June 26, 1931

LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):

The statement just made by the Prime Minister does not call for any comment. On the other hand it may be of advantage to citizens throughout Canada and to persons in other countries to know that with respect to the statement which the Prime Minister has just made, all parties in the house will be, I believe, in entire accord. Certainly, so far as the official opposition is concerned, we will support my right hon. friend in any steps that he may take toward international cooperation in a great measure of the kind to which he has referred.

Topic:   SUSPENSION OF WAR DEBTS
Subtopic:   STATEMENT OP PRIME MINISTER RESPECTIN Q PROPOSAL OP PRESIDENT HOOVER
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INQUIRIES FOR RETURNS


WHEAT PRICES-CORRESPONDENCE IN 1916-17 On the orders of the day:


LIB

William Richard Motherwell

Liberal

Hon. W. R. MOTHERWELL (Melville):

As the government has shown a disposition to meet my complaint of yesterday regarding non-tabling of returns, I have from the chief of parliamentary papers an official statement which was prepared at my request as follows:

Date of motion-Subject:

April 22-Embargo upon certain Russian commodities.

April 29-Pegging of wheat or grain prices. May 11-Communications from Saskatchewan government since January 1, 1931.

May 18-Fixing of wheat prices in Canada. May 20-Alleged surplus remaining at conclusion of operations of board of grain supervisors for years 1917 and 1918.

May 27-Order in council appointing wheat board, etc.; order in council appointing board of grain supervisors, etc.

None of these have as yet been tabled.

I may say that we had the privilege of seeing the last two before the agriculture committee, but according to this report they have not yet been officially tabled.

Topic:   INQUIRIES FOR RETURNS
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CON

Richard Bedford Bennett (Prime Minister; Minister of Finance and Receiver General; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Right Hon. R. B. BENNETT (Prime Minister) :

With respect to order No. 108, I

thought I gave the hon. gentleman an answer that he regarded as satisfactory in connection with the pegging of wheat prices.

Topic:   INQUIRIES FOR RETURNS
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LIB

William Richard Motherwell

Liberal

Mr. MOTHERWELL:

That was divided

into two. I got half of it; the other half I did not get.

Topic:   INQUIRIES FOR RETURNS
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TARIFF BOARD

PROVISION FOR APPOINTMENT, POWERS, DUTIES AND SALARIES


Right Hon. R. B. BENNETT (Minister of Finance) moved the second reading of Bill No. 47, to provide for the appointment of a tariff board. He said: I made a brief explanation of the principles of this measure when the resolution was before the house. The bill is founded upon the resolution. The bill contains two fixed principles: first, a provision for the appointment of a tariff board with the powers that are indicated in the bill, and, second, a provision that the board may act as a court of appeal from the decisions of the customs authorities in connection with matters provided for in other legislation. As to the necessity for the appointment of a tariff board, there seems to have been little difference between the two parties. The only difficulty is that my right hon. friend opposite saw fit to proceed by order in council based upon no statutory authority. It will perhaps be within the memory of the house that the hon Minister of Justice last year, in dealing with another matter to which attention was directed, very properly said that there must be, of course, a foundation for an order in council. That foundation must, of course, be a statutory authority. The statutory authority with respect to the order in council creating the late tariff board was non-existent, so far as any special authority was concerned. The only authority was the authority that is incidental, I suppose, to the conduct of government, and the appointment if the government so desires of assistants to the minister or to the ministry. Beyond that there was no authority for the creation of the board, and as there was no such authority, the board itself had no author- Tariff Board-Mr. Bennett



