May 8, 1928

IND

Alan Webster Neill

Independent

Mr. NEILL:

Might I repeat the suggestion I made before six o'clock that if the section is going to be amended it should read that when a settler-

Topic:   SOLDIER SETTLEMENT ACT AMENDMENT
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LIB
LIB
CON

John Arthur Clark

Conservative (1867-1942)

Mr. CLARK:

I do not propose to discuss the motion, but may I draw the minister's attention-

Topic:   SOLDIER SETTLEMENT ACT AMENDMENT
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LIB

Eugène Fiset

Liberal

The CHAIRMAN (Sir Eugene Fiset):

The motion is not debatable.

Progress reported.

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SUPPLY-DUMPING DUTY


Right Hon. W. L. MACKENZIE KING (Prime Minister) moved that the house go into committee of supply.


CON

Simon Fraser Tolmie

Conservative (1867-1942)

Hon. S. F. TOLMIE (Victoria, B.C.):

I

wish to move an amendment to this motion, Mr. Speaker, and in doing so, to draw the attention of the house to a very important matter, namely, the application of a dumping duty applicable to certain agricultural products that are imported into Canada from time to time.

It must be realized by all that to build up the agriculture of Canada we must establish and maintain stable markets in which the producer can dispose of his products at a profit. In Canada we find that our crops are divided practically into two divisions. Some of our crops are those which keep well and can be shipped long distances, and owing to *that and to our soil and climatic conditions as well, and to the condition of the world's market and the shortage of supply, we can put these crops on the market at a profit. Owing to the very nature of these products we can also hold them from time to time until we have an opportunity to sell them to the very best advantage. On the other hand, we are producing soft fruits and vegetables of various kinds, poultry and poultry products, and so forth. With regard to the

fruits and vegetables, they are of such a nature that an immediate sale must be obtained for them; otherwise a loss is experienced.

The United States, located to the south of the border line, and enjoying a very much earlier season, is able to dispose of her early products to great advantage in the large, populous and wealthy centres in that country', and a little later on, when her markets begin to be satisfied, she looks for other suitable markets in which to dump her surplus products. These products are shipped north into Canada in preference to forcing them on the home markets in the United States and spoiling those markets. These products come into Canada in competition with the early crops in this country, and they have a very serious effect on the results obtained by our producers. We have as an illustration of that the poultry business, the production of eggs, and so forth, which has now reached a very large figure in this country. We find that in California they have spring weather in December, January and February, when the poultry down there are producing their egg crop at the very lowest cost of the whole season, while the producers in Canada have to house their fowl and keep them at much greater expense, and are producing at the very highest peak of cost. Then we have in British Columbia a country that is milder than eastern Canada, a province that is especially well-fitted for the production of poultry and poultry products. We can ship to the big markets in eastern Canada, such as Montreal and Toronto and other places, at a season of the year before their local poultry have begun to produce at a profit. That presents a tremendous opportunity for the British Columbian to build up a great trade in the east, but when he ships his produce there, unless protected by the dumping clause as he has been for some short time, he finds that when his produce reaches that market it meets with the surplus production from the southern states, their end of the season crop, when their produce has to be sold very cheap, and the result is that the market is demoralized to a great extent.

As a striking illustration in fruit, take apricots. We have 'California, Oregon and some other states to the south all producing apricots. They sell their best quality apricots in the large centres of the United States, securing a high price for them, and then when it comes to disposing of their surplus crop, instead of spoiling their local market by forcing their sale, lowering prices to do so, they ship them north into Canada, and a

