March 16, 1928

WAYS AND MEANS

CUSTOMS TARIFF, 1927, AMENDMENT


The house in committee of ways and means, Mr. Johnston in the chair. Customs tariff-522. Rovings, yarns and warps wholly of cotton not exceeding number twentv, not more advanced than singles: British preferential tariff, 10 per cent; .intermediate tariff, 15 per cent; general tariff, 20 per cent.


CON

Hugh Alexander Stewart

Conservative (1867-1942)

Mr. STEWART (Leeds):

When the house adjourned last evening I was endeavouring to address myself to this item and a statement of the Minister of Finance in connection with the tariff advisory board which he described as a fact-finding board. That is exactly what I think every hon. member would like to have. We would like to have the facts in connection with this and the other items that are associated with it. The minister said: "The

evidence is on the table." That is quite correct, but it is very bulky and I am sure no hon. member could undertake to read it. When we have a fact-finding commission, surely it ought not to be the duty of hon. members to find the facts from a perusal of the evidence. The commission should discharge that duty, and particularly in connection with these controversial items we should have from the commission a sort of precis or review of the evidence and the proceedings taken before it, and a statement of what has been found, as a result of that investigation, to be the fact. Imagine a commissioner or a judge being asked to investigate and find facts and then coming into court or this parliament and putting the evidence on the table, asking us to assume that he had discharged his duties! For the minister's own protection and for the benefit of hon, members he ought to ask the board to make a short review or precis of the evidence and a statement of facts found in connection with each one of these cases.

We have established this board at great expense; it has set up machinery; it should be well equipped to discharge this duty, and if it does not do so, then we have set up a piece of machinery that is very expensive, that is to a large extent useless, and, worse still, that is dangerous, because these investigations may go on and all the information that the house is to have in connection with them is a statement of the Minister of Finance that he met the tariff board some time about two o'clock in the morning and discussed these items with them. Apparently when these items come before the house we can get very

little information in regard to them. This board was not intended to be a smoke-screen behind which the minister could hide, or behind which there could be private discussions and manipulations in connection with the tariff. What we expected was that we were to be furnished with findings of facts as ascertained by the commission, and; if the commission fails in that respect, then it fails entirely in the discharge of its duty. I know every hon. member desires to know the fact, and if we had the fact we would be relieved of a great deal of discussion, a great deal of this suspicion would be cleared up and we would be able to discuss these items intelligently. I suggest to the Minister of Finance that he allow these items to stand and ask the tariff board, even at this late date, to make a finding of fact for the information of the members of this house, as it was intended they should do in connection with all these items. This resolution covers many items. Some of them are not controversial; some of them, I believe, in no way change the existing tariff, and perhaps therefore we can dispose of them; but I do suggest that as to these important items which are undoubtedly controversial, and upon which the house desires information, the minister should procure a finding of fact and a report on the facts from the tariff board.

Topic:   WAYS AND MEANS
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CON

Hugh Guthrie

Conservative (1867-1942)

Mr. GUTHRIE:

Following on the suggestion of my hon. friend from Leeds, I confess my inability to appreciate the full significance of the changes in regard to the cotton schedules which the minister proposes in his present budget. I tried diligently last night for over three hours to gather from the discussion in this chamber just what the changes really were and just what they involved. I think I have a fair understanding of the matter now, but I may misapprehend the full significance of some of the changes. It is evident that in his effort to revise these cotton schedules the minister has not followed any principle; he has followed neither the principle of free trade, nor that of tariff for revenue, nor that of protection. He has operated on a happy-go-lucky, hit-or-miss, absolutely haphazard system, and when he stated in this chamber that criticism proceeding from the opposition and from the Progressive sections of the house was not uniform, the answer is that it would be hard to offer any uniform criticism or make any uniform suggestions in regard to proposals which have no uniformity about them, and which are not based on any principle. If I am wrong in the conclusions which I have reached in regard to this matter, the minister will correct me.

Ways and Means-Customs Tariff

The new items 522, 522a and 522b all relate to the importation of cotton yams into this country, and my conclusion is that on these three items the tariff is increased. There is no doubt whatever that there is an increase in item 522, because the minister so stated in so many words last night. Item 522 covers "cotton yarns not exceeding 20's, single," and the new rates proposed are 10, 15 and 20 per cent.

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LIB

James Alexander Robb (Minister of Finance and Receiver General)

Liberal

Mr. ROBB:

What were the old rates?

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CON
LIB

James Alexander Robb (Minister of Finance and Receiver General)

Liberal

Mr. ROBB:

I will tell my hon. friend so that the country will have the record correct. My hon. friend has just stated that the new rates are 10, 15 and 20 per cent, and he does not know what the old rates were. The old rates were 15, 22i and 25 per cent.

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CON

Hugh Guthrie

Conservative (1867-1942)

Mr. GUTHRIE:

Then the answer made last night by my hon. friend the Minister of Finance was incorrect.

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LIB

James Alexander Robb (Minister of Finance and Receiver General)

Liberal

Mr. ROBB:

No, I told my hon. friend that there were some items that were practically obsolete.

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CON

Hugh Guthrie

Conservative (1867-1942)

Mr. GUTHRIE:

The minister was asked if the duties in regard to item 522 were increased or decreased, and he said there was an increase. I take it that, having regard to the importations, there is an actual increase in the duty on that item.

Now I pass on to item 522a, which covers "cotton yarns exceeding 20's but not exceeding 40's, single," on which the new rates proposed are 12^, 15 and 22i per cent. Now I ask the minister, does that involve an increase or a decrease as compared with the former rates?