ity even to summons witnesses or to ask anyone to attend before it, and as its assumed power was .without sanction, we are proceeding in the only constitutional method, and that is by the enactment of a statute, which will at once define alike the constitution and the powers of the board. This bill proposes to create a tariff board. The method of the appointment of the board is described in the bill. The board will consist of three members, a chairman and two others. The chairman will receive $12,000 per annum, and the other two members $10,000 per annum. They will hold office for a period of ten years certain, and will be eligible for reappointment. As to the period of ten years, I gathered from what the right hon. leader of the opposition said a few days ago that he felt some objection might be taken to that provision. In my judgment it is essential that the board should hold office beyond the term of office of a government. If the principle is sound, then the members of the board should be in a position where they will not be deterred from the discharge of their duties by any thought of the personnel or of the policies of an administration. Their powers will not be political. Their powers are fact-finding powers, and just as the railway commissioners hold office for a period of years, so this body, which like the Board of Railway Commissioners is a federal court, should also hold office during a period of time that will ensure some form of continuity to the jurisprudence which they create. This board will be in every sense a judicial tribunal, charged with but one responsibility, not the making of decisions upon the facts, but the determination and report as to what the facts are, I believe it will be within the judgment of the house that the powers of the board are powers that will enable it accurately to ascertain the facts and report those facts to the government of the day. In addition to the powers thus given, the tribunal may be used for the purpose of making investigations under the Combines Investigation Act and under the provisions of the Customs Act, which heretofore have been dealt with by another method. Let us for a moment examine the principles that govern this tribunal in the exercise of its powers. They are dealt with largely in section 4 of the bill, and in that regard I desire to point out to the house the value that attaches to just such a body exercising the powers conferred by this section. I said the other day that the experience of the United (Mr. Bennett.] States in connection with their tariff commission had been both fortunate and unfortunate. One body had been found exceedingly valuable, and at another time its value was not so apparent, but recently they have reorganized the commission and I submit that in my reading of the proceedings before judicial commissions investigating facts I have seen nothing that was more complete than that which took place before that tribunal with respect, for instance, to the tariff on maple sugar and maple syrup. The report of the tariff commission on those commodities was made this year, on February 2, 11381, and how these very principles mentioned in section 4 of the bill before us are applied in practice is abundantly apparent from a perusal of that report. For instance, at page 5 of the report it is indicated that Canada is the only competing country of importance with the United States in the production of maple sugar and maple syrup. The data obtained on a former investigation was used as a basis of a report to the president transmitted on the 23rd of April, 1928, under section 315 of the Tariff Act of 1922. That report, particularly the cost data contained therein, together with information obtained by field work in the producing sections of the United States and Canada, in October, 1980, and by means of the public hearing, forms the basis of the present conclusions. The field investigation recently made was concerned primarily with determining what changes, if any, had occurred in the maple products industry since 1905. The information obtained indicated that no important changes affecting costs of production have occurred since 1925, but disclosed the necessity of making certain adjustments in the data for 1925 with respect to interest on the value of the sugar grove and the "weighing" of costs for certain areas. Then follows a discussion of the production in the United States and Canada, and on page 6 my idea of a proper hearing before a tariff commission is indicated by the inquiries there instituted. There is an indication of the number of pounds of maple sugar produced in the United States and Canada, and the number of gallons of maple syrup. These figures are taken from official sources. Then follows a statement as to where the industry is located in the United States and Canada. The maple products industry in the United States is scattered over many states, but its commercial importance is mainly in Vermont, New York and Ohio, in which states over 70 per cent of the domestic production is made. In Tariff Board-Mr. Bennett Canada over 70 per cent of production is in the province of Quebec. Then follows a statement with respect to exports and a statement with respect to imports, then a statement as to the grade and competitive character of imports; the organization of the industry; gifts and loans to the maple products industry by the government of the province of Quebec, and a determination that that was not an appreciable factor in determining the question at issue. Then there is a statement with respect to cost investigation, and the changes since 1925 in the factors affecting costs; then a statement as to adjustment in the cost data for 1925, together with the areas covered in the cost inquiry. Then follows a statement as to the farm cost of the production of maple syrup, exclusive of containers and in a table is set forth an itemized statement of the cost of producing maple syrup in the United States and Canada. The amazing fact is the detail with which the matter is considered. For example, the details provide for details of costs of producing maple sugar, as follows: Operating costs: Human labour. Horse labour. Fuel. Taxes. Rent. Repairs and depreciation. Other. Total operating cost without interest. Marketing costs: Human labour. Horse labour. Other except containers. Total marketing cost. Combined operating and marketing cost without interest or containers: Computed interest on syrup equipment at 6 per cent. _ Combined operating and marketing costs with interest but without containers. Sales value (syrup used and sold as syrup). A similar itemized statement is given with respect to the maple syrup industry. Then follows the conclusion, and the conclusion was that the rate of duty charged in the United States a.t that time was a higher rate than was necessary for the purpose of equalizing the costs of production, and accordingly the president made a proclamation reducing the tariff in accordance with that finding. The conclusion of the commission will be found on page 6. It is found by the investigation: (a) That the duties of 5£ cents per pound on maple syrup and 8 cents per pound on maple sugar do not equalize the differences in the costs of production in the United States of the said domestic articles and of the like or similar foreign articles produced in the principal competing country: (b) That a decrease in the rate of one and one-half cents per pound on maple syrup and a decrease in the rate of two cents per pound on maple sugar are necessary to equalize these differences; and (c) That the rates of duty necessary to equalize said differences are four cents per pound on maple syrup and six cents per pound on maple sugar. Appended to this statement of findings is a summary of information obtained in the investigation. This statement is signed by the members of the commission. I concede that to be a report upon a case similar to cases which may arise in this country, and properly or improperly I regard these conclusions as a fair indication of the evidence which should be submitted in order to enable a tariff board to ascertain what tariffs are necessary to equalize the differences in the cost of production in Canada and elsewhere, whatever the domestic article may be. That is what the commission in the United States has been doing, and that is what we propose the tariff board in Canada shall do. It has to determine what duty is necessary to enable an adjustment to be made of the differences between the cost of the goods which compete with Canadian goods, and the Canadian goods themselves. I refer particularly to costs in the market of our principal competitors. In some particular cases before the United States tariff commission the principal competitor has not been Canada; on occasions it has been some other country. Sometimes for instance it has been Jugoslavia, and in some instances I may say that the findings have been just exactly the opposite of those to which I have directed the attention of hon. members, namely, instead of finding that the duty should be reduced to equalize the difference in the cost of production at home and abroad there has been a finding that there Should be an increase in order that such equalization might be made. In the United States the facts when found are the basis of the executive action of the president who makes his proclamation accordingly. We have not provided that any such power shall be vested in the executive in Canada. It is felt that with the present machinery of the Customs Act-


