October 18, 1932

BUTTER IMPORTATIONS


On the orders of the day:


LIB

Thomas F. Donnelly

Liberal

Mr. T. F. DONNELLY (Willow Bunch):

I should like to ask the Minister of Agriculture a question of prime importance to the farmers of western Canada. Can he tell me whether any butter has arrived in Canada during the past three months from Australia or New Zealand and, if so, how much?

Topic:   BUTTER IMPORTATIONS
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CON

Robert Weir (Minister of Agriculture)

Conservative (1867-1942)

Hon. ROBERT WEIR (Minister of Agriculture) :

I shall be glad to let the hon. gentleman have the information tomorrow.

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LIB

Thomas F. Donnelly

Liberal

Mr. DONNELLY:

At the same time I

should like to ask whether any shipments of Canadian butter have been returned from the British Isles to Canada during the past three months and, if so, how much.

Topic:   BUTTER IMPORTATIONS
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IMPERIAL ECONOMIC CONFERENCE

CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM


The house resumed from Monday, October 17, consideration of the motion of Right Hon. R. B. Bennett (Prime Minister) for approval of the trade agreement entered into at Ottawa the 20th day of August, 1932, between representatives of His Majesty's government in Canada and of His Majesty's government in the United Kingdom, subject to the legislation required in order to give effect to the fiscal changes consequent thereon.


LIB

James Malcolm

Liberal

Hon. JAMES MALCOLM (North Bruce):

Mr. Speaker, the house is asked to approve a treaty drawn between His Majesty's government in Cheat Britain and His Majesty's government in Canada for the benefit of Canadian trade and, I presume, also for the benefit of British trade. It is only fair, before discussing the treaty, to go back and discuss the history of the treaty. At the time of the bringing down of the so-called Dunning budget, the government then in power having analyzed the trade that existed between Canada and British countries as against the trade that existed between Canada and foreign countries, found that the British Empire was buying from this dominion approximately $500,000,000 worth of mer-

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chandise, and that this country was buying from the British Empire $250,000,000 worth of merchandise-I am taking the figures for 1928-while as regards foreign countries the trade of this dominion consisted of an export business of $730,000,000 and an import business of $860,000,000. From all British countries we had a favourable trade balance of approximately $250,000,000 and from all foreign countries an adverse trade balance of about $130,000,000.

It was the desire of the government of that day, and I think it was the desire of everyone in the parliament of Canada that if possible our fiscal policy should be so adjusted as to give more business to those who were giving business to us. It was the desire of the government of that day and of the party to your left, Mr. Speaker, in so doing to increase our purchases from Great Britain and by so doing at lower rates of duty, to assist the primary producers in this country. It was also the desire of the government of that day, as it is the desire of the Liberal party, that upon the imports of merchandise substantial revenues should be raised. It was also the desire of the government of that day that those who were engaged in production of any kind in Canada and who were called upon to meet foreign competition in the markets of the world should have their implements of production, and raw material, at prices which would enable them to compete in the world's markets. The Dunning budget was presented in 1930 with five primary objects in view: First, to divert trade, upon which all agreed; second, to lower the cost to the consumer in Canada of the things he needed in his daily life; third, to decrease the cost of the implements of production to the primary producer, fourth, to lower the cost of all raw materials to the Canadian manufacturer for export so that he would be more able to compete in the markets of the world and fifth to produce revenue. Such, I think, is a fair representation of the position taken in the Dunning budget by the government then in power.

The present Prime Minister, in appealing to the public in the last election, 'stressed certain points. He stressed what was existing at that time in a slight degree, namely, unemployment. He stressed what he claimed were low prices for agricultural commodities. He stressed what he thought was entirely wrong, namely, too great an importation of foreign commodities, and he clearly stated on the platform to the public that it was the fault of the then government that those conditions

existed and that if he were elected Prime Minister of Canada, those conditions would not obtain, that unemployment would be corrected, trade would flourish, and the farmers would enjoy a more prosperous condition.

I believe the Prime Minister will agree with me that that is a fair representation of the facts. Not only did he so state, but he went farther and prescribed, honestly, a cure by which he would bring about these conditions. He stated that his highly protective policy would give adequate protection to agriculture as well as to industry, would result in a condition in this dominion very much better than that then existing.

