the Wheat Board having been raised, the matter was referred to the law officers of the Crown for

their opinion. Their opinion was laid on the Table of the House on the 19th of April last; it will be found in Hansard of that date. The recommendation of the committee for concurrent legislation by this Parliament and the provincial legislatures is based on procedure adopted in Australia. It was also suggested in the committee that if legislation were passed by this Parliament, it should be provided that any province taking advantage of a wheat board, should become responsible for any loss sustained by the board and should become possessed of any profits made therein. As the minutes of the proceedings of this committee contain all the evidence taken, and as these have been distributed amongst members of the House, who, I am sure, have read them all, I leave the matter for the consideration of the House.

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IND

William Findlay Maclean

Independent Conservative

Mr. MACLEAN (York) :

Will the hon. member explain briefly to the House just what the report of the committee is?

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LIB

William Frederic Kay

Liberal

Mr. KAY:

The recommendation of the committee was presented to the House on the 26th of May. I can read it to the House, but it will be found in the Votes and Proceedings of that date. It reads:

The select standing committee on Agriculture and Colonization beg leave to present the following as their fifth report:

Tour Committee, having held twenty-two meetings and heard the evidence of nineteen witnesses and having given full consideration to the whole matter referred to them, beg leave to submit the following Resolution as a recommendation, viz.:-

1. That it is desirable in the National Interests that the Government immediately create a National wheat marketing agency for the marketing of the wheat crop of .922.

2. That this agency be given ah the powers of the Wheat Board of 1919 as are within the jurisdiction of Parliament to grant except as they include the direct marketing of flour and other mill products.

3. That an act be passed based tn this resolution, to become effective by Proclamation, as soon as two or more of the provinces have conferred upon this agency such powers possessed by the Wheat Board of 1919 as come within provincial jurisdiction.

Your Committee also submit herewith the Minutes of their Proceedings and the Evidence taken by them.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Is the House ready for the question?

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Right Hon. ARTHUR MEIGHEN (Leader of the Opposition) :

Mr. Speaker, it seems to me incredible that the Government should permit this motion to be submitted to the House without any statement whatever of its position with regard thereto. Apparently, however, that was the state

Wheat Board

of mental paralysis the Government was in, and the House was about to vote on the resolution without any statement whatever.

The resolution that has just been read by the hon. member apparently constitutes the sole report of the Committee on Agriculture and Colonization on this question. The House will recall that some time ago, in the month of April, shortly after this question was submitted to the committee, on the occasion of an interim report requesting the submission to the Supreme Court of some question that had been raised as to jurisdiction, I took the opportunity of reviewing briefly the history of governmental handling of wheat, and, as regards such interim report, urged that the long delay involved in litigation was perilous-yes, fatal-to all wheat board prospects and was totally unnecessary. The House accepted the view I then presented and the matter of the determination of jurisdiction was left to the ordinary course, that is, reference to the law officers of the Crown. Such having been done, there appears to have been very little difficulty in determining where the line dividing jurisdictions lay. Indeed, there appears to have been on the part of the law officers of the federal government no pretence or claim that there was, under present conditions, the power to re-establish the board with its old compulsory features. Consequently, litigation would have been futile, because, even on the part of those contending for federal powers, there was no belief that those powers could be sustained.

The committee set to work to determine what should be recommended to Parliament, it having been decided that certain of the accompaniments and duties of the old board could not exist in a board constituted purely by this Parliament. They have taken a long while at the task; indeed, they have had something of a chequered career in coming to the point reached to-day. But now we have their recommendations. Why the matter should have been delayed so long it is hard for any one to comprehend who really wants a solution of the question. It is weeks since this decision was arrived at. Between this decision and a previous decision, there were one or two weeks intervening; and all the while time has been speeding, time that was exceedingly precious if there was to be the least prospect of action such as might be taken advantage of for the season of 1922. Hon. members should keep in mind that all that has apparently been under review in this committee is the question of handling of