LIB

Ernest Lapointe

Liberal

Mr. LAPOINTE:

Hear, hear.

Topic:   TARIFF BOARD
Subtopic:   PROVISION FOR APPOINTMENT, POWERS, DUTIES AND SALARIES
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CON

Richard Bedford Bennett (Prime Minister; Minister of Finance and Receiver General; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

I have said "with the

present machinery of the Customs Act"-it has not always been so-with the present machinery of the Customs Act it will be possible to await the annual meeting of parliament to deal with problems with which the President of the United States has dealt by executive action. In the United States executive action taken by the president is limited to 50 per cent decrease or increase.

Tariff Board-Mr. Bennett

Parliament would exercise its own judgment through recommendations made to it by the government of the day based on the facts as found by the tribunal thus to be constituted.

In closing I admit that much depends on the personnel of the tribunal. It is of the utmost importance that the tribunal should be dissociated from political considerations and should endeavour to ascertain the facts it is asked to obtain in a way in which high-minded and honourable men would discharge their duties upon the bench. This federal court so constituted would be composed of three judges. I use the word "judges" not in the narrow sense, as appertaining to legal procedure, but I refer to men capable of receiving testimony, weighing it and drawing conclusions therefrom concerning the determination of questions of fact. I do submit that such a body armed and clothed with the authority which is conferred upon it by this bill would be able, if properly constituted- as it will be-to render a very great anti distinct service to this country. We will then be able to adjust our tariff legislation to the principles which have been applied in other countries so that the adjustments, whatever they may be, will be based upon the equalization of the differences of the cost of production at home and the costs of our competitors abroad. I cannot think that any Canadians have ever asked for favours but they have asked for fair competition. There can be no such thing as fair competition if Canadians under their present standard of living and standards of wages, are subjected to competition which comes from a body of workmen who are living under lower standards of living. One of the chief purposes of this measure is to provide that that equalization when made by the government of the day anil embodied in its tariff legislation shall be based upon a report made by this court on the facts submitted to it for determination. Perhaps most hon. members of the house will recall a letter from Mr. Darby to the Toronto Star in which that gentleman pointed out that whatever may have been its conception of its obligations at its inception the late tariff board degenerated as it was bound to do, not having behind it the sanction of any statute, and nbt having any statutory authority for its creation. Its proceedings were bound to degenerate into what Mr. Darby described as the gathering together of the members of the board with many discussions in connection with tariff matters and the making of findings without any proper appreciation of the facts.