Dumping Duty-Mr. Tolmie

great advertising campaign is carried on to help dispose of them. They are several weeks ahead of our producers in the Okanagan, and when our first class product reaches the market we find that the shelves of the housewife have already been filled to a great extent by American trash. It was to meet such a condition as that, that the dumping clause was first introduced by Mr. Fielding in 1907. It provided that the

specific duty was not to exceed 15 per cent under any conditions. But in 1920 it was discovered that the dumping clause had been evaded to a great extent, and that it had been of really no protection to the fruit and vegetable growers in the way it was being applied up to that time. In 1921 it was amended and the duty was based on the cost of production, so that a reasonable figure was charged on these products from the south, and the protection thus received' by the producers in Canada was found by them to be very advantageous indeed. In 1922 this was repealed, and clause 47a was added to the Customs Act, whereby the duty was based on the fair market value, such value being fixed by the Minister of Customs. Very little action was taken under this clause for some time, and finally an order in council was passed' authorizing the minister actually to fix the various estimates of what a fair charge was. This list was prepared and published, and gave great satisfaction to the dealers throughout the country because it established stability to a certain extent. In 1926, and later, it was generally enforced, with excellent results indeed. The experience with the

dumping clause has been that it has not increased the prices of the products to the local consumer. We have found that by stabilizing our home market it has had the effect of encouraging greater production, with the result that our home production soon meets our home requirements, and as far as prices are concerned the competition between the various producers in this country regulates that feature.

The value of a dumping clause depends, first of all, very greatly upon its continuity and steady enforcement, so that a man is enabled to figure from one year to another, whether he is a buyer of these products, a dealer, or the producer on the land.

Secondly, we must have a fair conception of the market value. We progressed very well with the dumping clause, and it was found very advantageous to the producers, but on the 19th of March last, 1928, we found that this dumping clause was cancelled by the government. This has had a demoralizing effect and has given rise to a great deal

of discussion throughout the whole of this country from the Atlantic to the Pacific. This was clearly shown the other day at the meeting held in this building when a large delegation from all parts of the Dominion met members of the cabinet and discussed this matter very fully.

Now, the fixing of values on the importation of certain commodities into Canada is not entirely new. I remember years ago after there had been a very heavy settlement of the ranching districts of Oregon, Washington and Idaho, that a large number of horse ranches were closed up owing to the depreciation in the value of the stock. These animals were shipped into Canada several hundred at a time. I remember inspecting one train load of over three hundred head. Some of those horses on their home ranges were not worth more than five or ten dollars a head. To meet this situation our tariff was amended so that those animals were valued at not less than fifty dollars per head, thus assuring the payment of a duty of $12 50 on each animal. That had a very excellent effect for it kept out of this country a lot of cheap breeding stock that would have been detrimental to the horse breeding of the Dominion.

The present situation is one of urgency. It should be dealt with immediately. Some of these vegetable crops are now coming on the market. By the handling of these crops with a little care, by stabilizing our market, we can greatly increase our production not only along the lines I have mentioned but along other lines that are of importance to Canada. To be effective we must have quick action, otherwise the market is broken before the remedy can be applied. In addition to this, we must have such legislation as will anticipate the coming of various shipments. If we have to wait until a shipment arrives at the boundary line before we can get an order in council passed, I am afraid the procedure will be too slow to be effective. What we want is to be in a position immediately to meet any shipments which it is intended to dump here and take the requisite steps to exclude them except under certain conditions. I repeat, the case is most urgent, and I hope after the interview which the government had with the delegates from all parts of the country a few days ago, they fully realize the importance of speedy action and will take a sympathetic view of the whole situation.

Before reading the amendment I may refer to the fact that in the course of his remark*

Dumping Duly-Mr. Mackenzie King

the other day to the delegation the right hon Prime Minister said, referring to hot house tomatoes, asparagus and canteloup, that some of these were not even produced in this country. I would point out to the right hon. gentleman that that is not exactly so. We are producing asparagus of excellent quality in many parts of Ontario and also in British Columbia. As to hothouse tomatoes, they are produced of the very highest quality in British Columbia and in the east, and under present conditions without the protection of a dumping clause they are forced to come into competition with tomatoes sent up from the southern states, the product of Mexican peon labour. With regard to canteloup, I think growers in the east have established a great reputation for what is known as the Montreal melon. I do know that in the southern Okanagan valley our returned soldiers are producing a canteloup at Oliver, British Columbia. It is very thin of rind, rich in flavour, and second to none. Once you try an Oliver canteloup you are eager to order a case. I am quite sure that if this district is given an opportunity it will soon build up an extensive trade in the Oliver canteloup from one end of Canada to the other.