IMr. Meighen.]

the crop of this year. That is all that is contemplated by the resolution which now constitutes the report. To take care of that crop, final action must be taken at least during the month of July. The original wheat board was established towards the end of July, 1919. Then we had none of the advantages of previous experience. We had a novel situation from every aspect, and it took us two or three weeks of consideration, such time being devoted to it as we were able to give to the subject, other matters intervening. Even then it was a little later in being established than would have been best, had it been possible to come to a decision earlier. But this year, knowing as we do that federal action alone is incompetent, that provincial action must follow, and that for that purpose, provincial legislatures must be called and must hold special sessions before they can act, as contemplated by the report of the committee, what is the excuse for waiting until the 14th day of June to bring before Parliament the recommendations of the committee, which involve all the subsequent proceedings that are indispensable before final action can be taken?

Even were this report just as it should be, even were we in a position now to decide, I question whether it would be possible for such final action as this report contemplates to be taken in time to be of any value whatever for the crop this year. It really would appear that the whole project of the Wheat Board has been submitted to a long, cruel process of strangulation and that now we are asked to give it the final and fatal turn. Let me read from the report:

1. That it is desirable in the national interests that the Government immediately create a national wheat marketing agency for the marketing of the wheat crop of 1922.

2. That this agency be given all the powers of the Wheat Board of 1919 as are within the jurisdiction of Parliament to grant, except as they include the direct marketing of flour and other mill products.

The agency is to be given all the powers within federal jurisdiction, except that one. I ask hon. members, of the legal profession particularly, to reflect for a moment whether that one is a federal power at all.

3. That an act be passed based on this Resolution, to become effective by Proclamation, as soon as two or more of the provinces have conferred upon this agency such powers possessed by the Wheat Board of i!'19 as come within provincial jurisdiction.

When analyzed, what is that report? A wheat board is to be established, by

Wheat Board

legislation yet to be introduced, to take care of the crop of 1922, and that alone. That board is to be given all the powers conferred in 1919 upon the old board, whether by Order in Council or by subsequent statute. It is to have all the powers that are vested in the federal Parliament, save one, which is assumed to be a federal power. But the board, so constituted and empowered, shall sit silent and inactive and never come into real existence at all until at least two provinces meet in special session and do-what? Grant them such further powers as the provinces think wise? No; not at all but

grant them all such powers within the provincial jurisdiction as the old board had. The only option left to the provinces is to confer upon the board all powers of provincial origin possessed by the old wheat board. Two provinces must do that, and after they have done it, it rests with the Government by proclamation to call this act into effect.

Now. was I too strong in my language when I stated that this is merely the last step of the tragedy in the long process of strangulation of the whole prospect of wheat board?

First of all, what is made necessary under this proposal? I do not think anyone suggests that Ontario would act; we must be practical. So far as the resolution goes, Ontario could, of course, so could Nova Scotia and Prince Edward Island; but everyone knows that we have not those provinces in mind,-there is virtually no possibility of their considering the matter at all. Hardly anyone would suggest that Manitoba could. That province is now in the throes of an election, so how could a special session of the legislature be called now? There remain only two-Saskatchewan and Alberta; they might do so, for their people are doubtless very much interested in this project. Their people and ihe people of Manitoba are, I believe, sincerely desirous that we establish a wheat board as near the old Wheat Board as this Parliament can establish it. I think that is the prevailing opinion; whether we agree with its soundness or not.