I ask any fair-minded member of the house to read the reports of the late tariff board fMr. Bennett.]

and find in them anywhere any finding of facts such as that I have read with respect to maple sugar and maple syrup by the commission in the United States. It is of no use to frame a tariff or recommend the framing of a tariff unless such recommendation is based upon a finding of fact for which there is some substantial evidence. In my judgment the late board was defective in that regard-

Topic:   TARIFF BOARD
Subtopic:   PROVISION FOR APPOINTMENT, POWERS, DUTIES AND SALARIES
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LIB

Joseph Georges Bouchard

Liberal

Mr. BOUCHARD:

And the late tariff?

Topic:   TARIFF BOARD
Subtopic:   PROVISION FOR APPOINTMENT, POWERS, DUTIES AND SALARIES
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CON

Richard Bedford Bennett (Prime Minister; Minister of Finance and Receiver General; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

And the late board who were responsible for the late tariff. That is the reason we have had to change it; that is the very reason. Further, that is the reason we will continue to change it until such time -whenever it may be, as I shall submit to this house next week-until such time at least as there is an equalization of the differences between the costs of production abroad and these costs at home.

Without going into detail on the second reading I have outlined at least the principles governing the bill. We have endeavoured to ask the board to undertake, if it is not fully engaged with other activities, investigations under the Combines Investigation Act as distinguished from the provisions of the Customs Act which provides, as will be remembered, for certain investigations to be made when allegations are made apart altogether from the Combines Act, but under the Customs Act itself.

With great confidence in the use to which this measure may be put and the earnest belief that it will be of the greatest possible value to Canadians in all walks of life in ascertaining facts upon which equalization of costs may be determined and tariff action taken, I move the second reading of the bill,

Topic:   TARIFF BOARD
Subtopic:   PROVISION FOR APPOINTMENT, POWERS, DUTIES AND SALARIES
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LIB

Charles A. Stewart

Liberal

Mr. STEWART (Edmonton):

Before the right hon. Prime Minister takes his seat, may I ask a question respecting the power to be conferred upon the proposed new board. I understand the Prime Minister to say that the new board would act as an appeal board.

Topic:   TARIFF BOARD
Subtopic:   PROVISION FOR APPOINTMENT, POWERS, DUTIES AND SALARIES
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CON

Richard Bedford Bennett (Prime Minister; Minister of Finance and Receiver General; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

If my hon. friend from

West Edmonton (Mr. Stewart) will look at page 2 of the bill, and refer to section 4 paragraph 3 he will observe that the board would be empowered to make inquiries under the customs tariff. The appeal power is provided for on page 6 of the bill where it is stated that the tariff board will be substituted for the board of customs. Those two sections are not analogous at all and are not the same thing. Rulings on appeal as made by the

Tariff Board-Mr. Ilsley

board of customs as now constituted are really made by the same gentleman as made the original ruling. The present bill constitutes an endeavour to substitute the new board to act in place of the board of customs.

Topic:   TARIFF BOARD
Subtopic:   PROVISION FOR APPOINTMENT, POWERS, DUTIES AND SALARIES
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LIB

James Lorimer Ilsley

Liberal

Mr. J. L. ILSLEY (Hants-Kings):

Mr. Speaker, my purpose in rising is to move an amendment to the motion for tlio second reading of this bill.

