July 17, 1931

BANKING AND COMMERCE


Tenth report of the select standing committee on banking and commerce.-Mr. Matthews.


PRIVILEGES AND ELECTIONS


Mr. R. B. HANSON (York-Sunbury) moved that the second and final report of the select standing committee on privileges and elections be concurred in. Motion agreed to.


GASOLINE DUTIES


On the orders of the day:


LIB

Charles Edward Bothwell

Liberal

Mr. C. E. BOTHWELL (Swift Current):

Mr. Speaker, I asked a question yesterday of the Minister of National Revenue (Mr. Ryckman). Could the minister give me an answer to-day?

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CON

Edmond Baird Ryckman (Minister of National Revenue)

Conservative (1867-1942)

Hon. E. B. RYCKMAN (Minister of National Revenue):

Mr. Speaker, the question asked by the hon. gentleman concerned a headline appearing in the newspapers, as follows:

Announcement of new duties on refined gasoline was made yesterday.

This statement is hardly correct. The value for duty of gasoline is appraised by the department from time to time, and on July 11, 1981, a bulletin was issued by the department appraising the importations of refined gasoline from various refining points in the United States. I have no doubt the hon. gentleman will find some satisfaction in the fact that the values for duty have been reduced.

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LIB

Charles Edward Bothwell

Liberal

Mr. BOTHWELL:

Could the minister give the house the changes which have been made?

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CON

Edmond Baird Ryckman (Minister of National Revenue)

Conservative (1867-1942)

Mr. RYCKMAN:

I cannot give what they were before because they were carried out to the third decimal point, but it may be of assistance to my hon. friend to read the bulletin issued on July 11. It reads as follows:

Wine

gallon

cents

Pennsylvania, New York and district,

which includes Atlantic seaboard.. .. 6-315

Toledo, Detroit, Cleveland and district. 6-928

Chicago and district 5-828

Minneapolis and district 6-178

Wine

gallon

cents

Wood River, St. Louis and district.. .. 5-428

Mid-Continent district, which includes the states of Oklahoma, Kansas, part of Missouri, part of Arkansas, and

north Texas 3-678

South Texas, Louisiana and district.. 5-228

Wyoming and district 3-678

Montana and district 6-678

Provided, that goods are not to be entered at less than their invoice values, nor less than the fair market value as sold for home consumption. The above prices are based on to-day's prices of crude oil in the different fields, and you will be advised of any adjustment to the above prices, due to changes in the price of crude oil.

As the price of crude oil changes, these bulletins are made up and sent to the collectors of customs. I shall be glad to hand this bulletin to my hon. friend as it may help him to understand the matter.

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SAINT JOHN HARBOUR

CON

Alfred Duranleau (Minister of Marine)

Conservative (1867-1942)

Hon. ALFRED DURANLEAU (Minister of Marine):

Mr. Speaker, I move that

the resolution standing in my name covering a loan of $3,500,000 to the Saint John harbour commissioners be discharged. As hon. members probably know, since this resolution was placed on the order paper, a tremendous fire has taken place, and it is proposed that this amount be included in a larger amount to be covered by another resolution which will be placed before the house next week.

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Motion agreed to.


WAYS AND MEANS

CUSTOMS TARIFF RESOLUTIONS


The house in committee of ways and means, Mr. LaVergne in the chair. Customs tariff-184. "Newspapers and weekly literary papers, unbound, tailors', milliners', and mantlemakers' fashion plates, when imported in single copies in sheet form with periodical trade journals: British preferential tariff, free; intermediate tariff, free; general tariff, free. Customs tariff-184a. Periodical publications, in the English or the French language, consisting of magazines or fiction, unbound or paperbound, per pound: general tariff, 15 cents. Provided, that the governor in council may from time to time by order in council exempt from the duties specified in this item such of the periodical publications herein referred to as are deemed by the governor in council to be of a religious, educational or scientific character. Provided, further, that the rates of duty specified in this item shall not have force or effect until July 1, 1931. Provided, further, that nothing in this item shall affect in any way the provisions of item 1201 of schedule C to the customs tariff. 3878 COMMONS Ways and Means-Customs Tariff


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 (Minister of Finance):

Mr. Chairman, the various items have been adopted with the exception of items 184 and 184a. With respect to that we have made a very careful effort to meet certain criticisms that were urged against it, one of the principal being that the governor in council was perhaps not the best tribunal in the world to make the determinations that were called for under the item as read. It is therefore proposed to make it somewhat clearer than it read. Item 184 would read as follows:

184. Newspapers, unbound, n.o.p.; tailors', milliners' and mantlemakers' fashion plates, when imported in single copies in sheet form with periodical trade journals: magazines published in other than the French or the English language: British preferential tariff, free; intermediate tariff, free; general tariff, free.

That, hon. members will observe, is substantially item 184 as printed with some slight changes in the wording of the resolution. Then item 184a would read;

184a. Magazines, unbound: British preferential tariff, free; intermediate tariff, free.