Those provinces, then, might possibly induce their legislators to meet and pass this special legislation. But why should we make it a condition that they must not only give the board such powers as they think wise, but they must give it every power the old Wheat Board possessed in so far as those powers are compulsory-

185J

that is, provincial? The placing of that obligation upon them leaves them no discretion whatever, and reduces to a minimum the likehood that they ever would comply with these restrictions. ,

I want to inquire into the question from another angle. The provinces must grant the board, what powers? They must grant the following powers that have been held not to be within federal jurisdiction-I refer to the complusory powers:

To require each applicant for a license to give a bond in such form and in such amount as may be satisfactory to the board;

That is, a license to buy and sell wheat. So that, if Saskatchewan acts, she would impose those restraints and restrictions upon the whole wheat-buying and wheatselling structure of the province at a time when there were no such restraints and restrictions in Manitoba at all, probably none in Alberta, and certainly none in Ontario. Alberta would have to do the same and put the whole of the wheatbuying and wheat-selling instrumentality of that province under all those restraints when competitors in other provinces were not so restricted. It would be putting them in a position where they could not compete, and it would be putting them in a position where the system would be half compulsory and half voluntary and would not work at all.

Let me pass to another power:

To provide that no person, Arm or corporation other than the board, shall buy wheat, operate any elevator or warehouse where wheat is received, or handle wheat on commission or otherwise unless licensed by the board.

My remarks as to the previous power apply here. All those things they must impose upon their wheat-buying and wheat-selling agencies while other provinces have no such restraints, and while, indeed, other provinces will be operating under a different system altogether. But let us go a little further. They will be compelled to give the board this power:

To order any person holding wheat stored in any elevator or warehouse or on railway cars or Canadian boats to sell and dispose of the same to any purchaser named by the board on such terms as the board may direct, and any such order of the board shall pass to the purchaser the title in the wheat mentioned In any such order.

That is to say, there cannot be any buying and selling at all save by such person as the board names in those provinces.. The last power is:

To prohibit the export out of Canada-

Wheat Board

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LIB

James Alexander Robb (Minister of Trade and Commerce)

Liberal

Mr. ROBB:

May I interrupt my right hon. friend? Does he argue in favour of a compulsory wheat board?

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

What is my hon. friend afraid of?

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LIB

James Alexander Robb (Minister of Trade and Commerce)

Liberal

Mr. ROBB:

I am not afraid of anything; I would just like to follow my right hon. friend's ideas.

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

I have not argued in favour of a compulsory wheat hoard. I will say what I am in favour of very shortly. Indeed, I have said it already; I said it in the campaign of last fall, but I was denounced by my political foes-some of whom, by the way, now appear to be my best friends on this subject. I have no curves to take on this subject or on any other. It is suggested that I might reply to my hon. friend in the classic words of the Minister of Finance (Mr. Fielding) of

Wheat Board

yesterday; he cannot shake his gory locks at me. I am trying to show the House that it cannot possibly accept this report as a definition of the policy of this Parliament. It would land us in a quagmire. Imagine a wheat board with power to handle the whole crop and to fix the prices at which it should be sold to the miller in Alberta or in Saskatchewan; to fix the prices of grain to those people and then to say to them: "Here is a market; charge just whatever you like; we won't let any flour in; we won't let any wheat in; you have a closed market here to yourselves." That is the position we are asked to put the Wheat Board in by this resolution. And that is the position they will be put in if we adopt the motion; because if you permit the importations into these provinces then you put it out of their power to operate altogether.

Take the position of the eastern miller-[DOT] for example the miller in Montreal. The miller who is alongside the stream of grain, who has it at his door all the time, passing by, does not need to put in a stock; he can get it at any time. The miller in Montreal, though, can do that only during the period of navigation. Through that period he must stock up; he must get his grain and have his supply for production of flour later. He gets it and he protects himself by a system of hedging. Now, under the old Wheat Board and under the Board of Grain Supervisors, that situation was taken care of in this way: the Wheat Board sold to the miller the wheat-sold it first at $2.30-and allowed him to lay in a supply at that price. They also fixed the price of the flour for sale in Canada; they had to do so. You cannot fix the price to the miller and give him his market and not fix the price of selling; if you do, you give him a virtual monopoly under which he can do what he likes. So they fixed the price and said: "Within Canada you sell at that price." And what did they say with regard to selling outside of Canada? They said: "We will sell beyond Canada ourselves, and the balance over and above what we let you sell for here, over and above the margin of profit we fix, goes into the pool, is reflected in the participation certificates, and returns to the producer." That was a fair arrangement. In that way they kept the prices down fairly well to the consumer in Canada and they secured the whole benefit for the producer; it did not go to the miller. If the price went up, then the wheat pool behind was simply expanded by that amount; if the price went down, then there could at

least be no sale beyond the price or the margin of profit fixed by the Wheat Board

itself.