Before so doing however, I should like to discuss a few of the features of the bill, including its general principles, and I should like also to refer to some of the observations by the Prime Minister. At the outset I think we can agree that there should at all times be a body of qualified persons charged with the duty of gathering information and finding facts on which the government can base its tariff. As a matter of fact the last administration, realizing that, set up by order in council a tariff advisory board, which gathered facts and rendered very important service in getting information for the ministry upon which they could base their tariffs. Perhaps for the matter of record I should read the order in council under which that board was set up. This is P.C.530:

The committee of the privy council, on the recommendation of the Minister of Finance, advise that for the purpose of advising the Minister of Finance in regard to tariff, taxation, and other related matters, there be established an Advisory Board on Tariff and Taxation consisting of:

The Rt. Hon. George Perry Graham, Brock-ville, Ontario, chairman;

Alfred Lambert, manufacturer, Montreal,

P.Q.; ^

Donald Gordon McKenzie, farmer, Winnipeg, Man. _

The committee, on the same recommendation further advise that the following regulations be prescribed with reference to the Advisory Board on Tariff and Taxation:

(1) The duties of the board shall be to inquire into and hear representations on all matters pertaining to the tariff and other forms of taxation, as may be directed by the Minister of Finance, and to advise the minister in regard thereto.

(2) The said board shall be under the jurisdiction of the Minister of Finance, who may make such regulations and give such instructions as he deems expedient or necessary to carry out the purpose and intention thereof.

(3) The board shall hold meetings ivhenever it appears to the board to be necessary or desirable and also whenever required by the Minister of Finance to hold meetings.

(4) The board shall avail themselves of information and advice from such officers of the Departments of Agriculture, Customs and Excise, External Affairs, Finance, Labour, Trade and Commerce, or other departments of the public service, as may be able to be of assistance to the board.

(5) The Minister of Finance, on the recommendation of the chairman of the board, may engage competent persons possessing special

knowledge to assist the board and may similarly engage such clerical assistants as may be necessary and such persons and clerical assistants may be paid for their services at a rate to be determined by the Minister of Finance.

The committee further advise that any expenditure necessary for the purposes of the Advisory Board on Tariff and Taxation be made out of Vote No. 313 of The Appropriation Act, 1926.

The order in council, as I understand, was passed under the inherent authority of the government to deal with such matters, and the setting up of a tariff board was sanctioned by the votes which year by year the house passed for that purpose.

Now, the present government have abolished that board by rescinding that order in council and have introduced Bill No. 47 which is now before us for consideration. Under this bill it is proposed to set up a tariff board which is to have four classes of function: first, to make inquiries under direction of the minister into certain matters pertaining to tariffs and to report to the minister-that perhaps should be called its most important function; second, to hold certain inquiries under the Customs Tariff Act; third, to hold certain inquiries under the Combines Investigation Act; fourth, to assume and take over the functions, powers and duties of the board of customs. I do not propose to say anything about the three classes of functions last named, but there are a few observations I wish to make upon the first and most important function of the board to be set up by this legislation, that of making inquiries under the direction of the Minister of Finance upon tariff matters and reporting to him thereon.

This bill is based upon Bill No. 88, which was introduced in 1912 by Sir Thomas White, then Minister of Finance. That bill was amended in many particulars during the course of several long discussions in the session of that year. Amendments were suggested by a good many private members, and it may be interesting to recall some of their names. Hon. D. D. McKenzie, Hon. A. K. Maclean, Hon. E. M. Macdonald, Hon. William Pugsley, and Mr John Sinclair who at that time was member for Guysborough. The amendments suggested by these gentlemen were adapted by Sir Thomas White and are part of the bill now before us. Certain amendments were also suggested by the Senate, and these too, were adopted and are also incorporated in the present measure. There were other amendments suggested by the Senate which Sir Thomas White could not see his way clear to adopt, and for that reason the bill did not become law in 1912.

Tariff Board-Mr. Ilsley

Having given some study to the original bill, to the amendments which were suggested during its passage through the house and adopted, and to the amendments suggested by the Senate, and to the present bill which introduces several entirely new elements, I submit that in so far as the bill incorporates the provisions of Sir Thomas White's measure there is very little objectionable in it; in so far as it incorporates the amendments to which I have referred there is very little objection to it; but in so far as it incorporates several very important new principles there is a great deal of objection, and during the few minutes at my disposal I want to point out what I consider the most objectionable features of these additions which have been made to the bill by the present Minister of Finance.