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LIB

James Alexander Robb (Minister of Finance and Receiver General)

Liberal

Mr. ROBB:

The old rates were 15, 22J and 25 per cent.

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CON

Hugh Guthrie

Conservative (1867-1942)

Mr. GUTHRIE:

What was the number of

the old item?

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UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

There is

another item, 534, which came in free.

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LIB

James Alexander Robb (Minister of Finance and Receiver General)

Liberal

Mr. ROBB:

Answering one at a time, the old item was 520, and that has been split into two or three items.

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CON

Hugh Guthrie

Conservative (1867-1942)

Mr. GUTHRIE:

Apparently there is a reduction of 24 per cent on that, although my view is, on consulting the former tariff, that cotton yarns exceeding 20's and not exceeding 40's came in free. The minister tells me that the old rates were 15, 224 and 25 per cent, and the new rates proposed are 124, 15 and 224 per cent. Apparently on that item there is a 24 per cent reduction.

Then item 522b, which is the large item, covers " cotton yarns exceeding 40's, single," on which the new rates proposed are 74, 10 and 15 per cent, while the former rate was free, free, free. The importations under item 522b are so far beyond the importations under the other items that one must conclude that there has been an increase in the protection afforded under these three items. I do not think there is any doubt about it; you can prove it to a mathematical nicety; you can demonstrate it absolutely. I think we may take it for granted that the object of the minister in granting increased tariff protection under these three items was, as he said last night, to give the manufacturers of cotton yarns some of the protection which the cotton trade enjoys. That, he says, was the government's reason for making these changes. I do not take issue with him on that point. I think it is a proper principle, and I hope he will continue to follow that principle in regard to the other items in the tariff schedules. He has already adopted the protective principle in regard to cotton yarns so that the manufacturers of these yarns in Canada may have some benefit from tariff protection, and he is giving this protection, he says, in order that the other manufacturers of cotton will not hog all the advantage of the tariff. I think we now understand the situation in regard to these three items. It is clear that an actual tariff increase is taking place. I hope my hon. friends from Manitoba and Saskatchewan who sit on the other side of the house, and who are pronounced free-traders in their views, will realize the full meaning of the tariff changes in respect to these three items, and that is increased protection to give the producers of cotton yarns some benefit of the tariff.

I listened with great pleasure to the explanation volunteered last night by the Minister of Railways (Mr. Dunning). He realizes full well, perhaps better than any other member of this house, that these three items involve increased protection, and that it becomes necessary for him to offer some explanation to his people in Saskatchewan. Accordingly he enters upon a thoroughly ingenious and artificial argument, endeavouring to show that there is some distinction between manufacturer's items and consumer's items in the present tariff. After labouring considerably with his argument, he announced that the consumer would be benefited because the duty on the thread manufactured from these yams was reduced in the present proposals of the government. Now, how does that work out? Cotton yarns up to 40 and finer are now subject to a duty, when im-

Ways and Means-Customs Tariff

ported from Great Britain, of 74 per cent; up to the present time they have come in free. In the manufacture of thread these yams constitute 40 per cent of the cost. There is an increase in the protection of 74 per cent on 40 per cent of that thread, which, according to my calculation, is exactly 3 per cent increase on the thread. Then we turn to the subsequent item in the tariff and find that the government has reduced the duty on the thread by 21 per cent, with the net result that the consumer of thread will have to pay one-half of one per cent more in duty than he did the day before this tariff was brought down to the house. If there is anything wrong in my figures or in my argument or in my presentation of this matter to the attention of the government and the Minister of Finance, let the minister correct me now. Let me repeat. The duty on the raw cotton imported-and it is a large item of $2,500,000 -is increased by a stroke of the pen from free to 74 per cent. From that raw material is manufactured the cotton thread. Seven and a half per cent increased duty on the raw material, and the raw material representing 40 per cent of the finished product, a reduction of 24 per cent of the duty on the thread, leaves a net increase of duty to the consumers of this country of one-half of one per cent. If I am wrong I shall be glad to be corrected now.

I point this out again for the benefit of my hon. friend the Minister of Immigration and Colonization (Mr. Forke) and his colleagues from the province of Manitoba, and for the benefit of hon. gentlemen from the province of Saskatchewan who give to this government a slavish support on trade and fiscal matters. The truth is, this proposal has not been clearly laid before parliament. The government is not making readjustments upon any principle whatever. The criticism levelled against us that in one comer of the house we discuss this as a higher tariff and in the other as a lower tariff has some justification in fact. It is a tariff proposed I believe, simply with the idea of helping a particular industry here, or a particular industry there, upon no fiscal principle whatever, and at the same time intended to hoodwink that large body of supporters of the present government who live in the prairie provinces.

There is no doubt from the discussion last night, in fact we learned it from the lips of the Finance Minister himself, that this change in regard to item 522b was made at the instance of a single cotton company in this country. He says so. The Wabasso Company made the application. He stated

last night that that was the only company that he knew-[DOT]

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LIB

James Alexander Robb (Minister of Finance and Receiver General)

Liberal

Mr. ROBB:

No, I said that company

made application before the tariff board.

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CON

Hugh Guthrie

Conservative (1867-1942)

Mr. GUTHRIE:

I will read the minister's

exact words.

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LIB

James Alexander Robb (Minister of Finance and Receiver General)

Liberal

Mr. ROBB:

That will be better.

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CON

Hugh Guthrie

Conservative (1867-1942)

Mr. GUTHRIE:

At page 1388 will be

found this statement by the minister:

I admit that only one mill will he materially benefited by this change.

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March 16, 1928