I beg to move, Mr. Speaker, seconded by Mr. Charters:

That all the words after the word "that" be stricken out and the following substituted therefor:

In the opinion of this house the necessary action should be taken by the government forthwith to effectively control the importation into Canada, either on sale, or on consignment, of natural products of a class or kind produced in Canada under conditions which prejudicially or injuriously affect, or threaten to prejudicially or injuriously affect, the interests of Canadian producers.

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Right Hon. W. L. MACKENZIE KING (Prime Minister):

Mr. Speaker. I might say to the house that the government received no intimation whatever of the intention of the opposition to move this amendment until after the hon. member (Mr. Tolmie) who has just spoken was on his feet. It is customary, when an amendment is to be moved to the motion to go into committee of supply, particularly as in such a ease it is equivalent to a motion of non-confidence in the government, that notice should be given in advance to the administration in order that the ministers who are immediately concerned will be certain of being in their places and in a position to make reply. I regret that the Minister of Finance (Mr. Robb), who was here a few minutes ago, has gone to another

part of the building. Pending his return I shall say a few words with regard to the amendment.

The amendment implies that at the present time there is no power in the hands of the government to take action where necessary "forthwith to effectively control the importation into Canada, either on sale or on consignment, of natural products of a class or kind produced in Canada, under conditions which prejudicially or injuriously affect, or threaten to prejudicially or injuriously affect, the interests of Canadian producers." I may say that there is on the statute books a clause in one of the acts which was passed by this parliament some years ago designed to serve this very purpose. It is a part of the Customs Act and was designed for the express purpos'e of giving to the administration power to take action in case of necessity. I will read the clause, and I think hon. members will see at once that it almost parallels in its phraseology the terms of the amendment. Section 43 of the Customs Act provides:

If at any time it appears to the satisfaction of the governor in council on a report from the minister, that natural products of a class or kind produced in Canada are being imported into Canada, either on sale on on consignment, under such conditions as prejudicially or injuriously to affect the interests of Canadian producers, the governor in council may, in any case or class of cases, authorize the minister to value such goods for duty, notwithstanding any other provisions of this act, and the value so determined shall be held to be the fair market value thereof.

That clause has never been repealed. My hon. friend from Victoria (Mr. Tolmie) has referred to a rather important delegation which, as he remarked, waited upon the government a few days ago, within the precincts of this chamber. The members of that delegation for the most part came here under the impression that the power just referred to had 'been taken away from the administration, and they were here to request that a new section should be enacted which would restore the power so repealed. They were somewhat surprised to learn that they had evidently been misinformed as to what had taken place with respect to the matters in which they were interested, and to learn that the power which resides in the governor in council and under which alone, during the past years, it has been possible to take action of the character referred to in the amendment of my hon. friend, still resides in the governor in council and has in no sense been affected by any action on the part of the administration.

,Mr. LADNER: That is really the whole

point of the debate. Does the Prime Min-

2814 COMMONS

Dumping Duty-Mr. Mackenzie King

ister say there is provision under the act giving authority to the governor in council to pass an order in council to apply the dumping duty? I am informed that the Department of Justice has ruled that no such power as this exists under section 6.

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

I am not aware of the ruling to which my hon. friend refers. What I am aware of is the statute before me at the present time, and the clause which I have just read to the house is the clause in the Customs Act as it appears to-day. I would respectfully submit-

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CON

Leon Johnson Ladner

Conservative (1867-1942)

Mr. LADNER:

The section to which the

Prime Minister is referring is not linked up with the other section giving power to apply the dumping duty, and that is the fault in the whole thing.