They will thus be free under the British preferential tariff and the intermediate tariff, but not otherwise. Under item 184b these magazines are divided by the application of a new standard of division, as follows:

184b. Magazines, including agricultural, business, technical and trade journals, unbound or paper bound, which, by reason of their advertising content, are subject in the country of origin to zone rates of postage based upon such advertising content:

(i) w'hen the space devoted to advertisements exceeds 20 per centum, but does not exceed 30 per centum of the total space, per copy: general tariff, 2 cents.

(ii) when the space devoted to advertisements exceeds 30 per centum of the total space, per copy: general tariff^ 5 cents.

That is the application of two principles:

first, that in the country of origin the magazines are subject to a surtax or higher rate of postage by reason of their advertising content; second, the determination of what per centum of advertising shall subject them to a given standard or rate of duty. The next division is 184c:

184c. Magazines in which the advertising matter does not exceed 20 per centum of the total space: general tariff, free.

Lastly, to meet a difficulty to which I shall presently refer, we would have 184d:

184d. Periodicals or portions of newspapers consisting largely of fiction and/or feature stories or articles and/or, comic supplements, per pound: general tariff, 15 cents.

(The Chairman.]

Provided, that the duty under this tariff item shall be not less than, per copy: general tariff, 15 cents.

Provided, that nothing in tariff items 184, 184a, 184b, 184c or 184d shall affect in any way the provisions of item 1201 of schedule C to the customs tariff.

This is the item in the customs tariff providing for censorship and for the prohibition of magazines and newspapers that fall within the category mentioned.

Provided, further, that the governor in council may make such regulations as are deemed necessary to carry out the provisions of tariff items 184, 184a, 184b, 184c and 184d.

Provided, further, that the rates of duty specified in tariff items 184b and 184d shall be effective on and after the first day of September, 1931.

Some question has been raised as to when this should become effective; but inasmuch as magazines with a circulation of 1,000,000 copies or more have to commence printing a month or six weeks before the actual issue, in fairness to such magazines the date of the coming into effect of these items has been made the first day of September next.

May I say to the committee that the matter has not been free from difficulties. For the last twenty-five or thirty years Canada has imposed a tax by way of a tariff upon advertising matter. That tariff amounts to fifteen cents per pound or not less in any event than 35 per cent ad valorem. But amazing as it may sound, that class of advertising that was most potent, namely, the advertising in the magazines, periodicals and newspapers to which I have referred, has been free from the collection of any tariff with respect to advertising. Our great neighbour to the south early learned that it was undesirable to let this condition continue, and so they provided first of all that there should be a tax imposed upon advertising in such periodicals or publications; second, that wherever the amount of advertising exceeded 5 per cent, a graduated rate should apply. That rate was determined by the zone distances that established the rate in parcel post transportation or transmission. These rates are as follows:

Per pound

First and second, up to 150 miles. 1| cents

That is in addition to the ordinary postal rate of one and one-half cents, this being second class matter.

Per pound

Third, from 150 to 300 miles.. .. 2 cents

Fourth, 300 to 600 miles 3 cents

Fifth, 600 to 1,000 miles 4 cents

Sixth, 1,000 to 1,400 miles 5 cents

Seventh, 1,400 to 1,800 miles.. .. 6 cents

Eighth, over 1,800 miles 7 cents

Ways and Means-Customs Tariff

As I observed a moment ago, these are the rates charged for parcel post transmission within the United States. It has been found in the United States that the publications which we are seeking to reach by these items average approximately 45 per cent of advertising matter, and the average charge of postage paid as a surtax amounts to notquite two and one-half cents but 2-45 cents. It will be observed that the rate is slightly higher than the rate we have fixed because we realize the tremendous hold that such publications have upon this country. The circulation is tremendous; as a matter of fact, the ' sum total of the various publications amounts to 1,400,000 copies per issue, as against less than 950,000 of our own. I was recently reading a rather extensive articleupon the subject and I was somewhat amazed at the extent to which these publications have found a home in Canada.Then there is another class altogether.

There is a class which we reach by censorship and a very large number of those publications have been placed under the ban by reason of article 1201 of our tariff, which is the prohibition article to which I referred a moment ago. But there is a class that one would hardly describe as coming within the exact language of the words used in that article, but which is most offensive to a very considerable number of the Canadian people. It was found that the imposition of a high rate of duty would accomplish the end aimed at and in the budget resolution the rate was stated at fifteen cents per pound, which is the rate that will continue.

In the resolution we have endeavoured to be fair, because it is rather late in the day that this action is being taken. It is amazing that we should have continued all these years to tax ordinary advertising and yet permit this form of advertising to remain free from any tariff charge. I have never quite been able to understand just why this is so; I suspect there are many reasons with which I am not familiar, but at any rate, that is the fact. If other countries are right in making this charge on advertising content, I think it cannot be said that we ape treating the matter unfairly by endeavouring to secure some revenue from it ourselves, but we must, as I have said, endeavour to be fair for we have so long continued not to collect any revenue. Therefore, instead of adopting the principle that has been adopted in the United States,

of charging for advertising content beyond 5 per cent, we have left the advertising content up to 20 per cent free from this tariff charge. On advertising content from 20 to 30 per cent we have made the charge, as I have indicated, two cents per copy, but when the space devoted to it exceeds 30 per cent, then the rate is five cents per copy. I read to the committee the rates prevailing by way of surtax in the United States, showing that for transmission of a magazine of the class indicated, where the advertising was in excess of 30 per cent, the rate from the east to San Francisco would be seven cents per copy in addition to the ordinary postage. I think, therefore, it cannot be said that this is in any sense an unfair impost.