No one who has followed the course of the Prime Minister since attaining office in the mid-summer of 1930 can accuse him of insincerity. No man can accuse him of not having applied the cure in ever increasing doses. No one can see, however, any improvement in the patient's condition after heavy doses have been applied. Having arrived at that point we must consider, before discussing the treaty, whether or not in so far as our domestic condition is concerned an extremely high protective policy is best. It is with extreme high protection that members on this side disagree. I do not believe any man on this or on the other side of the house seriously disagrees with his fellow member of parliament on any thing except the policies which we advocate, ours being entirely different from that advocated by my hon. friends opposite. Therefore our discussion of the treaty now before us must be entirely upon the policy which is followed in making the treaty, as against the policy we advocated when in 1930 we suggested a treaty with Great Britain. In so far as our internal condition goes I do not need to labour the situation in Canada today. I do not wish to decry conditions, nor do I wish to make out for Canada any condition worse than that actually existing. It is only fair to say, however, that unemployment has not been solved; it is not true to say that farm prices have improved, or that the manufacturers in Canada have enjoyed any period of great prosperity.

Although that is so the government presents to us the draft of a treaty based on the protective principle. Again still greater consistency is exhibited than has been exhibited before, as evidenced in the fact that every clause of the treaty, every item in it, consistently holds to the policy advocated by the Prime Minister during the election campaign of 1930. With that policy we entirely disagree. I purpose to show that in the drafting of this

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treaty the Prime Minister has gone beyond the point I believe he himself intended to go. During the campaign the Prime Minister said-and I believe he has fairly maintained his position-that so far as he was concerned he would raise tariff barriers in Canada, and by virtue of the fact that he held as many cards in his hand as the other players, he would make tariffs fight for Canada. He recalled that between the years 1920 and 1930 countries throughout the world consistently raised tariff barriers against each other. In other words, the Prime Minister indicated that he would induce trade by lowering tariffs only when some other country lowered tariffs against us. I believe the Prime Minister will agree that that is a fair representation of his policy.

In connection with this particular treaty he has gained certain advantages, but I think in doing so he has tied his hands. That in blasting his way into British markets he has tied his hands more tightly than he may realize for future treaties. I purpose presently to show why I claim the Prime Minister of Canada has, whether by motive or innocently, put himself in a position where his blasting process will be after this treaty is passed of very little avail in securing markets in other countries. In so far as the main points of the treaty are concerned, I should like to direct attention to the first point stressed last night by the Minister of Trade and Commerce (Mr. Stevens) and to which reference was made by the hon. member for North Winnipeg (Mr. Heaps), to the effect that there is diversion of trade from foreign to British countries. That is a correct statement. Unquestionably there is a diversion of trade, and in so far as it takes place it is not inconsistent or out of line with the desire of Canadian people in all walks of life and in all political parties. To the diversion of trade as designed and carried out by this treaty no one can take any objection.

But there is a second feature of this treaty providing for very much higher duties, a provision which comes directly into conflict with Liberal principles. We note that higher duties are placed on implements of production. I wish to say to the Prime Minister and his supporters that in a low price market such as we have today in which commodity prices are probably at the lowest level they have reached in 'the lifetime of any of us, it is going to be very difficult for any person to make a living except in one of two ways. Either he must get his equipment at the lowest possible cost and operate his busines efficiently,- whether it be farming or manufacturing-or he must lower wages. Costs must be reduced in some way, and it does seem to me that in

this situation every hon. member in the house and every person in the country who has anything to do with labour would sooner cut down costs through efficient and lower priced machinery than take it out of labour.

I do not think at the present time there is anything as desirable for industry in Canada, whether it be mining, lumbering, farming or manufacturing, as to be able from the low returns received to get the implements with which we manufacture at costs as low as possible, to introduce the most efficient methods possible, and to treat our labour as well as we can with the remainder of the money at our disposal. So I say to the Prime Minister, in raising the prices of implements of production he has made a practical blunder, in so far as assisting Canadian producers is concerned in the exportation of materials- whether they be raw, semi-finished, or finished.