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

I cannot enter into an argument with my hon. friend on matters in respect of which I cannot speak with authority or with full knowledge, but I can say to him that the section of the Customs Act which was framed for the purpose of preventing the importation of natural products of a class or kind produced in Canada, at rates which would be prejudicial to or which would injuriously affect such products in Canada, still remains on the statute, and the governor in council has authority to act under that section.

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CON
LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

The governor

in council has the power to fix the rate at which these goods are to be valued when coming into the country.

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CON

Leon Johnson Ladner

Conservative (1867-1942)

Mr. LADNER:

But that merely makes it

subject to an ad valorem duty; it does not make it incumbent on the governor in council to apply the dumping duty. That is the point of the debate.

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

With respect

to the importation of natural products from other countries at rates which would be prejudicial to the producers of Canada, the method which this parliament has said should be adopted as an effective means of preventing that sort of thing has been to give the governor in council in cases of emergent necessity power to fix the valuation at which these commodities shall be admitted by the Department of National Revenue. That means is provided in the statute at the present time; the power to exercise that right still resides in the governor in council. I submit therefore, with respect to the amendment moved by my hon. friend, that the necesity for such a motion

does not appear inasmuch as the power rests already with the government for this express purpose. There is no doubt that there is wide misapprehension throughout the Dominion as to that power still residing in the government. Circulars were sent out from interested parties to horticultural organizations in different parts of the Dominion, which I gather created the impression that in some manner this power has been taken away from the administration; and the delegation to which my hon. friend refers waited upon the government with the express object of emphasizing the necessity for having that power restored. They were, as I have said, very much surprised when they were told that the power had not been taken away, but that it still resided in the governor in council.

I am informed by the Minister of National Revenue (Mr. Euler) that at the present time there are no representations before the Department of Customs with respect to any commodities coming into this country in a manner such as to necessitate action by the governor in council in accordance with the terms of the section of the Customs Act to which I have just referred. Should such a necessity arise, there is power for the governor in council to take action. And the governor in council proposes, as circumstances arise which appear to justify action under this clause, in keeping with the intention of parliament, to see that such action shall be taken as may be necessary. But I desire to make it very clear to this house that the governor in council does not purpose to usurp the powers of parliament with respect to fixing the rates of duty that should govern commodities coming into the country. The right to levy or fix customs duties, which are a form of taxation, is a right which no parliament that has any regard for British procedure will ever delegate to a governor in council or to an executive. So far as the collection or the imposition of customs duties is concerned, that is a responsibility for parliament; and when the government finds it necessary to impose additional customs duties on any class of products it will come to parliament and ask for the authority so to do. The government does not construe the clause to which I have referred as giving to the cabinet the right to fix duties, as the House of Commons would have the right to fix them. What it does construe the clauses as giving to the governor in council power to do is to meet emergent conditions, where producers of natural products in this country are placed at a disadvantage and prejudicially affected by situations, arising in other countries, which

Dumping Duty-Mr. Edwards (Frontenac)

could not be foreseen and which are of a temporary character, and such as parliament would not likely provide against from one year's end to the other.

I say therefore, with respect to this motion, that the necessary authority has already been given by parliament to the governor in council to deal with the situation to which my hon. friend has referred. There is no way in which that power could be increased except by the decision of parliament itself to raise the duties which are to be levied on natural products coming into this country. I submit that the moment to consider that question is when the house is in committee of ways and means, with budget resolutions before it proposed by the Minister of Finance, and not by an amendment brought forward upon a motion to go into supply, which is the equivalent of a motion of want of confidence in the administration.

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CON

Eccles James Gott

Conservative (1867-1942)

Mr. GOTT:

I want to ask the Prime Minister one question. Is he aware of the fact that order in council No. 1088 did not increase the tariff on vegetables imported from the United States?

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

I am sorry I

have not in mind just what order in council 1088 is. I do not know the orders by number.

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CON

Eccles James Gott

Conservative (1867-1942)

Mr. GOTT:

The one we are discussing

under 47a of the Customs Act.

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LIB

May 8, 1928