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LIB

William Daum Euler

Liberal

Mr. EULER:

Is the tax going to be imposed on a monthly basis, because the quantity of advertising will vary from month to month?

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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:

My hon. friend from

North Waterloo has asked me- the same question upon which I sought information when I was giving consideration to this matter, and I found that in the United States the publishers are compelled to file with the post office in the community in which the magazine is published a statement of the reading content and the advertising content of each issue as it leaves the press, and that determines the matter so far as they are concerned. In some instances you will find a copy from the press containing 45 or 50 per cent advertising content and 55 or 50 per cent reading content. In this item you will find the words, "which by reason of their advertising content are subject in the country of origin to zone rates of postage based upon such advertising content." That is, magazines which are not published in this country but come in here and have a wide circulation must, in order to fall within the provisions of that item of the tariff, be such as are subject to zone rates by reason of their advertising content. We apply the same principle, with the modification that we have been slightly more generous than in the country of origin for a reason which I think is not difficult to see, and which I think will appeal to the committee. That is, we have no zone system in this country. So in a broad and general way we have sought an average which I think the committee will agree is fairly represented by the charges that are made.

3880 COMMONS

Ways and Means-Customs Tariff

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LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. MACKENZIE KING:

The right hon. the Prime Minister has removed so much by way of exception that I find it rather difficult to realize what is left of the original resolution. The resolution as introduced was almost in the nature of an embargo on periodicals and magazines coming from the United States and other countries to this country, and as such it seemed to me to be a tax on thought and literary art. The protest that I wish to make at the moment is against a tax of that character. If the effect of the amendments, which my right hon. friend has just moved, has been to eliminate the greater part of the original resolution, I have little further to say; but as originally introduced, the resolution amounted, as I have said, so far as it concerned magazines and periodicals coming to this country from abroad, to all but a complete embargo, and to that extent to a prohibition upon thought and ideas conveyed through those media to the people of this country.

May I say that thought, as hon. members well know, is cosmopolitan. It should have mo limitation with respect either to place or time. All advances that are made in civilization are the result of ideas, and in any way to preclude the possibility of a good idea having its opportunity of fruition to the full in any quarter is to retard to that extent the progress of civilization itself. In these days there is probably nothing more important than what we now describe as the international mind, that effch nation should begin to appreciate the intellectual ideals and currents of thought that prevail and sway opinion in other countries. Viewed in this light the tax becomes a tax upon international good will. So far as our immediate neighbours are concerned, I venture to say that their thought on the great questions of the day finds its expression in the leading periodicals and publications' of the United States. I believe it is all in the interests of international good will that the people of our country should become as familar as possible with the trends of thought in the United States on all classes of questions, just as it is all important that our neighbours should also become acquainted with our trends of thought and thereby in a more immediate way become familiar with the thought which governs British communities generally. I dleplore any tax which will in any way restrict the widest spread of views and ideas throughout communities, particularly communities that are neighbours.

May I say further that it seems to me a tax of this kind is doing an injustice to our own authors and writers. My right hon. friend has sitting immediately behind him one who has distinguished himself as an author, and only a few days ago in this House of Commons he made the statement that but for the fact that he had been able to place some of his writings in the United States he doubted very much whether they would have found a market at all. If my right hon. friend is going to tax the magazines that come into this country from the United States, I venture to say that it will not be long before American publishers will cease taking contributions from the pens of Canadian authors and poets. Many of our writers have won distinction not only for themselves but for our country through their contributions to some of the large publications in the United States, and an inevitable reaction, it seems to me, to a tax of this kind will be the refusal hereafter by some of these publications of the work of some of the best writers in Canada. In that respect the tax would be a great mistake. How great a mistake no one will ever know, because none of us can value the thing which might have been but which is not because of certain circumstances.

May I mention another fact which comes to my mind, and that is the effect which this tax may have upon tourist travel? That may seem remote, but as we all know the tourist traffic from the United States into Canada is becoming a very important item in the revenues of this oountry. Tourists particularly desire when away from home to receive the publications which they are accustomed to read in their own country, and I do not believe it is stretching the point too far to assume that if our American friends travelling in different parts of Canada find that they can no longer secure at a book store, a hotel or anywhere else, copies of the publications they have been accustomed to read at home, they will prefer in the future a trip to some of their own national parks or * other fields of recreation to coming to Canada. Those are indirect effects, which nevertheless are quite important.

Again, American magazines and periodicals in some part use Canadian newsprint in the preparation of their material for publication, and to the extent to which my right hon. friend's tax operates against some of these magazines coming into Canada, he is dealing

Ways and Means-Customs Tariff

a blow to the pulp and paper industry of this country, on the product of which our neighbours to the south are in large part dependent.

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July 17, 1931