The third point in the agreement was discussed yesterday by the leader of the opposition, and the Minister of Trade and Commerce. I refer to the differential which is to be maintained. I do not know whether I shall succeed, but I should like very much to explain a difficulty appearing in the agreement which leads me to fear the Prime Minister and his ministers will experience some embarrassment when they come to make other treaties. In the past when making treaties former governments offered certain concessions. There are several ways to give concessions under a treaty, and if hon. members will pardon me for labouring a point, concerning which they may know more than I do, I shall outline the different classifications, so far as duties are concerned. We have the British preferential the intermediate, and the general tariffs. Also, by certain treaties we have given a lower specific duty to some countries, termed favoured nation treatment. In the main we have always tried to make our treaties by offering the intermediate tariff or favoured nations treatment.

When in power the party now on this side of the house in many instances did give specific duties in treaties and when in opposition the Prime Minister criticized us by saying that in connection with the French treaty the agreement made it possible for them to raise their duties against us, but that it was impossible for us to raise duties against them. Yet under the agreement now before us the Prime Minister grants endless specific general duties, rather than using existing tariff items and schedules and in the preferential column places these items on the free list. How will this work out?

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Last night the Minister of Trade and Commerce (Mr. Stevens) was speaking about these free items,-whether or not they amount to a great deal I will deal with later-the fact remains that where the item from Great Britain, is free and the intermediate and general rates are 20 and 25 per cent, it will 'be impossible toi make new treaties over a differential of 20 per cent. For the whole life of this treaty it will foe impossible to give a lower rate of duty on any commodity than the minimum now set by the intermediate tariff. Should we find it desirable to transfer some business from the British Empire say to Belgium on some steel product, in return for Belgium giving us substantial business on our wheat or barley or other primary products, we simply never could give Belgium anything lower than the rate provided in the intermediate tariff.

Not only that, if the intermediate and the general tariff had the ordinary variation we could say to Belgium; We will give you the intermediate tariff. But the intermediate tariff today is in many instances just as high as the general, so offering them the intermediate tariff is of no value. My right hon. friend knows that. Whether it was as a result of very clever design I do not know. My hon. friend the Minister of Trade and Commerce complimented the civil servants and the officers of his department last evening, very justly I think, on the work they have done in helping the conference. I think we might also have complimented just as deservedly some very clever tariff experts in the Canadian Manufacturers' Association. I do not want to impute motives of brilliant design for their own purposes which they do not deserve, but, knowing the gentlemen as well as I do, I cannot impute stupidity. Certainly everything about this tariff shows to me a cunning and brilliance, from the standpoint of protection, that has never been equalled in anything presented to this house before. The country must clearly understand that it was a protectionist government that brought down this treaty. I would never have expected anything different from some hon. gentlemen opposite. The Prime Minister and his colleagues were so insistent on the argument that only through a protective system could our condition be improved. But I do think that there are many hon. gentlemen opposite who if they knew the full import of each of these items in the schedules which we will have the privilege of discussing at a later date would find that they are not in accordance with their views.

I want to say to the Minister of Trade and Commerce that some otf the items he mentioned last night will be of benefit to Canada. He said that the linen schedules had been changed, linen coming into Canada free. Perfectly sound, perfectly justifiable. Linen used to be admitted into Canada at a very low duty, and when they were so admitted the retailers of this dominion sold just as much linen to American tourists as to the Canadian people. Canada's imports of linen were a source of very considerable resale revenue. Canadian linen experts will tell you that Canada consumed twice the volume of linen products that the population of this dominion justified, and it was known quite well in Northern Ireland what became of it. American tourists could buy Irish linen in Canada for very much less than in their own country, and I am glad that the minister has restored linen to the free list, it will be helpful to trade in this dominion and trade with Ireland.

But may I speak of the country of my forebears? If it is good in relation to linen from Northern Ireland, why is it not good in regard to fine woollens from Scotland? The very finest garments produced in Scotland cannot be produced in Canada or the United States. American tourists take the finest woollen goods off our counters and the finest of British cloth. There was a substantial resale of British woollen goods in this dominion because they were of a class not procurable on the American continent. That business is lost. Ask Holt, Renfrew, or any of the big retailers of fine men's wear where there trade has gone in fine British sweaters, overcoats and golf socks? It has gone to-day because you can buy the same overcoat in New York for the same price as in Canada. The American rate of duty against fine British woollens, when it is all worked out, is no higher than the rate in Canada, in fact with our depreciated currency I think in many instances it is higher into Canada than into the United States.