Among these objectionable features is the introduction of the principle of equalization of costs, to which the right hon. Minister of Finance has referred. He has laid great stress upon that. As a matter of fact he has inserted in this bill certain words incorporating that principle for the first time They are to be found in section 4, subsection 1 (b), giving the board power to report:

-what increases or decreases in rates of duty are required to equalize differences in the cost of production.

That is a new element in our tariff board legislation. It did not appear in the bill of 1912, it did not appear in any of the amendments and it does not appear in the powers conferred upon the Tariff Advisory Board in 1926 by the order in council which I have quoted.

Apparently the board that is being set up now is to undertake as its main business the ascertaining of what rates of duty will equalize the cost of production here and abroad. On that point, as to whether that is a proper basis on which to build a tariff, and a proper set of functions for a tariff board to exercise, we have very high authority. They set up in the United States in 1916 a tariff commission. The first chairman of that commission was Professor F. W. Taussig, of Harvard university, then, and now, probably the most eminent economist in North America. He was chairman of the commission for the first three years of its existence. The second chairman was Professor Thomas Walker Page, professor of economics at the university of Virginia and later chairman of the council of the Institute of Economics. These two gentlemen having not only economic training, but also having practical experience in the framing of tariffs, have stated in books

[Mr. Hsley.l

that they have written just what they think of the principle which is introduced in this bill for the first time, and is to be the basis of our tariffs in the future if we accept and adopt the principle. I want to refer first to what Professor Taussig says in this book Tariff History of the United States, edition of 1930, page 363:

The Republican platform contained a new version of the principle on which protection was to proceed: paraded, to be sure, as the "true" or "long-established" Republican doctrine, but, nevertheless, in its precision of statement substantially new. The doctrine was laid down as follows: "In all protective legislation the true principle of protection is best maintained by the imposition of such duties as will equal the difference between the cost of production at home and abroad, together with a reasonable profit to American industries."

This notion, very little heard of before, played a surprisingly large part in the discussions of 1908-09, and was hailed in many quarters as the definitive solution of the tariff question.

It is to-day; it has been so stated by the Prime Minister this afternoon.

It has an engaging appearance of moderation; yet it leads logically to the most extreme results. It seems to say,-no favours, no undue protection, nothing but equalization of conditions. Yet little acumen is needed to see that, carried out consistently, it means simple prohibition and complete stoppage of foreign trade.

Then later in the book, at pages 480 and 481, Professor Taussig says:

The notion of equalizing costs of production had become a sort of fetish among the protectionists. I Bay nothing here of its weakness from the point of view of economic principle, having indicated elsewhere that it seems to me fatally unsound as a matter of tenable or consistent theory. It is the question of practicability in administration that was now raised by its being set up in the tariff law. The rule was proclaimed, and an endeavour was made to apply it, quite without regard to the most obvious realities. It is difficult enough to ascertain costs of production in the United States. True, with compulsory adoption of uniform methods of cost accounting by American establishments; with a large staff of accountants to examine books and check returns from a considerable number in each branch of industry; with some careful procedure for arriving at a mean between the high cost and the low cost producers-representative figures can be secured for American articles of a standard sort. But can it be imagined that any officials in the United States could do this sort of thing for foreign products? That foreign producers would permit such a control of their accounts and figures as alone, would make it possible to ascertain trustworthy comparable figures for the competitive articles in foreign countries? These difficulties, great enough in case of standardized articles, obviously become immensely greater with specialties, and perhaps most difficult of all with goods produced at joint cost ("by-products"). These classes include many of the

Tariff Board-Mr. Ilsley

contested items for which resort to the flexible powers was likely to be sought. A biased or subservient tariff commission might make a pretence of having found accurate figures. A basis of well-ascertained fact is almost impossible to find, or if found, to keep up to date. Those who advocated this as a "scientific" solution of the tariff question were obsessed by formula and surprisingly unable to face the realities.