What is going to result if this resolution goes through?

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PRO

Thomas Alexander Crerar

Progressive

Mr. CRERAR:

Would my right hon. friend permit a question there, for information? In his opinion, has this Parliament the power to clothe any board or authority with the power to state the price at which the mills, say, of any of the provinces of Canada, shall sell their flour to their customers?

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

That has already been decided by the Justice Department. I do not seek to impose my opinions as legal opinions on the House, but the Justice Department has held in the negative. The provinces could give that power. What this resolution contemplates is that two provinces shall in western Canada. They give these and all these compulsory powers to a board to be applied in Western Canada alone; in eastern Canada, the millers of which depend on that very wheat, there shall be no such powers at all. Such an arrangement simply will not work. For example, they would be compelled to sell at a certain price to the miller in Montreal. We will say that after that the wheat price goes up. Of course, the market here must be surrounded, bo the miller is going to get the whole advantage. If, however, the wheat goes down, and they have bought at a certain price dictated to them, why, the milling industry of Canada will be ruined. In a Word, you cannot operate a board half compulsory and half voluntary. You cannot give it all those powers, provincial and federal, those monopolistic powers that the old board had, and give it to them only in a part of Canada. You Cannot so geographically limit it, while in the rest of Canada, where the same industries are carried on, no such conditions exist at all. Surely -it is manifest to the House that no such system as that would work.

Under the conditions of 1919 the wheat board policy was the correct policy. I do not hear very many expressions of dissent at this time. I heard a great many at that time, but let those things pass; they are incidental to politics. Under those conditions, differing wholly from the conditions to-day, the wheat board policy was the right course to pursue, and it resulted in tremendous advantage, certainly to the people of western Canada, to the people of the whole of Canada. When hon. members recite, as one did yesterday in the House,

Wheat Board

that all that has ever been done for the West has been done by the enemies of hon. gentlemen here, I venture to suggest that by the wise handling of the crop of 1919 more was done for the farmers of western Canada than has ever been done by any government or by all governments together in this country.

Soane hon. MEMBERS: Hear, hear.

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LIB

Andrew Ross McMaster

Liberal

Mr. McMASTER:

A large statement.

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

But very well received, 1 notice, by those who come from that part of Canada. Now, what were the conditions there? The United States had a closed market. The United States had a guaranteed price, and they had an embargo on grain going over. Europe, on the other hand, had virtually a closed buying agency. They were buying through one channel, and consequently, if they were not met by a similar situation at the selling end, then the selling end would have been helpless in the hands of the purchasing power. With the United States in that position, it was possible for us to operate this system. Europe is in no such situation to-day, neither is the United States. In the latter country, a free market exists, and with a free market in the United States you cannot, in my humble judgment, operate successfully a dosed market in Canada. I offer that opinion for whatever it is worth. I make no pretensions to such familiarity with the grain trade as would lend any excessive weight to the opinion I have just expressed, but let me say that it is buttressed by the judgment of many who have had very active and long experience in the grain trade of this country. And in Europe there is competitive buying.