With regard to these items which my hon. friend the minister says are on the free list we have no criticism to make. But let me return to some items which are on the free list and which he says he has done well with. Cream separators are one example. But they were always on the free list. They are only on the free list because the duty has been raised in the intermediate and general columns. To show that we have no quarrel with the Conservative party, only with the policy as outlined in this agreement, may I say that every hon. gentleman knows that a former Prime Minister of Conservative persuasion was the man who put cream separators on the free list, they were not put on

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by the Liberal government at all. Cream separators are made in Canada and constitute a very substantial manufacturing business. They were not coming from Great Britain; as the leader of the opposition showed yesterday, they were being made at home, and some imported from the United States. Does any man believe that the Canadian export of cream separators will not continue? Certainly it will, and it will continue on the basis of competition with world prices. Our cream separator manufacturers will still get some foreign business, but is any man so optimistic as to believe that with a 25 per cent duty and with the British production what it is at present it is going to control the price in Canada and that the price of cream separators in Canada will not go up? I do not believe it, I believe the Canadian manufacturer will do what he usually does, he will get the benefit of his protection in the local markets, or else why the protection? He will certainly sell in the export markets at world prices, because he has to, but as far as Canada is concerned he will try to get all the money he can for his products. So that is one of the free items in which I cannot see any benefit. And many others are the same. Furthermore I think that the government, down in their hearts, would admit that if you go through that whole schedule from start to finish-and we will see it all when we come to the resolutions- that the number of free items from Great Britain which are going to be of some benefit to the consumer are very few, but that most of the free items on the list are of much benefit to the Canadian manufacturer. Item after item " for use in the manufacture of-" it runs through the whole schedule, practically all the free items are for the benefit of the industry.

In so far as that is concerned it is not inconsistent with the policy Of my right hon. friend. But I do not think my right hon. friend should try to put down the throats of the Canadian consumers the idea that there are on this free list many items from Great Britain which are going to be of benefit to them. If the protection against British cloth is raised to a point which makes it impossible to get that cloth, what good is it to give the Canadian manufacturer yarn at a low rate of duty and lose the revenue to this country? The Prime Minister is facing now one of the most serious problems any prime minister in this dominion has ever faced, the problem of revenue. No man can accuse me of being a free trader, but I care not one whit whether

you knock the tariff wall down and let merchandise in without paying any duty or build it up so high the goods cannot come over, you are going to have to make up the resulting loss of revenue by direct taxation on business. Either course will bring about exactly the same result. The Prime Minister is putting himself in a position where he will have to increase direct taxation to replace the revenue he could enjoy under a moderate, reasonable and sane tariff. I object very strenuously to the heights to which this tariff has been raised. I am satisfied that the tariff now has been raised to the point of absurdity, where it will stifle business and will not redound to the credit of my right hon. friend the Prime Minister.

Just a word in passing with regard to treaties in general. The treaties made by the former government and by governments previous to that were criticized by my hon. friends opposite, when they were in opposition, and it is said now that they were made for terms of years. Of course they were. Any one in the house who has ever studied treaty making must know that treaties must be made for terms of years. There is no question about that. But the difference between this and those other treaties, the difference we are trying to point out, is that in previous treaties the government had a perfectly free hand to negotiate new treaties; nothing hampered them. If the old treaties which were in existence prior to this administration coming into office hampered the government in making new treaties, why is this treaty now before the house? The present treaty is the evidence that the other treaties did not hamper the government, and what we are pointing out now is that under the terms of this treaty, while in principle there is no difference, in practice we are insisting that for a period of years an extreme differential shall be maintained. In many cases the intermediate and general rates are the same, but in most cases they are so high that we have very little left to offer any foreign country. The Prime Minister said he was going to help the trade of Canada by using the tariff as an implement with which to negotiate bargains with other people. I do not see how he is going to do that. I think he has exhausted his force; I believe he has spiked his guns. I do not think he has any favours left to offer foreign countries, with these differential rates so high. Of course he may have some other process in mind. I do not know whether he is going to resort to barter, whether he is going to scrap the tariff and start carrying on direct trade, whether