That is the statement of Professor Taussig, to whom I have heard the right hon. gentleman pay tribute as the leading economist of North America. Then the evidence of Professor Page, in his book called Making the Tariff in the United States, edition of 1924, is found at page 99:

The conclusion cannot be escaped that it is rarely possible to ascertain accurately the difference in costs of production at home and abroad. To use as the basis of a general tariff act a thing so fleeting, evasive, and shadowy would be neither right nor possible.

So my first objection to this act, incorporating these words as it does for the first time, and adopting also for the first time that principle upon which it puts our tariff, is that it is based upon a false and exploded economic principle. Then I have another objection to that provision in the act; it is that under -this act, for the first time in our history, the board is empowered to recommend or to find specific rates of duty. They are enabled to say that a duty of 30 per cent is required instead of a duty of 20 per cent, or that a rate of 20 per cent is necessary instead of a rate of 30 per cent, in order to equalize the costs of production here and abroad. There can be no question that this is merely an opinion which they will form. When they come to a conclusion like that they will not be acting as a fact-finding body but as an opinion-forming body. When they form an opinion under such circumstances, and make that opinion known, the minister, the government, the house and the country will consider that they have recommended that a certain rate of duty be imposed, and we will have come to the position from which all parties have said we must keep away; that is, the position of setting up a duty-making body.

I might quote Sir Thomas White on that point; his words were very emphatic. At column 6810 of Hansard of April 1, 1912, he said:

There is not one word in that section with reference to the questions of duty ....

He was talking about his own bill; he could not have said the same thing about this bill.

.... increase of duty, or reduction of duty; there is not one word in regard to tariff duties.

The main object and purpose of the tariff commission is not to raise duties, is not to advise even with regard to raising of duties, it is not to lower duties or to advise in regard to the lowering of duties necessary. The sole object of this commission, as has been stated in this . house a hundred times, if it has been stated once during the course of the debate, is to ascertain economic facts upon which this government, which has not delegated and cannot delegate its constitutional powers to any outside body, may come to a conclusion in regard to the question of duties or in regard to its tariff policy.

I think it is a very fundamental objection to the bill which the right hon. Minister of Finance has introduced into this house that he departs from those principles laid down by Sir Thomas White, which have been held by both parties up to this time, and that we are really setting up a tariff-making body if we pass the bill in its present form.

Topic:   TARIFF BOARD
Subtopic:   PROVISION FOR APPOINTMENT, POWERS, DUTIES AND SALARIES
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LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. MACKENZIE KING:

In the explanatory note to this bill he lays down the same principle.

Topic:   TARIFF BOARD
Subtopic:   PROVISION FOR APPOINTMENT, POWERS, DUTIES AND SALARIES
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LIB

James Lorimer Ilsley

Liberal

Mr. ILSLEY:

The same principles laid

down by Sir Thomas White in 1912 are laid down in the explanatory note to the bill introduced by the right hon. Minister of Finance:

The purpose of this bill is to create a tariff board. It is not the intention to delegate to the board the duty and responsibility resting upon the government of originating bills for the raising of revenue, which will remain precisely as at present. The intention is to secure, as a result of the work of the board, a constantly increasing body of information which will be of service to the government and parliament.

I submit, sir, that the bill goes far beyond that. There is another feature of this bill which I submit is utterly indefensible; that is the provision to the effect that no member of the board shall be eligible to be a candidate for election to the House of Commons of Canada until after the expiration of two yearn from the date he ceases to be a member of the board.

Let us consider that for a moment. When the Prime Minister framed that section and put it in his bill he must have contemplated the possibility that in the future some appointee to this board would act so corruptly, as to use his position as a member of the board-which, be it remembered, is a high judicial position, as the Prime Minister has emphasized-to curry favour with prospective constituents unless he is debarred from doing so by this provision. That is a very sinister implication, because what is the duty of the members of the board? It is their duty to find facts, according to the Prime Minister. The implication is that unless you prevent

Tariff Board-Mr. llsley

them from standing for election within two 3rears after they cease to be members of the board there is a danger that they will find falsehoods instead of facts; that they will make themselves worse than perjurers, unless they are restrained from doing so by something in the nature of this provision.