There has been very serious complaint with regard to our wheat marketing system, our whole grain marketing system. I do not think all the complaints are justified; I do not think the grievance is nearly as large as it has been represented to be. But I believe there are substantial grievances, and I believe as well that in this year, 1922, that western country suffers more than any other part of Canada from the pains of deflated currency, from the effects of the premature deflation of the values of farm products and of manufactured and other goods. Such has been the experience in this and other countries of the world. Naturally this result would be particularly felt on the prairies. The West is so situated geographically that the task of overcoming its freight and transporta-

tion difficulties is the biggest of any wheat or grain-produding country in the world. It may not be as great as Rusia's to-day, but ordinarily it is the biggest mountain to get over in the way of transportation cost, just on account of its geography, that confronts any grain-growing country. Therefore, the West to-day is in the position, described, I think, though, in terms of some exaggeration by representatives from the West in this House. Nevertheless, they are in general right.

A rather serious position exists in western Canada just because of the two causes I have named. Therefore, it is the part of Parliament to render special assistance there, if special assistance can be rendered, to tide them over the present position, and Parliament should address itself to that task, and if to some extent the credit of this country is essential to do it, I do not think it will be the will of the majority of this House to withhold that credit for this purpose. If by the extension of federal facilities of credit and federal facilities of organization we can at least give a trial to another system of marketing, I for my part would like to see that system of marketing established. In that state of mind, and not unmindful as well, of the necessary restrictions in point of jurisdiction of the federal Parliament-in the state of mind I have described I stated last fall that if it was the wish of the western people, that should be done. I was prepared to commit myself to the establishment of a voluntary grain buying and grain selling system, or the establishment of a board by the federal Parliament, which board would have power to receive, to purchase, and to sell through its agency by the same system as the old wheat board, all grain committed to its charge in the year 1922. I also held out the hope that if that succeeded, if it proved feasible, it could be made the basis of a permanent system of marketing for that country. Undoubtedly it was to be in essence a voluntary system. It would not have the powers of the old board, and it would not have from some angles many of the advantages of the old board. That I well knew then; that I well know now; but I do not think in the light of conditions of to-day we could justify, even if the federal powers existed, the monopolization of the whole wheat handling of this country and virtually of the whole milling and flour disposal of this country.

It might be better and I would be prepared to do everything in my power to

Wheat Board

bring it about, that certain limited compulsory power be given. I do not think it would be of real value to have them given by two provinces alone. There might be certain compulsory powers, as to storage and disposition particularly, that could be given, and as to the giving of which this Government should not withhold its assent. Consequently, it seems to me the right course to take now is the course suggested there. I would be prepared to admit of some modification, of any modification that can be advanced in this House as feasible and of public advantage.

I suggest, then-I have not an amendment ready, but if the Government, particularly, has no opinions on this question I shall go to the trouble of getting an amendment and having it ready-I would suggest that we decide here and now on the establishment of a board upon the voluntary principle, and that we provide as well that if any province sees fit to repose in that board compulsory powers, the board can exercise those powers provided they are first reviewed by the federal government and receive its approval. I do not like Order in Council government. I never have.

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LIB

Andrew Ross McMaster

Liberal

Mr. McMASTER:

By others.

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Hon. gentlemen are

a little slow in laughing because I expect they were thinking of some startling legislation introduced by them that is now ir committee of this House. But here we are in the place where if there is to be any co-operative action at all as between provincial legislatures and this House, this House can act by Order in Council and in no other way whatever. There is no other way in Which it can act; there is no opportunity to act otherwise. This is the only way it can be done. I therefore suggest that we decide upon the establishment of a board with the powers we are able to give it-we cannot do any more than that-and that if any province decides to give it more, then it be within the power of the Government of this country to review that additional power to ascertain if it will work in consonance with the whole grain handling system of this country, to inquire if it has been adopted by sufficient provinces to enable the board to operate to see that it is such that it does not impose undue responsibility federally; and, if in the wisdom of the Government it is a power that can properly be exercised, this government can empower

the board to exercise that power so provincially conferred.

When I have said that, let me impress this as well. What I propose is going the full length that this Parliament by any means whatever can go to meet the wishes of western Canada in regard to this Wheat Board. There is no step in the world that . we can take beyond that. There is nothing we can do beyond that.

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June 14, 1922