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he is going to swap a shipload of wheat for a shipload of silk from Japan. He has already swapped a shipload of aluminum for a shipload of oil from Russia. I cannot see anything left to the Prime Minister except direct barter. That may be all right; it may be a very good way to correct the currency situation and take the money value problem out of trade. Considering our trade with Japan I do not see how my hon. friend is going to be able to help the manufacturers and growers of silk in that country, who are in the doldrums today just as Canadian wheat producers are, by placing high tariffs against their principal products. He certainly could do it; he could deal with Japan tomorrow by trading a shipload of wheat for a shipload of silk; there is no doubt as to that being a possibility, but whether that is to be the method my right hon. friend will employ I do not know. After this treaty is passed it seems about the only way left.

Let me make this prediction, in all seriousness: I know the Minister of Trade and Commerce has been more zealous, perhaps, than any man in his party; I believe he appreciates as much as any man in the Dominion of Canada the great possibilities for trade that exist on the Pacific slopes, and I think he understands the position Canada is in with regard to trading with the orient. I believe my hon. friend the Minister of Trade and Commerce is going to find this treaty not to his liking before many years have passed. Why do I say that? Let me refer for a moment to our trade with Japan; I think perhaps it might enlighten hon. members of the house. In 1928, which was previous to our peak year but was still a very good year, we sold Japan wheat to the value of some $11,000,000 and timber worth almost $6,000,000, divided up into logs, $1,500,000, lumber, $2,000,000 and squared timber, $2,000,000. In addition we sold paper to the extent of about $500,000; lead worth about $3,800,000; aluminum to the value of about $1,300,000 and zinc spelter worth about $1,800,000. What did we import that came in any way in conflict with our own manufactured products? Listen to these items, and remember that the items which held in 1928 hold today also:

Oranges $ 315,000

Rice 301,000

Tea 644,000

Silk 8,250,000

Chinaware 400,000

Buttons 136,000

That item may interfere with the business of my bon. friend from North Waterloo (Mr. Euler). Why, Mr. Speaker, the production of the orient is extremely complementary to the production of Canada. There are untold possibilities of trade, but that trade can be acquired only by giving some concession, and I am very much afraid that the terms of this treaty, with the very high rates under the general and intermediate tariffs, will preclude any concessions being given to the orient in trade matters.

Now may I say just one word on behalf of industry in this dominion? I think on one occasion the Prime Minister referred to some utterances of mine in which I had argued, against the viewpoint held by some hon. member in this corner of the house, that high tariffs did not necessarily bring about high prices of commodities within the country imposing such high tariffs. I have always contended that they do not, except in certain cases.

Topic:   IMPERIAL ECONOMIC CONFERENCE
Subtopic:   CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
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?

An hon. MEMBER:

Furniture.

Topic:   IMPERIAL ECONOMIC CONFERENCE
Subtopic:   CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
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LIB

James Malcolm

Liberal

Mr. MALCOLM:

Quite so; I am quite

willing to deal with that subject, because I happen to know a little more about it than my hon. friend. When the tariff on any commodity is too high business to a certain extent becomes a game. The game becomes attractive and a great many men go into it. We have had a good deal of high tariff in the last few years. Is there any industrialist in this house-I ask my hon. friend from North Perth (Mr. Wright)-who has not found the production greater than the demand and, by virtue of greater production and lesser demand, found price cutting to a degree never before known? Certainly if open competition exists within a country and combines do not exist it is a very easy matter for high tariffs to induce a degree of production which will make prices ruinous, but what has been the inevitable result? The result is that industry is driven into combines; different firms, for their own protection, are forced to combine, thereby creating vested interests, thereby raising prices and thereby injuring the consumer of the commodity. When that condition exists, what happens? A low tariff government comes into power; the whole thing is upset and we start around the circle again. Therefore as an industrialist I would rather have in this country a tariff of moderate proportions which would allow the importation of style goods and more expensive goods into the country, because these goods have a certain value. They have a value in giving inspiration to the designers of the country, for one thing. I would rather have seventy-five per cent of a good market than

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one hundred per cent of a zero market such as we have today. I do not believe it is good for industry itself to protect it with a tariff so high that goods cannot come in from other countries.

