The agreement says that the margin of preference must be maintained. The Minister of Trade and Commerce sought to explain the situation, or to get away from it, whichever you like, by referring to a clause in the French treaty which required that the margin between the intermediate and general tariffs should be preserved. That can be done only when you have actual rates with which to deal. Suppose we have a free British tariff, a thirty per cent intermediate and a forty per cent general tariff; the margin between the intermediate and general tariffs can be maintained by reducing each ten per cent, or according to the basis on which the margin is fixed. It may be that a ratio has to be preserved, but it dioes not matter; the argument holds good under any circumstances. However, you cannot preserve a margin between nothing and twenty-five per cent if at the same time you reduce the general tariff. The thing is mathematically impossible. One is almost ashamed to present an argument so simple, but evidently it would seem to be necessary because hon. gentlemen opposite loudly applauded the Minister of Trade and Commerce when he presented his statement of the case.
I wish to refer again in that connection to two items that have already been referred to a number of times, namely cream separators and barbed wire. They are two of the most outstanding necessities on the western farm today. How will the Minister of Agriculture (Mr. Weir) go through his constituency and justify a protection of twenty-five per cent on
cream separators? How will the hon. member for Marquette (Mr. Mullins) like to go through his constituency with a cream can as he did last year and say: Here, this old method of cream can or milk can will have to be used now instead of cream separators, which cannot be bought because this government has placed a duty of twenty-five per cent on cream separators. Surely they will never undertake to justify before their constituents an action of that kind.
In regard to preserving the margin of preference, a matter which has already been referred to, one of the things which concerned me during the progress of the negotiations was whether we in Canada would be in any measure bound not to reduce our tariff, and the first thing I looked for when the agreement came into my hands was to see whether any limitation had been put upon our freedom in that direction. Let us refer again to the matter of wheat. It has already been dealt with, but of necssity it will be referred to again and again and we may be able to present the argument from different points of view. I shall not undertake to interpret article 4, which states:
It is agreed that the duty on either wheat in grain, copper, zinc or lead as provided in this agreement may be removed if at any time empire producers of wheat in grain, copper, zinc and lead respectively are unable or unwilling to offer these commodities on first sale in the United Kingdom at prices not exceeding the world prices and in quantities sufficient to supply the requirements of the United Kingdom consumers.
I do not know what that means; but there is one thing that is abundantly clear to me, and that is that it certainly does not increase the effectiveness of the preference; on the contrary it imposes a limitation of some kind upon its effectiveness. Without this clause, and thinking only of the preference as usually understood, there were grave doubts in the minds of those who were concerned in the matter whether a preference on "wheat could be given that would be of any use to the producers of wheat. We know it to be a fact that the general grain trade made representations of the Prime Minister against such a proposal. We know that the United Grain Growers, a large farmers' institution, also made a representation on their own behalf. We know that the pools also made a representation against the idea of a preference. Only one man prominent in the grain trade, so far as I have seen the statement publicly, approved the idea and that was Mr. J, R.
Murray of the Alberta Pacific Grain Company, former general manager of the United Grain Growers. Undoubtedly Mr. Murray is a man who is well qualified to discuss matters relating to trade in grain, but he is only one against the great majority. If there were doubts as to the effectiveness of a preference without any rider such as this, still greater are those doubts when this proviso is put into the agreement. Let us consider the situation. First let me say this that this article would seem to be based upon the assumption that there is some body of men somewhere in Canada competent to act for the Canadian people in this matter of placing our wheat upon the British market. Such a body simply does not exist. It would seem also to be based upon the assumption that it is possible by some agreement between Canada and other dominions to come to an arrangement as to the price at which wheat shall be placed upon the British market. Such an arrangement would seem to me to be absolutely out of the question.
But let us consider the situation that might arise. Suppose Britain takes the action that is provided for in article 21, and Russian wheat is excluded from Great Britain. What is the effect? It simply means that Russian wheat is placed on other markets, depressing the world market, and that world market is the price at which we undertake to sell wheat to Britain. It seems as plain as anything that has ever been brought before us that this preference, so-called, can be of no effect in giving an increased price to the producers of wheat, since it takes away with one hand what it gives with the other. Perhaps there never was a better illustration used than that of the hon. member for West Elgin (Mr. Hep-bum) when he said that it was like giving a whistle to a boy and telling him that he should not blow it. Even before this proviso was known to wheat producers, it was generally conceded that supposing we were able to sell an increased quantity of wheat in the British market, this would simply mean keener competition in other markets, and since we have to sell the great bulk of our wheat in other markets, the net results so far as the producers of wheat were concerned would be nil.
Articles 16 and 17 might perhaps be considered together. The hon. member for Wey-burn (Mr. Young) has dealt very effectively with those, but I should like to emphasize again a point to which he drew attention and
Imperial Conference-Trade Agreements
to which some of us drew attention in our discussion on the budget last year. The Minister of Finance (Mr. Rhodes), in presenting his budget then, made the statement that the revenue from customs tariff had been reduced and one of the causes that brought about that reduction, he said, was the putting into effect of the policies of this government in seeking to encourage Canadian production and trade and to discourage imports from other countries. He did not go into details, but he said in a general way that revenues were reduced because of the effectiveness of the policies of this government It ought to be as clear as daylight that if the government continues those policies revenues will be still further reduced. What then, is the use of putting into article 17 of this agreement the following words:
His Majesty's government in Canada undertake that all existing surcharges on imports from the United Kingdom shall be completely abolished as soon as the finances of Canada will allow.
That is another illustration of seeming to give something, yet giving absolutely nothing. As I have already pointed out, if the points enunciated in articles 16 and 17 are beneficial, they were possible without the operation of this agreement.
At this point I wish to protest against the action of this government in dealing with certain imports. The other day I had occasion to draw attention to the government's action in dealing with repairs to agricultural implements. Undertakings given to the house by the Minister of Finance were set aside by departmental officials, acting, undoubtedly, upon representations made to them by someone. An understanding given to this house by the Minister of Finance was set aside. We gained some satisfaction by knowing that two days after the matter was brought to the attention of the house the order was rescinded; the fact is however, it should never have been passed. That change from the original undertaking constituted one of the most vicious actions ever taken by any government. Contrast an action of that kind with the procedure follow'ed by the former government, under which such matters would have been brought before the tariff board and representations made in public so that the people could be properly informed. Contrast that mode of procedure with the ho!e-in-the-corner method adopted by the present government. The action was vicious, and there is not a single hon. member on the opposite side of the house who would undertake to defend it. It is satisfactory
to know, however, that so far as British importations are concerned the surcharges mentioned in article 17 will' be abandoned as soon as possible. But if the practice is vicious the relief should apply not only to British trade but also to trade with other countries.