With all deference, Mr. Speaker, I submit that this is a reflection upon Canadians; it is an aspersion upon Canadian institutions; it is a slur upon prospective appointees to the board. Moreover, if the principle is introduced into this act it cannot stop there; it must be introduced into other acts as well. What is to be said of the Board of Railway Commissioners? This tariff board is to be merely a fact-finding body, according to the Prime Minister, but the Board of Railway Commissioners is a decision-making body on matters which affect the pockets of whole countrysides, whole provinces, whole districts and sections of the dominion. One can imagine a situation coming up like that suggested by the hon. member for New Westminster (Mr. Reid), the people of a province might be clamouring for lower rail rates on some particular commodity and be feeling very strongly upon the subject. If we are to take it for granted that when we set up these judicial bodies the members thereof are going to act corruptly, what is to prevent the members of the Board of Railway Commissioners from identifying themselves with some popular clamour and thereby making themselves undefeatable political candidates? If we are going to introduce an element such as this into our tariff board legislation, we will have to introduce it into our railway board legislation and amend the Railway Act, but no one would ever think of doing that. Not only that, but there is the Pension Act and the members of the pension board, the members of the pension tribunal and of the pension appeal court. Members of those bodies decide most important questions and upon their decisions depend the payment of large sums of money to applicants for pensions. If we are going to assume that men who are appointed to these positions are going to act corruptly, and we give concrete expression to our assumption by introducing such a section into the act, we will have to amend the Pension Act and the act providing for the setting up of the pension tribunals and other bodies. The same applies to the Canada Farm Loan Board, as well as to the judiciary of Canada. There is no more reason for having an objectionable section such as this in the bill before the house than there is for putting a similar section in the Judges Act. I say

in all conscience to the Prime Minister that there cannot be any good reason for introducing this objectionable feature into this important legislation.

Another feature of the bill which I think calls for a little comment is in connection with what might be termed the secrecy sections. There is nothing in the bill to provide that the proceedings before this tribunal shall be public; there is nothing in the bill to provide that the proceedings are to be printed and distributed from day to day so that the public will know what is going on. Moreover, there is a very remarkable provision in the bill that if any person makes public any information which is in its nature confidential that person will be guilty of an offence and liable on summary conviction to a penalty not exceeding SI,000 or to twelve months' imprisonment. That is a change from the bill as introduced by Sir Thomas White. There was a provision in that bill that the commission itself should not make public information which was in its nature confidential, but this bill apparently does not have in mind the commission itself, it has in mind some person who may be present, perhaps representing before the board the consuming public or some interested party and who goes out and makes public something which has come out in evidence before the board which he may think in all good faith ought to be made public. If he does that and if it is eventually decided that that evidence was in its nature confidential, he then becomes liable to a penalty of $1,000 or twelve months' imprisonment. He does not even need to be a wilful violator in order to be convicted if violating the harsh penalty provisions of the bill. It seems to me that this provision is just as indefensible as the others to which I have referred if indeed it is not more so.

Another provision of the bill to which I think the attention of the house should be called, is what might be termed the patronage section. In the act of 1912 it was provided that the staff of the board was to be selected by the governor in council upon the recommendation of the board itself. At that time there was no Civil Service Commission possessing the powers of the present commission; since that time the commission has been set up but instead of leaving the selection of the staff of this board to this commission, which would be the normal and natural thing to do, this bill takes not a forward step but a retrograde step by providing that the staff of the board is to be selected by the governor in council, not even

Tariff Board-Mr. Ilsley

on the recommendation of the board itself. In other words, the selection of the staff is placed under political patronage instead of leaving it to the Civil Service Commission or at least to the recommendation of the board itself.

Topic:   TARIFF BOARD
Subtopic:   PROVISION FOR APPOINTMENT, POWERS, DUTIES AND SALARIES
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UFA

Henry Elvins Spencer

United Farmers of Alberta

Mr. SPENCER:

Was the staff of the old

board appointed by the Civil Service Commission?

Topic:   TARIFF BOARD
Subtopic:   PROVISION FOR APPOINTMENT, POWERS, DUTIES AND SALARIES
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June 26, 1931