What are the arguments of all importers today? Certainly Canadian Cottons can supply the demand for print goods, but it is equally certain that the limited designs and the very few patterns the stores can get are curtailing sales and doing away with any individuality. We cannot standardize our people. We cannot make Canada into a Ford factory. I do not think in this country we want to eliminate the artistic sense in industry. If that is so there is one thing we should fear in Canada today, and that is the standardization of individual effort and individual thought. I would far rather have forty small industries, each making something of individual value and individual character, than have those forty industries thrown together into one mass production industry and have every man wearing exactly the same colour of coat and the same sort of shoes. The whole trend of extremely high tariffs is to force industry, through ruinous competition and low prices, into standardization, which is not good for the morale or the economics of the nation.

There is one point I want to emphasize here, and I have no wish to do so unkindly. In the making of this agreement, we had the manufacturers of Great Britain here; we had the manufacturers of Canada advising; and we had interests of every description advising the governments of the various dominions; but there was one great class of interests unrepresented, namely, the consuming public. I could not see where the great mass of the consuming public were being considered at all, and may I say with all sincerity that if we want prosperity in industry in Canada we must see to it that the customers, the great consuming public, have some money with which to buy the products of our industry. If we cannot bring about prosperity among those engaged in primary industry, those engaged in taking wealth out of the soil, out of the forest, out of our mines, if we cannot make money for these people, then we cannot hope to sell them the ecimmodities which we manufacture in our factories. Now I am afraid that we are leaning so far to the right that some day the pendulum will swing back past the point of sanity and we may be sorry that we ever allowed it to swing so far in the other direction. As an industrialist, I would rather meet competition under a reasonable tariff which would allow us to

maintain something of the standard of living which we desire to have in this country, than be sheltered behind a wall which would permit of no competition from without, which would induce competition from within, and which in the long run would stifle enterprise and business and leave it die of dry rot.

What is there in this agreement to help the British exporter? What is there to help him lower costs of production? Certainly higher foods will not enable him to lower costs of production; but we are told that under the agreement foodstuffs will not be higher. I was talking with a commercial friend of mine the other day. He had read the agreement carefully and he saw that we had, according to the Minister of Trade and Commerce, a sheltered market for a certain amount of commodities; but he also saw that these commodities had to be sold to Britain at the same price as in other markets of the world. Let me quote his remarks; they were terse and to the point. He said, "It doesn't mean anything but what we have always practised in business. When prices are equal, friendship starts." And that is what it means; we have always had the friendship of the British market in the purchase of our wheat, just as we have always had the friendship of that market so far as a great many other commodities are concerned. If we are not to get a decided price advantage, then I do not know just exactly where the sheltered market will be of such great advantage to us. True, the Minister of Trade and Commerce says there will be greater quantities imported under the terms of the agreement than have been imported heretofore. How does he know? How does he know what the capacity of the British Empire will be five years hence? These things are all very much in the air.

Last night I listened carefully to the speech delivered by the Minister of Trade and Commerce and I enjoyed it; I wished he could have gone on for another hour and explained more about the treaty. I presume we shall hear some explanations when the resolutions are brought down. I certainly admired many of the pious hopes he expressed, and I sincerely trust that his prophecies of increased British trade will come true. But the minister touched a vital point. This, Mr. Speaker, is only a diversion of trade; it is not a creation of very much new trade. And what Canada needs today is more business. Just think for a moment where we stood a few years ago, when the foreign trade of this dominion amounted to $2,500J)00,000. Allowing four to a family, the export busines of the country at that time meant $1,000 per family. What

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is the situation today? Through the lowering of price levels, through the curtailment by tariffs of the total business of Canada, our foreign trade has shrunk to something less than 81,000,000,000, probably $900,000,000, but we will take it at $1,000,000,000. That means, with a population of 10,000,000, $400 per family. In other words, we have lost $600 per family in respect to our foreign business. No wonder we are feeling depression in our farms, mines and timber camps. You cannot run timber camps without business, any more than you can conduct a farm without foreign markets. That foreign trade has fallen off to that extent, and the treaty will only divert trade from one country to another; it will not solve the problem. The problem must be solved by new treaties, and my hon. friend will have to make trade arrangements in the future to step up the trade. The problem will solve itself to some extent when price levels rise, but at the present time everything possible should be done to increase our foreign trade.

Most economists, most people who have thought much about the economic condition of the world, have fairly well agreed that there are three major causes for the depression, for the lowering of world prices, for the stifling of trade. These three are, first, international obligations which are too heavy for the countries to pay; secondly, the trouble with the monetary system; and, thirdly, the erection of very high tariff walls throughout the nations of the world. I do not think that, in a broad way, anyone will deny that these three problems have 'been the subject of a good deal of discussion in every country in the world.

Now, everyone in this house knows that the enormous production of British industry cannot possibly be consumed within the British Empire. No one knows better than those of us who have had to do wTith the trade of the dominion that it is utterly impossible for the empire to consume all the wheat of Canada; that it is utterly impossible for the empire to consume all the aluminum produced in Canada; that it is utterly impossible for us to find markets within the empire for all our newsprint, all our timber, all our pulp and all our nickel. Why, sir, it is a foregone conclusion; it cannot be done. The empire does not consume as much as is produced. We must, of necessity, find markets outside the empire. Both markets are extremely essential. No one belittles our British trade; but when you consider that in good years when

trade was flowing freely, British trade was a matter of $750,000,000 within the British Empire and Canada, and foreign trade amounted to $1,600,000,000, you realize that it is absolutely essential, whether you be a fisherman in Nova Scotia or a packer canning salmon in British Columbia, whether you be a timber man on the Pacific slopes or in Ontario, or in the maritime provinces, to find world markets for your products.

That being the case, the Minister of Trade and Commerce must, of necessity, give some consideration to other things, and I come back to the three problems mentioned. The very first point, international debts, we will admit, is one which is so broad in its scope as not to be solvable by any one nation in the world. No one can gainsay that. The monetary system is probably in the same category, with this exception that if we cannot solve it within the British Empire the question arises, how can we hope to solve it throughout the world? The Minister of Trade and Commerce has been intensely interested in the monetary system; but the conference met and nothing was done. No opinion was pronounced on the question of international debts; nothing was done to devise a scheme to standardize currency within the British Empire. On these two major points, therefore, the conference cannot be given credit for any constructive thought or work or conclusion. The third question, the question of tariff barriers which are stifling the trade of the world, we did hope was going to be dealt with in a satisfactory way. We did hope the tariff barriers within the empire would be lowered although we were not looking forward to Lord Beaverbrook's idea of empire free trade coming into effect over-night. We did hope that the duties within the empire against British merchandise would not be put up to the level to which they have been put. We felt that if we wanted the British workman to buy our wheat and the British carpenter to saw and nail our lumber we should give at least the British textile worker some chance to sell us some of his wares. I do not want to ruin the textile industry in Canada, far from it, but I do not think it would be a sacrifice to Canada to give the British people a fair share of our market.

A few years ago we were importing probably twenty-five or thirty per cent of our manufactured goods but we were exporting a like amount; the sum total of goods manufactured in Canada was equal to the sum total of manufactured goods consumed in Canada because we exported just as much as we imported. That was really a better situ-

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ation than to keep the Canadian market to ourselves and shut out our goods from foreign markets by high protection.

The conference has not solved the monetary problem; it has not offered a suggestion on international debts; tariff walls within our own economic unit have not been lowered to the extent that we can approach other economic units in the world and say that we have set our own house in order. As far as Canadian purchases from the British Empire are concerned, I am afraid we have maintained our previously selfish attitude.

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CON

Pierre Édouard Blondin (Speaker of the Senate)

Conservative (1867-1942)

Mr. SPEAKER:

I am afraid the hon. member is running beyond his time.

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LIB

James Malcolm

Liberal

Mr. MALCOLM:

Might I have five

minutes, with the consent of the house?

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Subtopic:   CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
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?

Some hon. MEMBERS:

Yes.

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LIB

James Malcolm

Liberal

Mr. MALCOLM:

I do not want to delay the house and I appreciate the great courtesy shown to me in giving me an extra moment. I might say that I have no desire to be provocative in any of my remarks.

I have one or two thoughts to express in conclusion. Far be it from me to say to the Prime Minister of Canada that he is not mindful of his obligations to this dominion, and far be it from me to suggest anything to him upon which he has not expressed an opinion but to which he may have given a great deal of thought. I am firmly convinced that the greatest trouble facing the world today is the result of a narrow spirit of selfishness, the constant thinking of monetary interests. In every dispute which arises, in every debate, economics are being placed ahead of humanity. We have in this country an economic problem but we have another problem more important, the human problem. In 1914, in order to fight, a physical conflict outside of the Dominion of Canada, this parliament voted unanimously the credit of the country to the extent of $2,000,000,000. During this conflict the lives of 50,000 of our best citizens were lost, while 250,000 men were crippled. Can we not pledge some of this country's credit to fight an economic conflict within the dominion?

The Prime Minister has my complete approval in his scheme to create work by building landing fields across the dominion to provide for the future of aviation. But he should go beyond that. If we in this dominion cannot bank upon the future of this country being great, then it matters not, but if we believe in the future then we should

pledge our credit to provide our citizens with constructive work. I do not hold that we should be unmindful of the balance in the treasury but if in dealing with this economic conflict we take only the part of money, then we will not be doing our duty as good parents to a troubled nation.

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LIB

Ernest Lapointe

Liberal

Hon. ERNEST LAPOINTE (Quebec East):

Mr. Speaker, before I commence my remarks may I say that I am quite willing to yield the floor to any hon. gentleman opposite. I should like to call the attention of the country to a remarkable situation. We have had a debate on the address but during its course hon. gentlemen opposite have refrained from taking part. We are now entering a more serious debate, a debate upon a matter so important that the government was compelled to summon a special session of parliament; this is the gravest matter which has engaged the attention of parliament for a number of years, but it seems that we are not to be favoured with an expression of views by hon. gentlemen opposite. Surely the Minister of Finance (Mr. Rhodes) should give us his views. The Minister of National Revenue (Mr. Ryckman) attended the conference and the house should have an opportunity of hearing him. The Minister of Railways (Mr. Manion) appealed to the electors of South Huron on the grounds of the results of this conference; surely he should take part in this debate.

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CON

Robert James Manion (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. MANION:

Perhaps he will.

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LIB

Ernest Lapointe

Liberal

Mr. LAPOINTE:

I am willing to yield the floor in order that he may answer the former Minister of Trade and Commerce (Mr. Malcolm).

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CON

Robert James Manion (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. MANION:

I was not prepared to answer him, but I may answer my hon. friend.

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LIB

Ernest Lapointe

Liberal

Mr. LAPOINTE:

I wonder if it is a case of having no argument to offer or of being too proud to fight.

At the risk of being called unpatriotic I am ready to accept the challenge of the Minister of Trade and Commerce (Mr. Stevens) and rise in this house to oppose this treaty. The Prime Minister has built up a patriotic myth around this treaty but I am prepared to indulge in some blasting of my own. I am prepared to blast the myth of this treaty being a sort of national and sacrosanct agreement, a kind of ark of the covenant at which no one can look without fear or respect. This is purely a political matter- the tariff is not out of politics. The tariff will be a political question in the future as it

United Kingdom

has been in the past. Elections will be fought both in Canada and in Great Britain upon the tariff, and I do not consider it to be unpatriotic to attack the stand taken by this government upon this political question.

The Prime Minister (Mr. Bennett) himself has made it a political question. At the conference held in 1930 he said: "I speak for the Conservative party of Canada." Even here, when he introduced this resolution before the house, he claimed credit for his party for anything that may be advantageous in these agreements. Surely he or his party must suffer discredit for anything which is not of advantage.

May I say that no greater opportunity was offered to the statesmen who gathered in Ottawa at this conference in July last. An atmosphere was created which was favourable to good work and understanding. Nobody criticized, and I think it is rather ungracious on the part of the right lion, gentleman to say that some people and more particularly my right hon. leader put obstacles in the way of the conference. The ground was clear for action. The country was prepared. Any change would be good after the two years of disillusionment which we had had in this country. Yes, the policies of this government have intensified the world crisis; they have sapped the strength of the nation and have forced tens, aye, hundreds of thousands of proud Canadians to eat the bread of charity. The whole structure of the administration has led to disaster. Any change, I said, would be welcome and was welcome. Well, prayers were offered everywhere. I myself prayed for the success of the conference. I see my hon. friends opposite are laughing. They are entitled to laugh because I did not get much result from my prayers.

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October 18, 1932